Exhibit - 10.1

 

 

 

CREDIT AGREEMENT

 

among

 

DJ ORTHOPEDICS, LLC,

as Borrower,

 

DJ ORTHOPEDICS, INC.,

 

THE LENDERS NAMED HEREIN,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Syndication Agent,

 

and

 

BANK OF AMERICA, N.A.,

BANK OF THE WEST

and

UNION BANK OF CALIFORNIA, N.A.,

as Documentation Agents

 

 

$130,000,000 Senior Secured Credit Facilities

 

 

WACHOVIA CAPITAL MARKETS, LLC

Sole Bookrunner and Sole Lead Arranger

 

 

Dated as of November 26, 2003

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I

 

 

 

DEFINITIONS

 

 

 

1.1

Defined Terms

 

1.2

Accounting Terms

 

1.3

Other Terms; Construction.

 

 

 

 

ARTICLE II

 

 

 

AMOUNT AND TERMS OF THE LOANS

 

 

 

2.1

Commitments.

 

2.2

Borrowings.

 

2.3

Disbursements; Funding Reliance; Domicile of Loans.

 

2.4

Evidence of Debt; Notes.

 

2.5

Termination and Reduction of Commitments and Swingline Commitment.

 

2.6

Mandatory Payments and Prepayments.

 

2.7

Voluntary Prepayments.

 

2.8

Interest.

 

2.9

Fees

 

2.10

Interest Periods

 

2.11

Conversions and Continuations.

 

2.12

Method of Payments; Computations.

 

2.13

Recovery of Payments.

 

2.14

Use of Proceeds

 

2.15

Pro Rata Treatment.

 

2.16

Increased Costs; Change in Circumstances; Illegality; etc.

 

2.17

Taxes.

 

2.18

Compensation

 

2.19

Replacement of Lenders; Mitigation of Costs.

 

 

 

 

ARTICLE III

 

 

 

LETTERS OF CREDIT

 

 

 

 

3.1

Issuance

 

3.2

Notices

 

3.3

Participations

 

3.4

Reimbursement

 

3.5

Payment by Revolving Loans

 

3.6

Payment to Revolving Credit Lenders

 

3.7

Obligations Absolute

 

3.8

Cash Collateral Account

 

 

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3.9

Effectiveness

 

 

 

 

ARTICLE IV

 

 

 

CONDITIONS OF BORROWING

 

 

 

 

4.1

Conditions of Initial Borrowing

 

4.2

Conditions of All Borrowings

 

 

 

 

ARTICLE V

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

 

5.1

Corporate Organization and Power

 

5.2

Authorization; Enforceability

 

5.3

No Violation

 

5.4

Governmental and Third-Party Authorization; Permits

 

5.5

Litigation

 

5.6

Taxes

 

5.7

Subsidiaries

 

5.8

Full Disclosure

 

5.9

Margin Regulations

 

5.10

No Material Adverse Effect

 

5.11

Financial Matters.

 

5.12

Ownership of Properties

 

5.13

ERISA.

 

5.14

Environmental Matters

 

5.15

Compliance with Laws

 

5.16

Intellectual Property

 

5.17

Regulated Industries

 

5.18

Insurance

 

5.19

Material Contracts

 

5.20

Deposit Accounts

 

5.21

Security Documents.

 

5.22

Labor Relations

 

5.23

BGS Acquisition.

 

5.24

No Burdensome Restrictions

 

5.25

Certain Tax Matters

 

5.26

OFAC; PATRIOT Act.

 

 

 

 

ARTICLE VI

 

 

 

AFFIRMATIVE COVENANTS

 

 

 

 

6.1

Financial Statements

 

6.2

Other Business and Financial Information

 

6.3

Existence; Franchises; Maintenance of Properties

 

6.4

Compliance with Laws

 

 

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6.5

Payment of Obligations

 

6.6

Insurance

 

6.7

Maintenance of Books and Records; Inspection

 

6.8

Interest Rate Protection

 

6.9

Permitted Acquisitions

 

6.10

Creation or Acquisition of Subsidiaries

 

6.11

Additional Security

 

6.12

Environmental Laws

 

6.13

PATRIOT Act Compliance

 

6.14

Further Assurances

 

6.15

Post-Closing Matters

 

 

 

 

ARTICLE VII

 

 

 

 

FINANCIAL COVENANTS

 

 

 

 

7.1

Total Leverage Ratio

 

7.2

Senior Leverage Ratio

 

7.3

Interest Coverage Ratio

 

7.4

Fixed Charge Ratio

 

 

 

 

ARTICLE VIII

 

 

 

 

NEGATIVE COVENANTS

 

 

 

 

8.1

Merger; Consolidation

 

8.2

Indebtedness

 

8.3

Liens

 

8.4

Asset Dispositions

 

8.5

Investments

 

8.6

Restricted Payments.

 

8.7

Transactions with Affiliates

 

8.8

Lines of Business.

 

8.9

Sale-Leaseback Transactions

 

8.10

Certain Amendments

 

8.11

Limitation on Certain Restrictions

 

8.12

No Other Negative Pledges

 

8.13

Fiscal Year

 

8.14

Accounting Changes

 

 

 

 

ARTICLE IX

 

 

 

 

EVENTS OF DEFAULT

 

 

 

 

9.1

Events of Default

 

9.2

Remedies: Termination of Commitments, Acceleration, etc.

 

9.3

Remedies: Set-Off

 

 

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ARTICLE X

 

 

 

 

THE ADMINISTRATIVE AGENT

 

 

 

 

10.1

Appointment

 

10.2

Nature of Duties

 

10.3

Exculpatory Provisions

 

10.4

Reliance by Administrative Agent

 

10.5

Non-Reliance on Administrative Agent and Other Lenders

 

10.6

Notice of Default

 

10.7

Indemnification

 

10.8

The Administrative Agent in its Individual Capacity

 

10.9

Successor Administrative Agent

 

10.10

Collateral Matters.

 

10.11

Issuing Lender and Swingline Lender

 

10.12

Other Agents, Managers

 

 

 

 

ARTICLE XI

 

 

 

 

MISCELLANEOUS

 

 

 

11.1

Fees and Expenses

 

11.2

Indemnification

 

11.3

Governing Law; Consent to Jurisdiction

 

11.4

Waiver of Jury Trial

 

11.5

Notices.

 

11.6

Amendments, Waivers, etc

 

11.7

Assignments, Participations.

 

11.8

No Waiver

 

11.9

Successors and Assigns

 

11.10

Survival

 

11.11

Severability

 

11.12

Construction

 

11.13

Confidentiality

 

11.14

Counterparts; Effectiveness

 

11.15

Disclosure of Information

 

11.16

Entire Agreement

 

 

EXHIBITS

 

Exhibit A-1

Form of Term Note

Exhibit A-2

Form of Revolving Note

Exhibit A-3

Form of Swingline Note

Exhibit B-1

Form of Notice of Borrowing

Exhibit B-2

Form of Notice of Swingline Borrowing

Exhibit B-3

Form of Notice of Conversion/Continuation

Exhibit B-4

Form of Letter of Credit Notice

 

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Exhibit C

Form of Compliance Certificate

Exhibit D

Form of Assignment and Acceptance

Exhibit E

Form of Security Agreement

Exhibit F

Form of Pledge Agreement

Exhibit G

Form of Guaranty Agreement

Exhibit H

Form of Financial Condition Certificate

 

SCHEDULES

 

Schedule 1.1(a)

Commitments and Notice Addresses

Schedule 1.1(b)

BGS EBITDA

Schedule 5.1

Jurisdictions of Organization

Schedule 5.4

Consents and Approvals

Schedule 5.5

Litigation

Schedule 5.7

Subsidiaries

Schedule 5.12

Real Property Interests

Schedule 5.14

Environmental Matters

Schedule 5.16

Intellectual Property

Schedule 5.18

Insurance Coverage

Schedule 5.19

Material Contracts

Schedule 5.26

Deposit Accounts

Schedule 8.2

Indebtedness

Schedule 8.3

Liens

Schedule 8.5

Investments

Schedule 8.7

Transactions with Affiliates

 

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CREDIT AGREEMENT

 

THIS CREDIT AGREEMENT, dated as of the 26th day of November, 2003, is made among
DJ ORTHOPEDICS, LLC, a Delaware limited liability company (the “Borrower”), DJ
ORTHOPEDICS, INC., a Delaware corporation (the “Parent”), the Lenders (as
hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent for the Lenders, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Syndication
Agent for the Lenders, and BANK OF AMERICA, N.A., BANK OF THE WEST and UNION
BANK OF CALIFORNIA, N.A., as Documentation Agents for the Lenders.

 

BACKGROUND STATEMENT

 

The Borrower has requested that the Lenders make available to the Borrower term
loan facilities in the aggregate principal amount of $100,000,000 and a
revolving credit facility in the aggregate principal amount of $30,000,000.  The
Borrower will use the proceeds of these facilities as provided in Section 2.14. 
The Lenders are willing to make available to the Borrower the credit facilities
described herein subject to and on the terms and conditions set forth in this
Agreement.

 

AGREEMENT

 

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

 

ARTICLE I

DEFINITIONS

 

1.1           DEFINED TERMS.  FOR PURPOSES OF THIS AGREEMENT, IN ADDITION TO THE
TERMS DEFINED ELSEWHERE HEREIN, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET
FORTH BELOW (SUCH MEANINGS TO BE EQUALLY APPLICABLE TO THE SINGULAR AND PLURAL
FORMS THEREOF):

 

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

 

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

 

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“Acquisition Amount” shall mean, with respect to any Acquisition, the sum
(without duplication) of (i) the amount of cash paid as part of the purchase
price thereof by the Borrower and its Subsidiaries in connection with such
Acquisition, (ii) the value of all Capital Stock of the Parent issued or given
in connection with such Acquisition (as determined by the parties thereto under
the definitive acquisition agreement), (iii) the amount (determined by using the
face amount or the amount payable at maturity, whichever is greater) of all
Indebtedness incurred, assumed or acquired by the Borrower and its Subsidiaries
in connection with such Acquisition, (iv) all Contingent Purchase Price GAAP
Amounts with respect to such Acquisition, (v) all amounts paid in respect of
covenants not to compete, consulting agreements and similar arrangements entered
into in connection with such Acquisition, and (vi) the aggregate fair market
value of all other real, mixed or personal property paid as purchase price by
the Borrower and its Subsidiaries in connection with such Acquisition.

 

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

 

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

 

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

 

“Affiliate” shall mean, as to any Person, each other Person that directly, or
indirectly through one or more intermediaries, owns or Controls, is Controlled
by or under common Control with, such Person or is a director or officer of such
Person.  Notwithstanding the foregoing, neither the Administrative Agent nor any
Lender shall be deemed an “Affiliate” of any Credit Party.

 

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

 

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

 

“Applicable Percentage” shall mean, at any time from and after the Closing Date,
the applicable percentage (i) to be added to the Base Rate for purposes of
determining the Adjusted Base Rate and (ii) to be added to the LIBOR Rate for
purposes of determining the Adjusted LIBOR Rate, in each case as determined
under the following matrix with reference to the Total Leverage Ratio (provided
that the Applicable Percentage for Swingline Loans at any time shall be equal to
(i) the Applicable Percentage at such time for Revolving Loans that are Base
Rate Loans minus (ii) 0.50%):

 

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Revolving Loans and Swingline Loans

 

Term Loans

 

Level

 

Total
Leverage Ratio

 

Applicable
LIBOR Margin

 

Applicable Base
Rate Margin

 

Applicable
LIBOR Margin

 

Applicable Base
Rate Margin

 

I

 

Greater than or equal to 3.75 to 1.0

 

3.50

%

2.50

%

2.75

%

1.75

%

 

 

 

 

 

 

 

 

 

 

 

 

II

 

Less than 3.75 to 1.0 but greater than or equal to 3.25 to 1.0

 

3.25

%

2.25

%

2.75

%

1.75

%

 

 

 

 

 

 

 

 

 

 

 

 

III

 

Less than 3.25 to 1.0 but greater than or equal to 2.75 to 1.0

 

3.00

%

2.00

%

2.75

%

1.75

%

 

 

 

 

 

 

 

 

 

 

 

 

IV

 

Less than 2.75 to 1.0

 

2.75

%

1.75

%

2.75

%

1.75

%

 

On each Adjustment Date (as hereinafter defined), the Applicable Percentage for
all Loans shall be adjusted effective as of such Adjustment Date (based upon the
calculation of the Total Leverage Ratio as of the last day of the Reference
Period to which such Adjustment Date relates) in accordance with the above
matrix; provided, however, that, notwithstanding the foregoing or anything else
herein to the contrary, if at any time the Borrower shall have failed to deliver
any of the financial statements as required by Sections 6.1(b) or 6.1(c), as the
case may be, or the Compliance Certificate as required by Section 6.2(a), then
at all times from and including the fifth (5th) Business Day following the date
on which such statements and Compliance Certificate are required to have been
delivered until the date on which the same shall have been delivered, each
Applicable Percentage shall be determined based on Level I above
(notwithstanding the actual Total Leverage Ratio).  For purposes of this
definition, “Adjustment Date” shall mean, with respect to any Reference Period
of the Borrower beginning with the Reference Period ending as of the last day of
the fourth fiscal quarter of fiscal year 2003, the day of (or, if such day is
not a Business Day, the next succeeding Business Day) delivery by the Borrower
in accordance with Section 6.1(b) or Section 6.1(c), as the case may be, of
(i) financial statements as of the end of and for such Reference Period and
(ii) a duly completed Compliance Certificate with respect to such Reference
Period.  From the Closing Date until the first Adjustment Date requiring a
change in any Applicable Percentage as provided herein, each Applicable
Percentage shall be based on Level II above.

 

“Approved Fund” shall mean any Fund that is administered or managed by (i) a
Lender, (ii) an Affiliate of a Lender, or (iii) a Person that administers or
manages a Lender or an Affiliate of such Person, or any finance company,
insurance company, investment bank or other financial institution that
temporarily warehouses loans for any of the foregoing.

 

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

 

“Asset Disposition” shall mean any sale, assignment, lease, conveyance, transfer
or other disposition by the Parent or any of its Subsidiaries (whether in one or
a series of transactions) of all or any of its assets, business or other
properties (including Capital Stock of Subsidiaries), other than pursuant to a
Casualty Event.

 

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

 

“Assignment and Acceptance” shall mean an Assignment and Acceptance in
substantially the form of Exhibit D.

 

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

 

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

 

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

 

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

 

“BGS Acquisition” shall mean the acquisition of the BGS Business by the Borrower
pursuant to the BGS Asset Purchase Agreement.

 

“BGS Asset Purchase Agreement” shall mean the Asset Purchase Agreement, dated as
of October 8, 2003, by and among OrthoLogic and the Borrower, as amended,
modified, restated or supplemented from time to time in accordance with the
terms of this Agreement.

 

“BGS Business” shall mean the “Business” (as defined in the BGS Asset Purchase
Agreement).

 

“BGS EBITDA” shall mean the “EBITDA” calculations set forth for the BGS Business
on Schedule 1.1(b).

 

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

 

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

 

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

 

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

 

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

 

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

 

“Capital Lease Obligations” shall mean, with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as Capital Leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.

 

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

 

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

 

“Cash Equivalents” shall mean (i) securities issued or unconditionally
guaranteed or insured by the United States of America or any agency or
instrumentality thereof, backed by the full faith and credit of the United
States of America and maturing within one year from the date of acquisition,
(ii) commercial paper issued by any Person organized under the laws of the
United States of America, maturing within 180 days from the date of acquisition
and, at the time of acquisition, having a rating of at least A-1 or the
equivalent thereof by Standard & Poor’s Ratings Services or at least P-1 or the
equivalent thereof by Moody’s Investors Service, Inc., (iii) time deposits and
certificates of deposit maturing within 180 days from the date of issuance and
issued by a bank or trust company organized under the laws of the United States
of America

 

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or any state thereof (y) that has combined capital and surplus of at least
$500,000,000 or (z) that has (or is a subsidiary of a bank holding company that
has) a long-term unsecured debt rating of at least A or the equivalent thereof
by Standard & Poor’s Ratings Services or at least A2 or the equivalent thereof
by Moody’s Investors Service, Inc., (iv) repurchase obligations with a term not
exceeding thirty (30) days with respect to underlying securities of the types
described in clause (i) above entered into with any bank or trust company
meeting the qualifications specified in clause (iii) above, and (v) money market
funds at least ninety-five percent (95%) of the assets of which are continuously
invested in securities of the foregoing types.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Consolidated Cash Interest Expense” shall mean, for any Reference Period,
Consolidated Interest Expense for such Reference Period to the extent paid (or
required to be paid) in cash, but excluding amounts paid in connection with the
closing of this Agreement and treated as deferred financing charges under GAAP;
provided, however, that (i) Consolidated Cash Interest Expense for the four
fiscal quarter period ending on the last day of the fourth fiscal quarter of
fiscal year 2003 shall be calculated as Consolidated Cash Interest Expense for
the fourth fiscal quarter of fiscal year 2003 multiplied by 4; (ii) Consolidated
Cash Interest Expense for the four fiscal quarter period ending on the last day
of the first fiscal quarter of fiscal year 2004 shall be calculated as
Consolidated Cash Interest Expense for the period of two fiscal quarters ending
on such date multiplied by 2; and (iii) Consolidated Cash Interest Expense for
the four fiscal quarter period ending on the last day of the second fiscal
quarter of fiscal year 2004 shall be calculated as Consolidated Cash Interest
Expense for the period of three fiscal quarters ending on such date multiplied
by 4/3; and provided further that for purposes of the calculations in clauses
(i) through (iii) above, interest on the Senior Subordinated Notes shall be
included on an accrual basis only.

 

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“Consolidated Current Assets” shall mean, as of any date of determination, all
assets of the Parent and its Subsidiaries (other than cash and Cash Equivalents)
that would, in accordance with GAAP, be classified on a consolidated balance
sheet of the Borrower and its Subsidiaries as current assets as of such date.

 

“Consolidated Current Liabilities” shall mean, as of any date of determination,
all liabilities (without duplication) of the Borrower and its Subsidiaries that
would, in accordance with GAAP, be classified on a consolidated balance sheet of
the Borrower and its Subsidiaries as current liabilities as of such date;
provided, however, that Consolidated Current Liabilities shall not include
current maturities of any long-term Indebtedness.

 

“Consolidated EBITDA” shall mean, for any Reference Period, the aggregate of
(i) Consolidated Net Income for such Reference Period, plus (ii) the sum
(without duplication) of (A) Consolidated Interest Expense, (B) federal, state,
local and other taxes on or determined by reference to income, (C) depreciation
and amortization, (D) noncash charges related to Hedge Agreements, (E) noncash
expenses resulting from the grant of stock options to any director, officer or
employee of any Credit Party pursuant to a written plan or agreement,
(F) nonrecurring losses, charges and expenses incurred in connection with (I)
the BGS Acquisition and the transactions contemplated by this Agreement
(including fees and expenses paid in connection with the BGS Acquisition, this
Agreement and the transactions contemplated hereby not to exceed $7,000,000) and
(II) Permitted Acquisitions to the extent such losses, charges and expenses are
approved by the Administrative Agent, and (G) other noncash charges (excluding
noncash charges relating to accounts receivable or inventories) in an aggregate
amount not to exceed $10,000,000 for any fiscal year, in each case under
clauses (A) through (G) above to the extent taken into account in the
calculation of Consolidated Net Income for such Reference Period and all
calculated in accordance with GAAP, minus (iii) noncash gains related to Hedge
Agreements, to the extent taken into account in the calculation of Consolidated
Net Income for such Reference Period and calculated in accordance with GAAP;
provided that if the Borrower or any Subsidiary has made any Permitted
Acquisition or any Asset Disposition outside the ordinary course of business
permitted by Section 8.4 during the relevant Reference Period for determining
Consolidated EBITDA, Consolidated EBITDA for the relevant Reference Period
(1) shall be calculated after giving pro forma effect thereto, as if such
Permitted Acquisition or Asset Disposition (and any related incurrence,
repayment or assumption of Indebtedness, with any new Indebtedness being deemed
to be amortized over the relevant period in accordance with its terms, and
assuming that any Revolving Loans borrowed in connection with such Permitted
Acquisition are repaid with excess cash balances when available) had occurred on
the first day of such Reference Period, but in the case of a Permitted
Acquisition, only so long as the results of the business being acquired are
supported by financial statements or other financial data reasonably acceptable
to the Administrative Agent, and (2) may include operating expense reductions
for such Reference Period resulting from any Permitted Acquisition that is being
given pro forma effect to the extent that such operating expense reductions
(y) would be permitted pursuant to Article XI of Regulation S-X under the
Securities Act or (z) have been approved by the Required Lenders; and provided
further that, notwithstanding the foregoing provisions of this definition, the
portion of Consolidated EBITDA attributable to the BGS Business for the first
three fiscal quarters and the tenth fiscal month of fiscal year 2003 shall be
the BGS EBITDA for such period as set forth on Schedule 1.1(b).

 

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“Consolidated Fixed Charges” shall mean, for any Reference Period, the aggregate
(without duplication) of the following, all determined on a consolidated basis
for the Parent and its Subsidiaries in accordance with GAAP for such Reference
Period: (a) Consolidated Cash Interest Expense, (b) aggregate cash tax expense
for such Reference Period, (c) cash Capital Expenditures for such Reference
Period, (d) the aggregate (without duplication) of all scheduled payments of
principal on Funded Debt (with respect to the Term Loans, as set forth in
Section 2.6(a)) required to have been made by the Parent and its Subsidiaries
during such Reference Period (whether or not such payments are actually made),
including scheduled principal payments with respect to any Seller Subordinated
Indebtedness, (e) the aggregate of all cash payments made by the Parent and its
Subsidiaries during such period in respect of Contingent Purchase Price
Obligations, and (f) the aggregate of all amounts paid by the Parent or any of
its Subsidiaries during such Reference Period as dividends or distributions in
respect of its Capital Stock or to purchase, redeem, retire or otherwise acquire
its Capital Stock.

 

“Consolidated Funded Senior Debt” shall mean, as of any date of determination,
the aggregate (without duplication) of all Funded Debt of the Parent and its
Subsidiaries as of such date that does not constitute Subordinated Indebtedness,
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Interest Expense” shall mean, for any Reference Period, the sum
(without duplication) of (i) total interest expense of the Parent and its
Subsidiaries for such Reference Period in respect of Consolidated Total Funded
Debt (including, without limitation, all such interest expense accrued or
capitalized during such Reference Period, whether or not actually paid during
such Reference Period), determined on a consolidated basis in accordance with
GAAP, (ii) all net amounts payable under or in respect of Hedge Agreements, to
the extent paid or accrued by the Parent and its Subsidiaries during such
Reference Period, and (iii) all recurring unused commitment fees and other
ongoing fees in respect of Funded Debt (including the unused fees and letter of
credit fees provided for under Section 2.9) paid, accrued or capitalized by the
Parent and its Subsidiaries during such Reference Period.

 

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

 

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“Consolidated Total Funded Debt” shall mean, as of any date of determination,
the aggregate (without duplication) of all Funded Debt of the Parent and its
Subsidiaries as of such date, determined on a consolidated basis in accordance
with GAAP.

 

“Consolidated Working Capital” shall mean, as of any date of determination,
Consolidated Current Assets as of such date minus Consolidated Current
Liabilities as of such date.

 

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

 

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

 

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

 

“Control” shall mean, with respect to any Person, (i) the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, or (ii) the beneficial ownership of securities or other
ownership interests of such Person having 15% or more of the combined voting
power of the then outstanding securities or other ownership interests of such
Person ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors or other governing body of
such Person; and the terms “Controlled” and “Controlling” have correlative
meanings.

 

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

 

“Credit Documents” shall mean this Agreement, the Notes, the Letters of Credit,
the Fee Letter, the Security Agreement, the Pledge Agreement, the Guaranty
Agreement, any Mortgages, any other Security Documents, and all other
agreements, instruments, documents and certificates

 

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now or hereafter executed and delivered to the Administrative Agent or any
Lender by or on behalf of the Borrower or any other Credit Party with respect to
this Agreement, in each case as amended, modified, supplemented or restated from
time to time, but specifically excluding any Hedge Agreement to which the
Borrower and any Lender or Affiliate of any Lender are parties.

 

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

 

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

 

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

 

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

 

“Disqualified Capital Stock” shall mean, with respect to any Person, any Capital
Stock of such Person that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event or otherwise, (i) matures or is mandatorily redeemable or subject
to any mandatory repurchase requirement, pursuant to a sinking fund obligation
or otherwise (other than any required offer to repay or repurchase (x) with
asset sale proceeds pursuant to customary arrangements providing that such
Person may (in lieu of making such offer) repay Indebtedness under this
Agreement or (y) pursuant to “change of control” provisions that are no more
restrictive than the analogous provisions contained in this Agreement), or
(ii) is convertible into or exchangeable for (whether at the option of the
issuer or the holder thereof) (y) debt securities or (z) any Capital Stock
referred to in (i) or (ii) above, in each case under (i) or (ii) above at any
time on or prior to the 180th day after the Term Loan Maturity Date; provided,
however, that only the portion of Capital Stock that so matures or is
mandatorily redeemable or is so convertible or exchangeable on or prior to such
date shall be deemed to be Disqualified Capital Stock.

 

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

 

“Documentation Agents” shall mean Bank of America, N.A., Bank of the West and
Union Bank of California, N.A. in their capacity as such under Section 10.12,
and their respective successors and permitted assigns in such capacity.

 

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

 

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“Eligible Assignee” shall mean (i) a Lender, (ii) an Affiliate of a Lender,
(iii) an Approved Fund with respect to a Lender, and (iv) any other Person
(other than a natural person) approved by (x) the Administrative Agent, (y) in
the case of any assignment of a Revolving Credit Commitment, the Issuing Lender,
and (z) unless a Default or Event of Default has occurred and is continuing, the
Borrower (each such approval to be evidenced by the approving party’s
counterexecution of the relevant Assignment and Acceptance and not to be
unreasonably withheld or delayed); provided, however, that in no event shall the
Borrower or any of its Subsidiaries or Affiliates (other than JPMorgan Chase
Bank) qualify as an Eligible Assignee.

 

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

 

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

 

“Equity Issuance” shall mean the issuance, sale or other disposition by any
Credit Party of its Capital Stock, any rights, warrants or options to purchase
or acquire any shares of its Capital Stock or any other security or instrument
representing, convertible into or exchangeable for an equity interest in any
Credit Party; provided, however, that the term Equity Issuance shall not include
(i) the issuance or sale of Capital Stock by any of the Subsidiaries of the
Borrower to the Borrower or any other Subsidiary of the Borrower, or by the
Borrower to the Parent, if such Capital Stock (excluding the portion of any
Foreign Subsidiary’s Capital Stock not required to be pledged hereunder) is
pledged to the Administrative Agent pursuant to the Pledge Agreement, (ii) any
Capital Stock of the Parent issued or sold in connection with any Permitted
Acquisition and constituting all or a portion of the applicable purchase price,
(iii) the issuance of any Capital Stock of the Parent, the Net Cash Proceeds of
which are used in whole to fund Permitted Acquisitions or Capital Expenditures,
(iv) the issuance of any Capital Stock of the Parent, any rights or options for
the Parent’s Capital Stock, and the underlying shares issued upon the exercise
thereof, in each case issued, sold or granted to directors and employees of the
Credit Parties pursuant to employee benefit plans, employment agreements or
other employment

 

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arrangements approved by the Board of Directors of the Parent, or (v) any
issuance of Capital Stock of the Parent in a Permitted Senior Subordinated Note
Redemption.

 

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

 

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

 

“ERISA Event” shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable:  (i) a Reportable Event, (ii) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan that results in liability under Section 4201 or 4204 of ERISA, or the
receipt by the Borrower or any ERISA Affiliate of notice from a Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated under Section 4041A
of ERISA, (iii) the distribution by the Borrower or any ERISA Affiliate under
Section 4041 of ERISA of a notice of intent to terminate any Plan or the taking
of any action to terminate any Plan, (iv) the commencement of proceedings by the
PBGC under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from any Multiemployer Plan that such action has been
taken by the PBGC with respect to such Multiemployer Plan, (v) the institution
of a proceeding by any fiduciary of any Multiemployer Plan against the Borrower
or any ERISA Affiliate to enforce Section 515 of ERISA, which is not dismissed
within thirty (30) days, (vi) the imposition upon the Borrower or any ERISA
Affiliate of any liability under Title IV of ERISA, other than for PBGC premiums
due but not delinquent under Section 4007 of ERISA, or the imposition or
threatened imposition of any Lien upon any assets of the Borrower or any ERISA
Affiliate as a result of any alleged failure to comply with the Internal Revenue
Code or ERISA in respect of any Plan, (vii) the engaging in or otherwise
becoming liable for a nonexempt Prohibited Transaction by the Borrower or any
ERISA Affiliate, or a violation of the applicable requirements of Section 404 or
405 of ERISA or the exclusive benefit rule under Section 401(a) of the Internal
Revenue Code by any fiduciary of any Plan for which the Borrower or any of its
ERISA Affiliates may be directly or indirectly liable, in each case under this
clause (vii) which has resulted or could reasonably be expected to result in
liability of the Borrower and its ERISA Affiliates in excess of $250,000,
(viii) the occurrence with respect to any Plan of any “accumulated funding
deficiency” (within the meaning of Section 302 of ERISA and Section 412 of the
Internal Revenue Code), whether or not waived, or (ix) the adoption of an
amendment to any Plan that, pursuant to Section 401(a)(29) of the Internal
Revenue Code or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if the Borrower or an ERISA
Affiliate fails to timely provide security to such Plan in accordance with the
provisions of such sections.

 

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

 

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“Excess Cash Flow” shall mean, for any fiscal year of the Parent, (a) the sum of
(i) Consolidated EBITDA for such fiscal year (determined by adding back thereto,
but without duplication, any amounts deducted in the calculation of Consolidated
EBITDA for such fiscal year that were paid, incurred or accrued in violation of
any of the provisions of this Agreement), (ii) an amount equal to any decrease
in Consolidated Working Capital from the first day to the last day of such
fiscal year and (iii) to the extent included in the calculation of Consolidated
EBITDA, the amount of any cash or noncash loss recognized and included in the
Net Cash Proceeds of an Asset Disposition which has been applied as a prepayment
of the Loans pursuant to Section 2.6(f), minus (b) the sum (without duplication)
of (i) Consolidated Interest Expense in respect of Indebtedness permitted
hereunder to the extent paid in cash during such fiscal year, (ii) aggregate
taxes of the Parent and its Subsidiaries to the extent paid in cash during such
fiscal year, (iii) except to the extent financed with proceeds from the issuance
of Indebtedness or equity securities, Capital Expenditures to the extent
permitted hereunder and to the extent paid in cash during such fiscal year,
(iv) scheduled payments of principal on the Term Loans made during such fiscal
year, (v) optional prepayments on the Term Loans made during such fiscal year,
(vi) optional prepayments on the Revolving Loans made during such fiscal year
that are accompanied by a corresponding permanent reduction in the Revolving
Credit Commitments, (vii) scheduled or mandatory principal payments on Funded
Debt (other than the Loans and Reimbursement Obligations) made during such
fiscal year to the extent permitted under this Agreement (other than in respect
of any revolving credit facility to the extent not accompanied by a
corresponding permanent reduction in the commitments thereunder), provided that
the aggregate amount of any such mandatory prepayments that may be added back
pursuant to this clause in calculating Excess Cash Flow shall not exceed
$1,500,000 for any fiscal year during the term of this Agreement, (viii) except
to the extent financed with proceeds from the issuance of Indebtedness or equity
securities, the amount of any cash consideration paid during such fiscal year
pursuant to Permitted Acquisitions, (ix) to the extent included in the
calculation of Consolidated EBITDA, the amount of any cash or noncash gain
recognized and included in the Net Cash Proceeds of an Asset Disposition which
has been applied as a prepayment of the Loans pursuant to Section 2.6(f) and
(x) an amount equal to any increase in Consolidated Working Capital from the
first day to the last day of such fiscal year.

 

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

 

“Excluded Asset Disposition” shall mean (i) any Asset Disposition permitted
under Sections 8.4(i), 8.4(ii), 8.4(iii) and 8.4(iv) and (ii) any other Asset
Disposition the Net Cash Proceeds from which do not exceed $250,000 in any
single fiscal year.

 

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

 

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

 

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Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.

 

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

 

“Fee Letter” shall mean the letter from the Administrative Agent and the
Arranger to the Borrower, dated October 8, 2003, as amended and restated on
November 18, 2003, relating to certain fees payable by the Borrower in respect
of the transactions contemplated by this Agreement, as further amended,
modified, restated or supplemented from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Fund” shall mean any Person (other than a natural person) that is or will be
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“Funded Debt” shall mean, with respect to any Person, all Indebtedness of such
Person (other than Indebtedness of the types referred to in clauses (iii) (but
only to the extent letters of credit and bankers’ acceptances are not drawn
upon), (ix) and (x) of the definition of “Indebtedness”) and all Guaranty
Obligations with respect to Funded Debt of other Persons.

 

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

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any central bank thereof, any municipal,
local, city or county government, and any entity exercising executive,
legislative, judicial, regulatory or

 

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administrative functions of or pertaining to government, and any corporation or
other entity owned or Controlled, through stock or capital ownership or
otherwise, by any of the foregoing.

 

“Guarantors” shall mean, collectively, the Parent and the Subsidiary Guarantors.

 

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

 

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

 

“Hazardous Substance” shall mean any substance or material meeting any one or
more of the following criteria:  (i) it is or contains a substance designated as
a hazardous waste, hazardous substance, hazardous material, pollutant,
contaminant or toxic substance under any Environmental Law, (ii) it is toxic,
explosive, corrosive, ignitable, infectious, radioactive, mutagenic or otherwise
hazardous to human health or the environment and are or become regulated by any
Governmental Authority, (iii) its presence may require investigation or response
under any Environmental Law, (iv) it constitutes a nuisance, trespass or health
or safety hazard to Persons or neighboring properties, or (v) it is or contains,
without limiting the foregoing, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

 

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

 

“Indebtedness” shall mean, with respect to any Person (without duplication),
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, or
upon which interest payments are customarily made, (iii) the maximum stated or
face amount of all letters of credit and bankers’ acceptances issued or created
for the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (iv) all obligations of such Person to
pay the deferred purchase price of property or services (excluding trade
payables incurred in the ordinary course of business and not more than 90 days
past due, provided that up to $500,000 of trade payables of the Borrower and its
Subsidiaries that are more than 90 days past due may be excluded from
“Indebtedness” hereunder), including any Contingent Purchase Price GAAP Amounts,
(v) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person,
(vi) all Capital Lease Obligations of such Person, (vii) all Disqualified
Capital Stock issued by such Person, with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any (for purposes hereof, the “maximum fixed
repurchase price” of any Disqualified Capital Stock that does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Capital Stock as if such Disqualified Capital Stock were purchased
on any date on which Indebtedness shall be required to be determined pursuant to
this Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value shall be
determined reasonably and in good faith by the board of directors or other
governing body of the issuer of such Disqualified Capital Stock), (viii) the
principal balance outstanding and owing by such Person under any synthetic
lease, tax retention operating lease or similar off-balance sheet financing
product, (ix) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person, (x) the net termination obligations of such
Person under any Hedge Agreements, calculated as of any date as if such
agreement or arrangement were terminated as of such date, and (xi) all
indebtedness of the types referred to in clauses (i) through (x) above (A) of
any partnership or unincorporated joint venture in which such Person is a
general partner or joint venturer to the extent such Person is liable therefor
or (B) secured by any Lien on any property or asset owned or held by such Person
regardless of whether or not the indebtedness secured thereby shall have been
incurred or assumed by such Person or is nonrecourse to the credit of such
Person, the amount thereof being equal to the value of the property or assets
subject to such Lien.

 

“Intellectual Property” shall mean (i) all inventions (whether or not patentable
and whether or not reduced to practice), all improvements thereto, and all
patents, patent applications, and patent disclosures, together with all
reissues, continuations, continuations-in-part, divisions, revisions,
extensions, and reexaminations thereof, (ii) all trademarks, service marks,
trade dress, logos, trade names, and corporate names, together with all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (iii) all copyrightable works and all copyrights
(registered and unregistered), (iv) all trade secrets and confidential
information (including, without limitation, financial, business and marketing

 

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plans and customer and supplier lists and related information), (v) all computer
software and software systems (including, without limitation, data, databases
and related documentation), (vi) all Internet web sites and domain names,
(vii) all technology, know-how, processes and other proprietary rights, and
(viii) all licenses or other agreements to or from third parties regarding any
of the foregoing.

 

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

 

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

 

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

 

“Investments” shall have the meaning given to such term in Section 8.5.

 

“Investor” shall mean J.P. Morgan DJ Partners, LLC, a Delaware limited liability
company.

 

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

 

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

 

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

 

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

 

“Letter of Credit Maturity Date” shall mean the seventh (7th) day prior to the
Revolving Credit Maturity Date.

 

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

 

“Letter of Credit Subcommitment” shall mean $10,000,000.

 

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

 

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

 

“LIBOR Rate” shall mean, with respect to each LIBOR Loan comprising part of the
same Borrowing for any Interest Period, an interest rate per annum obtained by
dividing (i) (y) the rate of interest (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two (2) Business
Days prior to the first day of such Interest Period for a period substantially
equal to such Interest Period and in an amount substantially equal to the amount
of Wachovia’s LIBOR Loan comprising part of such Borrowing, by (ii) the amount
equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such
Interest Period.

 

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

 

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

 

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

 

“Material Adverse Effect” shall mean (i) with reference to any time or period
prior to the consummation of the BGS Acquisition on the Closing Date, a material
adverse effect upon the condition (financial or otherwise), operations,
business, properties or prospects of (y) the Parent and its Subsidiaries, taken
as a whole, or (z) the BGS Business, and (ii) with reference to any time or
period from the consummation of the BGS Acquisition on the Closing Date and at
all times thereafter, a material adverse effect upon (A) the condition
(financial or otherwise), operations, business, properties or prospects of the
Parent and its Subsidiaries, taken as a whole, (B) the ability of any Material
Credit Party to perform its obligations under this Agreement or any of the other
Credit Documents to which it is a party or (C) the legality, validity or
enforceability of this Agreement or any of the other Credit Documents or the
rights and remedies of the Administrative Agent and the Lenders hereunder and
thereunder.

 

“Material Contract” shall have the meaning given to such term in Section 5.19.

 

“Material Credit Party” shall mean the Parent, the Borrower, and any Subsidiary
which constitutes at least 5% (10% for any Foreign Subsidiary) of the
consolidated revenues or net income, or the total assets, of the Borrower and
its Subsidiaries taken as a whole.

 

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

 

“Multiemployer Plan” shall mean any “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate makes,
is making or is obligated to make contributions.

 

“Net Cash Proceeds” shall mean, in the case of any Equity Issuance, Debt
Issuance, Casualty Event or Asset Disposition, the aggregate cash proceeds
received by any Credit Party in respect thereof (including, in the case of a
Casualty Event, insurance proceeds and condemnation awards), less (A) reasonable
fees and out-of-pocket expenses payable by the Parent or any of its Subsidiaries
in connection therewith, (B) taxes paid or payable as a result thereof, (C) in
the case of a Casualty Event or an Asset Disposition, the amount required to
retire Indebtedness to the extent such Indebtedness is secured by Liens on the
subject property or is otherwise subject to mandatory prepayment, (D) in the
case of an Asset Disposition, the amount of any reserves reasonably established
in accordance with GAAP in respect of warranty or indemnification obligations
relating to the assets sold, and (E) in the case of an Asset Disposition, the
amount of any liabilities directly relating to the assets sold that are not
assumed by the purchaser thereof; it being understood that the term “Net Cash
Proceeds” shall include, as and when received, any cash received upon the sale
or other disposition of any non-cash consideration received by any Credit Party
in respect of any of the foregoing events.

 

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

 

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

 

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

 

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

 

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

 

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

 

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unliquidated, secured or unsecured, and whether existing by contract, operation
of law or otherwise.

 

“OrthoLogic” shall mean OrthoLogic Corp., a Delaware corporation.

 

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

 

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

 

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

 

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

 

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

 

“Permitted Acquisition” shall mean (A) any Acquisition with respect to which all
of the following conditions are satisfied:  (i) each business acquired shall be
within the permitted lines of business described in Section 8.8, (ii) any
Capital Stock given as consideration in connection therewith shall be Capital
Stock of the Parent, (iii) in the case of an Acquisition involving the
acquisition of control of Capital Stock of any Person, immediately after giving
effect to such Acquisition such Person (or the surviving Person, if the
Acquisition is effected through a merger or consolidation) shall be a Subsidiary
of the Borrower, (iv) the Person to be acquired (or its board of directors or
equivalent governing body) has not (y) announced it will oppose such Acquisition
or (z) commenced any action which alleges that such Acquisition violates, or
will violate, any Requirement of Law, and (v) all of the conditions and
requirements of Sections 6.9 and 6.10 applicable to such Acquisition are
satisfied; or (B) any other Acquisition to which the Required Lenders (or the
Administrative Agent on their behalf) shall have given their prior written
consent (which consent may be in their sole discretion and may be given subject
to such additional terms and conditions as the Required Lenders shall establish)
and with respect to which all of the conditions and requirements set forth in
this definition and in Sections 6.9 and 6.10, and in or pursuant to any such
consent, have been satisfied or waived in writing by the Required Lenders (or
the Administrative Agent on their behalf); provided that with respect to each
Permitted Acquisition (and, in any event, in order to qualify as a “Permitted
Acquisition”):

 

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

 

(b)           so long as (i) the Total Leverage Ratio (as set forth in the
Compliance Certificate then most recently delivered to the Administrative Agent
and the Lenders) is greater than 3.0 to 1.0 (after giving pro forma effect to
such Acquisition) and (ii) the

 

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Acquisition Amount with respect thereto is greater than $5,000,000, the Person
or business acquired shall have a positive EBITDA, determined on a pro forma
basis for the period of twelve fiscal months most recently ended as if such
Permitted Acquisition had been consummated on the first day of such period and
calculated in the same manner as Consolidated EBITDA is calculated for the
Borrower and its Subsidiaries (which determination by the Borrower, together
with supporting financial statements of the acquired Person or business and a
schedule of adjustments, shall be delivered to the Lenders);

 

(c)           after giving effect to such Permitted Acquisition, the Borrower
shall be in compliance with the financial covenants contained in Article VII,
such compliance determined with regard to calculations made on a pro forma basis
for the Reference Period most recently ended, calculated in accordance with GAAP
as if each acquired Person or business had been consolidated with the Borrower
for those periods applicable to such covenants;

 

(d)           the Acquisition Amount with respect thereto (y) shall not exceed
$20,000,000, and (z) together with the aggregate of the Acquisition Amounts for
all other Permitted Acquisitions consummated during the same fiscal year of the
Borrower, shall not exceed $30,000,000 (including for this purpose, without
duplication, all Contingent Purchase Price Obligations incurred by the Borrower
or its Subsidiaries in connection with previous Permitted Acquisitions which
have been paid during such fiscal year and any Contingent Purchase Price Reserve
Amounts then outstanding); and

 

(e)           the Acquisition Amount for any Permitted Acquisition involving
assets situated outside of the United States of America or the Capital Stock of
Persons organized outside the United States of America (y) shall not exceed
$15,000,000, and (z) together with the aggregate of the Acquisition Amounts for
all such other Permitted Acquisitions consummated during the term of this
Agreement, shall not exceed $25,000,000.

 

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

 

“Permitted Senior Subordinated Note Redemption” shall mean the purchase,
redemption, retirement or other acquisition by the Borrower of the Senior
Subordinated Notes (including payment of accrued interest and any applicable
prepayment premium associated therewith) to the extent made with Net Cash
Proceeds from the issuance of Capital Stock of the Parent, provided that the
Total Leverage Ratio (as set forth in the Compliance Certificate then most
recently delivered to the Administrative Agent and the Lenders) is less than or
equal to 3.0 to 1.0 (without giving pro forma effect to such purchase,
redemption, retirement or acquisition of the Senior Subordinated Notes).

 

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

 

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

 

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

 

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

 

“Pro Forma Closing EBITDA” shall mean Consolidated EBITDA for fiscal year 2003,
calculated based on the combined annualized results, year-to-date through the
last day of the tenth fiscal month of fiscal year 2003, of (i) the BGS Business
(with the basis for such annualized calculation being the adjusted stand-alone
results of the BGS Business for such ten-month period) and (ii) the Parent and
its Subsidiaries (with the basis for such annualized calculation being their
consolidated actual results for such ten-month period without giving pro forma
effect to the BGS Acquisition).

 

“Prohibited Transaction” shall mean any transaction described in (i) Section 406
of ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a
Department of Labor prohibited transaction individual or class exemption or
(ii) Section 4975(c) of the Internal Revenue Code that is not exempt by reason
of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.

 

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

 

“Qualified Equity Issuance” shall mean an underwritten public offering of common
Capital Stock of the Parent pursuant to an effective registration statement
(other than on Form S-8) filed with the Securities and Exchange Commission under
the Securities Act, that results in gross cash proceeds to the Parent of at
least $35,000,000, but excluding any such offering to the extent the Net Cash
Proceeds therefrom are applied to fund (i) a Permitted Senior Subordinated Note
Redemption or (ii) a Permitted Acquisition, but in the case of this clause (ii),
only so long as the Total Leverage Ratio (as set forth in the Compliance
Certificate then most recently delivered to the Administrative Agent and the
Lenders) is less than or equal to 3.0 to 1.0 without giving pro forma effect to
such Permitted Acquisition.

 

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

 

“Reference Period” with respect to any date of determination, shall mean (except
as may be otherwise expressly provided herein) the period of twelve consecutive
fiscal months of the Parent immediately preceding such date or, if such date is
the last day of a fiscal quarter, the period of four consecutive fiscal quarters
ending on such date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reserve Requirement” shall mean, with respect to any Interest Period, the
reserve percentage (expressed as a decimal and rounded upwards, if necessary, to
the next higher 1/100th of 1%) in effect from time to time during such Interest
Period, as provided by the Federal Reserve Board, applied for determining the
maximum reserve requirements (including, without

 

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limitation, basic, supplemental, marginal and emergency reserves) applicable to
Wachovia under Regulation D with respect to “Eurocurrency liabilities” within
the meaning of Regulation D, or under any similar or successor regulation with
respect to Eurocurrency liabilities or Eurocurrency funding.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to
time, and any successor statute, and all rules and regulations from time to time
promulgated thereunder.

 

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

 

“Security Documents” shall mean the Security Agreement, the Pledge Agreement and
all other pledge or security agreements, Mortgages, assignments or other similar
agreements or instruments executed and delivered by any Credit Party pursuant to
Section 6.10 or 6.11 or otherwise in connection with the transactions
contemplated hereby, in each case as amended, modified, restated or supplemented
from time to time.

 

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

 

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

 

“Senior Subordinated Note Indenture” shall mean the Indenture, dated as of
June 30, 1999, among the Senior Subordinated Note Issuers, the Parent (as
successor by merger to Donjoy, L.L.C.), and the Bank of New York, as Trustee,
under which the Senior Subordinated Note Issuers issued the Senior Subordinated
Notes, as amended, modified, restated or supplemented from time to time in
accordance with the terms of this Agreement.

 

“Senior Subordinated Note Issuers” shall mean, collectively, the Borrower and DJ
Orthopedics Capital Corporation, a Delaware corporation.

 

“Senior Subordinated Notes” shall mean the 12-5/8% Senior Subordinated Notes due
2009 issued pursuant to the Senior Subordinated Note Indenture in the aggregate
principal amount of $75,000,000, as amended, modified, restated or supplemented
from time to time in accordance with the terms of this Agreement.

 

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

 

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

 

“Subsidiary” shall mean, with respect to any Person, any corporation or other
Person of which more than fifty percent (50%) of the outstanding Capital Stock
having ordinary voting power to elect a majority of the board of directors,
board of managers or other governing body of such Person, is at the time,
directly or indirectly, owned or controlled by such Person and one or

 

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more of its other Subsidiaries or a combination thereof (irrespective of
whether, at the time, securities of any other class or classes of any such
corporation or other Person shall or might have voting power by reason of the
happening of any contingency).  When used without reference to a parent entity,
the term “Subsidiary” shall be deemed to refer to a Subsidiary of the Borrower.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Syndication Agent” shall mean Wells Fargo Bank, National Association, in its
capacity as such under Section 10.12, and its successors and permitted assigns
in such capacity.

 

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

 

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

 

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

 

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Agent pursuant to Section 11.7(b) as such Lender’s “Term Loan Commitment,” as
such amount may be reduced at or prior to such time pursuant to the terms
hereof.

 

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

 

“Term Loan Maturity Date” shall mean May 15, 2009; provided that if more than
$15,000,000 in aggregate principal amount of the Senior Subordinated Notes is
outstanding on January 2, 2009, the Term Loan Maturity Date shall, on January 2,
2009, automatically be changed to January 2, 2009 (notwithstanding that one or
more amortization payments may be scheduled as coming due after such date under
Section 2.6(a)).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1.2           Accounting Terms.  Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with, GAAP applied on a basis
consistent with the most recent audited consolidated financial statements of the
Borrower delivered to the Lenders prior to the Closing Date; provided that if
the Borrower notifies the Administrative Agent that it wishes to amend any
financial covenant in Article VII to eliminate the effect of any change in GAAP
on the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend Article VII for such purpose),
then the Borrower’s compliance with such covenant shall be determined on the
basis of GAAP as in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Lenders.

 

1.3           OTHER TERMS; CONSTRUCTION.

 

(A)           UNLESS OTHERWISE SPECIFIED OR UNLESS THE CONTEXT OTHERWISE
REQUIRES, ALL REFERENCES HEREIN TO SECTIONS, ANNEXES, SCHEDULES AND EXHIBITS ARE
REFERENCES TO SECTIONS, ANNEXES, SCHEDULES AND EXHIBITS IN AND TO THIS
AGREEMENT, AND ALL TERMS DEFINED IN THIS AGREEMENT SHALL HAVE THE DEFINED
MEANINGS WHEN USED IN ANY OTHER CREDIT DOCUMENT OR ANY CERTIFICATE OR OTHER
DOCUMENT MADE OR DELIVERED PURSUANT HERETO.

 

(B)           ALL REFERENCES HEREIN TO THE LENDERS OR ANY OF THEM SHALL BE
DEEMED TO INCLUDE THE ISSUING LENDER AND THE SWINGLINE LENDER UNLESS
SPECIFICALLY PROVIDED OTHERWISE OR UNLESS THE CONTEXT OTHERWISE REQUIRES.

 

(C)           THE WORDS “HEREOF,” “HEREIN” AND “HEREUNDER” AND WORDS OF SIMILAR
IMPORT WHEN USED IN THIS AGREEMENT SHALL REFER TO THIS AGREEMENT AS A WHOLE AND
NOT TO ANY PARTICULAR PROVISION OF THIS AGREEMENT.

 

(D)           THE MEANINGS GIVEN TO TERMS DEFINED HEREIN SHALL BE EQUALLY
APPLICABLE TO BOTH THE SINGULAR AND PLURAL FORM OF SUCH TERMS.

 

ARTICLE II

 

AMOUNT AND TERMS OF THE LOANS

2.1           COMMITMENTS.

 

(A)           EACH TERM LENDER SEVERALLY AGREES, SUBJECT TO AND ON THE TERMS AND
CONDITIONS OF THIS AGREEMENT, TO MAKE A LOAN (EACH, A “TERM LOAN,” AND
COLLECTIVELY, THE “TERM LOANS”) TO THE BORROWER ON THE CLOSING DATE IN A
PRINCIPAL AMOUNT NOT TO EXCEED ITS TERM LOAN COMMITMENT.  NO TERM LOANS SHALL BE
MADE AT ANY TIME AFTER THE CLOSING DATE.  TO THE EXTENT REPAID, TERM LOANS MAY
NOT BE REBORROWED.

 

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(B)           EACH REVOLVING CREDIT LENDER SEVERALLY AGREES, SUBJECT TO AND ON
THE TERMS AND CONDITIONS OF THIS AGREEMENT, TO MAKE LOANS (EACH, A “REVOLVING
LOAN,” AND COLLECTIVELY, THE “REVOLVING LOANS”) TO THE BORROWER, FROM TIME TO
TIME ON ANY BUSINESS DAY DURING THE PERIOD FROM AND INCLUDING THE CLOSING DATE
TO BUT NOT INCLUDING THE REVOLVING CREDIT TERMINATION DATE, PROVIDED THAT NO
BORROWING OF REVOLVING LOANS SHALL BE MADE IF, IMMEDIATELY AFTER GIVING EFFECT
THERETO (AND TO ANY CONCURRENT REPAYMENT OF SWINGLINE LOANS WITH PROCEEDS OF
REVOLVING LOANS MADE PURSUANT TO SUCH BORROWING), (Y) THE REVOLVING CREDIT
EXPOSURE OF ANY REVOLVING CREDIT LENDER WOULD EXCEED ITS REVOLVING CREDIT
COMMITMENT AT SUCH TIME OR (Z) THE AGGREGATE REVOLVING CREDIT EXPOSURE WOULD
EXCEED THE AGGREGATE REVOLVING CREDIT COMMITMENTS AT SUCH TIME.  SUBJECT TO AND
ON THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE BORROWER MAY BORROW, REPAY
AND REBORROW REVOLVING LOANS.

 

(C)           THE SWINGLINE LENDER AGREES, SUBJECT TO AND ON THE TERMS AND
CONDITIONS OF THIS AGREEMENT, TO MAKE LOANS (EACH, A “SWINGLINE LOAN,” AND
COLLECTIVELY, THE “SWINGLINE LOANS”) TO THE BORROWER, FROM TIME TO TIME ON ANY
BUSINESS DAY DURING THE PERIOD FROM THE CLOSING DATE TO BUT NOT INCLUDING THE
SWINGLINE MATURITY DATE (OR, IF EARLIER, THE REVOLVING CREDIT TERMINATION DATE),
IN AN AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING NOT EXCEEDING THE
SWINGLINE COMMITMENT.  SWINGLINE LOANS MAY BE MADE EVEN IF THE AGGREGATE
PRINCIPAL AMOUNT OF SWINGLINE LOANS OUTSTANDING AT ANY TIME, WHEN ADDED TO THE
AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING LOANS MADE BY THE SWINGLINE LENDER
IN ITS CAPACITY AS A REVOLVING CREDIT LENDER OUTSTANDING AT SUCH TIME AND ITS
LETTER OF CREDIT EXPOSURE AT SUCH TIME, WOULD EXCEED THE SWINGLINE LENDER’S OWN
REVOLVING CREDIT COMMITMENT AT SUCH TIME, BUT PROVIDED THAT NO BORROWING OF
SWINGLINE LOANS SHALL BE MADE IF, IMMEDIATELY AFTER GIVING EFFECT THERETO,
(Y) THE REVOLVING CREDIT EXPOSURE OF ANY REVOLVING CREDIT LENDER WOULD EXCEED
ITS REVOLVING CREDIT COMMITMENT AT SUCH TIME OR (Z) THE AGGREGATE REVOLVING
CREDIT EXPOSURE WOULD EXCEED THE AGGREGATE REVOLVING CREDIT COMMITMENTS AT SUCH
TIME.  SUBJECT TO AND ON THE TERMS AND CONDITIONS OF THIS AGREEMENT, THE
BORROWER MAY BORROW, REPAY (INCLUDING BY MEANS OF A BORROWING OF REVOLVING LOANS
PURSUANT TO SECTION 2.2(E)) AND REBORROW SWINGLINE LOANS.

 

2.2           BORROWINGS.

 

(A)           THE TERM LOANS AND REVOLVING LOANS (EACH, TOGETHER WITH THE
SWINGLINE LOANS, A “CLASS” OF LOAN) SHALL, AT THE OPTION OF THE BORROWER AND
SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, BE EITHER BASE RATE LOANS
OR LIBOR LOANS (EACH, A “TYPE” OF LOAN), PROVIDED THAT (I) ALL LOANS COMPRISING
THE SAME BORROWING SHALL, UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN, BE OF
THE SAME TYPE, AND (II) NO LIBOR LOANS MAY BE BORROWED AT ANY TIME PRIOR TO THE
THIRD (3RD) BUSINESS DAY AFTER THE CLOSING DATE.  THE SWINGLINE LOANS SHALL BE
MADE AND MAINTAINED AS BASE RATE LOANS AT ALL TIMES.

 

(B)           IN ORDER TO MAKE A BORROWING (OTHER THAN (X) BORROWINGS OF
SWINGLINE LOANS, WHICH SHALL BE MADE PURSUANT TO SECTION 2.2(D), (Y) BORROWINGS
FOR THE PURPOSE OF REPAYING REFUNDED SWINGLINE LOANS, WHICH SHALL BE MADE
PURSUANT TO SECTION 2.2(E), AND (Z) BORROWINGS INVOLVING CONTINUATIONS OR
CONVERSIONS OF OUTSTANDING LOANS, WHICH SHALL BE MADE PURSUANT TO SECTION 2.11),
THE BORROWER WILL GIVE THE ADMINISTRATIVE AGENT WRITTEN NOTICE NOT LATER THAN
11:00 A.M., CHARLOTTE TIME, THREE (3) BUSINESS DAYS PRIOR TO EACH BORROWING TO
BE COMPRISED OF LIBOR LOANS AND ONE (1) BUSINESS DAY PRIOR TO EACH BORROWING TO
BE COMPRISED OF BASE RATE LOANS; PROVIDED, HOWEVER, THAT REQUESTS FOR THE
BORROWING OF THE TERM LOANS AND ANY REVOLVING

 

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Loans to be made on the Closing Date may, at the discretion of the
Administrative Agent, be given with less advance notice than as specified
hereinabove.  Each such notice (each, a “Notice of Borrowing”) shall be
irrevocable, shall be given in the form of Exhibit B-1 and shall specify (1) the
aggregate principal amount, Class and initial Type of the Loans to be made
pursuant to such Borrowing, (2) in the case of a Borrowing of LIBOR Loans, the
initial Interest Period to be applicable thereto, and (3) the requested
Borrowing Date, which shall be a Business Day.  Upon its receipt of a Notice of
Borrowing, the Administrative Agent will promptly notify each applicable Lender
of the proposed Borrowing.  Notwithstanding anything to the contrary contained
herein:

 

(I)            THE AGGREGATE PRINCIPAL AMOUNT OF THE BORROWING OF TERM LOANS
SHALL BE IN THE AMOUNT OF THE AGGREGATE TERM LOAN COMMITMENTS;

 

(II)           THE AGGREGATE PRINCIPAL AMOUNT OF EACH BORROWING COMPRISED OF
BASE RATE LOANS SHALL NOT BE LESS THAN $500,000 OR, IF GREATER, AN INTEGRAL
MULTIPLE OF $100,000 IN EXCESS THEREOF (OR, IN THE CASE OF A BORROWING OF
REVOLVING LOANS, IF LESS, IN THE AMOUNT OF THE AGGREGATE REVOLVING CREDIT
COMMITMENTS LESS THE AGGREGATE REVOLVING CREDIT EXPOSURE), AND THE AGGREGATE
PRINCIPAL AMOUNT OF EACH BORROWING COMPRISED OF LIBOR LOANS SHALL NOT BE LESS
THAN $1,000,000 OR, IF GREATER, AN INTEGRAL MULTIPLE OF $500,000 IN EXCESS
THEREOF;

 

(III)          IF THE BORROWER SHALL HAVE FAILED TO DESIGNATE THE TYPE OF LOANS
COMPRISING A BORROWING, THE BORROWER SHALL BE DEEMED TO HAVE REQUESTED A
BORROWING COMPRISED OF BASE RATE LOANS; AND

 

(IV)          IF THE BORROWER SHALL HAVE FAILED TO SELECT THE DURATION OF THE
INTEREST PERIOD TO BE APPLICABLE TO ANY BORROWING OF LIBOR LOANS, THEN THE
BORROWER SHALL BE DEEMED TO HAVE SELECTED AN INTEREST PERIOD WITH A DURATION OF
ONE MONTH.

 

(C)           NOT LATER THAN 1:00 P.M., CHARLOTTE TIME, ON THE REQUESTED
BORROWING DATE (WHICH SHALL BE THE CLOSING DATE, IN THE CASE OF THE TERM LOANS),
EACH APPLICABLE LENDER WILL MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT AT THE
PAYMENT OFFICE AN AMOUNT, IN DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, EQUAL
TO THE AMOUNT OF THE LOAN OR LOANS TO BE MADE BY SUCH LENDER.  TO THE EXTENT
SUCH LENDERS HAVE MADE SUCH AMOUNTS AVAILABLE TO THE ADMINISTRATIVE AGENT AS
PROVIDED HEREINABOVE, THE ADMINISTRATIVE AGENT WILL MAKE THE AGGREGATE OF SUCH
AMOUNTS AVAILABLE TO THE BORROWER IN ACCORDANCE WITH SECTION 2.3(A) AND IN LIKE
FUNDS AS RECEIVED BY THE ADMINISTRATIVE AGENT.

 

(D)           IN ORDER TO MAKE A BORROWING OF A SWINGLINE LOAN (OTHER THAN
BORROWINGS PURSUANT TO ANY LOAN SWEEP PRODUCT OR OTHER CASH MANAGEMENT
ARRANGEMENT IN EFFECT BETWEEN THE BORROWER AND THE SWINGLINE LENDER, WHICH SHALL
BE EFFECTED AS PROVIDED THEREUNDER), THE BORROWER WILL GIVE THE ADMINISTRATIVE
AGENT (AND THE SWINGLINE LENDER, IF THE SWINGLINE LENDER IS NOT ALSO THE
ADMINISTRATIVE AGENT) WRITTEN NOTICE NOT LATER THAN 11:00 A.M., CHARLOTTE TIME,
ON THE DATE OF SUCH BORROWING.  EACH SUCH NOTICE (EACH, A “NOTICE OF SWINGLINE
BORROWING”) SHALL BE GIVEN IN THE FORM OF EXHIBIT B-2, SHALL BE IRREVOCABLE AND
SHALL SPECIFY (I) THE PRINCIPAL AMOUNT OF THE SWINGLINE LOAN TO BE MADE PURSUANT
TO SUCH BORROWING (WHICH SHALL NOT BE LESS THAN $200,000 AND, IF GREATER, SHALL
BE IN AN INTEGRAL MULTIPLE OF $100,000 IN EXCESS THEREOF (OR, IF

 

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less, in the amount of the Unutilized Swingline Commitment)) and (ii) the
requested Borrowing Date, which shall be a Business Day.  Not later than 1:00
p.m., Charlotte time, on the requested Borrowing Date, the Swingline Lender will
make available to the Administrative Agent at the Payment Office an amount, in
Dollars and in immediately available funds, equal to the amount of the requested
Swingline Loan.  To the extent the Swingline Lender has made such amount
available to the Administrative Agent as provided hereinabove, the
Administrative Agent will make such amount available to the Borrower in
accordance with Section 2.3(a) and in like funds as received by the
Administrative Agent.

 

(E)           WITH RESPECT TO ANY OUTSTANDING SWINGLINE LOANS, THE SWINGLINE
LENDER MAY AT ANY TIME (WHETHER OR NOT AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING) IN ITS SOLE AND ABSOLUTE DISCRETION, AND IS HEREBY AUTHORIZED AND
EMPOWERED BY THE BORROWER TO, CAUSE A BORROWING OF REVOLVING LOANS TO BE MADE
FOR THE PURPOSE OF REPAYING SUCH SWINGLINE LOANS BY DELIVERING TO THE
ADMINISTRATIVE AGENT (IF THE ADMINISTRATIVE AGENT IS NOT ALSO THE SWINGLINE
LENDER) AND EACH OTHER REVOLVING CREDIT LENDER (ON BEHALF OF, AND WITH A COPY
TO, THE BORROWER), NOT LATER THAN 11:00 A.M., CHARLOTTE TIME, ONE (1) BUSINESS
DAY PRIOR TO THE PROPOSED BORROWING DATE THEREFOR, A NOTICE (WHICH SHALL BE
DEEMED TO BE A NOTICE OF BORROWING GIVEN BY THE BORROWER) REQUESTING THE
REVOLVING CREDIT LENDERS TO MAKE REVOLVING LOANS (WHICH SHALL BE MADE INITIALLY
AS BASE RATE LOANS) ON SUCH BORROWING DATE IN AN AGGREGATE AMOUNT EQUAL TO THE
AMOUNT OF SUCH SWINGLINE LOANS (THE “REFUNDED SWINGLINE LOANS”) OUTSTANDING ON
THE DATE SUCH NOTICE IS GIVEN THAT THE SWINGLINE LENDER REQUESTS TO BE REPAID. 
NOT LATER THAN 1:00 P.M., CHARLOTTE TIME, ON THE REQUESTED BORROWING DATE, EACH
REVOLVING CREDIT LENDER (OTHER THAN THE SWINGLINE LENDER) WILL MAKE AVAILABLE TO
THE ADMINISTRATIVE AGENT AT THE PAYMENT OFFICE AN AMOUNT, IN DOLLARS AND IN
IMMEDIATELY AVAILABLE FUNDS, EQUAL TO THE AMOUNT OF THE REVOLVING LOAN TO BE
MADE BY SUCH LENDER.  TO THE EXTENT THE REVOLVING CREDIT LENDERS HAVE MADE SUCH
AMOUNTS AVAILABLE TO THE ADMINISTRATIVE AGENT AS PROVIDED HEREINABOVE, THE
ADMINISTRATIVE AGENT WILL MAKE THE AGGREGATE OF SUCH AMOUNTS AVAILABLE TO THE
SWINGLINE LENDER IN LIKE FUNDS AS RECEIVED BY THE ADMINISTRATIVE AGENT, WHICH
SHALL APPLY SUCH AMOUNTS IN REPAYMENT OF THE REFUNDED SWINGLINE LOANS. 
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, ON THE RELEVANT
BORROWING DATE, THE REFUNDED SWINGLINE LOANS (INCLUDING THE SWINGLINE LENDER’S
RATABLE SHARE THEREOF, IN ITS CAPACITY AS A REVOLVING CREDIT LENDER) SHALL BE
DEEMED TO BE REPAID WITH THE PROCEEDS OF THE REVOLVING LOANS MADE AS PROVIDED
ABOVE (INCLUDING A REVOLVING LOAN DEEMED TO HAVE BEEN MADE BY THE SWINGLINE
LENDER), AND SUCH REFUNDED SWINGLINE LOANS DEEMED TO BE SO REPAID SHALL NO
LONGER BE OUTSTANDING AS SWINGLINE LOANS BUT SHALL BE OUTSTANDING AS REVOLVING
LOANS.  IF ANY PORTION OF ANY SUCH AMOUNT REPAID (OR DEEMED TO BE REPAID) TO THE
SWINGLINE LENDER SHALL BE RECOVERED BY OR ON BEHALF OF THE BORROWER FROM THE
SWINGLINE LENDER IN ANY BANKRUPTCY, INSOLVENCY OR SIMILAR PROCEEDING OR
OTHERWISE, THE LOSS OF THE AMOUNT SO RECOVERED SHALL BE SHARED RATABLY AMONG ALL
THE REVOLVING CREDIT LENDERS IN THE MANNER CONTEMPLATED BY SECTION 2.15(B).

 

(F)            IF, AS A RESULT OF ANY BANKRUPTCY, INSOLVENCY OR SIMILAR
PROCEEDING WITH RESPECT TO THE BORROWER, REVOLVING LOANS ARE NOT MADE PURSUANT
TO SECTION 2.2(E) IN AN AMOUNT SUFFICIENT TO REPAY ANY AMOUNTS OWED TO THE
SWINGLINE LENDER IN RESPECT OF ANY OUTSTANDING SWINGLINE LOANS, OR IF THE
SWINGLINE LENDER IS OTHERWISE PRECLUDED FOR ANY REASON FROM GIVING A NOTICE ON
BEHALF OF THE BORROWER AS PROVIDED FOR HEREINABOVE, THE SWINGLINE LENDER SHALL
BE DEEMED TO HAVE SOLD WITHOUT RECOURSE, REPRESENTATION OR WARRANTY (EXCEPT FOR
THE ABSENCE OF LIENS THEREON CREATED, INCURRED OR SUFFERED TO EXIST BY, THROUGH
OR UNDER THE SWINGLINE LENDER), AND EACH

 

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Revolving Credit Lender shall be deemed to have purchased and hereby agrees to
purchase, a participation in such outstanding Swingline Loans in an amount equal
to its ratable share (based on the proportion that its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitments at such time) of
the unpaid amount thereof together with accrued interest thereon.  Upon one (1)
Business Day’s prior notice from the Swingline Lender, each Revolving Credit
Lender (other than the Swingline Lender) will make available to the
Administrative Agent at the Payment Office an amount, in Dollars and in
immediately available funds, equal to its respective participation.  To the
extent the Revolving Credit Lenders have made such amounts available to the
Administrative Agent as provided hereinabove, the Administrative Agent will make
the aggregate of such amounts available to the Swingline Lender in like funds as
received by the Administrative Agent.  In the event any such Revolving Credit
Lender fails to make available to the Administrative Agent the amount of such
Lender’s participation as provided in this Section 2.2(f), the Swingline Lender
shall be entitled to recover such amount on demand from such Lender, together
with interest thereon for each day from the date such amount is required to be
made available for the account of the Swingline Lender until the date such
amount is made available to the Swingline Lender at the Federal Funds Rate for
the first three (3) Business Days and thereafter at the Adjusted Base Rate
applicable to Revolving Loans.  Promptly following its receipt of any payment by
or on behalf of the Borrower in respect of a Swingline Loan, the Swingline
Lender will pay to each Revolving Credit Lender that has acquired a
participation therein such Lender’s ratable share of such payment.

 

(G)           NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY,
THE OBLIGATION OF EACH REVOLVING CREDIT LENDER (OTHER THAN THE SWINGLINE LENDER)
TO MAKE REVOLVING LOANS FOR THE PURPOSE OF REPAYING ANY REFUNDED SWINGLINE LOANS
PURSUANT TO SECTION 2.2(E) AND EACH SUCH LENDER’S OBLIGATION TO PURCHASE A
PARTICIPATION IN ANY UNPAID SWINGLINE LOANS PURSUANT TO SECTION 2.2(F) SHALL BE
ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY ANY CIRCUMSTANCE OR
EVENT WHATSOEVER, INCLUDING, WITHOUT LIMITATION, (I) ANY SET-OFF, COUNTERCLAIM,
RECOUPMENT, DEFENSE OR OTHER RIGHT THAT SUCH LENDER MAY HAVE AGAINST THE
SWINGLINE LENDER, THE ADMINISTRATIVE AGENT, THE BORROWER OR ANY OTHER PERSON FOR
ANY REASON WHATSOEVER, (II) THE OCCURRENCE OR CONTINUANCE OF ANY DEFAULT OR
EVENT OF DEFAULT, (III) THE FAILURE OF THE AMOUNT OF SUCH BORROWING OF REVOLVING
LOANS TO MEET THE MINIMUM BORROWING AMOUNT SPECIFIED IN SECTION 2.2(B), OR
(IV) THE FAILURE OF ANY CONDITIONS SET FORTH IN SECTION 4.2 OR ELSEWHERE HEREIN
TO BE SATISFIED.

 

2.3           DISBURSEMENTS; FUNDING RELIANCE; DOMICILE OF LOANS.

 

(A)           THE BORROWER HEREBY AUTHORIZES THE ADMINISTRATIVE AGENT TO
DISBURSE THE PROCEEDS OF EACH BORROWING IN ACCORDANCE WITH THE TERMS OF ANY
WRITTEN INSTRUCTIONS FROM ANY AUTHORIZED OFFICER OF THE BORROWER, PROVIDED THAT
THE ADMINISTRATIVE AGENT SHALL NOT BE OBLIGATED UNDER ANY CIRCUMSTANCES TO
FORWARD AMOUNTS TO ANY ACCOUNT NOT LISTED IN AN ACCOUNT DESIGNATION LETTER.  THE
BORROWER MAY AT ANY TIME DELIVER TO THE ADMINISTRATIVE AGENT AN ACCOUNT
DESIGNATION LETTER LISTING ANY ADDITIONAL ACCOUNTS OR DELETING ANY ACCOUNTS
LISTED IN A PREVIOUS ACCOUNT DESIGNATION LETTER.

 

(B)           UNLESS THE ADMINISTRATIVE AGENT HAS RECEIVED, PRIOR TO 1:00 P.M.,
CHARLOTTE TIME, ON THE RELEVANT BORROWING DATE, WRITTEN NOTICE FROM A LENDER
THAT SUCH LENDER WILL NOT MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH
LENDER’S RATABLE PORTION, IF ANY, OF THE RELEVANT

 

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Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent in immediately available funds on
such Borrowing Date in accordance with the applicable provisions of Section 2.2,
and the Administrative Agent may, in reliance upon such assumption, but shall
not be obligated to, make a corresponding amount available to the Borrower on
such Borrowing Date.  If and to the extent that such Lender shall not have made
such portion available to the Administrative Agent, and the Administrative Agent
shall have made such corresponding amount available to the Borrower, such
Lender, on the one hand, and the Borrower, on the other, severally agree to pay
to the Administrative Agent forthwith on demand such corresponding amount,
together with interest thereon for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, (i) in the case of such Lender, at the Federal Funds Rate,
and (ii) in the case of the Borrower, at the rate of interest applicable at such
time to the Type and Class of Loans comprising such Borrowing, as determined
under the provisions of Section 2.8.  If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement. 
The failure of any Lender to make any Loan required to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan as part of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender as part of any Borrowing.

 

(C)           EACH LENDER MAY, AT ITS OPTION, MAKE AND MAINTAIN ANY LOAN AT, TO
OR FOR THE ACCOUNT OF ANY OF ITS LENDING OFFICES, PROVIDED THAT ANY EXERCISE OF
SUCH OPTION SHALL NOT AFFECT THE OBLIGATION OF THE BORROWER TO REPAY SUCH LOAN
TO OR FOR THE ACCOUNT OF SUCH LENDER IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT.

 

2.4           EVIDENCE OF DEBT; NOTES.

 

(A)           EACH LENDER SHALL MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE
AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF THE BORROWER TO THE
APPLICABLE LENDING OFFICE OF SUCH LENDER RESULTING FROM EACH LOAN MADE BY SUCH
LENDING OFFICE OF SUCH LENDER FROM TIME TO TIME, INCLUDING THE AMOUNTS OF
PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDING OFFICE OF SUCH LENDER
FROM TIME TO TIME UNDER THIS AGREEMENT.

 

(B)           THE ADMINISTRATIVE AGENT SHALL MAINTAIN THE REGISTER PURSUANT TO
SECTION 11.7(B), AND A SUBACCOUNT FOR EACH LENDER, IN WHICH REGISTER AND
SUBACCOUNTS (TAKEN TOGETHER) SHALL BE RECORDED (I) THE AMOUNT OF EACH SUCH LOAN,
THE CLASS AND TYPE OF EACH SUCH LOAN AND THE INTEREST PERIOD APPLICABLE THERETO,
(II) THE AMOUNT OF ANY PRINCIPAL OR INTEREST DUE AND PAYABLE OR TO BECOME DUE
AND PAYABLE FROM THE BORROWER TO EACH LENDER HEREUNDER IN RESPECT OF EACH SUCH
LOAN AND (III) THE AMOUNT OF ANY SUM RECEIVED BY THE ADMINISTRATIVE AGENT
HEREUNDER FROM THE BORROWER IN RESPECT OF EACH SUCH LOAN AND EACH LENDER’S SHARE
THEREOF.

 

(C)           THE ENTRIES MADE IN THE ACCOUNTS, REGISTER AND SUBACCOUNTS
MAINTAINED PURSUANT TO SECTION 2.4(B) (AND, IF CONSISTENT WITH THE ENTRIES OF
THE ADMINISTRATIVE AGENT, SECTION 2.4(A)) SHALL, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BE PRIMA FACIE EVIDENCE OF THE EXISTENCE AND AMOUNTS OF THE
OBLIGATIONS OF THE BORROWER THEREIN RECORDED; PROVIDED, HOWEVER, THAT THE
FAILURE OF ANY LENDER OR THE ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNT, SUCH
REGISTER OR SUCH SUBACCOUNT, AS APPLICABLE, OR ANY ERROR THEREIN, SHALL NOT IN
ANY MANNER AFFECT THE OBLIGATION OF

 

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the Borrower to repay (with applicable interest) the Loans made to the Borrower
by such Lender in accordance with the terms of this Agreement.

 

(D)           THE LOANS OF EACH CLASS MADE BY EACH LENDER SHALL, IF REQUESTED BY
THE APPLICABLE LENDER (WHICH REQUEST SHALL BE MADE TO THE ADMINISTRATIVE AGENT),
BE EVIDENCED (I) IN THE CASE OF TERM LOANS, BY A TERM NOTE APPROPRIATELY
COMPLETED IN SUBSTANTIALLY THE FORM OF EXHIBIT A-1, (II) IN THE CASE OF
REVOLVING LOANS, BY A REVOLVING NOTE APPROPRIATELY COMPLETED IN SUBSTANTIALLY
THE FORM OF EXHIBIT A-2, AND (III) IN THE CASE OF THE SWINGLINE LOANS, BY A
SWINGLINE NOTE APPROPRIATELY COMPLETED IN SUBSTANTIALLY THE FORM OF EXHIBIT A-3,
IN EACH CASE EXECUTED BY THE BORROWER AND PAYABLE TO THE ORDER OF SUCH LENDER. 
EACH NOTE SHALL BE ENTITLED TO ALL OF THE BENEFITS OF THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS AND SHALL BE SUBJECT TO THE PROVISIONS HEREOF AND
THEREOF.

 

2.5           TERMINATION AND REDUCTION OF COMMITMENTS AND SWINGLINE COMMITMENT.

 

(A)           THE TERM LOAN COMMITMENTS SHALL BE AUTOMATICALLY AND PERMANENTLY
TERMINATED CONCURRENTLY WITH THE MAKING OF THE TERM LOANS ON THE CLOSING DATE
(OR ON DECEMBER 15, 2003, IF THE CLOSING DATE SHALL NOT HAVE OCCURRED ON OR
PRIOR TO SUCH DATE).  THE REVOLVING CREDIT COMMITMENTS SHALL BE AUTOMATICALLY
AND PERMANENTLY TERMINATED ON THE REVOLVING CREDIT TERMINATION DATE (OR ON
DECEMBER 15, 2003, IF THE CLOSING DATE SHALL NOT HAVE OCCURRED ON OR PRIOR TO
SUCH DATE), UNLESS SOONER TERMINATED PURSUANT TO ANY OTHER PROVISION OF THIS
SECTION 2.5 OR SECTION 9.2.  THE SWINGLINE COMMITMENT SHALL BE AUTOMATICALLY AND
PERMANENTLY TERMINATED ON THE SWINGLINE MATURITY DATE (OR ON DECEMBER 15, 2003,
IF THE CLOSING DATE SHALL NOT HAVE OCCURRED ON OR PRIOR TO SUCH DATE), UNLESS
SOONER TERMINATED PURSUANT TO ANY OTHER PROVISION OF THIS SECTION 2.5 OR
SECTION 9.2.

 

(B)           AT ANY TIME AND FROM TIME TO TIME AFTER THE DATE HEREOF, UPON NOT
LESS THAN THREE (3) BUSINESS DAYS’ PRIOR WRITTEN NOTICE TO THE ADMINISTRATIVE
AGENT (AND IN THE CASE OF A TERMINATION OR REDUCTION OF THE UNUTILIZED SWINGLINE
COMMITMENT, THE SWINGLINE LENDER), THE BORROWER MAY TERMINATE IN WHOLE OR REDUCE
IN PART THE AGGREGATE UNUTILIZED REVOLVING CREDIT COMMITMENTS OR THE UNUTILIZED
SWINGLINE COMMITMENT, PROVIDED THAT ANY SUCH PARTIAL REDUCTION SHALL BE IN AN
AGGREGATE AMOUNT OF NOT LESS THAN $1,000,000 ($200,000 IN THE CASE OF THE
UNUTILIZED SWINGLINE COMMITMENT) OR, IF GREATER, AN INTEGRAL MULTIPLE OF
$500,000 IN EXCESS THEREOF ($100,000 IN THE CASE OF THE UNUTILIZED SWINGLINE
COMMITMENT), AND PROVIDED FURTHER THAT A NOTICE OF TERMINATION OF THE REVOLVING
CREDIT COMMITMENTS DELIVERED BY THE BORROWER MAY STATE THAT SUCH NOTICE IS
CONDITIONED UPON THE EFFECTIVENESS OF OTHER CREDIT FACILITIES, A PUBLIC OFFERING
OF CAPITAL STOCK OF THE PARENT OR A SALE OF ALL OR SUBSTANTIALLY ALL THE ASSETS
OR CAPITAL STOCK OF THE BORROWER OR THE PARENT (WHETHER BY MERGER OR OTHERWISE),
IN WHICH CASE SUCH NOTICE MAY BE REVOKED BY THE BORROWER (BY NOTICE TO THE
ADMINISTRATIVE AGENT ON OR PRIOR TO THE SPECIFIED EFFECTIVE DATE) IF SUCH
CONDITION IS NOT SATISFIED.  THE AMOUNT OF ANY TERMINATION OR REDUCTION MADE
UNDER THIS SECTION 2.5(B) MAY NOT THEREAFTER BE REINSTATED.

 

(C)           EACH REDUCTION OF THE REVOLVING CREDIT COMMITMENTS PURSUANT TO
THIS SECTION SHALL BE APPLIED RATABLY AMONG THE REVOLVING CREDIT LENDERS
ACCORDING TO THEIR RESPECTIVE REVOLVING CREDIT COMMITMENTS.  NOTWITHSTANDING ANY
PROVISION OF THIS AGREEMENT TO THE CONTRARY, ANY REDUCTION OF THE REVOLVING
CREDIT COMMITMENTS PURSUANT TO THIS SECTION 2.5 THAT HAS THE EFFECT OF REDUCING
THE AGGREGATE REVOLVING CREDIT COMMITMENTS TO AN AMOUNT LESS THAN

 

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

 

2.6           MANDATORY PAYMENTS AND PREPAYMENTS.

 

(A)           EXCEPT TO THE EXTENT DUE OR PAID SOONER PURSUANT TO THE PROVISIONS
OF THIS AGREEMENT, THE BORROWER WILL REPAY THE AGGREGATE OUTSTANDING PRINCIPAL
OF THE TERM LOANS ON THE DATES AND IN THE AMOUNTS SET FORTH BELOW:

 

Date

 

Payment Amount

 

March 31, 2004

 

$

1,250,000

 

June 30, 2004

 

$

1,250,000

 

September 30, 2004

 

$

1,250,000

 

December 31, 2004

 

$

1,250,000

 

March 31, 2005

 

$

1,250,000

 

June 30, 2005

 

$

1,250,000

 

September 30, 2005

 

$

1,250,000

 

December 31, 2005

 

$

1,250,000

 

March 31, 2006

 

$

1,250,000

 

June 30, 2006

 

$

1,250,000

 

September 30, 2006

 

$

1,250,000

 

December 31, 2006

 

$

1,250,000

 

March 31, 2007

 

$

1,250,000

 

June 30, 2007

 

$

1,250,000

 

September 30, 2007

 

$

1,250,000

 

December 31, 2007

 

$

1,250,000

 

March 31, 2008

 

$

1,250,000

 

June 30, 2008

 

$

1,250,000

 

September 30, 2008

 

$

1,250,000

 

December 31, 2008

 

$

1,250,000

 

March 31, 2009

 

$

37,500,000

 

Term Loan Maturity Date

 

$

37,500,000

 

 

(B)           EXCEPT TO THE EXTENT DUE OR PAID SOONER PURSUANT TO THE PROVISIONS
OF THIS AGREEMENT, (I) THE AGGREGATE OUTSTANDING PRINCIPAL OF THE TERM LOANS
SHALL BE DUE AND PAYABLE IN FULL ON THE TERM LOAN MATURITY DATE (AS SUCH DATE
MAY BE CHANGED IN ACCORDANCE WITH THE DEFINITION OF “TERM LOAN MATURITY DATE”),
(II) THE AGGREGATE OUTSTANDING PRINCIPAL OF THE REVOLVING LOANS SHALL BE DUE AND
PAYABLE IN FULL ON THE REVOLVING CREDIT MATURITY DATE, AND (III) THE AGGREGATE
OUTSTANDING PRINCIPAL OF THE SWINGLINE LOANS SHALL BE DUE AND PAYABLE IN FULL ON
THE SWINGLINE MATURITY DATE.

 

(C)           IN THE EVENT THAT, AT ANY TIME, THE AGGREGATE REVOLVING CREDIT
EXPOSURE (EXCLUDING THE AGGREGATE AMOUNT OF ANY SWINGLINE LOANS TO BE REPAID
WITH PROCEEDS OF

 

35

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Revolving Loans made on the date of determination) shall exceed the aggregate
Revolving Credit Commitments at such time (after giving effect to any concurrent
termination or reduction thereof), the Borrower will immediately prepay the
outstanding principal amount of the Swingline Loans and, to the extent of any
excess remaining after prepayment in full of outstanding Swingline Loans, the
outstanding principal amount of the Revolving Loans in the amount of such
excess; provided that, to the extent such excess amount is greater than the
aggregate principal amount of Swingline Loans and Revolving Loans outstanding
immediately prior to the application of such prepayment, the amount so prepaid
shall be retained by the Administrative Agent and held in the Cash Collateral
Account as cover for Letter of Credit Exposure, as more particularly described
in Section 3.8, and thereupon such cash shall be deemed to reduce the aggregate
Letter of Credit Exposure by an equivalent amount.

 

(D)           PROMPTLY UPON (AND IN ANY EVENT NOT LATER THAN ONE (1) BUSINESS
DAY AFTER) ITS RECEIPT THEREOF, THE BORROWER WILL PREPAY THE OUTSTANDING
PRINCIPAL AMOUNT OF THE LOANS IN AN AMOUNT EQUAL TO 100% OF THE NET CASH
PROCEEDS FROM ANY EQUITY ISSUANCE (OTHER THAN A QUALIFIED EQUITY ISSUANCE), 100%
OF THE NET CASH PROCEEDS FROM ANY DEBT ISSUANCE AND 50% OF THE NET CASH PROCEEDS
FROM ANY QUALIFIED EQUITY ISSUANCE, AND WILL DELIVER TO THE ADMINISTRATIVE
AGENT, CONCURRENTLY WITH SUCH PREPAYMENT, A CERTIFICATE SIGNED BY A FINANCIAL
OFFICER OF THE BORROWER IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE
AGENT AND SETTING FORTH THE CALCULATION OF SUCH NET CASH PROCEEDS.

 

(E)           NOT LATER THAN 180 DAYS AFTER ITS RECEIPT OF ANY PROCEEDS OF
INSURANCE, CONDEMNATION AWARD OR OTHER COMPENSATION IN RESPECT OF ANY CASUALTY
EVENT (OR, IF EARLIER, UPON ITS DETERMINATION NOT TO REPAIR OR REPLACE ANY
PROPERTY SUBJECT TO SUCH CASUALTY EVENT OR TO ACQUIRE ASSETS USED OR USEABLE IN
THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES), THE BORROWER WILL PREPAY THE
OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS IN AN AMOUNT EQUAL TO 100% OF THE NET
CASH PROCEEDS FROM SUCH CASUALTY EVENT (LESS ANY AMOUNTS THERETOFORE APPLIED (OR
CONTRACTUALLY COMMITTED TO BE APPLIED) TO THE REPAIR OR REPLACEMENT OF PROPERTY
SUBJECT TO SUCH CASUALTY EVENT OR TO ACQUIRE ASSETS USED OR USEABLE IN THE
BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES) AND WILL DELIVER TO THE
ADMINISTRATIVE AGENT, CONCURRENTLY WITH SUCH PREPAYMENT, A CERTIFICATE SIGNED BY
A FINANCIAL OFFICER OF THE BORROWER IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND SETTING FORTH THE CALCULATION OF SUCH NET CASH
PROCEEDS; PROVIDED, HOWEVER, THAT, NOTWITHSTANDING THE FOREGOING, (I) EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT (INCLUDING IN CLAUSE (II) BELOW) OR IN ANY
OTHER CREDIT DOCUMENT, THE ADMINISTRATIVE AGENT SHALL TURN OVER TO THE BORROWER
ANY SUCH PROCEEDS RECEIVED DURING SUCH 180-DAY PERIOD (UNLESS THE BORROWER HAS,
PRIOR TO THE ADMINISTRATIVE AGENT’S RECEIPT OF SUCH PROCEEDS, NOTIFIED THE
ADMINISTRATIVE AGENT OF ITS DETERMINATION NOT TO REPAIR OR REPLACE THE PROPERTY
SUBJECT TO THE APPLICABLE CASUALTY EVENT OR TO ACQUIRE ASSETS USED OR USEABLE IN
THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES), BUT NOTHING IN THIS
SECTION 2.6(E) SHALL BE DEEMED TO LIMIT OR OTHERWISE AFFECT ANY RIGHT OF THE
ADMINISTRATIVE AGENT HEREIN OR IN ANY OF THE OTHER CREDIT DOCUMENTS TO RECEIVE
AND HOLD SUCH PROCEEDS AS LOSS PAYEE AND TO DISBURSE THE SAME TO THE BORROWER
UPON THE TERMS HEREOF OR THEREOF, OR ANY OBLIGATION OF THE BORROWER OR ANY OF
ITS SUBSIDIARIES HEREIN OR IN ANY OF THE OTHER CREDIT DOCUMENTS TO REMIT ANY
SUCH PROCEEDS TO THE ADMINISTRATIVE AGENT UPON ITS RECEIPT THEREOF, AND (II) ANY
AND ALL SUCH PROCEEDS RECEIVED OR HELD BY THE ADMINISTRATIVE AGENT OR THE
BORROWER OR ANY OF ITS SUBSIDIARIES DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT (REGARDLESS OF ANY PROPOSED OR ACTUAL USE THEREOF FOR REPAIR,
REPLACEMENT OR REINVESTMENT) SHALL BE APPLIED TO PREPAY THE OUTSTANDING
PRINCIPAL AMOUNT OF THE LOANS.

 

36

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(F)            NOT LATER THAN 180 DAYS AFTER ITS RECEIPT OF PROCEEDS IN RESPECT
OF ANY ASSET DISPOSITION OTHER THAN AN EXCLUDED ASSET DISPOSITION (OR, IF
EARLIER, UPON ITS DETERMINATION NOT TO APPLY SUCH PROCEEDS TO THE ACQUISITION OF
ASSETS USED OR USEABLE IN THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES),
THE BORROWER WILL PREPAY THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS IN AN
AMOUNT EQUAL TO 100% OF THE NET CASH PROCEEDS FROM SUCH ASSET DISPOSITION (LESS
ANY AMOUNTS THERETOFORE APPLIED (OR CONTRACTUALLY COMMITTED TO BE APPLIED) TO
ACQUIRE ASSETS USED OR USEABLE IN THE BUSINESS OF THE BORROWER AND ITS
SUBSIDIARIES) AND WILL DELIVER TO THE ADMINISTRATIVE AGENT, CONCURRENTLY WITH
SUCH PREPAYMENT, A CERTIFICATE SIGNED BY A FINANCIAL OFFICER OF THE BORROWER IN
FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT AND SETTING FORTH
THE CALCULATION OF SUCH NET CASH PROCEEDS; PROVIDED, HOWEVER, THAT ANY SUCH NET
CASH PROCEEDS NOT APPLIED (OR CONTRACTUALLY COMMITTED TO BE APPLIED) WITHIN 180
DAYS TO THE ACQUISITION OF OTHER ASSETS AS PROVIDED HEREIN SHALL BE APPLIED BY
THE BORROWER AS A PREPAYMENT OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS NO
LATER THAN THE FIRST (1ST) BUSINESS DAY IMMEDIATELY FOLLOWING SUCH 180-DAY
PERIOD.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 2.6(F) SHALL BE
DEEMED TO PERMIT ANY ASSET DISPOSITION NOT EXPRESSLY PERMITTED UNDER
SECTION 8.4.

 

(G)           CONCURRENTLY WITH THE DELIVERY OF ITS ANNUAL FINANCIAL STATEMENTS
AFTER THE END OF EACH FISCAL YEAR, BEGINNING WITH DELIVERY OF THE ANNUAL
FINANCIAL STATEMENTS FOR FISCAL YEAR 2004, AND IN ANY EVENT NOT LATER THAN
NINETY (90) DAYS AFTER THE LAST DAY OF EACH SUCH FISCAL YEAR, THE BORROWER WILL
PREPAY THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS IN AN AMOUNT EQUAL TO 75%
OF EXCESS CASH FLOW, IF ANY, FOR SUCH FISCAL YEAR AND WILL DELIVER TO THE
ADMINISTRATIVE AGENT, CONCURRENTLY WITH SUCH PREPAYMENT, A CERTIFICATE SIGNED BY
A FINANCIAL OFFICER OF THE BORROWER IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND SETTING FORTH THE CALCULATION OF SUCH EXCESS CASH FLOW;
PROVIDED, HOWEVER, THAT IN THE EVENT THE TOTAL LEVERAGE RATIO IS EQUAL TO OR
LESS THAN 3.0 TO 1.0 AS OF THE LAST DAY OF ANY SUCH FISCAL YEAR, THE PREPAYMENT
REQUIRED UNDER THIS SECTION 2.6(G) SHALL BE AN AMOUNT EQUAL TO 50% OF EXCESS
CASH FLOW, IF ANY, FOR SUCH FISCAL YEAR.

 

(H)           EACH PREPAYMENT OF THE LOANS MADE PURSUANT TO SECTIONS 2.6(D)
THROUGH SECTION 2.6(G) SHALL BE APPLIED (I) FIRST, TO REDUCE THE OUTSTANDING
PRINCIPAL AMOUNT OF THE TERM LOANS, WITH SUCH REDUCTION TO BE APPLIED IN DIRECT
ORDER OF MATURITY TO THE PRINCIPAL PAYMENTS SCHEDULED TO COME DUE WITHIN THE
NEXT TWELVE MONTHS AND THEREAFTER TO THE REMAINING SCHEDULED PRINCIPAL PAYMENTS
ON A PRO RATA BASIS, (II) SECOND, TO THE EXTENT OF ANY EXCESS REMAINING AFTER
APPLICATION AS PROVIDED IN CLAUSE (I) ABOVE, TO REDUCE THE OUTSTANDING PRINCIPAL
AMOUNT OF THE SWINGLINE LOANS (WITH A CORRESPONDING PERMANENT REDUCTION OF THE
REVOLVING CREDIT COMMITMENTS), (III) THIRD, TO THE EXTENT OF ANY EXCESS
REMAINING AFTER APPLICATION AS PROVIDED IN CLAUSES (I) AND (II) ABOVE, TO REDUCE
THE OUTSTANDING PRINCIPAL AMOUNT OF THE REVOLVING LOANS (WITH A CORRESPONDING
PERMANENT REDUCTION OF THE REVOLVING CREDIT COMMITMENTS), AND (IV) FOURTH, TO
THE EXTENT OF ANY EXCESS REMAINING AFTER APPLICATION AS PROVIDED IN CLAUSES (I),
(II) AND (III) ABOVE, TO PAY ANY OUTSTANDING REIMBURSEMENT OBLIGATIONS AND, TO
THE EXTENT OF ANY EXCESS REMAINING, TO CASH COLLATERALIZE LETTER OF CREDIT
EXPOSURE.  WITHIN EACH CLASS OF LOANS, SUCH PREPAYMENTS SHALL BE APPLIED FIRST
TO PREPAY ALL BASE RATE LOANS, AND THEN TO PREPAY LIBOR LOANS IN DIRECT ORDER OF
INTEREST PERIOD MATURITIES.  EACH PAYMENT OR PREPAYMENT PURSUANT TO THE
PROVISIONS OF THIS SECTION 2.6 SHALL BE APPLIED RATABLY AMONG THE LENDERS
HOLDING THE LOANS BEING PREPAID, IN PROPORTION TO THE PRINCIPAL AMOUNT HELD BY
EACH.  EACH PAYMENT OR PREPAYMENT OF A LIBOR LOAN MADE PURSUANT TO THE
PROVISIONS OF THIS SECTION ON A DAY OTHER THAN THE LAST DAY

 

37

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of the Interest Period applicable thereto shall be made together with all
amounts required under Section 2.18 to be paid as a consequence thereof.

 

(I)            IF THE BORROWER IS REQUIRED TO MAKE A MANDATORY PREPAYMENT OF
LIBOR LOANS UNDER THIS SECTION 2.6, THE BORROWER SHALL HAVE THE RIGHT, IN LIEU
OF MAKING SUCH PREPAYMENT IN FULL, TO DEPOSIT AN AMOUNT EQUAL TO SUCH MANDATORY
PREPAYMENT WITH THE ADMINISTRATIVE AGENT IN A CASH COLLATERAL ACCOUNT MAINTAINED
(PURSUANT TO DOCUMENTATION REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT)
BY AND IN THE SOLE DOMINION AND CONTROL OF THE ADMINISTRATIVE AGENT.  ANY
AMOUNTS SO DEPOSITED SHALL BE HELD BY THE ADMINISTRATIVE AGENT AS COLLATERAL FOR
THE PREPAYMENT OF SUCH LIBOR LOANS AND SHALL BE APPLIED TO THE PREPAYMENT OF THE
APPLICABLE LIBOR LOANS AT THE END OF THE CURRENT INTEREST PERIODS APPLICABLE
THERETO.  AT THE REQUEST OF THE BORROWER, AMOUNTS SO DEPOSITED SHALL BE INVESTED
BY THE ADMINISTRATIVE AGENT IN CASH EQUIVALENTS MATURING PRIOR TO THE DATE OR
DATES ON WHICH IT IS ANTICIPATED THAT SUCH AMOUNTS WILL BE APPLIED TO PREPAY
SUCH LIBOR LOANS; ANY INTEREST EARNED ON SUCH CASH EQUIVALENTS WILL BE FOR THE
ACCOUNT OF THE BORROWER AND THE BORROWER WILL DEPOSIT WITH THE ADMINISTRATIVE
AGENT THE AMOUNT OF ANY LOSS ON ANY SUCH CASH EQUIVALENTS TO THE EXTENT
NECESSARY IN ORDER THAT THE AMOUNT OF THE PREPAYMENT TO BE MADE WITH THE
DEPOSITED AMOUNTS MAY NOT BE REDUCED.

 

(J)            IN THE EVENT THE ADMINISTRATIVE AGENT RECEIVES A NOTICE OF
PREPAYMENT WITH RESPECT TO SECTIONS 2.6(D) THROUGH 2.6(G), THE ADMINISTRATIVE
AGENT WILL GIVE PROMPT NOTICE THEREOF TO THE LENDERS; PROVIDED THAT IF SUCH
NOTICE HAS ALSO BEEN FURNISHED TO THE LENDERS, THE ADMINISTRATIVE AGENT SHALL
HAVE NO OBLIGATION TO NOTIFY THE LENDERS WITH RESPECT THERETO.

 

2.7           VOLUNTARY PREPAYMENTS.

 

(A)           AT ANY TIME AND FROM TIME TO TIME, THE BORROWER SHALL HAVE THE
RIGHT TO PREPAY THE LOANS, IN WHOLE OR IN PART, WITHOUT PREMIUM OR PENALTY
(EXCEPT AS PROVIDED IN CLAUSE (III) BELOW), UPON WRITTEN NOTICE GIVEN TO THE
ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M., CHARLOTTE TIME, THREE (3)
BUSINESS DAYS PRIOR TO EACH INTENDED PREPAYMENT OF LIBOR LOANS AND ONE (1)
BUSINESS DAY PRIOR TO EACH INTENDED PREPAYMENT OF BASE RATE LOANS (OTHER THAN
SWINGLINE LOANS, WHICH MAY BE PREPAID ON A SAME-DAY BASIS), PROVIDED THAT
(I) EACH PARTIAL PREPAYMENT OF LIBOR LOANS SHALL BE IN AN AGGREGATE PRINCIPAL
AMOUNT OF NOT LESS THAN $1,000,000 OR, IF GREATER, AN INTEGRAL MULTIPLE OF
$500,000 IN EXCESS THEREOF, AND EACH PARTIAL PREPAYMENT OF BASE RATE LOANS SHALL
BE IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 OR, IF GREATER, AN
INTEGRAL MULTIPLE OF $100,000 IN EXCESS THEREOF ($200,000 AND $100,000,
RESPECTIVELY, IN THE CASE OF SWINGLINE LOANS), (II) NO PARTIAL PREPAYMENT OF
LIBOR LOANS MADE PURSUANT TO ANY SINGLE BORROWING SHALL REDUCE THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF THE REMAINING LIBOR LOANS UNDER SUCH BORROWING
TO LESS THAN $1,000,000 OR TO ANY GREATER AMOUNT NOT AN INTEGRAL MULTIPLE OF
$500,000 IN EXCESS THEREOF, AND (III) UNLESS MADE TOGETHER WITH ALL AMOUNTS
REQUIRED UNDER SECTION 2.18 TO BE PAID AS A CONSEQUENCE OF SUCH PREPAYMENT, A
PREPAYMENT OF A LIBOR LOAN MAY BE MADE ONLY ON THE LAST DAY OF THE INTEREST
PERIOD APPLICABLE THERETO.  EACH SUCH NOTICE SHALL SPECIFY THE PROPOSED DATE OF
SUCH PREPAYMENT AND THE AGGREGATE PRINCIPAL AMOUNT, CLASS AND TYPE OF THE LOANS
TO BE PREPAID (AND, IN THE CASE OF LIBOR LOANS, THE INTEREST PERIOD OF THE
BORROWING PURSUANT TO WHICH MADE), AND SHALL BE IRREVOCABLE AND SHALL BIND THE
BORROWER TO MAKE SUCH PREPAYMENT ON THE TERMS SPECIFIED THEREIN, PROVIDED THAT A
NOTICE OF PREPAYMENT IN FULL OF THE REVOLVING LOANS DELIVERED BY THE BORROWER
MAY STATE THAT SUCH NOTICE IS CONDITIONED UPON THE EFFECTIVENESS OF OTHER CREDIT
FACILITIES, A PUBLIC OFFERING OF CAPITAL STOCK OF THE PARENT OR

 

38

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a sale of all or substantially all the assets or Capital Stock of the Borrower
or the Parent (whether by merger or otherwise), in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied (provided that
the Borrower shall be obligated to pay all amounts required under Section 2.18
to be paid as a consequence of the failure to make such prepayment).  Revolving
Loans and Swingline Loans (but not Term Loans) prepaid pursuant to this
Section 2.7(a) may be reborrowed, subject to the terms and conditions of this
Agreement.  In the event the Administrative Agent receives a notice of
prepayment under this Section, the Administrative Agent will give prompt notice
thereof to the Lenders; provided that if such notice has also been furnished to
the Lenders, the Administrative Agent shall have no obligation to notify the
Lenders with respect thereto.

 

(B)           EACH PREPAYMENT OF THE TERM LOANS MADE PURSUANT TO SECTION 2.7(A)
SHALL BE APPLIED TO THE REMAINING SCHEDULED PRINCIPAL PAYMENTS AS DIRECTED BY
THE BORROWER; PROVIDED THAT IF THE BORROWER SHALL FAIL TO FURNISH DIRECTION,
SUCH PREPAYMENT SHALL BE APPLIED TO THE REMAINING SCHEDULED PRINCIPAL PAYMENTS
ON A PRO RATA BASIS.  EACH PREPAYMENT OF THE LOANS MADE PURSUANT TO
SECTION 2.7(A) SHALL BE APPLIED RATABLY AMONG THE LENDERS HOLDING THE LOANS
BEING PREPAID, IN PROPORTION TO THE PRINCIPAL AMOUNT HELD BY EACH.

 

2.8           INTEREST.

 

(A)           THE BORROWER WILL PAY INTEREST IN RESPECT OF THE UNPAID PRINCIPAL
AMOUNT OF EACH LOAN, FROM THE DATE OF BORROWING THEREOF UNTIL SUCH PRINCIPAL
AMOUNT SHALL BE PAID IN FULL, (I) AT THE ADJUSTED BASE RATE, AS IN EFFECT FROM
TIME TO TIME DURING SUCH PERIODS AS SUCH LOAN IS A BASE RATE LOAN, AND (II) AT
THE ADJUSTED LIBOR RATE, AS IN EFFECT FROM TIME TO TIME DURING SUCH PERIODS AS
SUCH LOAN IS A LIBOR LOAN.

 

(B)           UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT INVOLVING FAILURE BY THE BORROWER TO PAY ANY PRINCIPAL OF OR INTEREST ON
ANY LOAN OR REIMBURSEMENT OBLIGATION OR ANY FEES UNDER SECTIONS 2.9(B) OR 2.9(C)
(WHETHER AT MATURITY, PURSUANT TO ACCELERATION OR OTHERWISE), SUCH OVERDUE
AMOUNT SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO (I) IN THE CASE OF
PRINCIPAL OF ANY LOAN, THE INTEREST RATE APPLICABLE FROM TIME TO TIME THEREAFTER
TO SUCH LOAN (WHETHER THE ADJUSTED BASE RATE OR THE ADJUSTED LIBOR RATE) PLUS
2%, AND (II) IN THE CASE OF ANY REIMBURSEMENT OBLIGATION OR ANY INTEREST OR FEE
REFERRED TO ABOVE FOR WHICH NO RATE IS PROVIDED HEREUNDER, AT THE ADJUSTED BASE
RATE APPLICABLE TO REVOLVING LOANS FROM TIME TO TIME PLUS 2%.  ADDITIONALLY, AT
THE ELECTION OF THE REQUIRED LENDERS, UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY OTHER EVENT OF DEFAULT, ALL OUTSTANDING PRINCIPAL AMOUNTS OF
THE LOANS AND, TO THE GREATEST EXTENT PERMITTED BY LAW, ALL INTEREST ACCRUED ON
THE LOANS, TOGETHER WITH ALL OTHER ACCRUED AND OUTSTANDING FEES AND OTHER
AMOUNTS HEREUNDER, SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO (I) IN THE
CASE OF PRINCIPAL OF ANY LOAN, THE INTEREST RATE APPLICABLE FROM TIME TO TIME
THEREAFTER TO SUCH LOAN (WHETHER THE ADJUSTED BASE RATE OR THE ADJUSTED LIBOR
RATE) PLUS 2%, OR (II) IN THE CASE OF ANY REIMBURSEMENT OBLIGATION OR ANY
INTEREST, FEE OR OTHER AMOUNTS FOR WHICH NO RATE IS PROVIDED HEREUNDER, AT THE
ADJUSTED BASE RATE APPLICABLE TO REVOLVING LOANS FROM TIME TO TIME PLUS 2%.  ALL
SUCH DEFAULT INTEREST ACCRUED HEREUNDER SHALL BE PAYABLE ON DEMAND.  TO THE
GREATEST EXTENT PERMITTED BY LAW, INTEREST SHALL CONTINUE TO ACCRUE AFTER THE
FILING BY OR AGAINST THE BORROWER OF ANY PETITION SEEKING ANY RELIEF IN
BANKRUPTCY OR UNDER ANY LAW PERTAINING TO INSOLVENCY OR DEBTOR RELIEF.

 

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(C)           ACCRUED (AND THERETOFORE UNPAID) INTEREST SHALL BE PAYABLE AS
FOLLOWS:

 

(I)            IN RESPECT OF EACH BASE RATE LOAN (INCLUDING ANY BASE RATE LOAN
OR PORTION THEREOF PAID OR PREPAID PURSUANT TO THE PROVISIONS OF SECTION 2.6,
EXCEPT AS PROVIDED HEREINBELOW), IN ARREARS ON THE LAST BUSINESS DAY OF EACH
CALENDAR QUARTER, BEGINNING WITH THE FIRST SUCH DAY TO OCCUR AFTER THE CLOSING
DATE; PROVIDED, THAT IN THE EVENT THE LOANS ARE REPAID OR PREPAID IN FULL AND
THE COMMITMENTS HAVE BEEN TERMINATED, THEN ACCRUED INTEREST IN RESPECT OF ALL
BASE RATE LOANS SHALL BE PAYABLE TOGETHER WITH SUCH REPAYMENT OR PREPAYMENT ON
THE DATE THEREOF;

 

(II)           IN RESPECT OF EACH LIBOR LOAN (INCLUDING ANY LIBOR LOAN OR
PORTION THEREOF PAID OR PREPAID PURSUANT TO THE PROVISIONS OF SECTION 2.6,
EXCEPT AS PROVIDED HEREINBELOW), IN ARREARS (Y) ON THE LAST BUSINESS DAY OF THE
INTEREST PERIOD APPLICABLE THERETO (SUBJECT TO THE PROVISIONS OF
SECTION 2.10(IV)) AND (Z) IN ADDITION, IN THE CASE OF A LIBOR LOAN WITH AN
INTEREST PERIOD HAVING A DURATION OF SIX MONTHS OR LONGER, ON EACH DATE ON WHICH
INTEREST WOULD HAVE BEEN PAYABLE UNDER CLAUSE (Y) ABOVE HAD SUCCESSIVE INTEREST
PERIODS OF THREE MONTHS’ DURATION BEEN APPLICABLE TO SUCH LIBOR LOAN; PROVIDED,
THAT IN THE EVENT ALL LIBOR LOANS MADE PURSUANT TO A SINGLE BORROWING ARE REPAID
OR PREPAID IN FULL, THEN ACCRUED INTEREST IN RESPECT OF SUCH LIBOR LOANS SHALL
BE PAYABLE TOGETHER WITH SUCH REPAYMENT OR PREPAYMENT ON THE DATE THEREOF; AND

 

(III)          IN RESPECT OF ANY LOAN, AT MATURITY (WHETHER PURSUANT TO
ACCELERATION OR OTHERWISE) AND, AFTER MATURITY, ON DEMAND.

 

(D)           NOTHING CONTAINED IN THIS AGREEMENT OR IN ANY OTHER CREDIT
DOCUMENT SHALL BE DEEMED TO ESTABLISH OR REQUIRE THE PAYMENT OF INTEREST TO ANY
LENDER AT A RATE IN EXCESS OF THE MAXIMUM RATE PERMITTED BY APPLICABLE LAW.  IF
THE AMOUNT OF INTEREST PAYABLE FOR THE ACCOUNT OF ANY LENDER ON ANY INTEREST
PAYMENT DATE WOULD EXCEED THE MAXIMUM AMOUNT PERMITTED BY APPLICABLE LAW TO BE
CHARGED BY SUCH LENDER, THE AMOUNT OF INTEREST PAYABLE FOR ITS ACCOUNT ON SUCH
INTEREST PAYMENT DATE SHALL BE AUTOMATICALLY REDUCED TO SUCH MAXIMUM PERMISSIBLE
AMOUNT.  IN THE EVENT OF ANY SUCH REDUCTION AFFECTING ANY LENDER, IF FROM TIME
TO TIME THEREAFTER THE AMOUNT OF INTEREST PAYABLE FOR THE ACCOUNT OF SUCH LENDER
ON ANY INTEREST PAYMENT DATE WOULD BE LESS THAN THE MAXIMUM AMOUNT PERMITTED BY
APPLICABLE LAW TO BE CHARGED BY SUCH LENDER, THEN THE AMOUNT OF INTEREST PAYABLE
FOR ITS ACCOUNT ON SUCH SUBSEQUENT INTEREST PAYMENT DATE SHALL BE AUTOMATICALLY
INCREASED TO SUCH MAXIMUM PERMISSIBLE AMOUNT, PROVIDED THAT AT NO TIME SHALL THE
AGGREGATE AMOUNT BY WHICH INTEREST PAID FOR THE ACCOUNT OF ANY LENDER HAS BEEN
INCREASED PURSUANT TO THIS SENTENCE EXCEED THE AGGREGATE AMOUNT BY WHICH
INTEREST PAID FOR ITS ACCOUNT HAS THERETOFORE BEEN REDUCED PURSUANT TO THE
PREVIOUS SENTENCE.

 

(E)           THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY THE BORROWER AND
THE LENDERS UPON DETERMINING THE INTEREST RATE FOR EACH BORROWING OF LIBOR LOANS
AFTER ITS RECEIPT OF THE RELEVANT NOTICE OF BORROWING OR NOTICE OF
CONVERSION/CONTINUATION, AND UPON EACH CHANGE IN THE BASE RATE; PROVIDED,
HOWEVER, THAT THE FAILURE OF THE ADMINISTRATIVE AGENT TO PROVIDE THE BORROWER OR
THE LENDERS WITH ANY SUCH NOTICE SHALL NEITHER AFFECT ANY OBLIGATIONS OF THE
BORROWER OR THE LENDERS HEREUNDER NOR RESULT IN ANY LIABILITY ON THE PART OF THE
ADMINISTRATIVE AGENT TO THE BORROWER OR ANY LENDER.  EACH SUCH DETERMINATION
(INCLUDING EACH DETERMINATION OF

 

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the Reserve Requirement) shall, absent manifest error, be conclusive and binding
on all parties hereto.

 

2.9           Fees.  The Borrower agrees to pay:

 

(A)           TO THE ARRANGER AND WACHOVIA, FOR THEIR OWN RESPECTIVE ACCOUNTS,
ON THE CLOSING DATE, THE FEES REQUIRED UNDER THE FEE LETTER TO BE PAID TO THEM
ON THE CLOSING DATE, IN THE AMOUNTS DUE AND PAYABLE ON THE CLOSING DATE AS
REQUIRED BY THE TERMS THEREOF;

 

(B)           TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF EACH REVOLVING
CREDIT LENDER, A COMMITMENT FEE FOR EACH CALENDAR QUARTER (OR PORTION THEREOF)
FOR THE PERIOD FROM THE DATE OF THIS AGREEMENT TO THE REVOLVING CREDIT
TERMINATION DATE, AT A PER ANNUM RATE OF 0.50% ON SUCH LENDER’S RATABLE SHARE
(BASED ON THE PROPORTION THAT ITS REVOLVING CREDIT COMMITMENT BEARS TO THE
AGGREGATE REVOLVING CREDIT COMMITMENTS) OF THE AVERAGE DAILY AGGREGATE
UNUTILIZED REVOLVING CREDIT COMMITMENTS (EXCLUDING CLAUSE (III) OF THE
DEFINITION THEREOF FOR PURPOSES OF THIS SECTION 2.9(B) ONLY), PAYABLE IN ARREARS
(I) ON THE LAST BUSINESS DAY OF EACH CALENDAR QUARTER, BEGINNING WITH THE FIRST
SUCH DAY TO OCCUR AFTER THE CLOSING DATE, AND (II) ON THE REVOLVING CREDIT
TERMINATION DATE;

 

(C)           TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF EACH REVOLVING
CREDIT LENDER, A LETTER OF CREDIT FEE FOR EACH CALENDAR QUARTER (OR PORTION
THEREOF) IN RESPECT OF ALL LETTERS OF CREDIT OUTSTANDING DURING SUCH QUARTER, AT
A PER ANNUM RATE EQUAL TO THE APPLICABLE PERCENTAGE IN EFFECT FROM TIME TO TIME
DURING SUCH QUARTER FOR REVOLVING LOANS THAT ARE MAINTAINED AS LIBOR LOANS, ON
SUCH LENDER’S RATABLE SHARE (BASED ON THE PROPORTION THAT ITS REVOLVING CREDIT
COMMITMENT BEARS TO THE AGGREGATE REVOLVING CREDIT COMMITMENTS) OF THE DAILY
AVERAGE AGGREGATE STATED AMOUNT OF SUCH LETTERS OF CREDIT, PAYABLE IN ARREARS
(I) ON THE LAST BUSINESS DAY OF EACH CALENDAR QUARTER, BEGINNING WITH THE FIRST
SUCH DAY TO OCCUR AFTER THE CLOSING DATE, AND (II) ON THE LATER OF THE REVOLVING
CREDIT TERMINATION DATE AND THE DATE OF TERMINATION OF THE LAST OUTSTANDING
LETTER OF CREDIT;

 

(D)           TO THE ISSUING LENDER, FOR ITS OWN ACCOUNT, A FACING FEE FOR EACH
CALENDAR QUARTER (OR PORTION THEREOF) IN RESPECT OF ALL LETTERS OF CREDIT
OUTSTANDING DURING SUCH QUARTER, AT A PER ANNUM RATE OF 0.25% ON THE DAILY
AVERAGE AGGREGATE STATED AMOUNT OF SUCH LETTERS OF CREDIT, PAYABLE IN ARREARS
(I) ON THE LAST BUSINESS DAY OF EACH CALENDAR QUARTER, BEGINNING WITH THE FIRST
SUCH DAY TO OCCUR AFTER THE CLOSING DATE, AND (II) ON THE LATER OF THE REVOLVING
CREDIT TERMINATION DATE AND THE DATE OF TERMINATION OF THE LAST OUTSTANDING
LETTER OF CREDIT;

 

(E)           TO THE ISSUING LENDER, FOR ITS OWN ACCOUNT, SUCH COMMISSIONS,
TRANSFER FEES AND OTHER FEES AND CHARGES INCURRED IN CONNECTION WITH THE
ISSUANCE AND ADMINISTRATION OF EACH LETTER OF CREDIT AS ARE CUSTOMARILY CHARGED
FROM TIME TO TIME BY THE ISSUING LENDER FOR THE PERFORMANCE OF SUCH SERVICES IN
CONNECTION WITH SIMILAR LETTERS OF CREDIT, OR AS MAY BE OTHERWISE AGREED TO BY
THE ISSUING LENDER, BUT WITHOUT DUPLICATION OF AMOUNTS PAYABLE UNDER
SECTION 2.9(D); AND

 

(F)            TO THE ADMINISTRATIVE AGENT, FOR ITS OWN ACCOUNT, THE ANNUAL
ADMINISTRATIVE FEE DESCRIBED IN THE FEE LETTER, ON THE TERMS, IN THE AMOUNT AND
AT THE TIMES SET FORTH THEREIN.

 

2.10         Interest Periods.  Concurrently with the giving of a Notice of
Borrowing or Notice of Conversion/Continuation in respect of any Borrowing
(whether in respect of Term Loans or

 

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Revolving Loans) comprised of Base Rate Loans to be converted into, or LIBOR
Loans to be continued as, LIBOR Loans, the Borrower shall have the right to
elect, pursuant to such notice, the interest period (each, an “Interest Period”)
to be applicable to such LIBOR Loans, which Interest Period shall, at the option
of the Borrower, be a one, two, three or six-month period; provided, however,
that:

 

(I)            ALL LIBOR LOANS COMPRISING A SINGLE BORROWING SHALL AT ALL TIMES
HAVE THE SAME INTEREST PERIOD;

 

(II)           THE INITIAL INTEREST PERIOD FOR ANY LIBOR LOAN SHALL COMMENCE ON
THE DATE OF THE BORROWING OF SUCH LIBOR LOAN (INCLUDING THE DATE OF ANY
CONTINUATION OF, OR CONVERSION INTO, SUCH LIBOR LOAN), AND EACH SUCCESSIVE
INTEREST PERIOD APPLICABLE TO SUCH LIBOR LOAN SHALL COMMENCE ON THE DAY ON WHICH
THE NEXT PRECEDING INTEREST PERIOD APPLICABLE THERETO EXPIRES;

 

(III)          LIBOR LOANS MAY NOT BE OUTSTANDING UNDER MORE THAN EIGHT (8)
SEPARATE INTEREST PERIODS AT ANY ONE TIME (FOR WHICH PURPOSE INTEREST PERIODS
SHALL BE DEEMED TO BE SEPARATE EVEN IF THEY ARE COTERMINOUS);

 

(IV)          IF ANY INTEREST PERIOD OTHERWISE WOULD EXPIRE ON A DAY THAT IS NOT
A BUSINESS DAY, SUCH INTEREST PERIOD SHALL EXPIRE ON THE NEXT SUCCEEDING
BUSINESS DAY UNLESS SUCH NEXT SUCCEEDING BUSINESS DAY FALLS IN ANOTHER CALENDAR
MONTH, IN WHICH CASE SUCH INTEREST PERIOD SHALL EXPIRE ON THE NEXT PRECEDING
BUSINESS DAY;

 

(V)           NO INTEREST PERIOD MAY BE SELECTED WITH RESPECT TO THE TERM LOANS
THAT WOULD END AFTER A SCHEDULED DATE FOR REPAYMENT OF PRINCIPAL OF THE TERM
LOANS OCCURRING ON OR AFTER THE FIRST DAY OF SUCH INTEREST PERIOD UNLESS,
IMMEDIATELY AFTER GIVING EFFECT TO SUCH SELECTION, THE AGGREGATE PRINCIPAL
AMOUNT OF TERM LOANS THAT ARE BASE RATE LOANS OR THAT HAVE INTEREST PERIODS
EXPIRING ON OR BEFORE SUCH PRINCIPAL REPAYMENT DATE EQUALS OR EXCEEDS THE
PRINCIPAL AMOUNT REQUIRED TO BE PAID ON SUCH PRINCIPAL REPAYMENT DATE;

 

(VI)          THE BORROWER MAY NOT SELECT ANY INTEREST PERIOD THAT EXPIRES
(Y) AFTER THE TERM LOAN MATURITY DATE, WITH RESPECT TO TERM LOANS THAT ARE TO BE
MAINTAINED AS LIBOR LOANS, OR (Z) AFTER THE REVOLVING CREDIT MATURITY DATE, WITH
RESPECT TO REVOLVING LOANS THAT ARE TO BE MAINTAINED AS LIBOR LOANS;

 

(VII)         IF ANY INTEREST PERIOD BEGINS ON A DAY FOR WHICH THERE IS NO
NUMERICALLY CORRESPONDING DAY IN THE CALENDAR MONTH DURING WHICH SUCH INTEREST
PERIOD WOULD OTHERWISE EXPIRE, SUCH INTEREST PERIOD SHALL EXPIRE ON THE LAST
BUSINESS DAY OF SUCH CALENDAR MONTH; AND

 

(VIII)        THE BORROWER MAY NOT SELECT ANY INTEREST PERIOD (AND CONSEQUENTLY,
NO LIBOR LOANS SHALL BE MADE) IF A DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING AT THE TIME OF SUCH NOTICE OF BORROWING OR NOTICE OF
CONVERSION/CONTINUATION WITH RESPECT TO ANY BORROWING.

 

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2.11         CONVERSIONS AND CONTINUATIONS.

 

(A)           THE BORROWER SHALL HAVE THE RIGHT, ON ANY BUSINESS DAY OCCURRING
ON OR AFTER THE CLOSING DATE, TO ELECT (I) TO CONVERT ALL OR A PORTION OF THE
OUTSTANDING PRINCIPAL AMOUNT OF ANY BASE RATE LOANS OF ANY CLASS INTO LIBOR
LOANS OF THE SAME CLASS, OR TO CONVERT ANY LIBOR LOANS OF ANY CLASS THE INTEREST
PERIODS FOR WHICH END ON THE SAME DAY INTO BASE RATE LOANS OF THE SAME CLASS, OR
(II) UPON THE EXPIRATION OF ANY INTEREST PERIOD, TO CONTINUE ALL OR A PORTION OF
THE OUTSTANDING PRINCIPAL AMOUNT OF ANY LIBOR LOANS OF ANY CLASS THE INTEREST
PERIODS FOR WHICH END ON THE SAME DAY FOR AN ADDITIONAL INTEREST PERIOD,
PROVIDED THAT (W) ANY SUCH CONVERSION OF LIBOR LOANS INTO BASE RATE LOANS SHALL
INVOLVE AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $500,000 OR, IF GREATER,
AN INTEGRAL MULTIPLE OF $100,000 IN EXCESS THEREOF; ANY SUCH CONVERSION OF BASE
RATE LOANS INTO, OR CONTINUATION OF, LIBOR LOANS SHALL INVOLVE AN AGGREGATE
PRINCIPAL AMOUNT OF NOT LESS THAN $1,000,000 OR, IF GREATER, AN INTEGRAL
MULTIPLE OF $500,000 IN EXCESS THEREOF; AND NO PARTIAL CONVERSION OF LIBOR LOANS
MADE PURSUANT TO A SINGLE BORROWING SHALL REDUCE THE OUTSTANDING PRINCIPAL
AMOUNT OF SUCH LIBOR LOANS TO LESS THAN $1,000,000 OR TO ANY GREATER AMOUNT NOT
AN INTEGRAL MULTIPLE OF $500,000 IN EXCESS THEREOF, (X) IF ANY LIBOR LOANS ARE
CONVERTED INTO BASE RATE LOANS OTHER THAN ON THE LAST DAY OF THE INTEREST PERIOD
APPLICABLE THERETO, THE BORROWER WILL PAY, UPON SUCH CONVERSION, ALL AMOUNTS
REQUIRED UNDER SECTION 2.18 TO BE PAID AS A CONSEQUENCE THEREOF, (Y) NO SUCH
CONVERSION OR CONTINUATION SHALL BE PERMITTED WITH REGARD TO ANY BASE RATE LOANS
THAT ARE SWINGLINE LOANS, AND (Z) NO CONVERSION OF BASE RATE LOANS INTO LIBOR
LOANS OR CONTINUATION OF LIBOR LOANS SHALL BE PERMITTED DURING THE CONTINUANCE
OF A DEFAULT OR EVENT OF DEFAULT.

 

(B)           THE BORROWER SHALL MAKE EACH SUCH ELECTION BY GIVING THE
ADMINISTRATIVE AGENT WRITTEN NOTICE NOT LATER THAN 11:00 A.M., CHARLOTTE TIME,
THREE (3) BUSINESS DAYS PRIOR TO THE INTENDED EFFECTIVE DATE OF ANY CONVERSION
OF BASE RATE LOANS INTO, OR CONTINUATION OF, LIBOR LOANS AND ONE (1) BUSINESS
DAY PRIOR TO THE INTENDED EFFECTIVE DATE OF ANY CONVERSION OF LIBOR LOANS INTO
BASE RATE LOANS.  EACH SUCH NOTICE (EACH, A “NOTICE OF CONVERSION/CONTINUATION”)
SHALL BE IRREVOCABLE, SHALL BE GIVEN IN THE FORM OF EXHIBIT B-3 AND SHALL
SPECIFY (X) THE DATE OF SUCH CONVERSION OR CONTINUATION (WHICH SHALL BE A
BUSINESS DAY), (Y) IN THE CASE OF A CONVERSION INTO, OR A CONTINUATION OF, LIBOR
LOANS, THE INTEREST PERIOD TO BE APPLICABLE THERETO, AND (Z) THE AGGREGATE
AMOUNT, CLASS AND TYPE OF THE LOANS BEING CONVERTED OR CONTINUED.  UPON THE
RECEIPT OF A NOTICE OF CONVERSION/CONTINUATION, THE ADMINISTRATIVE AGENT WILL
PROMPTLY NOTIFY EACH APPLICABLE LENDER OF THE PROPOSED CONVERSION OR
CONTINUATION.  IN THE EVENT THAT THE BORROWER SHALL FAIL TO DELIVER A NOTICE OF
CONVERSION/CONTINUATION AS PROVIDED HEREIN WITH RESPECT TO ANY OUTSTANDING LIBOR
LOANS, SUCH LIBOR LOANS SHALL AUTOMATICALLY BE CONVERTED TO BASE RATE LOANS UPON
THE EXPIRATION OF THE THEN CURRENT INTEREST PERIOD APPLICABLE THERETO (UNLESS
REPAID PURSUANT TO THE TERMS HEREOF).  IN THE EVENT THE BORROWER SHALL HAVE
FAILED TO SELECT IN A NOTICE OF CONVERSION/CONTINUATION THE DURATION OF THE
INTEREST PERIOD TO BE APPLICABLE TO ANY CONVERSION INTO, OR CONTINUATION OF,
LIBOR LOANS, THEN THE BORROWER SHALL BE DEEMED TO HAVE SELECTED AN INTEREST
PERIOD WITH A DURATION OF ONE MONTH.

 

2.12         METHOD OF PAYMENTS; COMPUTATIONS.

 

(A)           ALL PAYMENTS BY THE BORROWER HEREUNDER SHALL BE MADE WITHOUT
SETOFF, COUNTERCLAIM OR OTHER DEFENSE, IN DOLLARS AND IN IMMEDIATELY AVAILABLE
FUNDS TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE LENDERS ENTITLED TO
SUCH PAYMENT OR THE SWINGLINE

 

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Lender, as the case may be (except as otherwise expressly provided herein as to
payments required to be made directly to the Issuing Lender or the Lenders) at
the Payment Office prior to 12:00 noon, Charlotte time, on the date payment is
due.  Any payment made as required hereinabove, but after 12:00 noon, Charlotte
time, shall be deemed to have been made on the next succeeding Business Day.  If
any payment falls due on a day that is not a Business Day, then such due date
shall be extended to the next succeeding Business Day (except that in the case
of LIBOR Loans to which the provisions of Section 2.10(iv) are applicable, such
due date shall be the next preceding Business Day), and such extension of time
shall then be included in the computation of payment of interest, fees or other
applicable amounts.

 

(B)           THE ADMINISTRATIVE AGENT WILL DISTRIBUTE TO THE LENDERS LIKE
AMOUNTS RELATING TO PAYMENTS MADE TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
THE LENDERS AS FOLLOWS:  (I) IF THE PAYMENT IS RECEIVED BY 12:00 NOON, CHARLOTTE
TIME, IN IMMEDIATELY AVAILABLE FUNDS, THE ADMINISTRATIVE AGENT WILL MAKE
AVAILABLE TO EACH RELEVANT LENDER ON THE SAME DATE, BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS, SUCH LENDER’S RATABLE SHARE OF SUCH PAYMENT (BASED
ON THE PERCENTAGE THAT THE AMOUNT OF THE RELEVANT PAYMENT OWING TO SUCH LENDER
BEARS TO THE TOTAL AMOUNT OF SUCH PAYMENT OWING TO ALL OF THE RELEVANT LENDERS),
AND (II) IF SUCH PAYMENT IS RECEIVED AFTER 12:00 NOON, CHARLOTTE TIME, OR IN
OTHER THAN IMMEDIATELY AVAILABLE FUNDS, THE ADMINISTRATIVE AGENT WILL MAKE
AVAILABLE TO EACH SUCH LENDER ITS RATABLE SHARE OF SUCH PAYMENT BY WIRE TRANSFER
OF IMMEDIATELY AVAILABLE FUNDS ON THE NEXT SUCCEEDING BUSINESS DAY (OR IN THE
CASE OF UNCOLLECTED FUNDS, AS SOON AS PRACTICABLE AFTER COLLECTED).  IF THE
ADMINISTRATIVE AGENT SHALL NOT HAVE MADE A REQUIRED DISTRIBUTION TO THE
APPROPRIATE LENDERS AS REQUIRED HEREINABOVE AFTER RECEIVING A PAYMENT FOR THE
ACCOUNT OF SUCH LENDERS, THE ADMINISTRATIVE AGENT WILL PAY TO EACH SUCH LENDER,
ON DEMAND, ITS RATABLE SHARE OF SUCH PAYMENT WITH INTEREST THEREON AT THE
FEDERAL FUNDS RATE FOR EACH DAY FROM THE DATE SUCH AMOUNT WAS REQUIRED TO BE
DISBURSED BY THE ADMINISTRATIVE AGENT UNTIL THE DATE REPAID TO SUCH LENDER.  THE
ADMINISTRATIVE AGENT WILL DISTRIBUTE TO THE ISSUING LENDER LIKE AMOUNTS RELATING
TO PAYMENTS MADE TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING
LENDER IN THE SAME MANNER, AND SUBJECT TO THE SAME TERMS AND CONDITIONS, AS SET
FORTH HEREINABOVE WITH RESPECT TO DISTRIBUTIONS OF AMOUNTS TO THE LENDERS.

 

(C)           UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE
FROM THE BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO ANY LENDER
HEREUNDER THAT SUCH PAYMENT WILL NOT BE MADE IN FULL, THE ADMINISTRATIVE AGENT
MAY ASSUME THAT THE BORROWER HAS MADE SUCH PAYMENT IN FULL TO THE ADMINISTRATIVE
AGENT ON SUCH DATE, AND THE ADMINISTRATIVE AGENT MAY, IN RELIANCE ON SUCH
ASSUMPTION, BUT SHALL NOT BE OBLIGATED TO, CAUSE TO BE DISTRIBUTED TO SUCH
LENDER ON SUCH DUE DATE AN AMOUNT EQUAL TO THE AMOUNT THEN DUE TO SUCH LENDER. 
IF AND TO THE EXTENT THE BORROWER SHALL NOT HAVE SO MADE SUCH PAYMENT IN FULL TO
THE ADMINISTRATIVE AGENT, AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWER TO
MAKE SUCH PAYMENT IN ACCORDANCE WITH THE TERMS HEREOF, SUCH LENDER SHALL REPAY
TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND SUCH AMOUNT SO DISTRIBUTED TO
SUCH LENDER, TOGETHER WITH INTEREST THEREON FOR EACH DAY FROM THE DATE SUCH
AMOUNT IS SO DISTRIBUTED TO SUCH LENDER UNTIL THE DATE REPAID TO THE
ADMINISTRATIVE AGENT, AT THE FEDERAL FUNDS RATE.

 

(D)           ALL COMPUTATIONS OF INTEREST AND FEES HEREUNDER (INCLUDING
COMPUTATIONS OF THE RESERVE REQUIREMENT) SHALL BE MADE ON THE BASIS OF A YEAR
CONSISTING OF (I) IN THE CASE OF INTEREST ON BASE RATE LOANS, 365/366 DAYS, AS
THE CASE MAY BE, OR (II) IN ALL OTHER INSTANCES, 360 DAYS;

 

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and in each case under (i) and (ii) above, with regard to the actual number of
days (including the first day, but excluding the last day) elapsed.

 

2.13         RECOVERY OF PAYMENTS.

 

(A)           THE BORROWER AGREES THAT TO THE EXTENT THE BORROWER MAKES A
PAYMENT OR PAYMENTS TO OR FOR THE ACCOUNT OF THE ADMINISTRATIVE AGENT, THE
SWINGLINE LENDER, ANY LENDER OR THE ISSUING LENDER, WHICH PAYMENT OR PAYMENTS OR
ANY PART THEREOF ARE SUBSEQUENTLY INVALIDATED, DECLARED TO BE FRAUDULENT OR
PREFERENTIAL, SET ASIDE OR REQUIRED TO BE REPAID TO A TRUSTEE, RECEIVER OR ANY
OTHER PARTY UNDER ANY BANKRUPTCY, INSOLVENCY OR SIMILAR STATE OR FEDERAL LAW,
COMMON LAW OR EQUITABLE CAUSE (WHETHER AS A RESULT OF ANY DEMAND, SETTLEMENT,
LITIGATION OR OTHERWISE), THEN, TO THE EXTENT OF SUCH PAYMENT OR REPAYMENT, THE
OBLIGATION INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUED IN FULL FORCE
AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN RECEIVED.

 

(B)           IF ANY AMOUNTS DISTRIBUTED BY THE ADMINISTRATIVE AGENT TO ANY
LENDER ARE SUBSEQUENTLY RETURNED OR REPAID BY THE ADMINISTRATIVE AGENT TO THE
BORROWER OR ITS REPRESENTATIVE OR SUCCESSOR IN INTEREST, WHETHER BY COURT ORDER
OR BY SETTLEMENT APPROVED BY THE LENDER IN QUESTION, SUCH LENDER WILL, PROMPTLY
UPON RECEIPT OF NOTICE THEREOF FROM THE ADMINISTRATIVE AGENT, PAY THE
ADMINISTRATIVE AGENT SUCH AMOUNT.  IF ANY SUCH AMOUNTS ARE RECOVERED BY THE
ADMINISTRATIVE AGENT FROM THE BORROWER OR ITS REPRESENTATIVE OR SUCCESSOR IN
INTEREST, THE ADMINISTRATIVE AGENT WILL REDISTRIBUTE SUCH AMOUNTS TO THE LENDERS
ON THE SAME BASIS AS SUCH AMOUNTS WERE ORIGINALLY DISTRIBUTED.

 

2.14         Use of Proceeds.  The proceeds of the Loans shall be used (i) to
finance a portion of the consideration to be paid to OrthoLogic in connection
with the BGS Acquisition, (ii) to repay the Existing Senior Bank Facilities in
full, (iii) to pay or reimburse fees and expenses in connection with the BGS
Acquisition and the transactions contemplated by this Agreement, and (iv) to
provide for working capital and general corporate purposes and in accordance
with the terms and provisions of this Agreement (including, without limitation,
to finance Permitted Acquisitions in accordance with the terms and provisions of
this Agreement).

 

2.15         PRO RATA TREATMENT.

 

(A)           EXCEPT IN THE CASE OF SWINGLINE LOANS, ALL FUNDINGS, CONTINUATIONS
AND CONVERSIONS OF LOANS OF ANY CLASS SHALL BE MADE BY THE LENDERS PRO RATA ON
THE BASIS OF THEIR RESPECTIVE COMMITMENTS TO PROVIDE LOANS OF SUCH CLASS (IN THE
CASE OF THE FUNDING OF LOANS OF SUCH CLASS PURSUANT TO SECTION 2.2) OR ON THE
BASIS OF THEIR RESPECTIVE OUTSTANDING LOANS OF SUCH CLASS (IN THE CASE OF
CONTINUATIONS AND CONVERSIONS OF LOANS OF SUCH CLASS PURSUANT TO SECTION 2.11,
AND ADDITIONALLY IN ALL CASES IN THE EVENT THE COMMITMENTS HAVE EXPIRED OR HAVE
BEEN TERMINATED), AS THE CASE MAY BE FROM TIME TO TIME.  ALL PAYMENTS ON ACCOUNT
OF PRINCIPAL OF OR INTEREST ON ANY LOANS, FEES OR ANY OTHER OBLIGATIONS OWING TO
OR FOR THE ACCOUNT OF ANY ONE OR MORE LENDERS SHALL BE APPORTIONED RATABLY AMONG
SUCH LENDERS IN PROPORTION TO THE AMOUNTS OF SUCH PRINCIPAL, INTEREST, FEES OR
OTHER OBLIGATIONS OWED TO THEM RESPECTIVELY.

 

(B)           EACH LENDER AGREES THAT IF IT SHALL RECEIVE ANY AMOUNT HEREUNDER
(WHETHER BY VOLUNTARY PAYMENT, REALIZATION UPON SECURITY, EXERCISE OF THE RIGHT
OF SETOFF OR BANKER’S LIEN, COUNTERCLAIM OR CROSS ACTION, OR OTHERWISE, OTHER
THAN PURSUANT TO SECTION 2.16(A), 2.16(B),

 

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2.16(d), 2.17, 2.18 or 11.7) applicable to the payment of any of the Obligations
that exceeds its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of such Obligations due and payable to all Lenders at such
time) of payments on account of such Obligations then or therewith obtained by
all the Lenders to which such payments are required to have been made, such
Lender shall forthwith purchase from the other Lenders such participations in
such Obligations as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender (whether as a result of any demand,
settlement, litigation or otherwise), such purchase from each such other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other Lender’s ratable share (according to the proportion
of (i) the amount of such other Lender’s required repayment to (ii) the total
amount so recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered.  The Borrower agrees that any Lender so purchasing a participation
from another Lender pursuant to the provisions of this Section 2.15(b) may, to
the fullest extent permitted by law, exercise any and all rights of payment
(including, without limitation, setoff, banker’s lien or counterclaim) with
respect to such participation as fully as if such participant were a direct
creditor of the Borrower in the amount of such participation.  If under any
applicable bankruptcy, insolvency or similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 2.15(b) applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under this
Section 2.15(b) to share in the benefits of any recovery on such secured claim.

 

2.16         INCREASED COSTS; CHANGE IN CIRCUMSTANCES; ILLEGALITY; ETC.

 

(A)           IF THE INTRODUCTION OF OR ANY CHANGE IN ANY APPLICABLE LAW, RULE
OR REGULATION OR IN THE INTERPRETATION OR ADMINISTRATION THEREOF BY ANY
GOVERNMENTAL AUTHORITY CHARGED WITH THE INTERPRETATION OR ADMINISTRATION
THEREOF, IN EACH CASE AFTER THE DATE HEREOF, OR COMPLIANCE BY ANY LENDER
(INCLUDING THE ISSUING LENDER IN ITS CAPACITY AS SUCH) WITH ANY GUIDELINE OR
REQUEST FROM ANY SUCH GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF
LAW) GIVEN OR MADE AFTER THE DATE HEREOF, SHALL (I) SUBJECT SUCH LENDER TO ANY
TAX OR OTHER CHARGE, OR CHANGE THE BASIS OF TAXATION OF PAYMENTS TO SUCH LENDER,
IN RESPECT OF ANY OF ITS LIBOR LOANS OR ANY OTHER AMOUNTS PAYABLE HEREUNDER OR
ITS OBLIGATION TO MAKE, FUND OR MAINTAIN ANY LIBOR LOANS (OTHER THAN ANY CHANGE
IN THE RATE OR BASIS OF TAX ON OR DETERMINED BY REFERENCE TO THE OVERALL NET
INCOME OR PROFITS OF SUCH LENDER OR ITS APPLICABLE LENDING OFFICE OR FRANCHISE
TAXES IMPOSED IN LIEU THEREOF), (II) IMPOSE, MODIFY OR DEEM APPLICABLE ANY
RESERVE, SPECIAL DEPOSIT OR SIMILAR REQUIREMENT (BUT EXCLUDING ANY RESERVES TO
THE EXTENT ACTUALLY INCLUDED WITHIN THE RESERVE REQUIREMENT IN THE CALCULATION
OF THE LIBOR RATE) AGAINST ASSETS OF, DEPOSITS WITH OR FOR THE ACCOUNT OF, OR
CREDIT EXTENDED BY, SUCH LENDER OR ITS APPLICABLE LENDING OFFICE, OR
(III) IMPOSE ON SUCH LENDER OR ITS APPLICABLE LENDING OFFICE ANY OTHER
CONDITION, AND THE RESULT OF ANY OF THE FOREGOING SHALL BE TO INCREASE THE COST
TO SUCH LENDER OF MAKING OR MAINTAINING ANY LIBOR LOANS OR ISSUING, MAINTAINING
OR PARTICIPATING IN LETTERS OF CREDIT OR TO REDUCE THE AMOUNT OF ANY SUM
RECEIVED OR RECEIVABLE BY SUCH LENDER HEREUNDER (INCLUDING IN RESPECT OF LETTERS
OF CREDIT), THE BORROWER WILL, PROMPTLY UPON DEMAND THEREFOR BY SUCH LENDER, PAY
TO SUCH LENDER SUCH

 

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additional amounts as shall compensate such Lender for such increase in costs or
reduction in return.

 

(B)           IF ANY LENDER (INCLUDING THE ISSUING LENDER IN ITS CAPACITY AS
SUCH) SHALL HAVE REASONABLY DETERMINED THAT THE INTRODUCTION OF OR ANY CHANGE IN
ANY APPLICABLE LAW, RULE OR REGULATION REGARDING CAPITAL ADEQUACY OR IN THE
INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL AUTHORITY CHARGED
WITH THE INTERPRETATION OR ADMINISTRATION THEREOF, IN EACH CASE AFTER THE DATE
HEREOF, OR COMPLIANCE BY SUCH LENDER WITH ANY GUIDELINE OR REQUEST FROM ANY SUCH
GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW) GIVEN OR MADE
AFTER THE DATE HEREOF, HAS OR WOULD HAVE THE EFFECT, AS A CONSEQUENCE OF SUCH
LENDER’S COMMITMENT, LOANS OR ISSUANCE OF OR PARTICIPATIONS IN LETTERS OF CREDIT
HEREUNDER, OF REDUCING THE RATE OF RETURN ON THE CAPITAL OF SUCH LENDER OR ANY
PERSON CONTROLLING SUCH LENDER TO A LEVEL BELOW THAT WHICH SUCH LENDER OR
CONTROLLING PERSON COULD HAVE ACHIEVED BUT FOR SUCH INTRODUCTION, CHANGE OR
COMPLIANCE (TAKING INTO ACCOUNT SUCH LENDER’S OR CONTROLLING PERSON’S POLICIES
WITH RESPECT TO CAPITAL ADEQUACY), THE BORROWER WILL, PROMPTLY UPON DEMAND
THEREFOR BY SUCH LENDER, PAY TO SUCH LENDER SUCH ADDITIONAL AMOUNTS AS WILL
COMPENSATE SUCH LENDER OR CONTROLLING PERSON FOR SUCH REDUCTION IN RETURN.

 

(C)           IF, ON OR PRIOR TO THE FIRST DAY OF ANY INTEREST PERIOD, (Y) THE
ADMINISTRATIVE AGENT SHALL HAVE DETERMINED THAT ADEQUATE AND REASONABLE MEANS DO
NOT EXIST FOR ASCERTAINING THE APPLICABLE LIBOR RATE FOR SUCH INTEREST PERIOD OR
(Z) THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE FROM THE
REQUIRED LENDERS OF THEIR DETERMINATION THAT THE RATE OF INTEREST REFERRED TO IN
THE DEFINITION OF “LIBOR RATE” UPON THE BASIS OF WHICH THE ADJUSTED LIBOR RATE
FOR LIBOR LOANS FOR SUCH INTEREST PERIOD IS TO BE DETERMINED WILL NOT ADEQUATELY
AND FAIRLY REFLECT THE COST TO SUCH LENDERS OF MAKING OR MAINTAINING LIBOR LOANS
DURING SUCH INTEREST PERIOD, THE ADMINISTRATIVE AGENT WILL FORTHWITH SO NOTIFY
THE BORROWER AND THE LENDERS.  UPON SUCH NOTICE, (I) ALL THEN OUTSTANDING LIBOR
LOANS SHALL AUTOMATICALLY, ON THE EXPIRATION DATE OF THE RESPECTIVE INTEREST
PERIODS APPLICABLE THERETO (UNLESS THEN REPAID IN FULL), BE CONVERTED INTO BASE
RATE LOANS, (II) THE OBLIGATION OF THE LENDERS TO MAKE, TO CONVERT BASE RATE
LOANS INTO, OR TO CONTINUE, LIBOR LOANS SHALL BE SUSPENDED (INCLUDING PURSUANT
TO THE BORROWING TO WHICH SUCH INTEREST PERIOD APPLIES), AND (III) ANY NOTICE OF
BORROWING OR NOTICE OF CONVERSION/CONTINUATION GIVEN AT ANY TIME THEREAFTER WITH
RESPECT TO LIBOR LOANS SHALL BE DEEMED TO BE A REQUEST FOR BASE RATE LOANS, IN
EACH CASE UNTIL THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS, AS THE CASE
MAY BE, SHALL HAVE DETERMINED THAT THE CIRCUMSTANCES GIVING RISE TO SUCH
SUSPENSION NO LONGER EXIST (AND THE REQUIRED LENDERS, IF MAKING SUCH
DETERMINATION, SHALL HAVE SO NOTIFIED THE ADMINISTRATIVE AGENT), AND THE
ADMINISTRATIVE AGENT SHALL HAVE SO NOTIFIED THE BORROWER AND THE LENDERS.

 

(D)           NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, IF, AT ANY
TIME AFTER THE DATE HEREOF AND FROM TIME TO TIME, ANY LENDER SHALL HAVE
DETERMINED IN GOOD FAITH THAT THE INTRODUCTION OF OR ANY CHANGE IN ANY
APPLICABLE LAW, RULE OR REGULATION OR IN THE INTERPRETATION OR ADMINISTRATION
THEREOF BY ANY GOVERNMENTAL AUTHORITY CHARGED WITH THE INTERPRETATION OR
ADMINISTRATION THEREOF, OR COMPLIANCE WITH ANY GUIDELINE OR REQUEST FROM ANY
SUCH GOVERNMENTAL AUTHORITY (WHETHER OR NOT HAVING THE FORCE OF LAW), HAS OR
WOULD HAVE THE EFFECT OF MAKING IT UNLAWFUL FOR SUCH LENDER TO MAKE OR TO
CONTINUE TO MAKE OR MAINTAIN LIBOR LOANS, SUCH LENDER WILL FORTHWITH SO NOTIFY
THE ADMINISTRATIVE AGENT AND THE BORROWER.  UPON SUCH NOTICE, (I) EACH OF SUCH
LENDER’S THEN OUTSTANDING LIBOR LOANS SHALL AUTOMATICALLY, ON THE EXPIRATION

 

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date of the respective Interest Period applicable thereto (or, to the extent any
such LIBOR Loan may not lawfully be maintained as a LIBOR Loan until such
expiration date, upon such notice) and to the extent not sooner prepaid, be
converted into a Base Rate Loan, (ii) the obligation of such Lender to make, to
convert Base Rate Loans into, or to continue, LIBOR Loans shall be suspended
(including pursuant to any Borrowing for which the Administrative Agent has
received a Notice of Borrowing but for which the Borrowing Date has not
arrived), and (iii) any Notice of Borrowing or Notice of Conversion/Continuation
given at any time thereafter with respect to LIBOR Loans shall, as to such
Lender, be deemed to be a request for a Base Rate Loan, in each case until such
Lender shall have determined that the circumstances giving rise to such
suspension no longer exist and shall have so notified the Administrative Agent,
and the Administrative Agent shall have so notified the Borrower.

 

(E)           A CERTIFICATE (WHICH SHALL BE IN REASONABLE DETAIL) SHOWING THE
BASES FOR, AND METHOD OF ALLOCATION OR APPORTIONMENT OF, THE DETERMINATIONS SET
FORTH IN THIS SECTION 2.16 BY ANY LENDER AS TO ANY ADDITIONAL AMOUNTS PAYABLE
PURSUANT TO THIS SECTION 2.16 SHALL BE SUBMITTED BY SUCH LENDER TO THE BORROWER
EITHER DIRECTLY OR THROUGH THE ADMINISTRATIVE AGENT.  THE DETERMINATIONS SET
FORTH IN ANY SUCH CERTIFICATE FOR PURPOSES OF THIS SECTION 2.16 OF ANY INCREASED
COSTS, REDUCTION IN RETURN, MARKET CONTINGENCIES, ILLEGALITY OR ANY OTHER MATTER
SHALL, ABSENT MANIFEST ERROR, BE CONCLUSIVE, PROVIDED THAT SUCH DETERMINATIONS
ARE MADE IN GOOD FAITH.  NOTHING IN THIS SECTION 2.16 SHALL REQUIRE OR BE
CONSTRUED TO REQUIRE THE BORROWER TO PAY ANY INTEREST, FEES, COSTS OR OTHER
AMOUNTS IN EXCESS OF THAT PERMITTED BY APPLICABLE LAW.

 

2.17         TAXES.

 

(A)           ANY AND ALL PAYMENTS BY THE BORROWER HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT SHALL BE MADE, IN ACCORDANCE WITH THE TERMS HEREOF AND THEREOF,
FREE AND CLEAR OF AND WITHOUT DEDUCTION FOR ANY AND ALL PRESENT OR FUTURE TAXES,
LEVIES, IMPOSTS, DEDUCTIONS, CHARGES OR WITHHOLDINGS, AND ALL LIABILITIES WITH
RESPECT THERETO, EXCLUDING BRANCH PROFITS TAXES IMPOSED ON, AND TAXES IMPOSED ON
OR DETERMINED BY REFERENCE TO THE OVERALL NET INCOME OF (OR FRANCHISE TAXES
IMPOSED ON), THE ADMINISTRATIVE AGENT OR ANY LENDER, IN EITHER CASE BY REASON OF
ANY PRESENT OR FORMER CONNECTION BETWEEN THE ADMINISTRATIVE AGENT OR SUCH LENDER
AND THE JURISDICTION OF THE GOVERNMENTAL AUTHORITY IMPOSING SUCH TAX OR ANY
POLITICAL SUBDIVISION THEREOF, OTHER THAN SUCH A CONNECTION ARISING SOLELY FROM
THE ADMINISTRATIVE AGENT OR SUCH LENDER HAVING EXECUTED, DELIVERED OR PERFORMED
ITS OBLIGATIONS OR RECEIVED A PAYMENT UNDER, OR ENFORCED, THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT (ALL SUCH NONEXCLUDED TAXES, LEVIES, IMPOSTS, DEDUCTIONS,
CHARGES, WITHHOLDINGS AND LIABILITIES BEING HEREINAFTER REFERRED TO AS
“TAXES”).  IF THE BORROWER SHALL BE REQUIRED BY LAW TO DEDUCT ANY TAXES FROM OR
IN RESPECT OF ANY SUM PAYABLE HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT TO
THE ADMINISTRATIVE AGENT OR ANY LENDER, (I) THE SUM PAYABLE SHALL BE INCREASED
AS MAY BE NECESSARY SO THAT AFTER MAKING ALL REQUIRED DEDUCTIONS (INCLUDING
DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER THIS SECTION 2.17), THE
ADMINISTRATIVE AGENT OR SUCH LENDER, AS THE CASE MAY BE, RECEIVES AN AMOUNT
EQUAL TO THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE,
(II) THE BORROWER WILL MAKE SUCH DEDUCTIONS, (III) THE BORROWER WILL PAY THE
FULL AMOUNT DEDUCTED TO THE RELEVANT TAXATION AUTHORITY OR OTHER AUTHORITY IN
ACCORDANCE WITH APPLICABLE LAW AND (IV) THE BORROWER WILL DELIVER TO THE
ADMINISTRATIVE AGENT OR SUCH LENDER, AS THE CASE MAY BE, EVIDENCE OF SUCH
PAYMENT.

 

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(B)           THE BORROWER WILL INDEMNIFY THE ADMINISTRATIVE AGENT AND EACH
LENDER FOR THE FULL AMOUNT OF TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES
IMPOSED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 2.17) PAID BY
THE ADMINISTRATIVE AGENT OR SUCH LENDER, AS THE CASE MAY BE, AND ANY LIABILITY
(INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, WHETHER OR NOT SUCH TAXES WERE CORRECTLY OR LEGALLY ASSERTED.  THIS
INDEMNIFICATION SHALL BE MADE WITHIN 30 DAYS FROM THE DATE THE ADMINISTRATIVE
AGENT OR SUCH LENDER, AS THE CASE MAY BE, MAKES WRITTEN DEMAND THEREFOR.  SUCH
WRITTEN DEMAND SHALL SET FORTH IN REASONABLE DETAIL THE AMOUNT OF TAXES PAYABLE
AND THE CALCULATION THEREOF AND SHALL BE CONCLUSIVE AND BINDING ABSENT MANIFEST
ERROR, PROVIDED SUCH DETERMINATION IS MADE IN GOOD FAITH.

 

(C)           EACH OF THE ADMINISTRATIVE AGENT AND THE LENDERS AGREES THAT IF IT
SUBSEQUENTLY RECOVERS, OR RECEIVES A PERMANENT NET TAX BENEFIT WITH RESPECT TO,
ANY AMOUNT OF TAXES (I) PREVIOUSLY PAID BY IT AND AS TO WHICH IT HAS BEEN
INDEMNIFIED BY OR ON BEHALF OF THE BORROWER OR (II) PREVIOUSLY DEDUCTED BY THE
BORROWER (INCLUDING, WITHOUT LIMITATION, ANY TAXES DEDUCTED FROM ANY ADDITIONAL
SUMS PAYABLE UNDER SECTION 2.17(A)(I)), THE ADMINISTRATIVE AGENT OR SUCH LENDER,
AS THE CASE MAY BE, SHALL REIMBURSE THE BORROWER TO THE EXTENT OF THE AMOUNT OF
ANY SUCH RECOVERY OR PERMANENT NET TAX BENEFIT (BUT ONLY TO THE EXTENT OF
INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY OR ON BEHALF OF THE
BORROWER UNDER THIS SECTION 2.17 WITH RESPECT TO THE TAXES GIVING RISE TO SUCH
RECOVERY OR TAX BENEFIT); PROVIDED, HOWEVER, THAT THE BORROWER, UPON THE REQUEST
OF THE ADMINISTRATIVE AGENT OR SUCH LENDER, AGREES TO REPAY TO THE
ADMINISTRATIVE AGENT OR SUCH LENDER, AS THE CASE MAY BE, THE AMOUNT PAID OVER TO
THE BORROWER (TOGETHER WITH ANY PENALTIES, INTEREST OR OTHER CHARGES), IN THE
EVENT THE ADMINISTRATIVE AGENT OR SUCH LENDER IS REQUIRED TO REPAY SUCH AMOUNT
TO THE RELEVANT TAXING AUTHORITY OR OTHER GOVERNMENTAL AUTHORITY.  THE
ADMINISTRATIVE AGENT OR SUCH LENDER SHALL PROVIDE THE BORROWER WITH A
CERTIFICATE IN REASONABLE DETAIL SHOWING THE CALCULATIONS OF THE DISTRIBUTIONS
TO THE BORROWER PURSUANT TO THIS SECTION 2.17(C), WHICH CALCULATIONS SHALL BE
CONCLUSIVE AND BINDING ABSENT MANIFEST ERROR, PROVIDED SUCH DETERMINATION IS
MADE IN GOOD FAITH.  NOTHING IN THIS SECTION 2.17 SHALL OBLIGATE ANY LENDER TO
DISCLOSE TO THE BORROWER ANY TAX RETURNS OR OTHER INFORMATION REGARDING ITS TAX
AFFAIRS THAT IT DEEMS IN GOOD FAITH TO BE CONFIDENTIAL.

 

(D)           IF ANY LENDER IS NOT A UNITED STATES PERSON (AS SUCH TERM IS
DEFINED IN SECTION 7701(A)(30) OF THE CODE) FOR FEDERAL INCOME TAX PURPOSES (A
“NON-U.S. LENDER”) AND IS ENTITLED TO AN EXEMPTION FROM OR A REDUCTION OF UNITED
STATES WITHHOLDING TAX PURSUANT TO THE INTERNAL REVENUE CODE, SUCH NON-U.S.
LENDER WILL DELIVER TO EACH OF THE ADMINISTRATIVE AGENT AND THE BORROWER, ON OR
PRIOR TO THE CLOSING DATE (OR, IN THE CASE OF A NON-U.S. LENDER THAT BECOMES A
PARTY TO THIS AGREEMENT AS A RESULT OF AN ASSIGNMENT AFTER THE CLOSING DATE, ON
THE EFFECTIVE DATE OF SUCH ASSIGNMENT), (I) IN THE CASE OF A NON-U.S. LENDER
THAT IS A “BANK” FOR PURPOSES OF SECTION 881(C)(3)(A) OF THE INTERNAL REVENUE
CODE, TWO ACCURATE AND PROPERLY COMPLETED ORIGINAL SIGNED COPIES OF INTERNAL
REVENUE SERVICE FORM W-8BEN OR W-8ECI, AS APPLICABLE (OR SUCCESSOR FORMS),
CERTIFYING THAT SUCH NON-U.S. LENDER IS ENTITLED TO AN EXEMPTION FROM OR A
REDUCTION OF WITHHOLDING OR DEDUCTION FOR OR ON ACCOUNT OF UNITED STATES FEDERAL
INCOME TAXES IN CONNECTION WITH PAYMENTS UNDER THIS AGREEMENT OR ANY OF THE
OTHER CREDIT DOCUMENTS, OR (II) IN THE CASE OF A NON-U.S. LENDER THAT IS NOT A
“BANK” FOR PURPOSES OF SECTION 881(C)(3)(A) OF THE INTERNAL REVENUE CODE, A
CERTIFICATE IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT AND THE BORROWER AND TO THE EFFECT THAT (X) SUCH NON-U.S. LENDER IS NOT A
“BANK” FOR PURPOSES OF SECTION 881(C)(3)(A) OF THE INTERNAL REVENUE CODE, IS NOT
SUBJECT TO REGULATORY OR OTHER LEGAL REQUIREMENTS AS A BANK IN ANY

 

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jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (y) is not a 10-percent
shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code
and (z) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Internal Revenue
Code, together with two accurate and properly completed original signed copies
of Internal Revenue Service Form W-8BEN (or successor form).  Each such Non-U.S.
Lender further agrees to deliver to each of the Administrative Agent and the
Borrower additional copies of each such relevant form on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
(including a change in its applicable Lending Office) requiring a change in the
most recent forms so delivered by it, in each case certifying that such Non-U.S.
Lender is entitled to an exemption from or a reduction of withholding or
deduction for or on account of United States federal income taxes in connection
with payments under this Agreement or any of the other Credit Documents, unless
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required, which event renders all such forms inapplicable or the
exemption or reduction to which such forms relate unavailable and such Non-U.S.
Lender notifies the Administrative Agent and the Borrower that it is not
entitled to receive payments without or at a reduced rate of deduction or
withholding of United States federal income taxes.  Each such Non-U.S. Lender
will promptly notify the Administrative Agent and the Borrower of any changes in
circumstances that would modify or render invalid any claimed exemption or
reduction.

 

(E)           THE BORROWER SHALL NOT BE REQUIRED TO INDEMNIFY ANY NON-U.S.
LENDER, OR TO PAY ANY ADDITIONAL AMOUNTS TO ANY NON-U.S. LENDER, IN RESPECT OF
UNITED STATES FEDERAL WITHHOLDING TAX TO THE EXTENT THAT (I) THE OBLIGATION TO
WITHHOLD AMOUNTS WITH RESPECT TO UNITED STATES FEDERAL WITHHOLDING TAX EXISTED
ON THE DATE SUCH NON-U.S. LENDER BECAME A PARTY TO THIS AGREEMENT; PROVIDED,
HOWEVER, THAT THIS CLAUSE (I) SHALL NOT APPLY TO THE EXTENT THAT (Y) THE
INDEMNITY PAYMENTS OR ADDITIONAL AMOUNTS ANY LENDER WOULD BE ENTITLED TO RECEIVE
(WITHOUT REGARD TO THIS CLAUSE (I)) DO NOT EXCEED THE INDEMNITY PAYMENT OR
ADDITIONAL AMOUNTS THAT THE PERSON MAKING THE ASSIGNMENT, PARTICIPATION OR
TRANSFER TO SUCH LENDER WOULD HAVE BEEN ENTITLED TO RECEIVE IN THE ABSENCE OF
SUCH ASSIGNMENT, PARTICIPATION OR TRANSFER, OR (Z) SUCH ASSIGNMENT,
PARTICIPATION OR TRANSFER WAS REQUESTED BY THE BORROWER, (II) THE OBLIGATION TO
PAY SUCH ADDITIONAL AMOUNTS WOULD NOT HAVE ARISEN BUT FOR A FAILURE BY SUCH
NON-U.S. LENDER TO COMPLY WITH THE PROVISIONS OF SECTION 2.17(D), OR (III) ANY
OF THE REPRESENTATIONS OR CERTIFICATIONS MADE BY A NON-U.S. LENDER PURSUANT TO
SECTION 2.17(D) ARE INCORRECT AT THE TIME A PAYMENT HEREUNDER IS MADE, OTHER
THAN BY REASON OF ANY CHANGE IN TREATY, LAW OR REGULATION HAVING EFFECT AFTER
THE DATE SUCH REPRESENTATIONS OR CERTIFICATIONS WERE MADE.

 

2.18         Compensation.  The Borrower will compensate each Lender upon demand
for all losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund or maintain LIBOR
Loans) that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a Borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or
conversion of any LIBOR Loan occurs on a date other than the last day of an
Interest Period applicable thereto

 

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(including as a consequence of acceleration of the maturity of the Loans
pursuant to Section 9.2), (iii) if any prepayment of any LIBOR Loan is not made
on any date specified in a notice of prepayment given by the Borrower or (iv) as
a consequence of any other failure by the Borrower to make any payments with
respect to any LIBOR Loan when due hereunder.  Calculation of all amounts
payable to a Lender under this Section 2.18 shall be made as though such Lender
had actually funded its relevant LIBOR Loan through the purchase of a Eurodollar
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
such LIBOR Loan, having a maturity comparable to the relevant Interest Period;
provided, however, that each Lender may fund its LIBOR Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 2.18.  A certificate (which shall be in
reasonable detail) showing the bases for the determinations set forth in this
Section 2.18 by any Lender as to any additional amounts payable pursuant to this
Section 2.18 shall be submitted by such Lender to the Borrower either directly
or through the Administrative Agent.  Determinations set forth in any such
certificate made in good faith for purposes of this Section 2.18 of any such
losses, expenses or liabilities shall be conclusive absent manifest error,
provided such determination was made in good faith.

 

2.19         REPLACEMENT OF LENDERS; MITIGATION OF COSTS.

 

(A)           THE BORROWER MAY, AT ANY TIME AND SO LONG AS NO DEFAULT OR EVENT
OF DEFAULT HAS THEN OCCURRED AND IS CONTINUING, REPLACE ANY LENDER (I) THAT HAS
REQUESTED COMPENSATION FROM THE BORROWER UNDER SECTION 2.16(A), 2.16(B) OR 2.17,
(II) THE OBLIGATION OF WHICH TO MAKE OR MAINTAIN LIBOR LOANS HAS BEEN SUSPENDED
UNDER SECTION 2.16(D) OR (III) THAT IS A DEFAULTING LENDER, IN ANY CASE UNDER
CLAUSES (I) THROUGH (III) ABOVE BY WRITTEN NOTICE TO SUCH LENDER AND THE
ADMINISTRATIVE AGENT GIVEN NOT MORE THAN SIXTY (60) DAYS AFTER ANY SUCH EVENT
AND IDENTIFYING ONE OR MORE PERSONS EACH OF WHICH SHALL BE AN ELIGIBLE ASSIGNEE
AND REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT (EACH, A “REPLACEMENT
LENDER,” AND COLLECTIVELY, THE “REPLACEMENT LENDERS”) TO REPLACE SUCH LENDER
(THE “REPLACED LENDER”), PROVIDED THAT (I) THE NOTICE FROM THE BORROWER TO THE
REPLACED LENDER AND THE ADMINISTRATIVE AGENT PROVIDED FOR HEREINABOVE SHALL
SPECIFY AN EFFECTIVE DATE FOR SUCH REPLACEMENT (THE “REPLACEMENT EFFECTIVE
DATE”), WHICH SHALL BE AT LEAST FIVE (5) BUSINESS DAYS AFTER SUCH NOTICE IS
GIVEN, (II) AS OF THE RELEVANT REPLACEMENT EFFECTIVE DATE, EACH REPLACEMENT
LENDER SHALL ENTER INTO AN ASSIGNMENT AND ACCEPTANCE WITH THE REPLACED LENDER
PURSUANT TO SECTION 11.7(A) (BUT SHALL NOT BE REQUIRED TO PAY THE PROCESSING FEE
OTHERWISE PAYABLE TO THE ADMINISTRATIVE AGENT PURSUANT TO SECTION 11.7(A), WHICH
FEE, FOR PURPOSES HEREOF, SHALL BE WAIVED), PURSUANT TO WHICH SUCH REPLACEMENT
LENDERS COLLECTIVELY SHALL ACQUIRE, IN SUCH PROPORTION AMONG THEM AS THEY MAY
AGREE WITH THE BORROWER AND THE ADMINISTRATIVE AGENT, ALL (BUT NOT LESS THAN
ALL) OF THE COMMITMENTS AND OUTSTANDING LOANS OF THE REPLACED LENDER, AND, IN
CONNECTION THEREWITH, SHALL PAY (X) TO THE REPLACED LENDER, AS THE PURCHASE
PRICE IN RESPECT THEREOF, AN AMOUNT EQUAL TO THE SUM AS OF THE REPLACEMENT
EFFECTIVE DATE (WITHOUT DUPLICATION) OF (1) THE UNPAID PRINCIPAL AMOUNT OF, AND
ALL ACCRUED BUT UNPAID INTEREST ON, ALL OUTSTANDING LOANS OF THE REPLACED LENDER
AND (2) THE REPLACED LENDER’S RATABLE SHARE OF ALL ACCRUED BUT UNPAID FEES OWING
TO THE REPLACED LENDER HEREUNDER, (Y) TO THE ADMINISTRATIVE AGENT, FOR ITS OWN
ACCOUNT, ANY AMOUNTS OWING TO THE ADMINISTRATIVE AGENT BY THE REPLACED LENDER
UNDER SECTION 2.3(B), AND (Z) TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF
THE SWINGLINE LENDER, ANY AMOUNTS OWING TO THE SWINGLINE LENDER UNDER
SECTION 2.2(E), AND (III) ALL OTHER OBLIGATIONS OF THE BORROWER OWING TO THE
REPLACED LENDER (OTHER THAN THOSE SPECIFICALLY DESCRIBED IN CLAUSE (II) ABOVE IN
RESPECT OF WHICH THE ASSIGNMENT PURCHASE PRICE HAS

 

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been, or is concurrently being, paid), including, without limitation, amounts
payable under Sections 2.16(a), 2.16(b) and 2.17 which give rise to the
replacement of such Replaced Lender and amounts payable under Section 2.18 as a
result of the actions required to be taken under this Section 2.19, shall be
paid in full by the Borrower to the Replaced Lender on or prior to the
Replacement Effective Date.

 

(B)           ANY LENDER (INCLUDING THE ISSUING LENDER IN SUCH CAPACITY)
CLAIMING ANY AMOUNTS PURSUANT TO SECTION 2.16(A), 2.16(B) OR 2.17 SHALL USE
REASONABLE EFFORTS (CONSISTENT WITH LEGAL AND REGULATORY RESTRICTIONS) TO AVOID
ANY COSTS, REDUCTIONS OR TAXES IN RESPECT OF WHICH SUCH AMOUNTS ARE CLAIMED,
INCLUDING THE FILING OF ANY CERTIFICATE OR DOCUMENT REASONABLY REQUESTED BY THE
BORROWER OR THE CHANGING OF THE JURISDICTION OF ITS LENDING OFFICE, IF SUCH
EFFORTS WOULD AVOID THE NEED FOR OR REDUCE THE AMOUNT OF ANY SUCH AMOUNTS WHICH
WOULD THEREAFTER ACCRUE AND WOULD NOT, IN THE SOLE DETERMINATION OF SUCH LENDER,
RESULT IN ANY ADDITIONAL RISKS OR UNREIMBURSED COSTS OR EXPENSES TO SUCH LENDER
OR BE OTHERWISE DISADVANTAGEOUS TO SUCH LENDER.

 

(C)           NO FAILURE BY THE ADMINISTRATIVE AGENT OR ANY LENDER AT ANY TIME
TO DEMAND PAYMENT OF ANY AMOUNTS PAYABLE UNDER SECTIONS 2.16(A), 2.16(B), 2.17
OR 2.18 SHALL CONSTITUTE A WAIVER OF ITS RIGHT TO DEMAND PAYMENT OF SUCH AMOUNTS
AT ANY LATER TIME OR TO DEMAND PAYMENT OF ANY ADDITIONAL AMOUNTS ARISING AT ANY
LATER TIME; PROVIDED THAT THE BORROWER SHALL NOT BE REQUIRED TO COMPENSATE ANY
LENDER PURSUANT TO SECTIONS 2.16(A), 2.16(B), 2.17 OR 2.18 FOR ANY INCREASED
COSTS, REDUCTIONS IN RETURN, TAXES OR OTHER AMOUNTS INCURRED MORE THAN 180 DAYS
PRIOR TO THE DATE THAT SUCH LENDER OR THE ADMINISTRATIVE AGENT NOTIFIES THE
BORROWER OF THE CIRCUMSTANCES OR EVENT GIVING RISE THERETO AND OF ITS INTENTION
TO CLAIM COMPENSATION IN RESPECT THEREOF; BUT PROVIDED FURTHER THAT IF ANY
CHANGE IN LAW (OR CHANGE IN INTERPRETATION OR ADMINISTRATION THEREOF) OR ANY
OTHER SUCH EVENT GIVING RISE TO ANY CLAIM FOR COMPENSATION PURSUANT TO
SECTIONS 2.16(A), 2.16(B), 2.17 OR 2.18 IS RETROACTIVE, THEN THE 180-DAY PERIOD
REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE PERIOD OF RETROACTIVE EFFECT
THEREOF.

 

ARTICLE III

 

LETTERS OF CREDIT

 

3.1           Issuance.  Subject to and upon the terms and conditions herein set
forth, so long as no Default or Event of Default has occurred and is continuing,
the Issuing Lender will, at any time and from time to time on and after the
Closing Date and prior to the earlier of (i) the Letter of Credit Maturity Date
and (ii) the Revolving Credit Termination Date, and upon request by the Borrower
in accordance with the provisions of Section 3.2, issue for the account of the
Borrower one or more irrevocable standby letters of credit denominated in
Dollars and in a form customarily used or otherwise approved by the Issuing
Lender (together with all amendments, modifications and supplements thereto,
substitutions therefor and renewals and restatements thereof, collectively, the
“Letters of Credit”).  The Stated Amount of each Letter of Credit shall not be
less than such amount as may be acceptable to the Issuing Lender. 
Notwithstanding the foregoing:

 

(A)           NO LETTER OF CREDIT SHALL BE ISSUED IF THE STATED AMOUNT UPON
ISSUANCE (I) WHEN ADDED TO THE AGGREGATE LETTER OF CREDIT EXPOSURE OF THE
REVOLVING CREDIT LENDERS AT SUCH TIME, WOULD EXCEED THE LETTER OF CREDIT
SUBCOMMITMENT, OR (II) WHEN ADDED TO THE AGGREGATE

 

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REVOLVING CREDIT EXPOSURE, WOULD EXCEED THE AGGREGATE REVOLVING CREDIT
COMMITMENTS AT SUCH TIME;

 

(B)           NO LETTER OF CREDIT SHALL BE ISSUED THAT BY ITS TERMS EXPIRES
LATER THAN THE LETTER OF CREDIT MATURITY DATE OR, IN ANY EVENT, MORE THAN ONE
(1) YEAR AFTER ITS DATE OF ISSUANCE; PROVIDED, HOWEVER, THAT A LETTER OF CREDIT
MAY, IF REQUESTED BY THE BORROWER, PROVIDE BY ITS TERMS, AND ON TERMS ACCEPTABLE
TO THE ISSUING LENDER, FOR RENEWAL FOR SUCCESSIVE PERIODS OF ONE YEAR OR LESS
(BUT NOT BEYOND THE LETTER OF CREDIT MATURITY DATE), UNLESS AND UNTIL THE
ISSUING LENDER SHALL HAVE DELIVERED A NOTICE OF NONRENEWAL AT LEAST 30 DAYS
PRIOR TO THE THEN EXPIRY THEREOF TO THE BENEFICIARY OF SUCH LETTER OF CREDIT;
AND

 

(C)           THE ISSUING LENDER SHALL BE UNDER NO OBLIGATION TO ISSUE ANY
LETTER OF CREDIT IF, AT THE TIME OF SUCH PROPOSED ISSUANCE, (I) ANY ORDER,
JUDGMENT OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR ARBITRATOR SHALL PURPORT BY
ITS TERMS TO ENJOIN OR RESTRAIN THE ISSUING LENDER FROM ISSUING SUCH LETTER OF
CREDIT, OR ANY REQUIREMENT OF LAW APPLICABLE TO THE ISSUING LENDER OR ANY
REQUEST OR DIRECTIVE (WHETHER OR NOT HAVING THE FORCE OF LAW) FROM ANY
GOVERNMENTAL AUTHORITY WITH JURISDICTION OVER THE ISSUING LENDER SHALL PROHIBIT,
OR REQUEST THAT THE ISSUING LENDER REFRAIN FROM, THE ISSUANCE OF LETTERS OF
CREDIT GENERALLY OR SUCH LETTER OF CREDIT IN PARTICULAR OR SHALL IMPOSE UPON THE
ISSUING LENDER WITH RESPECT TO SUCH LETTER OF CREDIT ANY RESTRICTION OR RESERVE
OR CAPITAL REQUIREMENT (FOR WHICH THE ISSUING LENDER IS NOT OTHERWISE
COMPENSATED) NOT IN EFFECT ON THE CLOSING DATE, OR ANY UNREIMBURSED LOSS, COST
OR EXPENSE THAT WAS NOT APPLICABLE, IN EFFECT OR KNOWN TO THE ISSUING LENDER AS
OF THE CLOSING DATE AND THAT THE ISSUING LENDER IN GOOD FAITH DEEMS MATERIAL TO
IT, OR (II) THE ISSUING LENDER SHALL HAVE ACTUAL KNOWLEDGE, OR SHALL HAVE
RECEIVED NOTICE FROM ANY LENDER, PRIOR TO THE ISSUANCE OF SUCH LETTER OF CREDIT
THAT ONE OR MORE OF THE CONDITIONS SPECIFIED IN SECTION 4.1 (IF APPLICABLE) OR
SECTION 4.2 ARE NOT THEN SATISFIED (OR HAVE NOT BEEN WAIVED IN WRITING AS
REQUIRED HEREIN) OR THAT THE ISSUANCE OF SUCH LETTER OF CREDIT WOULD VIOLATE THE
PROVISIONS OF SECTION 3.1(A).

 

3.2           NOTICES.  WHENEVER THE BORROWER DESIRES THE ISSUANCE OF A LETTER
OF CREDIT, THE BORROWER WILL GIVE THE ISSUING LENDER WRITTEN NOTICE WITH A COPY
TO THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M., CHARLOTTE TIME, THREE (3)
BUSINESS DAYS (OR SUCH SHORTER PERIOD AS IS ACCEPTABLE TO THE ISSUING LENDER IN
ANY GIVEN CASE) PRIOR TO THE REQUESTED DATE OF ISSUANCE THEREOF.  EACH SUCH
NOTICE (EACH, A “LETTER OF CREDIT NOTICE”) SHALL BE IRREVOCABLE, SHALL BE GIVEN
IN THE FORM OF EXHIBIT B-4 AND SHALL SPECIFY (I) THE REQUESTED DATE OF ISSUANCE,
WHICH SHALL BE A BUSINESS DAY, (II) THE REQUESTED STATED AMOUNT AND EXPIRY DATE
OF THE LETTER OF CREDIT, AND (III) THE NAME AND ADDRESS OF THE REQUESTED
BENEFICIARY OR BENEFICIARIES OF THE LETTER OF CREDIT.  THE BORROWER WILL ALSO
COMPLETE ANY APPLICATION PROCEDURES AND DOCUMENTS REASONABLY REQUIRED BY THE
ISSUING LENDER IN CONNECTION WITH THE ISSUANCE OF ANY LETTER OF CREDIT.  UPON
ITS ISSUANCE OF ANY LETTER OF CREDIT, THE ISSUING LENDER WILL PROMPTLY NOTIFY
THE ADMINISTRATIVE AGENT OF SUCH ISSUANCE, AND THE ADMINISTRATIVE AGENT WILL
GIVE PROMPT NOTICE THEREOF TO EACH REVOLVING CREDIT LENDER.  THE RENEWAL OR
EXTENSION OF ANY OUTSTANDING LETTER OF CREDIT SHALL, FOR PURPOSES OF THIS
ARTICLE III, BE TREATED IN ALL RESPECTS AS THE ISSUANCE OF A NEW LETTER OF
CREDIT.

 

3.3           PARTICIPATIONS.  IMMEDIATELY UPON THE ISSUANCE OF ANY LETTER OF
CREDIT, THE ISSUING LENDER SHALL BE DEEMED TO HAVE SOLD AND TRANSFERRED TO EACH
REVOLVING CREDIT LENDER, AND EACH REVOLVING CREDIT LENDER SHALL BE DEEMED
IRREVOCABLY AND UNCONDITIONALLY TO HAVE PURCHASED AND RECEIVED FROM THE ISSUING
LENDER, WITHOUT RECOURSE OR WARRANTY (EXCEPT FOR THE ABSENCE OF LIENS

 

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thereon created, incurred or suffered to exist by, through or under the Issuing
Lender), an undivided interest and participation, pro rata (based on the
percentage of the aggregate Revolving Credit Commitments represented by such
Revolving Credit Lender’s Revolving Credit Commitment), in such Letter of
Credit, each drawing made thereunder and the obligations of the Borrower under
this Agreement with respect thereto and any Collateral or other security
therefor or guaranty pertaining thereto; provided, however, that the fee
relating to Letters of Credit described in Section 2.9(d) shall be payable
directly to the Issuing Lender as provided therein, and the other Revolving
Credit Lenders shall have no right to receive any portion thereof.  In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Lender, such Lender’s pro rata share (determined
as provided above) of each Reimbursement Obligation not reimbursed by the
Borrower on the date due as provided in Section 3.4 or through the Borrowing of
Revolving Loans as provided in Section 3.5, or of any reimbursement payment
required to be refunded to the Borrower for any reason.  Upon any change in the
Revolving Credit Commitments of any of the Revolving Credit Lenders pursuant to
Section 11.7(a), with respect to all outstanding Letters of Credit and
Reimbursement Obligations there shall be an automatic adjustment to the
participations pursuant to this Section 3.3 to reflect the new pro rata shares
of the assigning Lender and the Assignee.  Each Revolving Lender’s obligation to
make payment to the Issuing Lender pursuant to this Section 3.4 shall be
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the termination of the Revolving Credit Commitments or the
existence of any Default or Event of Default, and each such payment shall be
made without any offset, abatement, reduction or withholding whatsoever.

 

3.4           REIMBURSEMENT.  THE BORROWER HEREBY AGREES TO REIMBURSE THE
ISSUING LENDER BY MAKING PAYMENT TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF
THE ISSUING LENDER, IN IMMEDIATELY AVAILABLE FUNDS, FOR ANY PAYMENT MADE BY THE
ISSUING LENDER UNDER ANY LETTER OF CREDIT (EACH SUCH AMOUNT SO PAID UNTIL
REIMBURSED, TOGETHER WITH INTEREST THEREON PAYABLE AS PROVIDED HEREINBELOW, A
“REIMBURSEMENT OBLIGATION”) IMMEDIATELY AFTER, AND IN ANY EVENT WITHIN ONE (1)
BUSINESS DAY AFTER ITS RECEIPT OF NOTICE OF, SUCH PAYMENT (PROVIDED THAT ANY
SUCH REIMBURSEMENT OBLIGATION SHALL BE DEEMED TIMELY SATISFIED (BUT NEVERTHELESS
SUBJECT TO THE PAYMENT OF INTEREST THEREON AS PROVIDED HEREINBELOW) IF SATISFIED
PURSUANT TO A BORROWING OF REVOLVING LOANS MADE ON OR PRIOR TO THE NEXT BUSINESS
DAY FOLLOWING THE DATE OF THE BORROWER’S RECEIPT OF NOTICE OF SUCH PAYMENT, AS
SET FORTH MORE COMPLETELY IN SECTION 3.5), TOGETHER WITH INTEREST ON THE AMOUNT
SO PAID BY THE ISSUING LENDER, TO THE EXTENT NOT REIMBURSED PRIOR TO 2:00 P.M.,
CHARLOTTE TIME, ON THE DATE OF SUCH PAYMENT OR DISBURSEMENT, FOR THE PERIOD FROM
THE DATE OF THE RESPECTIVE PAYMENT TO THE DATE THE REIMBURSEMENT OBLIGATION
CREATED THEREBY IS SATISFIED, AT THE ADJUSTED BASE RATE APPLICABLE TO REVOLVING
LOANS AS IN EFFECT FROM TIME TO TIME DURING SUCH PERIOD, SUCH INTEREST ALSO TO
BE PAYABLE ON DEMAND.  THE ISSUING LENDER WILL PROVIDE THE ADMINISTRATIVE AGENT
AND THE BORROWER WITH PROMPT NOTICE OF ANY PAYMENT OR DISBURSEMENT MADE UNDER
ANY LETTER OF CREDIT, ALTHOUGH THE FAILURE TO GIVE, OR ANY DELAY IN GIVING, ANY
SUCH NOTICE SHALL NOT RELEASE, DIMINISH OR OTHERWISE AFFECT THE BORROWER’S
OBLIGATIONS UNDER THIS SECTION 3.4 OR ANY OTHER PROVISION OF THIS AGREEMENT. 
THE ADMINISTRATIVE AGENT WILL PROMPTLY PAY TO THE ISSUING LENDER ANY SUCH
AMOUNTS RECEIVED BY IT UNDER THIS SECTION 3.4.

 

3.5           PAYMENT BY REVOLVING LOANS.  IN THE EVENT THAT THE ISSUING LENDER
MAKES ANY PAYMENT UNDER ANY LETTER OF CREDIT AND THE BORROWER SHALL NOT HAVE
TIMELY SATISFIED IN FULL ITS

 

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Reimbursement Obligation to the Issuing Lender pursuant to Section 3.4, and to
the extent that any amounts then held in the Cash Collateral Account established
pursuant to Section 3.8 shall be insufficient to satisfy such Reimbursement
Obligation in full, the Issuing Lender will promptly notify the Administrative
Agent, and the Administrative Agent will promptly notify each Revolving Credit
Lender, of such failure.  If the Administrative Agent gives such notice prior to
12:00 noon, Charlotte time, on any Business Day, each Revolving Credit Lender
will make available to the Administrative Agent, for the account of the Issuing
Lender, its pro rata share (based on the percentage of the aggregate Revolving
Credit Commitments represented by such Lender’s Revolving Credit Commitment) of
the amount of such payment on such Business Day in immediately available funds.
 If the Administrative Agent gives such notice after 12:00 noon, Charlotte time,
on any Business Day, each such Revolving Credit Lender shall make its pro rata
share of such amount available to the Administrative Agent on the next
succeeding Business Day.  If and to the extent any Revolving Credit Lender shall
not have so made its pro rata share of the amount of such payment available to
the Administrative Agent, such Lender agrees to pay to the Administrative Agent,
for the account of the Issuing Lender, forthwith on demand such amount, together
with interest thereon at the Federal Funds Rate for each day from such date
until the date such amount is paid to the Administrative Agent.  The failure of
any Revolving Credit Lender to make available to the Administrative Agent its
pro rata share of any payment under any Letter of Credit shall not relieve any
other Revolving Credit Lender of its obligation hereunder to make available to
the Administrative Agent its pro rata share of any payment under any Letter of
Credit on the date required, as specified above, but no Revolving Credit Lender
shall be responsible for the failure of any other Revolving Credit Lender to
make available to the Administrative Agent such other Revolving Credit Lender’s
pro rata share of any such payment.  Each such payment by a Revolving Credit
Lender under this Section 3.5 of its pro rata share of an amount paid by the
Issuing Lender shall constitute a Revolving Loan by such Revolving Credit Lender
(the Borrower being deemed to have given a timely Notice of Borrowing therefor)
and shall be treated as such for all purposes of this Agreement; provided that
for purposes of determining the aggregate Unutilized Revolving Credit
Commitments immediately prior to giving effect to the application of the
proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied
thereby shall be deemed not to be outstanding at such time.  Each Revolving
Lender’s obligation to make Revolving Loans pursuant to this Section 3.5 shall
be absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, (i) the existence of any Default or
Event of Default, (ii) the failure of the amount of such Borrowing of Revolving
Loans to meet the minimum Borrowing amount specified in Section 2.2(b), or
(iii) the failure of any conditions set forth in Section 4.2 or elsewhere herein
to be satisfied.

 

3.6           PAYMENT TO REVOLVING CREDIT LENDERS.  WHENEVER THE ISSUING LENDER
RECEIVES A PAYMENT IN RESPECT OF A REIMBURSEMENT OBLIGATION AS TO WHICH THE
ADMINISTRATIVE AGENT HAS RECEIVED, FOR THE ACCOUNT OF THE ISSUING LENDER, ANY
PAYMENTS FROM THE REVOLVING CREDIT LENDERS PURSUANT TO SECTION 3.5, THE ISSUING
LENDER WILL PROMPTLY PAY TO THE ADMINISTRATIVE AGENT, AND THE ADMINISTRATIVE
AGENT WILL PROMPTLY PAY TO EACH REVOLVING CREDIT LENDER THAT HAS PAID ITS PRO
RATA SHARE THEREOF, IN IMMEDIATELY AVAILABLE FUNDS, AN AMOUNT EQUAL TO SUCH
REVOLVING CREDIT LENDER’S RATABLE SHARE (BASED ON THE PROPORTIONATE AMOUNT
FUNDED BY SUCH REVOLVING CREDIT LENDER TO THE AGGREGATE AMOUNT FUNDED BY ALL
REVOLVING CREDIT LENDERS) OF SUCH REIMBURSEMENT OBLIGATION.

 

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3.7           OBLIGATIONS ABSOLUTE.  THE REIMBURSEMENT OBLIGATIONS OF THE
BORROWER SHALL BE IRREVOCABLE, SHALL REMAIN IN EFFECT UNTIL THE ISSUING LENDER
SHALL HAVE NO FURTHER OBLIGATIONS TO MAKE ANY PAYMENTS OR DISBURSEMENTS UNDER
ANY CIRCUMSTANCES WITH RESPECT TO ANY LETTER OF CREDIT, AND SHALL BE ABSOLUTE
AND UNCONDITIONAL, SHALL NOT BE SUBJECT TO COUNTERCLAIM, SETOFF OR OTHER DEFENSE
OR ANY OTHER QUALIFICATION OR EXCEPTION WHATSOEVER AND SHALL BE MADE IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT UNDER ALL
CIRCUMSTANCES, INCLUDING, WITHOUT LIMITATION, ANY OF THE FOLLOWING
CIRCUMSTANCES:

 

(A)           ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT, ANY OF
THE OTHER CREDIT DOCUMENTS OR ANY DOCUMENTS OR INSTRUMENTS RELATING TO ANY
LETTER OF CREDIT;

 

(B)           ANY CHANGE IN THE TIME, MANNER OR PLACE OF PAYMENT OF, OR IN ANY
OTHER TERM OF, ALL OR ANY OF THE OBLIGATIONS IN RESPECT OF ANY LETTER OF CREDIT
OR ANY OTHER AMENDMENT, MODIFICATION OR WAIVER OF OR ANY CONSENT TO DEPARTURE
FROM ANY LETTER OF CREDIT OR ANY DOCUMENTS OR INSTRUMENTS RELATING THERETO, IN
EACH CASE WHETHER OR NOT THE BORROWER HAS NOTICE OR KNOWLEDGE THEREOF;

 

(C)           THE EXISTENCE OF ANY CLAIM, SETOFF, DEFENSE OR OTHER RIGHT THAT
THE BORROWER MAY HAVE AT ANY TIME AGAINST A BENEFICIARY NAMED IN A LETTER OF
CREDIT, ANY TRANSFEREE OF ANY LETTER OF CREDIT (OR ANY PERSON FOR WHOM ANY SUCH
TRANSFEREE MAY BE ACTING), THE ADMINISTRATIVE AGENT, THE ISSUING LENDER, ANY
LENDER OR OTHER PERSON, WHETHER IN CONNECTION WITH THIS AGREEMENT, ANY LETTER OF
CREDIT, THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY UNRELATED TRANSACTIONS
(INCLUDING ANY UNDERLYING TRANSACTION BETWEEN THE BORROWER AND THE BENEFICIARY
NAMED IN ANY SUCH LETTER OF CREDIT);

 

(D)           ANY DRAFT, CERTIFICATE OR ANY OTHER DOCUMENT PRESENTED UNDER THE
LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN
ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT
(PROVIDED THAT SUCH DRAFT, CERTIFICATE OR OTHER DOCUMENT APPEARS ON ITS FACE TO
COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), ANY ERRORS, OMISSIONS,
INTERRUPTIONS OR DELAYS IN TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL,
TELECOPIER OR OTHERWISE, OR ANY ERRORS IN TRANSLATION OR IN INTERPRETATION OF
TECHNICAL TERMS;

 

(E)           ANY DEFENSE BASED UPON THE FAILURE OF ANY DRAWING UNDER A LETTER
OF CREDIT TO CONFORM TO THE TERMS OF THE LETTER OF CREDIT (PROVIDED THAT ANY
DRAFT, CERTIFICATE OR OTHER DOCUMENT PRESENTED PURSUANT TO SUCH LETTER OF CREDIT
APPEARS ON ITS FACE TO COMPLY WITH THE TERMS THEREOF), ANY NONAPPLICATION OR
MISAPPLICATION BY THE BENEFICIARY OR ANY TRANSFEREE OF THE PROCEEDS OF SUCH
DRAWING OR ANY OTHER ACT OR OMISSION OF SUCH BENEFICIARY OR TRANSFEREE IN
CONNECTION WITH SUCH LETTER OF CREDIT;

 

(F)            THE EXCHANGE, RELEASE, SURRENDER OR IMPAIRMENT OF ANY COLLATERAL
OR OTHER SECURITY FOR THE OBLIGATIONS;

 

(G)           THE OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT; OR

 

(H)           ANY OTHER CIRCUMSTANCE OR EVENT WHATSOEVER, INCLUDING, WITHOUT
LIMITATION, ANY OTHER CIRCUMSTANCE THAT MIGHT OTHERWISE CONSTITUTE A DEFENSE
AVAILABLE TO, OR A DISCHARGE OF, THE BORROWER OR A GUARANTOR; PROVIDED THAT
NOTHING IN THE FOREGOING SHALL BE DEEMED TO EXCUSE THE ISSUING LENDER FROM
LIABILITY TO THE BORROWER TO THE EXTENT OF ANY DAMAGES SUFFERED BY THE

 

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Borrower that are caused by the Issuing Lender’s gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.

 

Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon the Borrower and
each Lender and shall not create or result in any liability of the Issuing
Lender to the Borrower or any Lender.  It is expressly understood and agreed
that, for purposes of determining whether a wrongful payment under a Letter of
Credit resulted from the Issuing Lender’s gross negligence or willful
misconduct, (i) the Issuing Lender’s acceptance of documents that appear on
their face to comply with the terms of such Letter of Credit, without
responsibility for further investigation, regardless of any notice or
information to the contrary, (ii) the Issuing Lender’s exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including the amount of any draft presented under such Letter
of Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document appears on its face to comply with the terms of such Letter of Credit),
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of the Issuing Lender.

 

3.8           CASH COLLATERAL ACCOUNT.  AT ANY TIME AND FROM TIME TO TIME
(I) AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, THE
ADMINISTRATIVE AGENT MAY, AND AT THE DIRECTION OR WITH THE CONSENT OF THE
REQUIRED LENDERS SHALL, REQUIRE THE BORROWER TO DELIVER TO THE ADMINISTRATIVE
AGENT SUCH ADDITIONAL AMOUNT OF CASH AS IS EQUAL TO 105% OF THE AGGREGATE LETTER
OF CREDIT THEN OUTSTANDING (WHETHER OR NOT ANY BENEFICIARY UNDER ANY LETTER OF
CREDIT SHALL HAVE DRAWN OR BE ENTITLED AT SUCH TIME TO DRAW THEREUNDER) PLUS ALL
ACCRUED AND UNPAID INTEREST AND FEES THEREON AND (II) IN THE EVENT OF A
PREPAYMENT UNDER SECTION 2.6(C) OR SECTION 2.6(H), THE ADMINISTRATIVE AGENT WILL
RETAIN SUCH AMOUNT AS MAY THEN BE REQUIRED TO BE RETAINED, SUCH AMOUNTS IN EACH
CASE UNDER CLAUSES (I) AND (II) ABOVE TO BE HELD BY THE ADMINISTRATIVE AGENT IN
A CASH COLLATERAL ACCOUNT (THE “CASH COLLATERAL ACCOUNT”).  THE BORROWER HEREBY
GRANTS TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE ISSUING LENDER AND
THE LENDERS, A LIEN UPON AND SECURITY INTEREST IN THE CASH COLLATERAL ACCOUNT
AND ALL AMOUNTS HELD THEREIN FROM TIME TO TIME AS SECURITY FOR LETTER OF CREDIT
EXPOSURE, AND FOR APPLICATION TO THE BORROWER’S REIMBURSEMENT OBLIGATIONS AS AND
WHEN THE SAME SHALL ARISE.  THE ADMINISTRATIVE AGENT SHALL HAVE EXCLUSIVE
DOMINION AND CONTROL, INCLUDING THE EXCLUSIVE RIGHT OF WITHDRAWAL, OVER SUCH
ACCOUNT.  OTHER THAN ANY INTEREST ON THE INVESTMENT OF SUCH AMOUNTS IN CASH
EQUIVALENTS, WHICH INVESTMENTS SHALL BE MADE AT THE DIRECTION OF THE BORROWER
(UNLESS A DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, IN
WHICH CASE THE DETERMINATION AS TO INVESTMENTS SHALL BE MADE AT THE OPTION AND
IN THE DISCRETION OF THE ADMINISTRATIVE AGENT), AMOUNTS IN THE CASH COLLATERAL
ACCOUNT SHALL NOT BEAR INTEREST.  INTEREST AND PROFITS, IF ANY, ON SUCH
INVESTMENTS SHALL ACCUMULATE IN SUCH ACCOUNT.  IN THE EVENT OF A DRAWING, AND
SUBSEQUENT PAYMENT BY THE ISSUING LENDER, UNDER ANY LETTER OF CREDIT AT ANY TIME
DURING WHICH ANY AMOUNTS ARE HELD IN THE CASH COLLATERAL ACCOUNT, THE
ADMINISTRATIVE AGENT WILL DELIVER TO THE ISSUING LENDER AN AMOUNT EQUAL TO THE
REIMBURSEMENT OBLIGATION CREATED AS A RESULT OF SUCH PAYMENT

 

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(or, if the amounts so held are less than such Reimbursement Obligation, all of
such amounts) to reimburse the Issuing Lender therefor.  Any amounts remaining
in the Cash Collateral Account (including interest) after the expiration of all
Letters of Credit and reimbursement in full of the Issuing Lender for all of its
obligations thereunder shall be held by the Administrative Agent, for the
benefit of the Borrower, to be applied against the Obligations in such order and
manner as the Administrative Agent may direct.  If the Borrower is required to
provide cash collateral pursuant to Section 2.6(c), such amount (including
interest), to the extent not applied as aforesaid, shall be returned to the
Borrower on demand, provided that after giving effect to such return (i) the
Aggregate Revolving Credit Exposure would not exceed the aggregate Revolving
Credit Commitments at such time and (ii) no Default or Event of Default shall
have occurred and be continuing at such time.  If the Borrower is required to
provide cash collateral as a result of an Event of Default, such amount (to the
extent not applied as aforesaid) shall be returned to the Borrower within three
(3) Business Days after all Events of Default have been cured or waived.

 

3.9           EFFECTIVENESS.  NOTWITHSTANDING ANY TERMINATION OF THE REVOLVING
CREDIT COMMITMENTS OR REPAYMENT OF THE LOANS, OR BOTH, THE OBLIGATIONS OF THE
BORROWER UNDER THIS ARTICLE III SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL THE
ISSUING LENDER AND THE REVOLVING CREDIT LENDERS SHALL HAVE NO FURTHER
OBLIGATIONS TO MAKE ANY PAYMENTS OR DISBURSEMENTS UNDER ANY CIRCUMSTANCES WITH
RESPECT TO ANY LETTER OF CREDIT.

 

ARTICLE IV

 

CONDITIONS OF BORROWING

 

4.1           CONDITIONS OF INITIAL BORROWING.  THE OBLIGATION OF EACH LENDER TO
MAKE LOANS IN CONNECTION WITH THE INITIAL BORROWING HEREUNDER, AND THE
OBLIGATION OF THE ISSUING LENDER TO ISSUE LETTERS OF CREDIT HEREUNDER ON THE
CLOSING DATE, IS SUBJECT TO THE SATISFACTION OF THE FOLLOWING CONDITIONS
PRECEDENT:

 

(A)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE FOLLOWING, EACH
DATED AS OF THE CLOSING DATE (UNLESS OTHERWISE SPECIFIED) AND IN SUCH NUMBER OF
COPIES AS THE ADMINISTRATIVE AGENT SHALL HAVE REQUESTED:

 

(I)            TO THE EXTENT REQUESTED BY ANY LENDER IN ACCORDANCE WITH
SECTION 2.4(D), A NOTE OR NOTES FOR SUCH LENDER, IN EACH CASE DULY COMPLETED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 2.4(A) AND EXECUTED BY THE BORROWER;

 

(II)           THE GUARANTY AGREEMENT, DULY COMPLETED AND EXECUTED BY EACH
SUBSIDIARY (OTHER THAN ANY FOREIGN SUBSIDIARY);

 

(III)          THE SECURITY AGREEMENT, DULY COMPLETED AND EXECUTED BY THE
PARENT, THE BORROWER AND EACH SUBSIDIARY (OTHER THAN ANY FOREIGN SUBSIDIARY);

 

(IV)          THE PLEDGE AGREEMENT, DULY COMPLETED AND EXECUTED BY THE PARENT,
THE BORROWER AND EACH SUBSIDIARY (OTHER THAN ANY FOREIGN SUBSIDIARY) THAT OWNS
CAPITAL STOCK OF ANOTHER SUBSIDIARY, TOGETHER WITH ANY CERTIFICATES EVIDENCING
THE CAPITAL STOCK BEING PLEDGED THEREUNDER AS OF THE CLOSING DATE AND UNDATED
ASSIGNMENTS SEPARATE FROM CERTIFICATE FOR ANY SUCH CERTIFICATE, DULY EXECUTED IN
BLANK;

 

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(V)                                 SHORT-FORM SECURITY AGREEMENTS FOR THE
FEDERALLY REGISTERED INTELLECTUAL PROPERTY REFERRED TO IN ANNEXES C, D AND E OF
THE SECURITY AGREEMENT, IN SUBSTANTIALLY THE FORM OF EXHIBITS B AND C (AS
APPLICABLE) TO THE SECURITY AGREEMENT; AND

 

(VI)                              THE FAVORABLE OPINIONS OF (A) BINGHAM
MCCUTCHEN LLP, SPECIAL COUNSEL TO THE PARENT AND ITS SUBSIDIARIES, AND
(B) GENERAL COUNSEL TO THE PARENT AND ITS SUBSIDIARIES, EACH IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND (TO THE
EXTENT REASONABLY AVAILABLE) COPIES OF THE OPINION REQUIRED TO BE DELIVERED BY
COUNSEL TO ORTHOLOGIC PURSUANT TO THE BGS ASSET PURCHASE AGREEMENT, ACCOMPANIED
BY A RELIANCE LETTER (UNLESS SUCH OPINION IS ADDRESSED TO THE ADMINISTRATIVE
AGENT AND THE LENDERS OR EXPRESSLY INCLUDES A RELIANCE PROVISION) FROM THE
COUNSEL RENDERING SUCH OPINION, TO THE EFFECT THAT THE ADMINISTRATIVE AGENT AND
THE LENDERS ARE ENTITLED TO RELY ON SUCH OPINION AS IF IT WERE ADDRESSED TO THE
ADMINISTRATIVE AGENT AND THE LENDERS, AND ADDRESSING SUCH OTHER MATTERS AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST, ALL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(B)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
A CERTIFICATE, SIGNED BY THE PRESIDENT, THE CHIEF EXECUTIVE OFFICER OR THE CHIEF
FINANCIAL OFFICER OF THE PARENT, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE ADMINISTRATIVE AGENT, CERTIFYING THAT (I) AS OF THE CLOSING DATE, ALL
REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES CONTAINED IN THIS AGREEMENT
AND THE OTHER CREDIT DOCUMENTS QUALIFIED AS TO MATERIALITY ARE TRUE AND CORRECT
AND THOSE NOT SO QUALIFIED ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS, BOTH
IMMEDIATELY BEFORE AND AFTER GIVING EFFECT TO THE CONSUMMATION OF THE BGS
ACQUISITION AND THE TRANSACTIONS CONTEMPLATED HEREBY (EXCEPT TO THE EXTENT ANY
SUCH REPRESENTATION OR WARRANTY IS EXPRESSLY STATED TO HAVE BEEN MADE AS OF A
SPECIFIC DATE, IN WHICH CASE SUCH REPRESENTATION OR WARRANTY IS TRUE AND CORRECT
(IF QUALIFIED AS TO MATERIALITY) OR TRUE AND CORRECT IN ALL MATERIAL RESPECTS
(IF NOT SO QUALIFIED), IN EACH CASE AS OF SUCH DATE), (II) NO DEFAULT OR EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING, BOTH IMMEDIATELY BEFORE AND AFTER
GIVING EFFECT TO THE CONSUMMATION OF THE BGS ACQUISITION AND THE TRANSACTIONS
CONTEMPLATED HEREBY, (III) BOTH IMMEDIATELY BEFORE AND AFTER GIVING EFFECT TO
THE CONSUMMATION OF THE BGS ACQUISITION AND THE TRANSACTIONS CONTEMPLATED
HEREBY, NO MATERIAL ADVERSE EFFECT HAS OCCURRED SINCE DECEMBER 31, 2002, AND
THERE EXISTS NO EVENT, CONDITION OR STATE OF FACTS THAT COULD REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, AND (IV) ALL CONDITIONS TO THE
INITIAL EXTENSIONS OF CREDIT HEREUNDER SET FORTH IN THIS SECTION 4.1 AND IN
SECTION 4.2 HAVE BEEN SATISFIED OR WAIVED AS REQUIRED HEREUNDER.

 

(C)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY OF EACH CREDIT
PARTY EXECUTING ANY CREDIT DOCUMENTS AS OF THE CLOSING DATE, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, CERTIFYING
(I) THAT ATTACHED THERETO IS A TRUE AND COMPLETE COPY OF THE ARTICLES OR
CERTIFICATE OF INCORPORATION, CERTIFICATE OF FORMATION OR OTHER ORGANIZATIONAL
DOCUMENT AND ALL AMENDMENTS THERETO OF SUCH CREDIT PARTY, CERTIFIED AS OF A
RECENT DATE BY THE SECRETARY OF STATE (OR COMPARABLE GOVERNMENTAL AUTHORITY) OF
ITS JURISDICTION OF ORGANIZATION, AND THAT THE SAME HAS NOT BEEN AMENDED SINCE
THE DATE OF SUCH CERTIFICATION, (II) THAT ATTACHED THERETO IS A TRUE AND
COMPLETE COPY OF THE BYLAWS, OPERATING AGREEMENT OR SIMILAR GOVERNING DOCUMENT
OF SUCH CREDIT PARTY, AS THEN IN EFFECT AND AS IN EFFECT AT ALL TIMES FROM THE
DATE ON WHICH THE RESOLUTIONS REFERRED TO IN CLAUSE (III) BELOW WERE ADOPTED TO
AND INCLUDING THE DATE OF SUCH CERTIFICATE, AND (III) THAT ATTACHED THERETO IS A
TRUE AND

 

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complete copy of resolutions adopted by the board of directors (or similar
governing body) of such Credit Party, authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party, and as to the incumbency and genuineness of the signature of each officer
of such Credit Party executing this Agreement or any of such other Credit
Documents, and attaching all such copies of the documents described above.

 

(D)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
(I) A CERTIFICATE AS OF A RECENT DATE OF THE GOOD STANDING OF EACH CREDIT PARTY
EXECUTING ANY CREDIT DOCUMENTS AS OF THE CLOSING DATE, UNDER THE LAWS OF ITS
JURISDICTION OF ORGANIZATION, FROM THE SECRETARY OF STATE (OR COMPARABLE
GOVERNMENTAL AUTHORITY) OF SUCH JURISDICTION, AND (II) A CERTIFICATE AS OF A
RECENT DATE OF THE QUALIFICATION OF EACH CREDIT PARTY TO CONDUCT BUSINESS AS A
FOREIGN CORPORATION IN EACH JURISDICTION WHERE IT IS SO QUALIFIED AS OF THE
CLOSING DATE, FROM THE SECRETARY OF STATE (OR COMPARABLE GOVERNMENTAL AUTHORITY)
OF SUCH JURISDICTION.

 

(E)                                  ALL APPROVALS, PERMITS AND CONSENTS OF ANY
GOVERNMENTAL AUTHORITIES OR OTHER PERSONS (INCLUDING THE STOCKHOLDERS OF, AND
LENDERS TO, ORTHOLOGIC) REQUIRED IN CONNECTION WITH THE EXECUTION AND DELIVERY
OF THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS AND THE BGS ASSET PURCHASE
AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY SHALL HAVE BEEN OBTAINED, WITHOUT THE IMPOSITION OF CONDITIONS THAT ARE
NOT ACCEPTABLE TO THE ADMINISTRATIVE AGENT, AND ALL RELATED FILINGS, IF ANY,
SHALL HAVE BEEN MADE, AND ALL SUCH APPROVALS, PERMITS, CONSENTS AND FILINGS
SHALL BE IN FULL FORCE AND EFFECT AND THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED SUCH COPIES THEREOF AS IT SHALL HAVE REASONABLY REQUESTED; ALL
APPLICABLE WAITING PERIODS SHALL HAVE EXPIRED WITHOUT ANY ADVERSE ACTION BEING
TAKEN OR THREATENED BY ANY GOVERNMENTAL AUTHORITY HAVING JURISDICTION; AND NO
ACTION, PROCEEDING, INVESTIGATION, REGULATION OR LEGISLATION SHALL HAVE BEEN
INSTITUTED, THREATENED OR PROPOSED BEFORE, AND NO ORDER, INJUNCTION OR DECREE
SHALL HAVE BEEN ENTERED BY, ANY COURT OR OTHER GOVERNMENTAL AUTHORITY, IN EACH
CASE TO ENJOIN, RESTRAIN OR PROHIBIT, TO OBTAIN SUBSTANTIAL DAMAGES IN RESPECT
OF, OR TO IMPOSE MATERIALLY ADVERSE CONDITIONS UPON, THIS AGREEMENT, ANY OF THE
OTHER CREDIT DOCUMENTS OR THE BGS ASSET PURCHASE AGREEMENT, OR THE CONSUMMATION
OF THE BGS ACQUISITION OR THAT COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

(F)                                    THE APPROVAL OF THE BGS ASSET PURCHASE
AGREEMENT BY THE BORROWER’S BOARD OF DIRECTORS SHALL NOT HAVE BEEN WITHDRAWN OR
MODIFIED IN A MANNER ADVERSE TO THE LENDERS; AND THE ADMINISTRATIVE AGENT SHALL
BE SATISFIED THAT, PRIOR TO OR SUBSTANTIALLY CONCURRENTLY WITH THE MAKING OF THE
INITIAL LOANS HEREUNDER, THE BGS ACQUISITION SHALL HAVE BEEN CONSUMMATED IN
ACCORDANCE WITH THE TERMS OF THE BGS ASSET PURCHASE AGREEMENT AND ALL OTHER
APPLICABLE DOCUMENTATION AND IN COMPLIANCE WITH ALL APPLICABLE LAW AND
REGULATORY APPROVALS, WITHOUT ANY AMENDMENT OR WAIVER OF ANY MATERIAL CONDITION
OR OTHER PROVISION THEREOF EXCEPT AS APPROVED BY THE ADMINISTRATIVE AGENT.

 

(G)                                 THE ADMINISTRATIVE AGENT SHALL BE SATISFIED
THAT (I) THE AGGREGATE PURCHASE PRICE FOR THE BGS ACQUISITION WILL NOT EXCEED
$93,000,000 (WITHOUT TAKING INTO ACCOUNT ANY ASSUMED LIABILITIES OR POST-CLOSING
WORKING CAPITAL ADJUSTMENT TO THE PURCHASE PRICE), AND (II) AGGREGATE FEES AND
EXPENSES PAYABLE BY OR ON BEHALF OF THE BORROWER IN CONNECTION WITH THE BGS
ACQUISITION AND THE TRANSACTIONS CONTEMPLATED HEREBY WILL NOT EXCEED $7,000,000.

 

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(H)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
A CERTIFICATE OF A FINANCIAL OFFICER OF THE BORROWER SATISFACTORY TO IT,
DEMONSTRATING THAT THE CONSUMMATION BY THE BORROWER OF THE TRANSACTIONS
CONTEMPLATED HEREBY AND THE MAKING OF THE INITIAL LOANS HEREUNDER ON THE CLOSING
DATE WILL BE PERMITTED UNDER SECTION 4.03 OF THE SENIOR SUBORDINATED NOTE
INDENTURE.

 

(I)                                     CONCURRENTLY WITH THE MAKING OF THE
INITIAL LOANS HEREUNDER, (I) ALL PRINCIPAL, INTEREST AND OTHER AMOUNTS
OUTSTANDING UNDER THE BORROWER’S EXISTING SENIOR BANK CREDIT FACILITIES (THE
“EXISTING SENIOR BANK FACILITIES”) SHALL BE REPAID AND SATISFIED IN FULL AND ALL
GUARANTEES BY THE CREDIT PARTIES RELATING THERETO EXTINGUISHED, (II) ALL
COMMITMENTS TO EXTEND CREDIT UNDER THE AGREEMENTS AND INSTRUMENTS RELATING TO
THE EXISTING SENIOR BANK FACILITIES SHALL BE TERMINATED, AND (III) ANY LIENS
SECURING THE EXISTING SENIOR BANK FACILITIES SHALL BE RELEASED AND ANY RELATED
FILINGS (INCLUDING UCC FINANCING STATEMENTS, MORTGAGES, AND INTELLECTUAL
PROPERTY FILINGS) TERMINATED OF RECORD (OR ARRANGEMENTS SATISFACTORY TO THE
ADMINISTRATIVE AGENT MADE THEREFOR), AND THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED EVIDENCE OF THE FOREGOING SATISFACTORY TO IT.

 

(J)                                     THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED CERTIFIED REPORTS FROM AN INDEPENDENT SEARCH SERVICE SATISFACTORY TO IT
LISTING ANY JUDGMENT OR TAX LIEN FILING OR UNIFORM COMMERCIAL CODE FINANCING
STATEMENT THAT NAMES ANY CREDIT PARTY AS DEBTOR IN ANY OF THE JURISDICTIONS
LISTED BENEATH ITS NAME ON ANNEX B TO THE SECURITY AGREEMENT, AS WELL AS LIEN
SEARCH RESULTS WITH RESPECT TO FOREIGN SUBSIDIARIES IN THEIR JURISDICTION OF
ORGANIZATION (TO THE EXTENT REQUESTED BY THE ADMINISTRATIVE AGENT) AND LIEN
SEARCH RESULTS WITH RESPECT TO THE SELLERS OF THE BGS BUSINESS IN SUCH
JURISDICTIONS AS SHALL HAVE BEEN REQUESTED BY THE ADMINISTRATIVE AGENT, AND THE
RESULTS THEREOF SHALL BE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(K)                                  WITH RESPECT TO THE “PURCHASED ASSETS” (AS
DEFINED IN THE BGS ASSET PURCHASE AGREEMENT), THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED SUCH LIEN RELEASES (INCLUDING A LIEN RELEASE LETTER OR OTHER
AGREEMENT AND UCC-3 FINANCING STATEMENT PARTIAL RELEASES) FROM THE LENDERS UNDER
ORTHOLOGIC’S SENIOR BANK CREDIT FACILITY (OR THE AGENT THEREUNDER ON THEIR
BEHALF) AS IT MAY HAVE REQUESTED.

 

(L)                                     THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO IT THAT ALL FILINGS,
RECORDINGS, REGISTRATIONS AND OTHER ACTIONS (INCLUDING, WITHOUT LIMITATION, THE
FILING OF DULY COMPLETED UCC-1 FINANCING STATEMENTS IN EACH JURISDICTION LISTED
ON ANNEX A TO THE SECURITY AGREEMENT) NECESSARY TO PERFECT THE LIENS CREATED BY
THE SECURITY DOCUMENTS SHALL HAVE BEEN COMPLETED, OR ARRANGEMENTS SATISFACTORY
TO THE ADMINISTRATIVE AGENT FOR THE COMPLETION THEREOF SHALL HAVE BEEN MADE.

 

(M)                               SINCE DECEMBER 31, 2002, BOTH IMMEDIATELY
BEFORE AND AFTER GIVING EFFECT TO THE CONSUMMATION OF THE BGS ACQUISITION AND
THE TRANSACTIONS CONTEMPLATED HEREBY, THERE SHALL NOT HAVE OCCURRED (I) A
MATERIAL ADVERSE EFFECT OR (II) ANY EVENT, CONDITION OR STATE OF FACTS THAT
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(N)                                 THE BORROWER SHALL HAVE PAID (I) TO THE
ARRANGER AND WACHOVIA, THE FEES REQUIRED UNDER THE FEE LETTER TO BE PAID TO THEM
ON THE CLOSING DATE, IN THE AMOUNTS DUE AND PAYABLE ON THE CLOSING DATE AS
REQUIRED BY THE TERMS THEREOF, (II) TO THE ADMINISTRATIVE AGENT, THE INITIAL
PAYMENT OF THE ANNUAL ADMINISTRATIVE FEE DESCRIBED IN THE FEE LETTER, AND
(III) ALL OTHER FEES AND REASONABLE EXPENSES OF THE ARRANGER, THE ADMINISTRATIVE
AGENT AND THE LENDERS REQUIRED

 

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hereunder or under any other Credit Document to be paid on or prior to the
Closing Date (including reasonable fees and expenses of counsel) in connection
with this Agreement and the other Credit Documents.

 

(O)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
(I) COPIES OF THE AUDITED FINANCIAL STATEMENTS REFERRED TO IN SECTION 5.11(A)
AND A FINANCIAL CONDITION CERTIFICATE, (II) THE PROJECTIONS, (III) UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT AND ITS SUBSIDIARIES AND THE BGS
BUSINESS AS OF THE LAST DAY OF THE MONTH MOST RECENTLY ENDED PRIOR TO THE
CLOSING DATE FOR WHICH SUCH FINANCIAL STATEMENTS ARE AVAILABLE, AND (IV) AN
UNAUDITED CONSOLIDATED OPENING BALANCE SHEET OF THE PARENT AND ITS SUBSIDIARIES
AS OF THE LAST DAY OF THE TENTH FISCAL MONTH OF FISCAL YEAR 2003, GIVING PRO
FORMA EFFECT TO THE CONSUMMATION OF THE BGS ACQUISITION, THE REPAYMENT OF THE
EXISTING SENIOR BANK FACILITIES, THE INITIAL EXTENSIONS OF CREDIT MADE UNDER
THIS AGREEMENT AND THE PAYMENT OF TRANSACTION FEES AND EXPENSES RELATED TO THE
FOREGOING, ALL AS IF SUCH EVENTS HAD OCCURRED ON SUCH DATE (THE “PRO FORMA
BALANCE SHEET”), ALL OF WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE
ADMINISTRATIVE AGENT.

 

(P)                                 THE ADMINISTRATIVE AGENT SHALL BE SATISFIED
THAT, ON A PRO FORMA BASIS AFTER GIVING EFFECT TO THE CONSUMMATION OF THE BGS
ACQUISITION, THE REPAYMENT OF THE EXISTING SENIOR BANK FACILITIES, THE INITIAL
EXTENSIONS OF CREDIT MADE UNDER THIS AGREEMENT, AND THE PAYMENT OF TRANSACTION
FEES AND EXPENSES RELATED TO THE FOREGOING, ALL AS IF SUCH TRANSACTIONS HAD
OCCURRED ON THE DATE OF THE PRO FORMA BALANCE SHEET, (I) PRO FORMA CLOSING
EBITDA IS NOT LESS THAN $50,100,000, AND (III) CONSOLIDATED TOTAL FUNDED DEBT IS
NOT GREATER THAN PRO FORMA CLOSING EBITDA MULTIPLIED BY 3.7; AND THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE OF A FINANCIAL OFFICER OF
THE BORROWER AS TO THE FOREGOING, TOGETHER WITH SUPPORTING DOCUMENTATION, ALL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(Q)                                 THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY TO IT THAT ALL OF THE REQUIREMENTS
OF SECTION 6.6 AND THOSE PROVISIONS OF THE SECURITY AGREEMENT RELATING TO THE
MAINTENANCE OF INSURANCE WITH RESPECT TO THE COLLATERAL HAVE BEEN SATISFIED,
INCLUDING RECEIPT OF CERTIFICATES OF INSURANCE EVIDENCING THE INSURANCE
COVERAGES DESCRIBED ON SCHEDULE 5.18 AND ALL OTHER OR ADDITIONAL COVERAGES
REQUIRED UNDER THE SECURITY AGREEMENT AND NAMING THE ADMINISTRATIVE AGENT AS
LOSS PAYEE OR ADDITIONAL INSURED, AS ITS INTERESTS MAY APPEAR.

 

(R)                                    THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED AN ACCOUNT DESIGNATION LETTER, TOGETHER WITH WRITTEN INSTRUCTIONS FROM
AN AUTHORIZED OFFICER OF THE BORROWER, INCLUDING WIRE TRANSFER INFORMATION,
DIRECTING THE PAYMENT OF THE PROCEEDS OF THE INITIAL LOANS TO BE MADE HEREUNDER.

 

(S)                                  EACH OF THE ADMINISTRATIVE AGENT AND EACH
LENDER SHALL HAVE RECEIVED SUCH OTHER DOCUMENTS, CERTIFICATES, OPINIONS AND
INSTRUMENTS IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY AS IT SHALL
HAVE REASONABLY REQUESTED.

 

4.2                                 Conditions of All Borrowings.  The
obligation of each Lender to make any Loans hereunder, including the initial
Loans (but excluding Revolving Loans made for the purpose of repaying Refunded
Swingline Loans pursuant to Section 2.2(e)), and the obligation of the

 

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Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:

 

(A)                                  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A NOTICE OF BORROWING IN ACCORDANCE WITH SECTION 2.2(B), OR (TOGETHER
WITH THE SWINGLINE LENDER) A NOTICE OF SWINGLINE BORROWING IN ACCORDANCE WITH
SECTION 2.2(D), OR (TOGETHER WITH THE ISSUING LENDER) A LETTER OF CREDIT NOTICE
IN ACCORDANCE WITH SECTION 3.2, AS APPLICABLE;

 

(B)                                 EACH OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE V AND IN THE OTHER CREDIT DOCUMENTS QUALIFIED AS TO
MATERIALITY SHALL BE TRUE AND CORRECT AND THOSE NOT SO QUALIFIED SHALL BE TRUE
AND CORRECT IN ALL MATERIAL RESPECTS, IN EACH CASE ON AND AS OF SUCH BORROWING
DATE (INCLUDING THE CLOSING DATE, IN THE CASE OF THE INITIAL LOANS MADE
HEREUNDER) OR DATE OF ISSUANCE OF A LETTER OF CREDIT WITH THE SAME EFFECT AS IF
MADE ON AND AS OF SUCH DATE, BOTH IMMEDIATELY BEFORE AND AFTER GIVING EFFECT TO
THE LOANS TO BE MADE OR LETTER OF CREDIT TO BE ISSUED ON SUCH DATE (EXCEPT TO
THE EXTENT ANY SUCH REPRESENTATION OR WARRANTY IS EXPRESSLY STATED TO HAVE BEEN
MADE AS OF A SPECIFIC DATE, IN WHICH CASE SUCH REPRESENTATION OR WARRANTY SHALL
BE TRUE AND CORRECT (IF QUALIFIED AS TO MATERIALITY) OR TRUE AND CORRECT IN ALL
MATERIAL RESPECTS (IF NOT SO QUALIFIED), IN EACH CASE AS OF SUCH DATE); AND

 

(C)                                  NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING ON SUCH DATE, BOTH IMMEDIATELY BEFORE AND AFTER
GIVING EFFECT TO THE LOANS TO BE MADE OR LETTER OF CREDIT TO BE ISSUED ON SUCH
DATE.

 

Each giving of a Notice of Borrowing, a Notice of Swingline Borrowing or a
Letter of Credit Notice, and the consummation of each Borrowing or issuance of a
Letter of Credit, shall be deemed to constitute a representation by the Borrower
that the statements contained in Sections 4.2(b) and 4.2(c) are true, both as of
the date of such notice or request and as of the relevant Borrowing Date or date
of issuance.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

To induce the Administrative Agent, the Issuing Lender and the Lenders to enter
into this Agreement and to induce the Lenders to extend the credit contemplated
hereby and the Issuing Lender to issue Letters of Credit, each of the Parent and
the Borrower represents and warrants to the Administrative Agent, the Issuing
Lender and the Lenders as follows:

 

5.1                                 Corporate Organization and Power.  Each
Credit Party (i) is a corporation or a limited liability company duly organized
or formed, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as the case may be (which
jurisdictions, as of the Closing Date, are set forth on Schedule 5.1), (ii) has
the full corporate or limited liability company power and authority to execute,
deliver and perform the Credit Documents to which it is or will be a party, to
own and hold its property and to engage in its business as presently conducted,
and (iii) is duly qualified to do business as a foreign corporation or limited
liability company and is in good standing in each jurisdiction where the nature
of its business or the ownership of its properties requires it to be so
qualified, except where the failure

 

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to be so qualified, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.2                                 Authorization; Enforceability.  Each Credit
Party has taken, or on the Closing Date will have taken, all necessary corporate
or limited liability action, as applicable, to execute, deliver and perform each
of the Credit Documents to which it is or will be a party, and has, or on the
Closing Date (or any later date of execution and delivery) will have, validly
executed and delivered each of the Credit Documents to which it is or will be a
party.  This Agreement constitutes, and each of the other Credit Documents upon
execution and delivery will constitute, the legal, valid and binding obligation
of each Credit Party that is a party hereto or thereto, enforceable against it
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, by general equitable principles or by
principles of good faith and fair dealing (regardless of whether enforcement is
sought in equity or at law).

 

5.3                                 No Violation.  The execution, delivery and
performance by each Credit Party of each of the Credit Documents to which it is
or will be a party, and compliance by it with the terms hereof and thereof, do
not and will not (i) violate any provision of its articles or certificate of
incorporation or formation, its bylaws or operating agreement, or other
applicable formation or organizational documents, (ii) contravene any other
Requirement of Law applicable to it, (iii) conflict with, result in a breach of
or constitute (with notice, lapse of time or both) a default under any
indenture, agreement or other instrument to which it is a party, by which it or
any of its properties is bound or to which it is subject, or (iv) except for the
Liens granted in favor of the Administrative Agent pursuant to the Security
Documents, result in or require the creation or imposition of any Lien upon any
of its properties, revenues or assets; except, in the case of clauses (ii) and
(iii) above, where such violations or conflicts, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.4                                 Governmental and Third-Party Authorization;
Permits.  No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each Credit Party of this Agreement or
any of the other Credit Documents to which it is or will be a party or the
legality, validity or enforceability hereof or thereof, other than (i) filings
of Uniform Commercial Code financing statements and other instruments and
actions necessary to perfect the Liens created by the Security Documents,
(ii) consents, authorizations and filings that have been (or on or prior to the
Closing Date will have been) made or obtained and that are (or on the Closing
Date will be) in full force and effect, which consents, authorizations and
filings are listed on Schedule 5.4, and (iii) consents and filings the failure
to obtain or make which, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.  Each Credit Party has, and is in
good standing with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

 

5.5                                 Litigation.  Except as specified in
Schedule 5.5, there are no actions, investigations, suits or proceedings pending
or, to the knowledge of the Borrower, threatened, at

 

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law, in equity or in arbitration, before any court, other Governmental
Authority, arbitrator or other Person, (i) against or affecting any Credit Party
or any of their respective properties that, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, or (ii) with respect
to this Agreement, any of the other Credit Documents, the BGS Asset Purchase
Agreement or any of the transactions contemplated hereby or thereby.

 

5.6                                 Taxes.  Each Credit Party has timely filed
all federal, state, local and foreign tax returns and reports required to be
filed by it and has paid, prior to the date on which penalties would attach
thereto or a Lien would attach to any of the properties of a Credit Party if
unpaid, all taxes, assessments, fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable, other than those that
are not yet delinquent or that are being contested in good faith and by proper
proceedings and for which adequate reserves have been established in accordance
with GAAP.  Such returns accurately reflect in all material respects all
liability for taxes of the Credit Parties for the periods covered thereby.  As
of the Closing Date, there is no ongoing audit or examination or, to the
knowledge of the Borrower, other investigation by any Governmental Authority of
the tax liability of any of the Credit Parties, and there is no material
unresolved claim by any Governmental Authority concerning the tax liability of
any Credit Party for any period for which tax returns have been or were required
to have been filed, other than unsecured claims for which adequate reserves have
been established in accordance with GAAP.  As of the Closing Date, no Credit
Party has waived or extended or has been requested to waive or extend the
statute of limitations relating to the payment of any taxes.  Notwithstanding
the foregoing, with respect to any state, local, or foreign sales tax returns or
reports, the payment or transfer to the applicable authority of any sales taxes,
or any audits, or examinations, or waivers or extensions of statutes of
limitations with respect thereto, the representations in this Section 5.6 are
true except to the extent that the failure of any such representations to be
true could not reasonably be expected to have a Material Adverse Effect.

 

5.7                                 Subsidiaries.  Schedule 5.7 sets forth a
list, as of the Closing Date and after giving effect to the BGS Acquisition, of
all of the Subsidiaries of the Parent (including the Borrower) and (i) as to
each such Subsidiary, the percentage ownership (direct and indirect) of the
Parent in each class of its Capital Stock and each direct owner thereof, and
(ii) as to each Credit Party (other than the Parent), the number of shares of
each class of Capital Stock outstanding, and the number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and similar rights.  All outstanding shares of Capital Stock of the
Borrower and each of its Subsidiaries are duly and validly issued, fully paid
and nonassessable.  Except for the shares of Capital Stock and the other equity
arrangements expressly indicated on Schedule 5.7, as of the Closing Date there
are no shares of Capital Stock, warrants, rights, options or other equity
securities, or other Capital Stock of any Credit Party (other than the Parent)
outstanding or reserved for any purpose.

 

5.8                                 Full Disclosure.  All factual information
heretofore, contemporaneously or hereafter furnished in writing to the
Administrative Agent, the Arranger or any Lender by or on behalf of any Credit
Party for purposes of or in connection with this Agreement and the transactions
contemplated hereby is or will be true and accurate in all material respects on
the date as of which such information is dated or certified (or, if such
information has been updated, amended or supplemented, on the date as of which
any such update, amendment or supplement is dated or certified) and not made
incomplete by omitting to state a material fact necessary to

 

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make the statements contained herein and therein, in light of the circumstances
under which such information was provided, not misleading; provided that, with
respect to projections, budgets and other estimates, except as specifically
represented in Section 5.11(c), the Parent and the Borrower represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.  As of the Closing Date, there is no fact known to
any Credit Party that has, or could reasonably be expected to have, a Material
Adverse Effect, which fact has not been set forth herein, in the financial
statements of the Parent and its Subsidiaries or the BGS Business furnished to
the Administrative Agent and/or the Lenders, or in any certificate, opinion or
other written statement made or furnished by the Borrower to the Administrative
Agent and/or the Lenders.

 

5.9                                 Margin Regulations.  No Credit Party is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.  No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such purpose or for any other purpose, in
each case that would violate or be inconsistent with Regulations T, U or X or
any provision of the Exchange Act.

 

5.10                           No Material Adverse Effect.  There has been no
Material Adverse Effect since December 31, 2002, and there exists no event,
condition or state of facts that could reasonably be expected to result in a
Material Adverse Effect.

 

5.11                           FINANCIAL MATTERS.

 

(A)                                  THE BORROWER HAS HERETOFORE FURNISHED TO
THE ADMINISTRATIVE AGENT COPIES OF (I) THE AUDITED CONSOLIDATED BALANCE SHEETS
OF THE PARENT AND ITS SUBSIDIARIES AS OF DECEMBER 31, 2002, 2001 AND 2000, IN
EACH CASE WITH THE RELATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’
EQUITY FOR THE FISCAL YEARS THEN ENDED, TOGETHER WITH THE OPINION OF ERNST &
YOUNG LLP THEREON, (II) THE UNAUDITED CONSOLIDATED BALANCE SHEET OF THE PARENT
AND ITS SUBSIDIARIES AS OF THE LAST DAY OF THE THIRD FISCAL QUARTER OF FISCAL
YEAR 2003, AND THE RELATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’
EQUITY FOR THE NINE-MONTH PERIOD THEN ENDED, (III) THE UNAUDITED CONSOLIDATED
BALANCE SHEET OF THE PARENT AND ITS SUBSIDIARIES AS OF THE LAST DAY OF THE TENTH
FISCAL MONTH OF FISCAL YEAR 2003, AND THE RELATED STATEMENTS OF INCOME AND CASH
FLOWS FOR THE TEN-MONTH PERIOD THEN ENDED, AND (IV) THE UNAUDITED CONSOLIDATED
BALANCE SHEET OF THE BGS BUSINESS AS OF THE LAST DAY OF EACH OF THE THIRD FISCAL
QUARTER AND TENTH FISCAL MONTH OF FISCAL YEAR 2003, AND THE RELATED STATEMENT OF
INCOME FOR THE PERIODS THEN ENDED, FURNISHED TO THE BORROWER BY ORTHOLOGIC. 
SUCH FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP (SUBJECT,
WITH RESPECT TO THE UNAUDITED FINANCIAL STATEMENTS, TO THE ABSENCE OF NOTES
REQUIRED BY GAAP AND TO NORMAL YEAR-END ADJUSTMENTS AND, IN THE CASE OF THE BGS
BUSINESS FINANCIAL STATEMENTS, ON THE ASSUMPTION THAT THE BGS BUSINESS WAS A
SEPARATE BUSINESS ENTITY REPORTABLE IN ACCORDANCE WITH GAAP) AND PRESENT FAIRLY
IN ALL MATERIAL RESPECTS THE FINANCIAL CONDITION OF THE PARENT AND ITS
SUBSIDIARIES (ON A CONSOLIDATED BASIS) OR THE BGS BUSINESS, AS THE CASE MAY BE,
AS OF THE RESPECTIVE DATES THEREOF AND THE RESULTS OF OPERATIONS OF THE PARENT
AND ITS SUBSIDIARIES (ON A CONSOLIDATED BASIS) OR THE BGS BUSINESS, AS THE CASE
MAY BE, FOR THE RESPECTIVE PERIODS THEN ENDED.  EXCEPT AS FULLY REFLECTED IN THE
MOST RECENT FINANCIAL STATEMENTS REFERRED TO ABOVE AND THE NOTES THERETO, THERE
ARE NO MATERIAL LIABILITIES OR OBLIGATIONS WITH RESPECT TO THE PARENT AND ITS
SUBSIDIARIES OR (TO THE EXTENT BEING ASSUMED BY THE BORROWER IN THE BGS
ACQUISITION) THE BGS

 

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Business of any nature whatsoever (whether absolute, contingent or otherwise and
whether or not due) that are required in accordance with GAAP to be reflected in
such financial statements and that are not so reflected.

 

(B)                                 THE PRO FORMA BALANCE SHEET GIVES PRO FORMA
EFFECT TO THE CONSUMMATION OF THE BGS ACQUISITION, THE REPAYMENT OF THE EXISTING
SENIOR BANK FACILITIES, THE INITIAL EXTENSIONS OF CREDIT MADE UNDER THIS
AGREEMENT, AND THE PAYMENT OF TRANSACTION FEES AND EXPENSES RELATED TO THE
FOREGOING, ALL AS IF SUCH EVENTS HAD OCCURRED ON THE DATE AS OF WHICH THE PRO
FORMA BALANCE SHEET IS PREPARED.  THE PRO FORMA BALANCE SHEET HAS BEEN PREPARED
IN ACCORDANCE WITH THE REQUIREMENTS OF REGULATION S-X UNDER THE EXCHANGE ACT, IS
BASED ON STATED ASSUMPTIONS MADE IN GOOD FAITH AND HAVING A REASONABLE BASIS SET
FORTH THEREIN, AND PRESENTS FAIRLY IN ALL MATERIAL RESPECTS THE CONSOLIDATED
FINANCIAL CONDITION OF THE PARENT AND ITS SUBSIDIARIES ON AN UNAUDITED PRO FORMA
BASIS AS OF THE DATE SET FORTH THEREIN AFTER GIVING EFFECT TO THE CONSUMMATION
OF THE TRANSACTIONS DESCRIBED ABOVE.

 

(C)                                  THE PARENT HAS PREPARED, AND HAS HERETOFORE
FURNISHED TO THE ADMINISTRATIVE AGENT A COPY OF, PROJECTED CONSOLIDATED BALANCE
SHEETS AND STATEMENTS OF INCOME AND CASH FLOWS OF THE PARENT AND ITS
SUBSIDIARIES (CONSISTING OF BALANCE SHEETS AND STATEMENTS OF INCOME AND CASH
FLOWS PREPARED BY THE PARENT ON AN ANNUAL BASIS) THROUGH THE END OF FISCAL YEAR
2009, GIVING EFFECT TO THE CONSUMMATION OF THE BGS ACQUISITION, THE REPAYMENT OF
THE EXISTING SENIOR BANK FACILITIES, THE INITIAL EXTENSIONS OF CREDIT MADE UNDER
THIS AGREEMENT, AND THE PAYMENT OF TRANSACTION FEES AND EXPENSES RELATED TO THE
FOREGOING (THE “PROJECTIONS”).  IN THE GOOD FAITH OPINION OF MANAGEMENT OF THE
PARENT, THE ASSUMPTIONS USED IN THE PREPARATION OF THE PROJECTIONS WERE FAIR,
COMPLETE AND REASONABLE WHEN MADE AND CONTINUE TO BE FAIR, COMPLETE AND
REASONABLE AS OF THE DATE HEREOF.  THE PROJECTIONS HAVE BEEN PREPARED IN GOOD
FAITH BY THE EXECUTIVE AND FINANCIAL PERSONNEL OF THE PARENT, ARE COMPLETE AND
REPRESENT A REASONABLE ESTIMATE OF THE FUTURE PERFORMANCE AND FINANCIAL
CONDITION OF THE PARENT AND ITS SUBSIDIARIES, SUBJECT TO THE UNCERTAINTIES AND
APPROXIMATIONS INHERENT IN ANY PROJECTIONS.

 

(D)                                 AFTER GIVING EFFECT TO THE CONSUMMATION OF
THE BGS ACQUISITION AND THE TRANSACTIONS CONTEMPLATED HEREBY, THE BORROWER AND
THE CREDIT PARTIES TAKEN AS A WHOLE (I) HAVE CAPITAL SUFFICIENT TO CARRY ON
THEIR BUSINESSES AS CONDUCTED AND AS PROPOSED TO BE CONDUCTED, (II) HAVE ASSETS
WITH A FAIR SALEABLE VALUE, DETERMINED ON A GOING CONCERN BASIS, WHICH, TOGETHER
WITH ANTICIPATED CASH FLOWS, ARE (Y) NOT LESS THAN THE AMOUNT REQUIRED TO PAY
THE PROBABLE LIABILITY ON THEIR EXISTING DEBTS AS THEY BECOME ABSOLUTE AND
MATURED AND (Z) GREATER THAN THE TOTAL AMOUNT OF THEIR LIABILITIES (INCLUDING
IDENTIFIED CONTINGENT LIABILITIES, VALUED AT THE AMOUNT THAT CAN REASONABLY BE
EXPECTED TO BECOME ABSOLUTE AND MATURED IN THEIR ORDINARY COURSE), AND (III) DO
NOT INTEND TO, AND DO NOT BELIEVE THAT THEY WILL, INCUR DEBTS OR LIABILITIES
BEYOND THEIR ABILITY TO PAY SUCH DEBTS AND LIABILITIES AS THEY MATURE IN THEIR
ORDINARY COURSE.

 

5.12                           Ownership of Properties.  Each Credit Party
(i) has good and marketable title to all real property owned by it, (ii) holds
interests as lessee under valid leases in full force and effect with respect to
all material leased real and personal property used in connection with its
business, and (iii) has good title to all of its other material properties and
assets reflected in the most recent financial statements referred to in
Section 5.11(a) (except as sold or otherwise disposed of since the date thereof
in the ordinary course of business), in each case free and clear of all Liens
other than Permitted Liens.  Schedule 5.12(a) lists, as of the Closing Date and
after

 

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giving effect to the BGS Acquisition, all Realty of the Credit Parties,
indicating in each case the identity of the owner, the address of the property,
the nature of use of the premises, and whether such interest is a leasehold or
fee ownership interest.

 

5.13                           ERISA.

 

(A)                                  EACH CREDIT PARTY AND ITS ERISA AFFILIATES
IS IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF ERISA, AND EACH PLAN IS AND
HAS BEEN ADMINISTERED IN COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF LAW,
INCLUDING, WITHOUT LIMITATION, THE APPLICABLE PROVISIONS OF ERISA AND THE
INTERNAL REVENUE CODE, IN EACH CASE EXCEPT WHERE THE FAILURE SO TO COMPLY,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.  NO ERISA EVENT (I) HAS OCCURRED WITHIN THE FIVE (5)
YEAR PERIOD PRIOR TO THE CLOSING DATE, (II) HAS OCCURRED AND IS CONTINUING, OR
(III) TO THE KNOWLEDGE OF THE BORROWER, IS REASONABLY EXPECTED TO OCCUR WITH
RESPECT TO ANY PLAN.  NO PLAN HAS ANY UNFUNDED PENSION LIABILITY AS OF THE MOST
RECENT ANNUAL VALUATION DATE APPLICABLE THERETO THAT, WHEN ADDED TO THE
AGGREGATE AMOUNT OF UNFUNDED PENSION LIABILITIES WITH RESPECT TO ALL OTHER
PLANS, EXCEEDS $250,000, AND NO CREDIT PARTY OR ANY OF ITS ERISA AFFILIATES HAS
ENGAGED IN A TRANSACTION THAT COULD BE SUBJECT TO SECTION 4069 OR 4212(C) OF
ERISA.

 

(B)                                 NO CREDIT PARTY OR ANY OF ITS ERISA
AFFILIATES HAS ANY OUTSTANDING LIABILITY ON ACCOUNT OF A COMPLETE OR PARTIAL
WITHDRAWAL FROM ANY MULTIEMPLOYER PLAN.  NO MULTIEMPLOYER PLAN IS IN
“REORGANIZATION” OR IS “INSOLVENT” WITHIN THE MEANING OF SUCH TERMS UNDER ERISA.

 

5.14                           Environmental Matters.  Except as set forth on
Schedule 5.14 and except as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:

 

(A)                                  NO HAZARDOUS SUBSTANCES ARE OR HAVE BEEN
GENERATED, USED, LOCATED, RELEASED, TREATED, TRANSPORTED, DISPOSED OF OR STORED,
CURRENTLY OR IN THE PAST, (I) BY ANY CREDIT PARTY OR (II) TO THE KNOWLEDGE OF
THE BORROWER, BY ANY OTHER PERSON (INCLUDING ANY PREDECESSOR IN INTEREST) OR
OTHERWISE, IN EITHER CASE IN, ON, ABOUT OR TO OR FROM ANY PORTION OF ANY REAL
PROPERTY, LEASED, OWNED OR OPERATED BY ANY CREDIT PARTY, EXCEPT IN COMPLIANCE
WITH ALL APPLICABLE ENVIRONMENTAL LAWS; NO PORTION OF ANY SUCH REAL PROPERTY OR,
TO THE KNOWLEDGE OF THE BORROWER, ANY OTHER REAL PROPERTY AT ANY TIME LEASED,
OWNED OR OPERATED BY ANY CREDIT PARTY IS CONTAMINATED BY ANY HAZARDOUS
SUBSTANCE; AND NO PORTION OF ANY REAL PROPERTY LEASED, OWNED OR OPERATED BY ANY
CREDIT PARTY IS PRESENTLY OR, TO THE KNOWLEDGE OF THE BORROWER, HAS EVER BEEN,
THE SUBJECT OF AN ENVIRONMENTAL AUDIT, ASSESSMENT OR REMEDIAL ACTION.

 

(B)                                 NO PORTION OF ANY REAL PROPERTY LEASED,
OWNED OR OPERATED BY ANY CREDIT PARTY HAS BEEN USED BY ANY CREDIT PARTY OR, TO
THE KNOWLEDGE OF THE BORROWER, BY ANY OTHER PERSON, AS OR FOR A MINE, LANDFILL,
DUMP OR OTHER DISPOSAL FACILITY, GASOLINE SERVICE STATION OR BULK PETROLEUM
PRODUCTS STORAGE FACILITY; AND NO PORTION OF SUCH REAL PROPERTY OR ANY OTHER
REAL PROPERTY CURRENTLY OR AT ANY TIME IN THE PAST LEASED, OWNED OR OPERATED BY
ANY CREDIT PARTY HAS, PURSUANT TO ANY ENVIRONMENTAL LAW, BEEN PLACED ON THE
“NATIONAL PRIORITIES LIST” OR “CERCLIS LIST” (OR ANY SIMILAR FEDERAL, STATE OR
LOCAL LIST) OF SITES SUBJECT TO POSSIBLE ENVIRONMENTAL PROBLEMS.

 

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(C)                                  ALL ACTIVITIES AND OPERATIONS OF THE CREDIT
PARTIES ARE IN COMPLIANCE WITH THE REQUIREMENTS OF ALL APPLICABLE ENVIRONMENTAL
LAWS; EACH CREDIT PARTY HAS OBTAINED ALL LICENSES AND PERMITS UNDER
ENVIRONMENTAL LAWS NECESSARY TO ITS RESPECTIVE OPERATIONS, ALL SUCH LICENSES AND
PERMITS ARE BEING MAINTAINED IN GOOD STANDING, AND EACH CREDIT PARTY IS IN
COMPLIANCE WITH ALL TERMS AND CONDITIONS OF SUCH LICENSES AND PERMITS; AND NO
CREDIT PARTY IS INVOLVED IN ANY SUIT, ACTION OR PROCEEDING, OR HAS RECEIVED ANY
NOTICE, COMPLAINT OR OTHER REQUEST FOR INFORMATION FROM ANY GOVERNMENTAL
AUTHORITY OR OTHER PERSON, WITH RESPECT TO ANY ACTUAL OR ALLEGED ENVIRONMENTAL
CLAIMS, AND TO THE KNOWLEDGE OF THE BORROWER, THERE ARE NO THREATENED
ENVIRONMENTAL CLAIMS, NOR ANY BASIS THEREFOR.

 

5.15                           Compliance with Laws.  Each Credit Party has
timely filed all material reports, documents and other materials required to be
filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties, except in each
case to the extent that the failure to comply therewith, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

5.16                           Intellectual Property.  Each Credit Party owns,
or has the legal right to use, all Intellectual Property necessary for it to
conduct its business as currently conducted.  Schedule 5.16 lists, as of the
Closing Date and after giving effect to the BGS Acquisition, all registered
Intellectual Property owned by any Credit Party.  No claim has been asserted or
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower know of any such claim, and to the knowledge of
the Borrower, the use of such Intellectual Property by any Credit Party does not
infringe on the known rights of any Person, except for such claims and
infringements that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.

 

5.17                           Regulated Industries.  No Credit Party is (i) an
“investment company,” a company “controlled” by an “investment company,” or an
“investment advisor,” within the meaning of the Investment Company Act of 1940,
as amended, or (ii) a “holding company,” a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

 

5.18                           Insurance.  Schedule 5.18 sets forth, as of the
Closing Date and after giving effect to the BGS Acquisition, an accurate and
complete list and a brief description (including the insurer, policy number,
type of insurance, coverage limits, deductibles, expiration dates and any
special cancellation conditions) of all policies of property and casualty,
liability (including, but not limited to, product liability), business
interruption, workers’ compensation, and other forms of insurance owned or held
by the Parent and its Subsidiaries or pursuant to which any of their respective
assets are insured.  The assets, properties and business of the Parent and its
Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.

 

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5.19                           Material Contracts.  Schedule 5.19 lists, as of
the Closing Date and after giving effect to the BGS Acquisition, each contract
or other agreement to which any Credit Party is a party, by which any Credit
Party or its properties is bound or to which any Credit Party is subject, in
each case the termination or cancellation of which, or default thereunder or
breach thereof by any Credit Party, could reasonably be expected to have a
Material Adverse Effect (collectively, “Material Contracts”), and also indicates
the parties thereto.  As of the Closing Date and after giving effect to the BGS
Acquisition, (i) each Material Contract is in full force and effect and is
enforceable by each Credit Party that is a party thereto in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, by general or equitable principles or by principles of good faith and
fair dealing, and (ii) no Credit Party or, to the knowledge of the Borrower, any
other party thereto is in breach of or default under any Material Contract in
any material respect or has given notice of termination or cancellation of any
Material Contract.

 

5.20                           Deposit Accounts.  Schedule 5.20 lists, as of the
Closing Date and after giving effect to the BGS Acquisition, all deposit
accounts maintained by any Credit Party at any bank or other financial
institution located in the United States, and lists in each case the name in
which the account is held, the name of the depository institution, the type of
account and the account number.

 

5.21                           SECURITY DOCUMENTS.

 

(A)                                  THE PROVISIONS OF EACH OF THE SECURITY
DOCUMENTS OTHER THAN THE MORTGAGES (WHETHER EXECUTED AND DELIVERED PRIOR TO OR
ON THE CLOSING DATE OR THEREAFTER) ARE AND WILL BE EFFECTIVE TO CREATE IN FAVOR
OF THE ADMINISTRATIVE AGENT, FOR ITS BENEFIT AND THE BENEFIT OF THE LENDERS, A
VALID AND ENFORCEABLE (SUBJECT, IN THE CASE OF DIRECT ENFORCEABILITY AGAINST
GOVERNMENTAL PAYORS OF ACCOUNTS OWING TO THE CREDIT PARTIES UNDER THE FEDERAL
MEDICARE AND MEDICAID PROGRAMS, TO THE RESTRICTIONS IMPOSED BY THE FEDERAL
SOCIAL SECURITY ACT AND OTHER APPLICABLE FEDERAL AND STATE LAWS) SECURITY
INTEREST IN AND LIEN UPON ALL RIGHT, TITLE AND INTEREST OF EACH CREDIT PARTY
THAT IS A PARTY THERETO IN AND TO THE COLLATERAL PURPORTED TO BE PLEDGED BY IT
THEREUNDER AND DESCRIBED THEREIN, AND UPON (I) THE INITIAL EXTENSION OF CREDIT
HEREUNDER, (II) THE FILING OF APPROPRIATELY COMPLETED UNIFORM COMMERCIAL CODE
FINANCING STATEMENTS AND CONTINUATIONS THEREOF IN THE JURISDICTIONS SPECIFIED
THEREIN, (III) THE FILING OF APPROPRIATELY COMPLETED SHORT-FORM ASSIGNMENTS IN
THE U.S. PATENT AND TRADEMARK OFFICE AND THE U.S. COPYRIGHT OFFICE, AS
APPLICABLE, AND (IV) THE POSSESSION BY THE ADMINISTRATIVE AGENT OF ANY
CERTIFICATES EVIDENCING THE SECURITIES PLEDGED THEREBY, DULY ENDORSED OR
ACCOMPANIED BY DULY EXECUTED STOCK POWERS, SUCH SECURITY INTEREST AND LIEN SHALL
CONSTITUTE A FULLY PERFECTED AND FIRST PRIORITY SECURITY INTEREST IN AND LIEN
UPON SUCH RIGHT, TITLE AND INTEREST OF THE APPLICABLE CREDIT PARTY IN AND TO
SUCH COLLATERAL, TO THE EXTENT THAT SUCH SECURITY INTEREST AND LIEN CAN BE
PERFECTED BY SUCH FILINGS, ACTIONS AND POSSESSION, SUBJECT ONLY TO PERMITTED
LIENS.

 

(B)                                 THE PROVISIONS OF EACH MORTGAGE (WHETHER
EXECUTED AND DELIVERED PRIOR TO OR ON THE CLOSING DATE OR THEREAFTER) ARE AND
WILL BE EFFECTIVE TO CREATE IN FAVOR OF THE ADMINISTRATIVE AGENT, FOR ITS
BENEFIT AND THE BENEFIT OF THE LENDERS, A VALID AND ENFORCEABLE SECURITY
INTEREST IN AND LIEN UPON ALL RIGHT, TITLE AND INTEREST OF EACH CREDIT PARTY
THAT IS A PARTY THERETO IN AND TO THE MORTGAGED PREMISES DESCRIBED THEREIN, AND
UPON (I) THE INITIAL EXTENSION OF CREDIT HEREUNDER AND

 

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(ii) the filing of such Mortgage in the applicable real property recording
office, such security interest and Lien shall constitute a fully perfected and
first priority security interest in and Lien upon such right, title and interest
of such Credit Party in and to such mortgaged premises, in each case prior and
superior to the rights of any other Person and subject only to Permitted Liens.

 

5.22                           Labor Relations.  No Credit Party is engaged in
any unfair labor practice within the meaning of the National Labor Relations Act
of 1947, as amended.  As of the Closing Date, there is (i) no unfair labor
practice complaint before the National Labor Relations Board, or grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement, pending or, to the knowledge of the Borrower, threatened, against any
Credit Party, (ii) no strike, lock-out, slowdown, stoppage, walkout or other
labor dispute pending or, to the knowledge of the Borrower, threatened, against
any Credit Party, and (iii) to the knowledge of the Borrower, no petition for
certification or union election or union organizing activities taking place with
respect to any Credit Party.  As of the Closing Date, there are no collective
bargaining agreements or Multiemployer Plans covering the employees of the
Credit Parties.

 

5.23                           BGS ACQUISITION.

 

(A)                                  THE BORROWER HAS HERETOFORE FURNISHED TO
THE ADMINISTRATIVE AGENT A TRUE AND COMPLETE COPIES OF THE BGS ASSET PURCHASE
AGREEMENT, TOGETHER WITH ALL SCHEDULES AND EXHIBITS THERETO AND ALL AGREEMENTS
REQUIRED TO BE EXECUTED AND DELIVERED PURSUANT THERETO, AND IN EACH CASE ALL
AMENDMENTS, MODIFICATIONS AND WAIVERS RELATING THERETO.  AS OF THE CLOSING DATE
AND IMMEDIATELY PRIOR TO GIVING EFFECT TO THE CONSUMMATION OF THE BGS
ACQUISITION, (I) NONE OF SUCH AGREEMENTS HAS BEEN AMENDED, MODIFIED OR
SUPPLEMENTED, NOR ANY CONDITION OR PROVISION THEREOF WAIVED, IN ANY MATERIAL
RESPECT OTHER THAN AS APPROVED BY THE ADMINISTRATIVE AGENT, AND EACH SUCH
AGREEMENT IS IN FULL FORCE AND EFFECT AND NO CREDIT PARTY (OR, TO THE KNOWLEDGE
OF THE BORROWER, ANY OTHER PARTY THERETO) IS IN DEFAULT THEREUNDER OR IN BREACH
THEREOF, AND (II) ALL REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND, TO THE
KNOWLEDGE OF THE BORROWER, ALL REPRESENTATIONS AND WARRANTIES OF ORTHOLOGIC
CONTAINED IN THE BGS ASSET PURCHASE AGREEMENT ARE TRUE AND CORRECT WITH THE SAME
EFFECT AS IF MADE ON AND AS OF THE CLOSING DATE EXCEPT FOR REPRESENTATIONS AND
WARRANTIES THAT SPEAK AS OF AN EARLIER DATE (WHICH ARE TRUE AND CORRECT AS OF
SUCH DATE) EXCEPT, IN EACH CASE, FOR ANY FAILURE THAT, INDIVIDUALLY OR IN THE
AGGREGATE, HAS NOT RESULTED IN OR WOULD NOT RESULT IN A MATERIAL ADVERSE EFFECT.

 

(B)                                 THE SUBORDINATION PROVISIONS CONTAINED IN
THE SENIOR SUBORDINATED NOTE INDENTURE AND IN THE SENIOR SUBORDINATED NOTES ARE
ENFORCEABLE AGAINST THE BORROWER AND THE HOLDERS OF THE SENIOR SUBORDINATED
NOTES, EXCEPT AS ENFORCEABILITY MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR OTHER SIMILAR LAWS AFFECTING CREDITORS’ RIGHTS
GENERALLY, BY GENERAL OR EQUITABLE PRINCIPLES OR BY PRINCIPLES OF GOOD FAITH AND
FAIR DEALING, AND THE BORROWER HEREBY DESIGNATES ALL OF THE OBLIGATIONS AS
“DESIGNATED SENIOR INDEBTEDNESS” WITHIN THE MEANING OF SUCH TERM IN THE SENIOR
SUBORDINATED NOTE INDENTURE.

 

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5.24                           No Burdensome Restrictions.  No Credit Party is a
party to any written agreement or instrument or subject to any other obligations
or any charter or corporate restriction or any provision of any applicable
Requirement of Law that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

5.25                           Certain Tax Matters.  The Borrower does not
intend to treat the Loans and/or Letters of Credit and related transactions as
being a “reportable transaction” (within the meaning of Treasury Regulation
section 1.6011-4).  In the event the Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof.  The Borrower acknowledges that the Administrative Agent and/or
one or more of the Lenders may treat the Loans and/or Letters of Credit and
related transactions as part of a transaction that is subject to Treasury
Regulation section 1.6011-4 or section 301.6112-1, and the Administrative Agent
and such Lender or Lenders, as applicable, may file such IRS forms or maintain
such lists and other records as they may determine are required by such Treasury
Regulations.

 

5.26                           OFAC; PATRIOT ACT.

 

(A)                                  NO CREDIT PARTY (I) IS OR WILL BECOME A
PERSON WHOSE PROPERTY OR INTERESTS IN PROPERTY ARE BLOCKED OR SUBJECT TO
BLOCKING PURSUANT TO SECTION 1 OF EXECUTIVE ORDER 13224 OF SEPTEMBER 23, 2001
BLOCKING PROPERTY AND PROHIBITING TRANSACTIONS WITH PERSONS WHO COMMIT, THREATEN
TO COMMIT, OR SUPPORT TERRORISM (66 FED. REG. 49079 (2001)), (II) ENGAGES OR
WILL ENGAGE IN ANY DEALINGS OR TRANSACTIONS PROHIBITED BY SECTION 2 OF SUCH
EXECUTIVE ORDER, OR BE OTHERWISE ASSOCIATED WITH ANY SUCH PERSON IN ANY MANNER
VIOLATIVE OF SECTION 2, OR (III) WILL OTHERWISE BECOME A PERSON ON THE LIST OF
SPECIALLY DESIGNATED NATIONALS AND BLOCKED PERSONS OR SUBJECT TO THE LIMITATIONS
OR PROHIBITIONS UNDER ANY OTHER OFAC REGULATION OR EXECUTIVE ORDER.

 

(B)                                 THE CREDIT PARTIES ARE IN COMPLIANCE IN ALL
MATERIAL RESPECTS WITH THE PATRIOT ACT.  NO PART OF THE PROCEEDS OF THE LOANS
HEREUNDER WILL BE USED, DIRECTLY OR INDIRECTLY, FOR ANY PAYMENTS TO ANY
GOVERNMENTAL OFFICIAL OR EMPLOYEE, POLITICAL PARTY, OFFICIAL OF A POLITICAL
PARTY, CANDIDATE FOR POLITICAL OFFICE, OR ANYONE ELSE ACTING IN AN OFFICIAL
CAPACITY, IN ORDER TO OBTAIN, RETAIN OR DIRECT BUSINESS OR OBTAIN ANY IMPROPER
ADVANTAGE, IN VIOLATION OF THE UNITED STATES FOREIGN CORRUPT PRACTICES ACT OF
1977, AS AMENDED.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

Each of the Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans together with all other amounts (including any Reimbursement Obligations)
then due and owing hereunder:

 

6.1                                 Financial Statements.  The Borrower will
deliver to the Administrative Agent and to each Lender:

 

(A)                                  AS SOON AS AVAILABLE AND IN ANY EVENT
WITHIN THIRTY (30) DAYS AFTER THE END OF EACH FISCAL MONTH, BEGINNING WITH THE
ELEVENTH FISCAL MONTH OF FISCAL YEAR 2003 OR ANY EARLIER MONTH FOR WHICH SUCH
FINANCIAL STATEMENTS WERE NOT DELIVERED AS OF THE CLOSING DATE AND CONTINUING
FOR

 

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eleven fiscal months thereafter (or, if earlier, until the date on which the
Borrower delivers to the Administrative Agent and the Lenders financial
statements and a Compliance Certificate indicating a Total Leverage Ratio of
less than 3.0 to 1.0 as of the last day of the period covered thereby),
unaudited consolidated balance sheets of the Parent and its Subsidiaries as of
the end of such fiscal month and unaudited consolidated statements of income and
cash flows for the Parent and its Subsidiaries for the fiscal month then ended
and for that portion of the fiscal year then ended, in each case setting forth
comparative consolidated figures as of the end of and for the corresponding
period in the preceding fiscal year together with comparative budgeted figures
for the fiscal period then ended, all in reasonable detail and prepared in
accordance with GAAP (subject to the absence of notes required by GAAP and
subject to normal year-end adjustments) applied on a basis consistent with that
of the preceding month or containing disclosure of the effect on the financial
condition or results of operations of any change in the application of
accounting principles and practices during such month;

 

(B)                                 AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN
FIFTY (50) DAYS AFTER THE END OF EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH
FISCAL YEAR, BEGINNING WITH THE FIRST FISCAL QUARTER OF FISCAL YEAR 2004, AN
UNAUDITED CONSOLIDATED BALANCE SHEET (AND, TO THE EXTENT AVAILABLE, AN UNAUDITED
CONSOLIDATING BALANCE SHEET WITH RESPECT TO THE BGS BUSINESS) OF THE PARENT AND
ITS SUBSIDIARIES AS OF THE END OF SUCH FISCAL QUARTER AND UNAUDITED CONSOLIDATED
STATEMENTS OF INCOME AND CASH FLOWS FOR THE PARENT AND ITS SUBSIDIARIES (AND, TO
THE EXTENT AVAILABLE, AN UNAUDITED CONSOLIDATING STATEMENT OF INCOME WITH
RESPECT TO THE BGS BUSINESS) FOR THE FISCAL QUARTER THEN ENDED AND FOR THAT
PORTION OF THE FISCAL YEAR THEN ENDED, IN EACH CASE SETTING FORTH COMPARATIVE
CONSOLIDATED (OR CONSOLIDATING, IF APPLICABLE) FIGURES AS OF THE END OF AND FOR
THE CORRESPONDING PERIOD IN THE PRECEDING FISCAL YEAR TOGETHER WITH COMPARATIVE
BUDGETED FIGURES FOR THE FISCAL YEAR THEN ENDED, ALL IN REASONABLE DETAIL AND
PREPARED IN ACCORDANCE WITH GAAP (SUBJECT TO THE ABSENCE OF NOTES REQUIRED BY
GAAP AND SUBJECT TO NORMAL YEAR-END ADJUSTMENTS) APPLIED ON A BASIS CONSISTENT
WITH THAT OF THE PRECEDING QUARTER OR CONTAINING DISCLOSURE OF THE EFFECT ON THE
FINANCIAL CONDITION OR RESULTS OF OPERATIONS OF ANY CHANGE IN THE APPLICATION OF
ACCOUNTING PRINCIPLES AND PRACTICES DURING SUCH QUARTER; AND

 

(C)                                  AS SOON AS AVAILABLE AND IN ANY EVENT
WITHIN 100 DAYS AFTER THE END OF EACH FISCAL YEAR, BEGINNING WITH FISCAL YEAR
2003, AN AUDITED CONSOLIDATED BALANCE SHEET (AND, TO THE EXTENT AVAILABLE, AN
UNAUDITED CONSOLIDATING BALANCE SHEET WITH RESPECT TO THE BGS BUSINESS) OF THE
PARENT AND ITS SUBSIDIARIES AS OF THE END OF SUCH FISCAL YEAR AND THE RELATED
AUDITED CONSOLIDATED STATEMENTS OF INCOME, CASH FLOWS AND STOCKHOLDERS’ EQUITY
(AND, TO THE EXTENT AVAILABLE, AN UNAUDITED CONSOLIDATING STATEMENT OF INCOME
WITH RESPECT TO THE BGS BUSINESS) FOR THE PARENT AND ITS SUBSIDIARIES FOR THE
FISCAL YEAR THEN ENDED, INCLUDING THE NOTES THERETO, IN EACH CASE SETTING FORTH
COMPARATIVE FIGURES AS OF THE END OF AND FOR THE PRECEDING FISCAL YEAR TOGETHER
WITH COMPARATIVE BUDGETED FIGURES FOR THE FISCAL YEAR THEN ENDED, ALL IN
REASONABLE DETAIL AND (WITH RESPECT TO THE AUDITED STATEMENTS) CERTIFIED BY
ERNST & YOUNG LLP OR ANOTHER INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM OF
RECOGNIZED NATIONAL STANDING REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT,
TOGETHER WITH A REPORT THEREON BY SUCH ACCOUNTANTS THAT IS NOT QUALIFIED AS TO
GOING CONCERN OR SCOPE OF AUDIT AND TO THE EFFECT THAT SUCH FINANCIAL STATEMENTS
PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF THE PARENT AND ITS SUBSIDIARIES AS OF THE DATES AND FOR
THE PERIODS INDICATED IN ACCORDANCE WITH GAAP APPLIED ON A BASIS CONSISTENT WITH
THAT OF THE PRECEDING YEAR OR CONTAINING DISCLOSURE OF THE EFFECT

 

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on the financial condition or results of operations of any change in the
application of accounting principles and practices during such year.

 

6.2                                 Other Business and Financial Information. 
The Borrower will deliver to the Administrative Agent and each Lender:

 

(A)                                  CONCURRENTLY WITH EACH DELIVERY OF THE
FINANCIAL STATEMENTS DESCRIBED IN SECTIONS 6.1(B) AND 6.1(C), A COMPLIANCE
CERTIFICATE WITH RESPECT TO THE PERIOD COVERED BY THE FINANCIAL STATEMENTS BEING
DELIVERED THEREUNDER, EXECUTED BY A FINANCIAL OFFICER OF THE PARENT, TOGETHER
WITH A COVENANT COMPLIANCE WORKSHEET REFLECTING THE COMPUTATION OF THE FINANCIAL
COVENANTS SET FORTH IN ARTICLE VII AS OF THE LAST DAY OF THE PERIOD COVERED BY
SUCH FINANCIAL STATEMENTS;

 

(B)                                 CONCURRENTLY WITH EACH DELIVERY OF THE
FINANCIAL STATEMENTS DESCRIBED IN SECTION 6.1(C), A CERTIFICATE EXECUTED BY A
FINANCIAL OFFICER OF THE PARENT IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND SETTING FORTH THE CALCULATION OF EXCESS CASH FLOW
FOR SUCH FISCAL YEAR;

 

(C)                                  AS SOON AS AVAILABLE AND IN ANY EVENT
WITHIN THIRTY (30) DAYS AFTER THE COMMENCEMENT OF EACH FISCAL YEAR, BEGINNING
WITH THE 2004 FISCAL YEAR, A CONSOLIDATED OPERATING BUDGET FOR THE PARENT AND
ITS SUBSIDIARIES FOR THE SUCCEEDING FISCAL YEAR (PREPARED ON A QUARTERLY BASIS),
CONSISTING OF A CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS OF INCOME
AND CASH FLOWS, TOGETHER WITH A CERTIFICATE OF A FINANCIAL OFFICER OF THE PARENT
TO THE EFFECT THAT SUCH BUDGET HAS BEEN PREPARED IN GOOD FAITH BASED ON
ESTIMATES AND ASSUMPTIONS BELIEVED TO BE REASONABLE; AND AS SOON AS AVAILABLE
FROM TIME TO TIME THEREAFTER, ANY MODIFICATIONS OR REVISIONS TO OR RESTATEMENTS
OF SUCH BUDGET;

 

(D)                                 PROMPTLY UPON RECEIPT THEREOF, COPIES OF ANY
“MANAGEMENT LETTER” SUBMITTED TO THE PARENT OR ANY OF ITS SUBSIDIARIES BY ITS
CERTIFIED PUBLIC ACCOUNTANTS IN CONNECTION WITH EACH ANNUAL, INTERIM OR SPECIAL
AUDIT, AND PROMPTLY UPON COMPLETION THEREOF, ANY RESPONSE REPORTS FROM THE
PARENT OR ANY SUCH SUBSIDIARY IN RESPECT THEREOF;

 

(E)                                  PROMPTLY UPON THE SENDING, FILING OR
RECEIPT THEREOF, COPIES OF (I) ALL FINANCIAL STATEMENTS, REPORTS, NOTICES AND
PROXY STATEMENTS THAT THE PARENT SHALL SEND OR MAKE AVAILABLE GENERALLY TO ITS
SHAREHOLDERS, (II) ALL REGULAR, PERIODIC AND SPECIAL REPORTS, REGISTRATION
STATEMENTS AND PROSPECTUSES (OTHER THAN ON FORM S-8) THAT ANY CREDIT PARTY SHALL
RENDER TO OR FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC. OR ANY NATIONAL SECURITIES EXCHANGE, AND
(III) ALL PRESS RELEASES AND OTHER STATEMENTS MADE AVAILABLE GENERALLY BY THE
PARENT TO THE PUBLIC CONCERNING MATERIAL DEVELOPMENTS IN THE BUSINESS OF THE
PARENT AND ITS SUBSIDIARIES;

 

(F)                                    PROMPTLY UPON (AND IN ANY EVENT WITHIN
FIVE (5) BUSINESS DAYS AFTER) ANY RESPONSIBLE OFFICER OF ANY CREDIT PARTY
OBTAINING KNOWLEDGE THEREOF, WRITTEN NOTICE OF ANY OF THE FOLLOWING:

 

(I)                                     THE OCCURRENCE OF ANY DEFAULT OR EVENT
OF DEFAULT, TOGETHER WITH A WRITTEN STATEMENT OF A RESPONSIBLE OFFICER OF THE
PARENT SPECIFYING THE NATURE OF SUCH DEFAULT OR

 

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Event of Default, the period of existence thereof and the action that the Parent
has taken and proposes to take with respect thereto;

 

(II)                                  THE INSTITUTION OR THREATENED INSTITUTION
OF ANY ACTION, SUIT, INVESTIGATION OR PROCEEDING AGAINST OR AFFECTING ANY CREDIT
PARTY, INCLUDING ANY SUCH INVESTIGATION OR PROCEEDING BY ANY GOVERNMENTAL
AUTHORITY (OTHER THAN ROUTINE PERIODIC INQUIRIES, INVESTIGATIONS OR REVIEWS),
THAT, IF ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED, INDIVIDUALLY OR IN
THE AGGREGATE, TO HAVE A MATERIAL ADVERSE EFFECT, AND ANY MATERIAL DEVELOPMENT
IN ANY LITIGATION OR OTHER PROCEEDING PREVIOUSLY REPORTED PURSUANT TO
SECTION 5.5 OR THIS SECTION 6.2(F)(II);

 

(III)                               THE RECEIPT BY ANY CREDIT PARTY FROM ANY
GOVERNMENTAL AUTHORITY OF (A) ANY NOTICE ASSERTING ANY FAILURE BY ANY CREDIT
PARTY TO BE IN COMPLIANCE WITH APPLICABLE REQUIREMENTS OF LAW OR THAT THREATENS
THE TAKING OF ANY ACTION AGAINST ANY CREDIT PARTY OR SETS FORTH CIRCUMSTANCES
THAT, IF TAKEN OR ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT, OR (B) ANY NOTICE OF ANY ACTUAL OR THREATENED
SUSPENSION, LIMITATION OR REVOCATION OF, FAILURE TO RENEW, OR IMPOSITION OF ANY
RESTRAINING ORDER, ESCROW OR IMPOUNDMENT OF FUNDS IN CONNECTION WITH, ANY
LICENSE, PERMIT, ACCREDITATION OR AUTHORIZATION OF ANY CREDIT PARTY, WHERE SUCH
ACTION COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(IV)                              THE OCCURRENCE OF ANY ERISA EVENT, TOGETHER
WITH (X) A WRITTEN STATEMENT OF A RESPONSIBLE OFFICER OF THE PARENT SPECIFYING
THE DETAILS OF SUCH ERISA EVENT AND THE ACTION THAT THE APPLICABLE CREDIT PARTY
HAS TAKEN AND PROPOSES TO TAKE WITH RESPECT THERETO, (Y) A COPY OF ANY NOTICE
WITH RESPECT TO SUCH ERISA EVENT THAT MAY BE REQUIRED TO BE FILED WITH THE PBGC
AND (Z) A COPY OF ANY NOTICE DELIVERED BY THE PBGC TO ANY CREDIT PARTY OR AN
ERISA AFFILIATE WITH RESPECT TO SUCH ERISA EVENT;

 

(V)                                 THE OCCURRENCE OF ANY MATERIAL DEFAULT
UNDER, OR ANY PROPOSED OR THREATENED TERMINATION OR CANCELLATION OF, ANY
MATERIAL CONTRACT OR OTHER MATERIAL CONTRACT OR AGREEMENT TO WHICH ANY CREDIT
PARTY IS A PARTY, THE DEFAULT UNDER OR TERMINATION OR CANCELLATION OF WHICH
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(VI)                              THE OCCURRENCE OF ANY OF THE FOLLOWING:
(X) THE ASSERTION OF ANY ENVIRONMENTAL CLAIM AGAINST OR AFFECTING ANY CREDIT
PARTY OR ANY REAL PROPERTY LEASED, OPERATED OR OWNED BY ANY CREDIT PARTY, OR ANY
CREDIT PARTY’S DISCOVERY OF A BASIS FOR ANY SUCH ENVIRONMENTAL CLAIM; (Y) THE
RECEIPT BY ANY CREDIT PARTY OF NOTICE OF ANY ALLEGED VIOLATION OF OR
NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS OR RELEASE OF ANY HAZARDOUS SUBSTANCE;
OR (Z) THE TAKING OF ANY INVESTIGATION, REMEDIATION OR OTHER RESPONSIVE ACTION
BY ANY CREDIT PARTY OR ANY OTHER PERSON IN RESPONSE TO THE ACTUAL OR ALLEGED
VIOLATION OF ANY ENVIRONMENTAL LAW BY ANY CREDIT PARTY OR GENERATION, STORAGE,
TRANSPORT, RELEASE, DISPOSAL OR DISCHARGE OF ANY HAZARDOUS SUBSTANCES ON, TO,
UPON OR FROM ANY REAL PROPERTY LEASED, OPERATED OR OWNED BY ANY CREDIT PARTY;
BUT IN EACH CASE UNDER CLAUSES (X), (Y) AND (Z) ABOVE, ONLY TO THE EXTENT THE
SAME COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; AND

 

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(VII)                           ANY OTHER MATTER OR EVENT THAT HAS, OR COULD
REASONABLY BE EXPECTED TO HAVE, A MATERIAL ADVERSE EFFECT, TOGETHER WITH A
WRITTEN STATEMENT OF A RESPONSIBLE OFFICER OF THE PARENT SETTING FORTH THE
NATURE AND PERIOD OF EXISTENCE THEREOF AND THE ACTION THAT THE AFFECTED CREDIT
PARTIES HAVE TAKEN AND PROPOSE TO TAKE WITH RESPECT THERETO;

 

(G)                                 PROMPTLY AFTER THE BORROWER HAS NOTIFIED THE
ADMINISTRATIVE AGENT OF ANY INTENTION BY THE BORROWER TO TREAT THE LOANS AND/OR
LETTERS OF CREDIT AND RELATED TRANSACTIONS AS BEING A “REPORTABLE TRANSACTION”
(WITHIN THE MEANING OF TREASURY REGULATION SECTION 1.6011-4), A DULY COMPLETED
COPY OF IRS FORM 8886 OR ANY SUCCESSOR FORM; AND

 

(H)                                 AS PROMPTLY AS REASONABLY POSSIBLE, SUCH
OTHER INFORMATION ABOUT THE BUSINESS, CONDITION (FINANCIAL OR OTHERWISE),
OPERATIONS OR PROPERTIES OF ANY CREDIT PARTY AS THE ADMINISTRATIVE AGENT OR ANY
LENDER MAY FROM TIME TO TIME REASONABLY REQUEST.

 

6.3                                 Existence; Franchises; Maintenance of
Properties.  Each of the Parent and the Borrower will, and will cause each of
its Subsidiaries to, (i) maintain and preserve in full force and effect its
legal existence, except as expressly permitted otherwise by Section 8.1,
(ii) obtain, maintain and preserve in full force and effect all other rights,
franchises, licenses, permits, certifications, approvals and authorizations
required by Governmental Authorities and necessary to the ownership, occupation
or use of its properties or the conduct of its business, except to the extent
the failure to do so could not reasonably be expected to have a Material Adverse
Effect, and (iii) keep all material properties in good working order and
condition (normal wear and tear and damage by casualty excepted) and from time
to time make all necessary repairs to and renewals and replacements of such
properties, except to the extent that any of such properties are obsolete or are
being replaced or, in the good faith judgment of the Borrower, are no longer
useful or desirable in the conduct of the business of the Credit Parties.

 

6.4                                 Compliance with Laws.  Each of the Parent
and the Borrower will, and will cause each of its Subsidiaries to, comply in all
respects with all Requirements of Law applicable in respect of the conduct of
its business and the ownership and operation of its properties, except to the
extent the failure so to comply could not reasonably be expected to have a
Material Adverse Effect.

 

6.5                                 Payment of Obligations.  Each of the Parent
and the Borrower will, and will cause each of its Subsidiaries to, (i) pay,
discharge or otherwise satisfy at or before maturity all liabilities and
obligations as and when due (subject to any applicable subordination, grace and
notice provisions), except to the extent failure to do so could not reasonably
be expected to have a Material Adverse Effect, and (ii) pay and discharge all
taxes, assessments and governmental charges or levies imposed upon it, upon its
income or profits or upon any of its properties, prior to the date on which
penalties would attach thereto, and all lawful claims that, if unpaid, would
become a Lien (other than a Permitted Lien) upon any of the properties of any
Credit Party; provided, however, that no Credit Party shall be required to pay
any such liability, obligation, tax, assessment, charge, levy or claim that is
being contested in good faith (and by appropriate proceedings, except with
respect to non-governmental claims not exceeding $250,000 in the aggregate at
any time) and as to which such Credit Party is maintaining adequate reserves
with respect thereto in accordance with GAAP.

 

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6.6                                 Insurance.  Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, maintain with
financially sound and reputable insurance companies insurance with respect to
its assets, properties and business, against such hazards and liabilities, of
such types and in such amounts, as is customarily maintained by companies in the
same or similar businesses similarly situated, and maintain such other or
additional insurance on such terms and subject to such conditions as may be
required under any Security Document.

 

6.7                                 Maintenance of Books and Records;
Inspection.  Each of the Parent and the Borrower will, and will cause each of
its Subsidiaries to, (i) maintain adequate books, accounts and records, in which
full, true and correct entries shall be made of all financial transactions in
relation to its business and properties in accordance with sound business
practices sufficient to permit the preparation of financial statements required
under this Agreement in accordance with GAAP, and in compliance with the
requirements of any Governmental Authority having jurisdiction over it, and
prepare all financial statements required under this Agreement, in accordance
with GAAP, and (ii) permit employees or agents of the Administrative Agent or
any Lender to visit and inspect its properties and examine or audit its books,
records, working papers and accounts and make copies and memoranda of them, and
to discuss its affairs, finances and accounts with its officers and employees
and, upon notice to the Parent, the independent public accountants of the Parent
and its Subsidiaries (and by this provision the Parent authorizes such
accountants to discuss the finances and affairs of the Parent and its
Subsidiaries, provided that the Parent shall be entitled to be present at any
such discussions), all at such times and from time to time, upon reasonable
notice and during business hours, as may be reasonably requested.

 

6.8                                 [Reserved.].

 

6.9                                 Permitted Acquisitions.  In addition to the
requirements contained in the definition of Permitted Acquisition and in the
other applicable terms and conditions of this Agreement, the Borrower shall,
with respect to any Permitted Acquisition, comply with, and cause each other
applicable Credit Party to comply with, the following covenants:

 

(A)                                  NOT LESS THAN TEN (10) BUSINESS DAYS PRIOR
TO THE CONSUMMATION OF ANY PERMITTED ACQUISITION, THE BORROWER SHALL HAVE
DELIVERED TO THE ADMINISTRATIVE AGENT AND EACH LENDER THE FOLLOWING (BUT WITH
RESPECT TO ANY PERMITTED ACQUISITION HAVING AN ACQUISITION AMOUNT LESS THAN
$5,000,000 (OR $10,000,000, IN THE EVENT TOTAL LEVERAGE RATIO IS LESS THAN 3.0
TO 1.0 AFTER GIVING PRO FORMA EFFECT TO SUCH PERMITTED ACQUISITION), ONLY THE
CERTIFICATE AND SUPPORTING CALCULATIONS DESCRIBED IN CLAUSE (V) BELOW):

 

(I)                                     A REASONABLY DETAILED DESCRIPTION OF THE
MATERIAL TERMS OF SUCH PERMITTED ACQUISITION (INCLUDING, WITHOUT LIMITATION, THE
PURCHASE PRICE AND METHOD AND STRUCTURE OF PAYMENT) AND OF EACH PERSON OR
BUSINESS THAT IS THE SUBJECT OF SUCH PERMITTED ACQUISITION (EACH, A “TARGET”);

 

(II)                                  HISTORICAL FINANCIAL STATEMENTS OF THE
TARGET (OR, IF THERE ARE TWO OR MORE TARGETS THAT ARE THE SUBJECT OF SUCH
PERMITTED ACQUISITION AND THAT ARE PART OF THE SAME CONSOLIDATED GROUP,
CONSOLIDATED HISTORICAL FINANCIAL STATEMENTS FOR ALL SUCH TARGETS) FOR THE TWO
(2) MOST RECENT FISCAL YEARS AVAILABLE AND, IF AVAILABLE, FOR ANY INTERIM
PERIODS SINCE THE MOST RECENT FISCAL YEAR-END;

 

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(III)                               CONSOLIDATED PROJECTED INCOME STATEMENTS OF
THE PARENT AND ITS SUBSIDIARIES (GIVING EFFECT TO SUCH PERMITTED ACQUISITION AND
THE CONSOLIDATION OF EACH RELEVANT TARGET) FOR THE THREE-YEAR PERIOD FOLLOWING
THE CONSUMMATION OF SUCH PERMITTED ACQUISITION, IN REASONABLE DETAIL, TOGETHER
WITH ANY APPROPRIATE STATEMENT OF ASSUMPTIONS AND PRO FORMA ADJUSTMENTS;

 

(IV)                              WITH RESPECT TO ANY SUCH PERMITTED ACQUISITION
IN WHICH ANY CONTINGENT PURCHASE PRICE OBLIGATIONS OR SELLER SUBORDINATED
INDEBTEDNESS SHALL BE INCURRED BY THE BORROWER OR ANY OTHER CREDIT PARTY, A COPY
OF THE MOST RECENT DRAFT OF THE ACQUISITION AGREEMENT (INCLUDING SCHEDULES AND
EXHIBITS THERETO, TO THE EXTENT AVAILABLE) AND OTHER MATERIAL DOCUMENTS
(INCLUDING THE DOCUMENTATION EVIDENCING SUCH CONTINGENT PURCHASE PRICE
OBLIGATIONS OR SELLER SUBORDINATED INDEBTEDNESS); AND

 

(V)                                 A CERTIFICATE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT, EXECUTED BY A FINANCIAL
OFFICER OF THE BORROWER SETTING FORTH THE ACQUISITION AMOUNT (INCLUDING THE
CALCULATION OF ANY CONTINGENT PURCHASE PRICE GAAP AMOUNT CONSTITUTING PART OF
SUCH ACQUISITION AMOUNT AND ANY CONTINGENT PURCHASE PRICE RESERVE AMOUNT
ASSOCIATED WITH SUCH PERMITTED ACQUISITION) AND FURTHER TO THE EFFECT THAT, TO
THE BEST OF SUCH FINANCIAL OFFICER’S KNOWLEDGE THE CONSUMMATION OF SUCH
PERMITTED ACQUISITION WILL NOT RESULT IN A VIOLATION OF ANY PROVISION OF THIS
SECTION 6.9 OR ANY OTHER PROVISION OF THIS AGREEMENT, AND AFTER GIVING EFFECT TO
SUCH PERMITTED ACQUISITION AND ANY BORROWINGS MADE IN CONNECTION THEREWITH, THE
BORROWER WILL BE IN COMPLIANCE WITH THE FINANCIAL COVENANTS CONTAINED IN
ARTICLE VII, SUCH COMPLIANCE DETERMINED WITH REGARD TO CALCULATIONS MADE ON A
PRO FORMA BASIS FOR THE REFERENCE PERIOD MOST RECENTLY ENDED, CALCULATED IN
ACCORDANCE WITH GAAP AS IF EACH SUCH TARGET HAD BEEN CONSOLIDATED WITH THE
BORROWER FOR THOSE PERIODS APPLICABLE TO SUCH COVENANTS (SUCH CALCULATIONS TO BE
ATTACHED TO THE CERTIFICATE USING THE COVENANT COMPLIANCE WORKSHEET).

 

(B)                                 AS SOON AS REASONABLY PRACTICABLE AFTER THE
CONSUMMATION OF ANY PERMITTED ACQUISITION, THE BORROWER WILL DELIVER TO THE
ADMINISTRATIVE AGENT AND EACH LENDER TRUE AND CORRECT COPIES OF THE FULLY
EXECUTED ACQUISITION AGREEMENT (INCLUDING SCHEDULES AND EXHIBITS THERETO) AND
OTHER MATERIAL DOCUMENTS AND CLOSING PAPERS DELIVERED IN CONNECTION THEREWITH,
TOGETHER WITH (IN THE CASE OF ANY PERMITTED ACQUISITION HAVING AN ACQUISITION
AMOUNT LESS THAN $5,000,000 (OR $10,000,000, IN THE EVENT TOTAL LEVERAGE RATIO
IS LESS THAN 3.0 TO 1.0 AFTER GIVING PRO FORMA EFFECT TO SUCH PERMITTED
ACQUISITION) THE ITEMS DESCRIBED IN CLAUSES (I) AND (II) OF SECTION 6.9(A).

 

(C)                                  THE CONSUMMATION OF EACH PERMITTED
ACQUISITION SHALL BE DEEMED TO BE A REPRESENTATION AND WARRANTY BY THE BORROWER
THAT (EXCEPT AS SHALL HAVE BEEN APPROVED IN WRITING BY THE REQUIRED LENDERS) ALL
CONDITIONS THERETO SET FORTH IN THIS SECTION 6.9 AND IN THE DESCRIPTION
FURNISHED UNDER SECTION 6.9(A)(I) HAVE BEEN SATISFIED, THAT THE SAME IS
PERMITTED IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, AND THAT THE MATTERS
CERTIFIED TO BY THE FINANCIAL OFFICER OF THE BORROWER IN THE CERTIFICATE
REFERRED TO IN SECTION 6.9(A)(V) ARE, TO THE BEST OF SUCH FINANCIAL OFFICER’S
KNOWLEDGE, TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE SUCH
CERTIFICATE IS GIVEN, WHICH REPRESENTATION AND WARRANTY SHALL BE DEEMED TO BE A
REPRESENTATION AND WARRANTY AS

 

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of the date thereof for all purposes hereunder, including, without limitation,
for purposes of Sections 4.2 and 9.1.

 

6.10                           Creation or Acquisition of Subsidiaries.  Subject
to the provisions of Section 8.5, the Borrower may from time to time create or
acquire new Wholly Owned Subsidiaries in connection with Permitted Acquisitions
or otherwise, and the Wholly Owned Subsidiaries of the Borrower may create or
acquire new Wholly Owned Subsidiaries, provided that:

 

(A)                                  CONCURRENTLY WITH (AND IN ANY EVENT WITHIN
TEN (10) BUSINESS DAYS AFTER) THE CREATION OR DIRECT OR INDIRECT ACQUISITION BY
THE BORROWER THEREOF, EACH SUCH NEW SUBSIDIARY WILL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT (I) A JOINDER TO THE GUARANTY AGREEMENT, PURSUANT TO WHICH
SUCH NEW SUBSIDIARY SHALL BECOME A GUARANTOR THEREUNDER AND SHALL GUARANTEE THE
PAYMENT IN FULL OF THE OBLIGATIONS OF THE BORROWER UNDER THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS, AND (II) A JOINDER TO THE SECURITY AGREEMENT, PURSUANT
TO WHICH SUCH NEW SUBSIDIARY SHALL BECOME A PARTY THERETO AND SHALL GRANT TO THE
ADMINISTRATIVE AGENT A FIRST PRIORITY LIEN UPON AND SECURITY INTEREST IN ITS
ACCOUNTS RECEIVABLE, INVENTORY, EQUIPMENT, GENERAL INTANGIBLES AND OTHER
PERSONAL PROPERTY AS COLLATERAL FOR ITS OBLIGATIONS UNDER THE GUARANTY
AGREEMENT, SUBJECT ONLY TO PERMITTED LIENS;

 

(B)                                 CONCURRENTLY WITH (AND IN ANY EVENT WITHIN
TEN (10) BUSINESS DAYS AFTER) THE CREATION OR ACQUISITION OF ANY NEW SUBSIDIARY
ALL OR A PORTION OF THE CAPITAL STOCK OF WHICH IS DIRECTLY OWNED BY THE
BORROWER, THE BORROWER WILL EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT AN
AMENDMENT OR SUPPLEMENT TO THE PLEDGE AGREEMENT PURSUANT TO WHICH ALL OF THE
CAPITAL STOCK OF SUCH NEW SUBSIDIARY OWNED BY THE BORROWER SHALL BE PLEDGED TO
THE ADMINISTRATIVE AGENT, TOGETHER WITH THE CERTIFICATES EVIDENCING SUCH CAPITAL
STOCK AND UNDATED STOCK POWERS DULY EXECUTED IN BLANK; AND CONCURRENTLY WITH
(AND IN ANY EVENT WITHIN TEN (10) BUSINESS DAYS AFTER) THE CREATION OR
ACQUISITION OF ANY NEW SUBSIDIARY ALL OR A PORTION OF THE CAPITAL STOCK OF WHICH
IS DIRECTLY OWNED BY ANOTHER SUBSIDIARY, THE PARENT SUBSIDIARY WILL EXECUTE AND
DELIVER TO THE ADMINISTRATIVE AGENT AN APPROPRIATE JOINDER, AMENDMENT OR
SUPPLEMENT TO THE PLEDGE AGREEMENT, PURSUANT TO WHICH ALL OF THE CAPITAL STOCK
OF SUCH NEW SUBSIDIARY OWNED BY SUCH PARENT SUBSIDIARY SHALL BE PLEDGED TO THE
ADMINISTRATIVE AGENT, TOGETHER WITH THE CERTIFICATES EVIDENCING SUCH CAPITAL
STOCK AND UNDATED STOCK POWERS DULY EXECUTED IN BLANK; AND

 

(C)                                  AS PROMPTLY AS REASONABLY POSSIBLE, THE
BORROWER AND ITS SUBSIDIARIES WILL DELIVER ANY SUCH OTHER DOCUMENTS,
CERTIFICATES AND OPINIONS (INCLUDING OPINIONS OF COUNSEL, CERTIFIED COPIES OF
ITS ORGANIZATIONAL DOCUMENTS, RESOLUTIONS, LIEN SEARCHES AND OTHER CUSTOMARY
ITEMS), IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT, AS THE ADMINISTRATIVE AGENT OR THE REQUIRED LENDERS MAY REASONABLY
REQUEST IN CONNECTION THEREWITH AND WILL TAKE SUCH OTHER ACTION AS THE
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST TO CREATE IN FAVOR OF THE
ADMINISTRATIVE AGENT A PERFECTED SECURITY INTEREST IN THE COLLATERAL BEING
PLEDGED PURSUANT TO THE DOCUMENTS DESCRIBED ABOVE;

 

provided that, with respect to any Foreign Subsidiary, (i) the Capital Stock of
such Foreign Subsidiary will not be required to be pledged to the extent (but
only to the extent) that (y) such Foreign Subsidiary is a Subsidiary of a
Foreign Subsidiary or (z) such pledge exceeds sixty-five percent (65%) of the
voting Capital Stock of such Foreign Subsidiary, unless and to the extent

 

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that the pledge of greater than sixty-five percent (65%) of the voting Capital
Stock of such Foreign Subsidiary would not cause any adverse tax consequences to
the Borrower (other than that which would be de minimis), and (ii) such Foreign
Subsidiary will not be required to become a Subsidiary Guarantor or become a
party to the Security Agreement (and the documents, certificates, opinions and
other items required under Section 6.10(c) shall not be required with respect to
such Foreign Subsidiary) if doing so would cause adverse tax consequences to the
Borrower (other than that which would be de minimis).

 

6.11                           Additional Security.  Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, grant to the
Administrative Agent, for the benefit of the Lenders, from time to time security
interests, mortgages and other Liens in and upon such of its assets and
properties as are not covered by the Security Documents executed and delivered
on the Closing Date or pursuant to Section 6.10 and as may be reasonably
requested from time to time by the Required Lenders (including, without
limitation, a Mortgage with respect to owned interests in real property but
excluding leased real property), but subject to the proviso at the end of
Section 6.10.  Such security interests, mortgages and Liens shall be granted
pursuant to documentation in form and substance reasonably satisfactory to the
Administrative Agent and shall constitute valid and perfected security interests
and Liens, subject to no Liens other than Permitted Liens.  Without limitation
of the foregoing, (i) the Borrower shall use its commercially reasonable efforts
to deliver to the Administrative Agent, not later than 15 days after the Closing
Date, a landlord agreement from the landlord of the Borrower’s Vista, California
facility, in form and substance satisfactory to the Administrative Agent and
(ii) in connection with the grant of any Mortgage, the Borrower will, and will
cause each applicable Subsidiary to, at the Borrower’s expense, prepare, obtain
and deliver to the Administrative Agent any environmental assessments,
appraisals, surveys, title insurance and other matters or documents as the
Administrative Agent may reasonably request or as may be required under
applicable banking laws and regulations.

 

6.12                           Environmental Laws.  Each of the Parent and the
Borrower will, and will cause each of its Subsidiaries to, (i) comply in all
material respects with, and use commercially reasonable efforts to ensure
compliance in all material respects by all tenants and subtenants, if any, with,
all applicable Environmental Laws and obtain and comply in all material respects
with and maintain, and use commercially reasonable efforts to ensure that all
tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, and (ii) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions, required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except to the extent that the same are being contested in good faith by
appropriate proceedings or to the extent the failure to conduct or complete any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect.

 

6.13                           PATRIOT ACT COMPLIANCE.  EACH OF THE PARENT AND
THE BORROWER WILL, AND WILL CAUSE EACH OF ITS SUBSIDIARIES TO, PROVIDE, TO THE
EXTENT COMMERCIALLY REASONABLE, SUCH INFORMATION AND TAKE SUCH ACTIONS AS ARE
REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT OR ANY LENDER IN ORDER TO
ASSIST THE ADMINISTRATIVE AGENT AND THE LENDERS IN MAINTAINING COMPLIANCE WITH
THE PATRIOT ACT.

 

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6.14                           Further Assurances.  Each of the Parent and
Borrower will, and will cause each of its Subsidiaries to, make, execute,
endorse, acknowledge and deliver any amendments, modifications or supplements
hereto and restatements hereof and any other agreements, instruments or
documents, and take any and all such other actions, as may from time to time be
reasonably requested by the Administrative Agent or the Required Lenders to
perfect and maintain the validity and priority of the Liens granted pursuant to
the Security Documents and to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents.

 

6.15                           POST-CLOSING MATTERS.

 

(A)                                  WITHIN 60 DAYS AFTER THE CLOSING DATE, THE
BORROWER SHALL HAVE EXECUTED AND DELIVERED TO THE ADMINISTRATIVE AGENT A PLEDGE
AGREEMENT WITHOUT TRANSMISSION OF POSSESSION (CONTRATO DE PRENDA SIN TRANSMISION
DE POSESIÓN) WITH RESPECT TO THE EQUIPMENT AND INVENTORY OF THE BORROWER LOCATED
IN MEXICO, TOGETHER WITH AN OPINION OF MEXICAN COUNSEL AND SUCH OTHER DOCUMENTS
AND CERTIFICATES AS THE ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST, ALL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(B)                                 WITHIN 120 DAYS AFTER THE CLOSING DATE, THE
BORROWER SHALL HAVE EXECUTED AND DELIVERED TO THE ADMINISTRATIVE AGENT A PLEDGE
AGREEMENT EFFECTIVE UNDER GERMAN LAW TO PLEDGE TO THE ADMINISTRATIVE AGENT 65%
OF THE VOTING CAPITAL STOCK OF DJ ORTHOPEDICS DEUTSCHLAND GMBH, TOGETHER WITH AN
OPINION OF GERMAN COUNSEL AND SUCH OTHER DOCUMENTS AND CERTIFICATES AS THE
ADMINISTRATIVE AGENT SHALL REASONABLY REQUEST, ALL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

ARTICLE VII

 

FINANCIAL COVENANTS

 

The Borrower covenants and agrees that, until the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment in full of all principal and interest with respect to the Loans together
with all other amounts (including any Reimbursement Obligations) then due and
owing hereunder:

 

7.1                                 Total Leverage Ratio.  The Borrower will not
permit the Total Leverage Ratio as of the last day of any fiscal quarter,
beginning with the fourth fiscal quarter of fiscal year 2003, to be greater than
the ratio set forth below opposite such fiscal quarter (or opposite the period
that includes such fiscal quarter):

 

Period

 

Maximum Total
Leverage Ratio

 

4th FQ of FY 2003

 

4.0 : 1.0

 

1st FQ of FY 2004 through and including 2nd FQ of FY 2004

 

3.75 : 1.0

 

3rd FQ of FY 2004 through and including 4th FQ of FY 2004

 

3.5 : 1.0

 

 

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Period

 

Maximum Total
Leverage Ratio

 

1st FQ of FY 2005 through and including 4th FQ of FY 2005

 

3.25 : 1.0

 

1st FQ of FY 2006 through and including 4th FQ of FY 2006

 

3.0 : 1.0

 

1st FQ of FY 2007 and thereafter

 

2.5 : 1.0

 

 

7.2                                 Senior Leverage Ratio.  The Borrower will
not permit the Senior Leverage Ratio as of the last day of any fiscal quarter,
beginning with the fourth fiscal quarter of fiscal year 2003, to be greater than
the ratio set forth below opposite such fiscal quarter (or opposite the period
that includes such fiscal quarter):

 

Period

 

Maximum Senior
Leverage Ratio

 

4th FQ of FY 2003

 

2.5 : 1.0

 

1st FQ of FY 2004 through and including 4th FQ of FY 2004

 

2.25 : 1.0

 

1st FQ of FY 2005 through and including 2nd FQ of FY 2006

 

2.0 : 1.0

 

3rd FQ of FY 2006 and thereafter

 

1.75 : 1.0

 

 

7.3                                 Interest Coverage Ratio.  The Borrower will
not permit the Interest Coverage Ratio as of the last day of any fiscal quarter,
beginning with the fourth fiscal quarter of fiscal year 2003, to be less than
the ratio set forth below opposite such fiscal quarter (or opposite the period
that includes such fiscal quarter):

 

Period

 

Minimum Interest
Coverage Ratio

 

4th FQ of FY 2003 through and including 4th FQ of FY 2005

 

3.0 : 1.0

 

Thereafter

 

3.5 : 1.0

 

 

7.4                                 Fixed Charge Ratio.  The Borrower will not
permit the Fixed Charge Coverage Ratio as of the last day of any fiscal quarter,
beginning with the fourth fiscal quarter of fiscal year 2003, to be less than
the ratio set forth below opposite such fiscal quarter (or opposite the period
that includes such fiscal quarter):

 

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Period

 

Minimum Fixed
Charge Coverage
Ratio

 

4th FQ of FY 2003 and thereafter

 

1.5 : 1.0

 

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

Each of the Parent and the Borrower covenants and agrees that, until the
termination of the Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans together with all other amounts (including any Reimbursement Obligations)
then due and owing hereunder:

 

8.1                                 Merger; Consolidation.  Each of the Parent
and the Borrower will not, and will not permit or cause any of its Subsidiaries
to, liquidate, wind up or dissolve, or enter into any consolidation, merger or
other combination, or agree to do any of the foregoing; provided, however, that:

 

(I)                                     ANY WHOLLY OWNED SUBSIDIARY OF THE
BORROWER MAY MERGE OR CONSOLIDATE WITH, OR BE LIQUIDATED INTO, (X) THE BORROWER
(SO LONG AS THE BORROWER IS THE SURVIVING OR CONTINUING ENTITY) OR (Y) ANY OTHER
WHOLLY OWNED SUBSIDIARY (SO LONG AS, IF EITHER CONSTITUENT ENTITY IS A
SUBSIDIARY GUARANTOR, THE SURVIVING OR CONTINUING ENTITY IS A SUBSIDIARY
GUARANTOR), AND IN EACH CASE SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR WOULD RESULT THEREFROM;

 

(II)                                  ANY WHOLLY OWNED SUBSIDIARY OF THE
BORROWER MAY MERGE OR CONSOLIDATE WITH ANOTHER PERSON (OTHER THAN ANOTHER CREDIT
PARTY), SO LONG AS (X) THE SURVIVING ENTITY IS A SUBSIDIARY GUARANTOR, (Y) SUCH
MERGER OR CONSOLIDATION CONSTITUTES A PERMITTED ACQUISITION AND THE APPLICABLE
CONDITIONS AND REQUIREMENTS OF SECTIONS 6.9 AND 6.10 ARE SATISFIED, AND (Z) NO
DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT
THEREFROM;

 

(III)                               THE BORROWER MAY MERGE OR CONSOLIDATE WITH
ANOTHER PERSON (OTHER THAN ANOTHER CREDIT PARTY), SO LONG AS (X) THE BORROWER IS
THE SURVIVING ENTITY, (Y) SUCH MERGER OR CONSOLIDATION CONSTITUTES A PERMITTED
ACQUISITION AND THE APPLICABLE CONDITIONS AND REQUIREMENTS OF SECTIONS 6.9 AND
6.10 ARE SATISFIED, AND (Z) NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING OR WOULD RESULT THEREFROM; AND

 

(IV)                              ANY SUBSIDIARY THAT IS NOT A SUBSIDIARY
GUARANTOR MAY MERGE INTO OR CONSOLIDATE WITH, OR BE LIQUIDATED INTO, ANY OTHER
SUBSIDIARY THAT IS NOT A SUBSIDIARY GUARANTOR.

 

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8.2                                 Indebtedness.  Each of the Parent and the
Borrower will not, and will not permit or cause any of its Subsidiaries to,
create, incur, assume or suffer to exist any Indebtedness other than (without
duplication):

 

(I)                                     INDEBTEDNESS OF THE CREDIT PARTIES IN
FAVOR OF THE ADMINISTRATIVE AGENT AND THE LENDERS INCURRED UNDER THIS AGREEMENT
AND THE OTHER CREDIT DOCUMENTS;

 

(II)                                  INDEBTEDNESS UNDER THE SENIOR SUBORDINATED
NOTES IN AN AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING NOT EXCEEDING THE
AGGREGATE OF (Y) $75,000,000 MINUS (Z) THE AGGREGATE OF ANY PRINCIPAL PAYMENTS
OR PREPAYMENTS (IF ANY) MADE WITH RESPECT TO THE SENIOR SUBORDINATED NOTES, AND
ANY RENEWALS, REPLACEMENTS, REFINANCINGS OR EXTENSIONS THEREOF THAT ARE ON
ECONOMIC AND OTHER TERMS NO MORE ONEROUS TO THE BORROWER IN ANY MATERIAL RESPECT
AND THAT DO NOT INCREASE THE OUTSTANDING PRINCIPAL AMOUNT THEREOF, RESULT IN AN
EARLIER FINAL MATURITY DATE OR DECREASED WEIGHTED AVERAGE LIFE THEREOF, ADD (OR
MAKE MATERIALLY MORE RESTRICTIVE) ANY COVENANT OR EVENT OF DEFAULT, OR OTHERWISE
CONTAIN ANY SUBORDINATION TERMS OR OTHER MATERIAL TERMS LESS FAVORABLE TO THE
LENDERS THAN THE CORRESPONDING TERMS OF THE SENIOR SUBORDINATED NOTES AS IN
EFFECT AS OF THE DATE HEREOF;

 

(III)                               SUBORDINATED GUARANTEES OF THE SENIOR
SUBORDINATED NOTES BY THE PARENT AND THE SUBSIDIARIES OF THE BORROWER PARTY TO
THE SENIOR SUBORDINATED NOTE INDENTURE, AS SET FORTH IN THE SENIOR SUBORDINATED
NOTE INDENTURE;

 

(IV)                              ACCRUED EXPENSES (INCLUDING SALARIES, ACCRUED
VACATION AND OTHER COMPENSATION), CURRENT TRADE OR OTHER ACCOUNTS PAYABLE AND
OTHER CURRENT LIABILITIES ARISING IN THE ORDINARY COURSE OF BUSINESS AND NOT
INCURRED THROUGH THE BORROWING OF MONEY, IN EACH CASE ABOVE TO THE EXTENT
CONSTITUTING INDEBTEDNESS;

 

(V)                                 INDEBTEDNESS OF THE BORROWER AND ITS
SUBSIDIARIES INCURRED SOLELY TO FINANCE THE ACQUISITION, CONSTRUCTION OR
IMPROVEMENT OF ANY EQUIPMENT, REAL PROPERTY OR OTHER FIXED ASSETS IN THE
ORDINARY COURSE OF BUSINESS (OR ASSUMED OR ACQUIRED BY THE BORROWER AND ITS
SUBSIDIARIES IN CONNECTION WITH A PERMITTED ACQUISITION OR OTHER TRANSACTION
PERMITTED UNDER THIS AGREEMENT), INCLUDING INDEBTEDNESS IN RESPECT OF CAPITAL
LEASE OBLIGATIONS, AND ANY RENEWALS, REPLACEMENTS, REFINANCINGS OR EXTENSIONS
THEREOF, PROVIDED THAT ALL SUCH INDEBTEDNESS SHALL NOT EXCEED $15,000,000 IN
AGGREGATE PRINCIPAL AMOUNT OUTSTANDING AT ANY ONE TIME;

 

(VI)                              UNSECURED LOANS AND ADVANCES (A) BY THE
BORROWER OR ANY SUBSIDIARY TO ANY SUBSIDIARY GUARANTOR, (B) BY ANY SUBSIDIARY TO
THE BORROWER, OR (C) BY THE BORROWER OR ANY SUBSIDIARY TO ANY SUBSIDIARY THAT IS
NOT A SUBSIDIARY GUARANTOR, PROVIDED IN EACH CASE THAT ANY SUCH LOAN OR ADVANCE
IS SUBORDINATED IN RIGHT AND TIME OF PAYMENT TO THE OBLIGATIONS AND IS EVIDENCED
BY A PROMISSORY NOTE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT AND PLEDGED TO THE ADMINISTRATIVE AGENT PURSUANT TO THE
SECURITY DOCUMENTS, AND PROVIDED FURTHER THAT ALL SUCH LOANS AND ADVANCES MADE
PURSUANT TO CLAUSE (C) ABOVE TO SUBSIDIARIES (INCLUDING FOREIGN SUBSIDIARIES)
THAT ARE NOT SUBSIDIARY GUARANTORS SHALL BE SUBJECT TO THE LIMITATIONS ON
INVESTMENTS SET FORTH IN SECTION 8.5;

 

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(VII)                           INDEBTEDNESS OF THE BORROWER UNDER HEDGE
AGREEMENTS REQUIRED PURSUANT TO, AND ENTERED INTO IN ACCORDANCE WITH,
SECTION 6.8 OR UNDER OTHER HEDGE AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS TO MANAGE EXISTING OR ANTICIPATED INTEREST RATE OR FOREIGN CURRENCY
RISKS AND NOT FOR SPECULATIVE PURPOSES;

 

(VIII)                        INDEBTEDNESS EXISTING ON THE CLOSING DATE AND
DESCRIBED IN SCHEDULE 8.2 AND ANY RENEWALS, REPLACEMENTS, REFINANCINGS OR
EXTENSIONS OF ANY SUCH INDEBTEDNESS THAT DO NOT INCREASE THE OUTSTANDING
PRINCIPAL AMOUNT THEREOF OR RESULT IN AN EARLIER FINAL MATURITY DATE OR
DECREASED WEIGHTED AVERAGE LIFE THEREOF;

 

(IX)                                INDEBTEDNESS CONSISTING OF GUARANTY
OBLIGATIONS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES INCURRED IN THE ORDINARY
COURSE OF BUSINESS FOR THE BENEFIT OF ANOTHER CREDIT PARTY, PROVIDED THAT THE
PRIMARY OBLIGATION BEING GUARANTEED IS EXPRESSLY PERMITTED BY THIS AGREEMENT,
AND PROVIDED FURTHER THAT ANY GUARANTY OBLIGATIONS OF THE BORROWER OR ANY
SUBSIDIARY GUARANTOR OF OBLIGATIONS OF A SUBSIDIARY THAT IS NOT A SUBSIDIARY
GUARANTOR SHALL BE SUBJECT TO THE LIMITATIONS ON INVESTMENTS SET FORTH IN
SECTION 8.5;

 

(X)                                   UNSECURED INDEBTEDNESS ISSUED AFTER THE
CLOSING DATE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES TO SELLERS IN CONNECTION
WITH PERMITTED ACQUISITIONS (INCLUDING INDEBTEDNESS CONSISTING OF CONTINGENT
PURCHASE PRICE OBLIGATIONS), IN AN AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING
$10,000,000 OUTSTANDING AT ANY TIME, PROVIDED THAT SUCH INDEBTEDNESS (A) IS
FULLY SUBORDINATED IN RIGHT AND TIME OF PAYMENT TO THE OBLIGATIONS ON TERMS AND
CONDITIONS REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT, AND (B) SHALL HAVE
COVENANTS AND UNDERTAKINGS THAT ARE NO MORE RESTRICTIVE THAN THOSE CONTAINED
HEREIN AND SHALL NOT BE CROSS-DEFAULTED TO THIS AGREEMENT (BUT MAY BE
CROSS-ACCELERATED) (THE INDEBTEDNESS DESCRIBED IN THIS PARAGRAPH, “SELLER
SUBORDINATED INDEBTEDNESS”); AND GUARANTY OBLIGATIONS OF THE PARENT IN RESPECT
OF SELLER SUBORDINATED INDEBTEDNESS PERMITTED HEREUNDER, PROVIDED THAT SUCH
GUARANTY OBLIGATIONS COMPLY WITH CLAUSES (A) AND (B) ABOVE;

 

(XI)                                INDEBTEDNESS THAT MAY BE DEEMED TO EXIST
PURSUANT TO ANY PERFORMANCE BOND, SURETY, STATUTORY APPEAL OR SIMILAR OBLIGATION
ENTERED INTO OR INCURRED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES IN THE
ORDINARY COURSE OF BUSINESS;

 

(XII)                             INDEBTEDNESS OF THE PARENT AND ITS
SUBSIDIARIES ARISING FROM THE HONORING BY A BANK OR OTHER FINANCIAL INSTITUTION
OF A CHECK, DRAFT OR SIMILAR INSTRUMENT INADVERTENTLY (EXCEPT IN THE CASE OF
DAYLIGHT OVERDRAFTS) DRAWN AGAINST INSUFFICIENT FUNDS IN THE ORDINARY COURSE OF
BUSINESS, PROVIDED THAT SUCH INDEBTEDNESS IS EXTINGUISHED WITHIN FIVE BUSINESS
DAYS OF ITS INCURRENCE; AND

 

(XIII)                          OTHER UNSECURED INDEBTEDNESS OF THE BORROWER AND
ITS SUBSIDIARIES NOT EXCEEDING $10,000,000 IN AGGREGATE PRINCIPAL AMOUNT
OUTSTANDING AT ANY TIME; PROVIDED THAT THE AGGREGATE PRINCIPAL AMOUNT OF
INDEBTEDNESS OF FOREIGN SUBSIDIARIES INCURRED PURSUANT TO THIS SECTION 8.2(XIII)
OUTSTANDING AT ANY TIME SHALL NOT EXCEED $5,000,000.

 

8.3                                 Liens.  Each of the Parent and the Borrower
will not, and will not permit or cause any of its Subsidiaries to, directly or
indirectly, make, create, incur, assume or suffer to exist, any

 

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Lien upon or with respect to any part of its property or assets, whether now
owned or hereafter acquired, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any state or under any similar recording or notice statute,
or agree to do any of the foregoing, other than the following (collectively,
“Permitted Liens”):

 

(I)                                     LIENS IN FAVOR OF THE ADMINISTRATIVE
AGENT AND THE LENDERS CREATED BY OR OTHERWISE EXISTING UNDER OR IN CONNECTION
WITH THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS;

 

(II)                                  LIENS IN EXISTENCE ON THE CLOSING DATE AND
SET FORTH ON SCHEDULE 8.3, AND ANY EXTENSIONS, RENEWALS OR REPLACEMENTS THEREOF;
PROVIDED THAT ANY SUCH EXTENSION, RENEWAL OR REPLACEMENT LIEN SHALL BE LIMITED
TO ALL OR A PART OF THE PROPERTY THAT SECURED THE LIEN SO EXTENDED, RENEWED OR
REPLACED (PLUS ANY IMPROVEMENTS ON SUCH PROPERTY) AND SHALL SECURE ONLY THOSE
OBLIGATIONS THAT IT SECURES ON THE DATE HEREOF (AND ANY RENEWALS, REPLACEMENTS,
REFINANCINGS OR EXTENSIONS OF SUCH OBLIGATIONS THAT DO NOT INCREASE THE
OUTSTANDING PRINCIPAL AMOUNT THEREOF);

 

(III)                               LIENS IMPOSED BY LAW, SUCH AS LIENS OF
CARRIERS, WAREHOUSEMEN, MECHANICS, MATERIALMEN AND LANDLORDS, INCURRED IN THE
ORDINARY COURSE OF BUSINESS FOR SUMS NOT CONSTITUTING BORROWED MONEY THAT ARE
NOT OVERDUE FOR A PERIOD OF MORE THAN SIXTY (60) DAYS OR THAT ARE BEING
CONTESTED IN GOOD FAITH (AND BY APPROPRIATE PROCEEDINGS, EXCEPT WITH RESPECT TO
CLAIMS NOT EXCEEDING $250,000 IN THE AGGREGATE AT ANY TIME) AND FOR WHICH
ADEQUATE RESERVES HAVE BEEN ESTABLISHED IN ACCORDANCE WITH GAAP (IF SO
REQUIRED);

 

(IV)                              LIENS (OTHER THAN ANY LIEN IMPOSED BY ERISA,
THE CREATION OR INCURRENCE OF WHICH WOULD RESULT IN AN EVENT OF DEFAULT UNDER
SECTION 9.1(J)) INCURRED IN THE ORDINARY COURSE OF BUSINESS IN CONNECTION WITH
WORKER’S COMPENSATION, UNEMPLOYMENT INSURANCE OR OTHER FORMS OF GOVERNMENTAL
INSURANCE OR BENEFITS, OR TO SECURE THE PERFORMANCE OF LETTERS OF CREDIT,
CUSTOMS BONDS, BIDS, TENDERS, STATUTORY OBLIGATIONS, INDEMNITY, SURETY AND
APPEAL BONDS, LEASES, PUBLIC OR STATUTORY OBLIGATIONS, CONTRACTS AND OTHER
SIMILAR OBLIGATIONS (OTHER THAN OBLIGATIONS FOR BORROWED MONEY) ENTERED INTO IN
THE ORDINARY COURSE OF BUSINESS;

 

(V)                                 LIENS FOR TAXES, ASSESSMENTS OR OTHER
GOVERNMENTAL CHARGES OR STATUTORY OBLIGATIONS THAT ARE NOT DELINQUENT OR REMAIN
PAYABLE WITHOUT ANY PENALTY OR THAT ARE BEING CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS AND FOR WHICH ADEQUATE RESERVES HAVE BEEN ESTABLISHED IN
ACCORDANCE WITH GAAP (IF SO REQUIRED);

 

(VI)                              ANY ATTACHMENT OR JUDGMENT LIEN NOT
CONSTITUTING AN EVENT OF DEFAULT UNDER SECTION 9.1(H);

 

(VII)                           LIENS SECURING THE INDEBTEDNESS PERMITTED UNDER
SECTION 8.2(V), PROVIDED THAT (X) ANY SUCH LIEN SHALL ATTACH TO THE PROPERTY
BEING ACQUIRED, CONSTRUCTED OR IMPROVED WITH SUCH INDEBTEDNESS CONCURRENTLY WITH
OR WITHIN ONE HUNDRED EIGHTY (180) DAYS AFTER THE ACQUISITION (OR COMPLETION OF
CONSTRUCTION OR IMPROVEMENT) OR THE

 

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refinancing thereof by the Borrower or such Subsidiary, (y) the amount of the
Indebtedness secured by such Lien shall not exceed 100% of the cost to the
Borrower or such Subsidiary of acquiring, constructing or improving the property
and any other assets then being financed solely by the same financing source,
and (z) any such Lien shall not encumber any other property of the Borrower or
any of its Subsidiaries except assets then being financed solely by the same
financing source and proceeds thereof;

 

(VIII)                        CUSTOMARY RIGHTS OF SET-OFF, REVOCATION, REFUND OR
CHARGEBACK UNDER DEPOSIT AGREEMENTS OR UNDER THE UNIFORM COMMERCIAL CODE OF
BANKS OR OTHER FINANCIAL INSTITUTIONS WHERE THE PARENT OR ANY OF ITS
SUBSIDIARIES MAINTAINS DEPOSITS (OTHER THAN DEPOSITS INTENDED AS CASH
COLLATERAL) IN THE ORDINARY COURSE OF BUSINESS;

 

(IX)                                LIENS THAT ARISE IN FAVOR OF BANKS UNDER
ARTICLE 4 OF THE UNIFORM COMMERCIAL CODE ON ITEMS IN COLLECTION AND THE
DOCUMENTS RELATING THERETO AND PROCEEDS THEREOF;

 

(X)                                   LIENS ARISING FROM THE FILING (FOR NOTICE
PURPOSES ONLY) OF UCC-1 FINANCING STATEMENTS (OR EQUIVALENT FILINGS,
REGISTRATIONS OR AGREEMENTS IN FOREIGN JURISDICTIONS) IN RESPECT OF TRUE LEASES
OTHERWISE PERMITTED HEREUNDER;

 

(XI)                                WITH RESPECT TO ANY REALTY OCCUPIED BY THE
PARENT OR ANY OF ITS SUBSIDIARIES, (A) ALL EASEMENTS, RIGHTS OF WAY,
RESERVATIONS, LICENSES, ENCROACHMENTS, VARIATIONS AND SIMILAR RESTRICTIONS,
CHARGES AND ENCUMBRANCES ON TITLE THAT DO NOT SECURE MONETARY OBLIGATIONS AND DO
NOT MATERIALLY IMPAIR THE USE OF SUCH PROPERTY FOR ITS INTENDED PURPOSES OR THE
VALUE THEREOF, AND (B) ANY OTHER LIEN OR EXCEPTION TO COVERAGE DESCRIBED IN
MORTGAGEE POLICIES OF TITLE INSURANCE ISSUED IN FAVOR OF AND ACCEPTED BY THE
ADMINISTRATIVE AGENT;

 

(XII)                             ANY LEASES, SUBLEASES, LICENSES OR SUBLICENSES
GRANTED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES TO THIRD PARTIES IN THE
ORDINARY COURSE OF BUSINESS AND NOT INTERFERING IN ANY MATERIAL RESPECT WITH THE
BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES, AND ANY INTEREST OR TITLE OF A
LESSOR, SUBLESSOR, LICENSOR OR SUBLICENSOR UNDER ANY LEASE OR LICENSE PERMITTED
UNDER THIS AGREEMENT; AND

 

(XIII)                          OTHER LIENS SECURING OBLIGATIONS NOT EXCEEDING
$1,000,000 IN AGGREGATE PRINCIPAL AMOUNT OUTSTANDING AT ANY TIME.

 

8.4                                 Asset Dispositions.  Each of the Parent and
the Borrower will not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, make or agree to make any Asset Disposition except for:

 

(I)                                     THE SALE OR OTHER DISPOSITION OF
INVENTORY AND CASH EQUIVALENTS IN THE ORDINARY COURSE OF BUSINESS;

 

(II)                                  THE SALE, EXCHANGE OR OTHER DISPOSITION IN
THE ORDINARY COURSE OF BUSINESS OF EQUIPMENT OR OTHER CAPITAL ASSETS NO LONGER
USED OR USEFUL IN THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES;

 

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(III)                               THE SALE OR OTHER DISPOSITION OF ASSETS
PURSUANT TO ANY CASUALTY EVENT, PROVIDED ANY NET CASH PROCEEDS THEREFROM ARE BE
REINVESTED OR APPLIED TO THE PREPAYMENT OF THE LOANS IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 2.6(E);

 

(IV)                              THE SALE, LEASE, TRANSFER OR OTHER DISPOSITION
OF ASSETS BY THE BORROWER OR ANY SUBSIDIARY OF THE BORROWER TO THE BORROWER OR
TO A SUBSIDIARY GUARANTOR (OR BY ANY SUBSIDIARY THAT IS NOT A SUBSIDIARY
GUARANTOR TO ANOTHER SUBSIDIARY THAT IS NOT A SUBSIDIARY GUARANTOR), IN EACH
CASE SO LONG AS NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR
WOULD RESULT THEREFROM; AND

 

(V)                                 THE SALE OR OTHER DISPOSITION OF ASSETS
(OTHER THAN THE CAPITAL STOCK OF SUBSIDIARIES) OUTSIDE THE ORDINARY COURSE OF
BUSINESS FOR FAIR VALUE AND FOR CONSIDERATION AT LEAST 66-2/3% OF WHICH CONSISTS
OF CASH OR CASH EQUIVALENTS, PROVIDED THAT (X) THE AGGREGATE AMOUNT OF NET CASH
PROCEEDS FROM ALL SUCH SALES OR DISPOSITIONS THAT ARE CONSUMMATED DURING ANY
FISCAL YEAR SHALL NOT EXCEED $5,000,000, (Y) SUCH NET CASH PROCEEDS SHALL, TO
THE EXTENT REQUIRED HEREUNDER, BE REINVESTED OR APPLIED TO THE PREPAYMENT OF THE
LOANS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.6(F), AND (Z) NO DEFAULT OR
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT
THEREFROM.  FOR PURPOSES OF THIS SECTION 8.4, THE FOLLOWING SHALL BE DEEMED TO
BE CASH:  (A) THE ASSUMPTION OF ANY LIABILITIES OF THE BORROWER OR ANY
SUBSIDIARY GUARANTOR WITH RESPECT TO, AND THE RELEASE OF THE BORROWER OR SUCH
SUBSIDIARY GUARANTOR FROM ALL LIABILITY IN RESPECT OF, ANY INDEBTEDNESS OF THE
BORROWER OR THE SUBSIDIARIES PERMITTED HEREUNDER (IN THE AMOUNT OF SUCH
INDEBTEDNESS) THAT IS DUE AND PAYABLE WITHIN ONE YEAR OF THE CONSUMMATION OF
SUCH DISPOSITION AND (B) SECURITIES RECEIVED BY THE BORROWER OR ANY SUBSIDIARY
GUARANTOR FROM THE TRANSFEREE THAT ARE IMMEDIATELY CONVERTIBLE INTO CASH WITHOUT
BREACH OF THEIR TERMS OR THE AGREEMENT PURSUANT TO WHICH THEY WERE PURCHASED AND
THAT ARE PROMPTLY CONVERTED BY THE BORROWER OR SUCH SUBSIDIARY GUARANTOR INTO
CASH.

 

8.5                                 Investments.  Each of the Parent and the
Borrower will not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, purchase, own, invest in or otherwise acquire any
Capital Stock, evidence of indebtedness or other obligation or security or any
interest whatsoever in any other Person, or make or permit to exist any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any other Person, or purchase or otherwise acquire (whether in one
or a series of related transactions) any portion of the assets, business or
properties of another Person (including pursuant to an Acquisition), or create
or acquire any Subsidiary, or become a partner or joint venturer in any
partnership or joint venture (collectively, “Investments”), or make a commitment
or otherwise agree to do any of the foregoing, other than:

 

(I)                                     INVESTMENTS CONSISTING OF CASH
EQUIVALENTS;

 

(II)                                  INVESTMENTS CONSISTING OF THE EXTENSION OF
TRADE CREDIT, THE CREATION OF PREPAID EXPENSES, AND THE PURCHASE OF INVENTORY,
SUPPLIES, EQUIPMENT AND OTHER ASSETS, IN EACH CASE IN THE ORDINARY COURSE OF
BUSINESS;

 

(III)                               INVESTMENTS CONSISTING OF LOANS AND ADVANCES
TO EMPLOYEES, OFFICERS OR DIRECTORS OF THE PARENT AND ITS SUBSIDIARIES IN THE
ORDINARY COURSE OF BUSINESS NOT

 

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EXCEEDING $1,500,000 AT ANY TIME OUTSTANDING, PROVIDED THAT LOANS FOR THE
PURPOSE OF ACQUIRING CAPITAL STOCK OF THE PARENT THE NET CASH PROCEEDS OF WHICH
EQUITY ISSUANCE ARE CONTRIBUTED TO THE CAPITAL OF THE BORROWER OR USED TO
ACQUIRE CAPITAL STOCK OF THE BORROWER SHALL NOT BE SUBJECT TO SUCH LIMIT;

 

(IV)                              INVESTMENTS (INCLUDING EQUITY SECURITIES AND
DEBT OBLIGATIONS) OF THE BORROWER AND ITS SUBSIDIARIES (A) RECEIVED IN
CONNECTION WITH THE BANKRUPTCY OR REORGANIZATION OF SUPPLIERS AND CUSTOMERS AND
IN GOOD FAITH SETTLEMENT OF DELINQUENT OBLIGATIONS OF, AND OTHER DISPUTES WITH,
CUSTOMERS AND SUPPLIERS ARISING IN THE ORDINARY COURSE OF BUSINESS OR
(B) CONSTITUTING NON-CASH PROCEEDS OF ANY SALE, TRANSFER OR OTHER DISPOSITION
PERMITTED BY SECTIONS 8.4(II) OR 8.4(V);

 

(V)                                 WITHOUT DUPLICATION, INVESTMENTS CONSISTING
OF INTERCOMPANY INDEBTEDNESS PERMITTED UNDER SECTION 8.2(VI);

 

(VI)                              INVESTMENTS EXISTING AS OF THE CLOSING DATE
AND DESCRIBED IN SCHEDULE 8.5;

 

(VII)                           INVESTMENTS OF THE BORROWER UNDER HEDGE
AGREEMENTS REQUIRED PURSUANT TO, AND ENTERED INTO IN ACCORDANCE WITH,
SECTION 6.8 OR UNDER OTHER HEDGE AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE
OF BUSINESS TO MANAGE EXISTING OR ANTICIPATED INTEREST RATE OR FOREIGN CURRENCY
RISKS AND NOT FOR SPECULATIVE PURPOSES;

 

(VIII)                        INVESTMENTS (Y) OF THE PARENT IN THE BORROWER AND
(Z) OF THE BORROWER IN ITS SUBSIDIARIES, IN EACH CASE MADE PRIOR TO THE CLOSING
DATE;

 

(IX)                                INVESTMENTS CONSISTING OF THE MAKING OF
CAPITAL CONTRIBUTIONS OR THE PURCHASE OF CAPITAL STOCK (X) BY THE PARENT IN THE
BORROWER, (Y) BY THE BORROWER OR ANY SUBSIDIARY IN ANY OTHER NEWLY CREATED OR
ACQUIRED WHOLLY OWNED SUBSIDIARY THAT IS (OR IMMEDIATELY AFTER GIVING EFFECT TO
SUCH INVESTMENT WILL BE) A SUBSIDIARY GUARANTOR, PROVIDED THAT THE BORROWER
COMPLIES WITH THE PROVISIONS OF SECTION 6.10, AND PROVIDED FURTHER THAT IN NO
EVENT SHALL ANY FOREIGN SUBSIDIARY CREATE OR ACQUIRE ANY DOMESTIC SUBSIDIARY,
AND (Z) BY ANY SUBSIDIARY IN THE BORROWER;

 

(X)                                   INVESTMENTS BY THE BORROWER IN FOREIGN
SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, CAPITAL CONTRIBUTIONS MADE TO ANY
FOREIGN SUBSIDIARY, LOANS MADE TO ANY FOREIGN SUBSIDIARY, AND GUARANTEE
OBLIGATIONS WITH RESPECT TO OBLIGATIONS OF ANY SUCH FOREIGN SUBSIDIARY) MADE
AFTER THE CLOSING DATE IN AN AGGREGATE AMOUNT NOT EXCEEDING $5,000,000 AT ANY
TIME OUTSTANDING FOR ALL SUCH INVESTMENTS;

 

(XI)                                THE BGS ACQUISITION;

 

(XII)                             PERMITTED ACQUISITIONS; AND

 

(XIII)                          OTHER INVESTMENTS OF THE BORROWER AND ITS
SUBSIDIARIES NOT OTHERWISE PERMITTED UNDER THIS SECTION 8.5 (INCLUDING JOINT
VENTURES, BUT EXCLUDING INVESTMENTS IN FOREIGN SUBSIDIARIES) IN AN AGGREGATE
AMOUNT NOT EXCEEDING $6,000,000 AT ANY TIME OUTSTANDING FOR ALL SUCH
INVESTMENTS.

 

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8.6                                 RESTRICTED PAYMENTS.

 

(A)                                  EACH OF THE PARENT AND THE BORROWER WILL
NOT, AND WILL NOT PERMIT OR CAUSE ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR
INDIRECTLY, DECLARE OR MAKE ANY DIVIDEND PAYMENT, OR MAKE ANY OTHER DISTRIBUTION
OF CASH, PROPERTY OR ASSETS, IN RESPECT OF ANY OF ITS CAPITAL STOCK OR ANY
WARRANTS, RIGHTS OR OPTIONS TO ACQUIRE ITS CAPITAL STOCK, OR PURCHASE, REDEEM,
RETIRE OR OTHERWISE ACQUIRE FOR VALUE ANY SHARES OF ITS CAPITAL STOCK OR ANY
WARRANTS, RIGHTS OR OPTIONS TO ACQUIRE ITS CAPITAL STOCK, OR SET ASIDE FUNDS FOR
ANY OF THE FOREGOING, EXCEPT THAT:

 

(I)                                     THE PARENT AND ANY OF ITS SUBSIDIARIES
MAY DECLARE AND MAKE DIVIDEND PAYMENTS OR OTHER DISTRIBUTIONS PAYABLE SOLELY IN
ITS COMMON STOCK;

 

(II)                                  THE BORROWER MAY MAKE DIVIDEND PAYMENTS OR
OTHER DISTRIBUTIONS TO THE PARENT IN AMOUNTS EQUAL TO AMOUNTS REQUIRED FOR THE
PARENT TO PAY UNITED STATES FEDERAL, STATE AND LOCAL INCOME TAXES TO THE EXTENT
SUCH TAXES ARE ATTRIBUTABLE TO THE INCOME OF THE BORROWER AND ITS SUBSIDIARIES;

 

(III)                               EACH WHOLLY OWNED SUBSIDIARY OF THE BORROWER
MAY DECLARE AND MAKE DIVIDEND PAYMENTS OR OTHER DISTRIBUTIONS TO THE BORROWER OR
TO ANOTHER SUBSIDIARY OF THE BORROWER, IN EACH CASE TO THE EXTENT NOT PROHIBITED
UNDER APPLICABLE REQUIREMENTS OF LAW;

 

(IV)                              THE BORROWER MAY DECLARE AND MAKE DIVIDEND
PAYMENTS AND OTHER DISTRIBUTIONS TO THE PARENT TO ENABLE THE PARENT TO PAY
ORDINARY AND REASONABLE HOLDING COMPANY OPERATING EXPENSES; AND

 

(V)                                 SO LONG AS NO DEFAULT OR EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING OR WOULD RESULT THEREFROM, THE BORROWER
MAY DECLARE AND MAKE DIVIDEND PAYMENTS AND OTHER DISTRIBUTIONS TO THE PARENT TO
ENABLE THE PARENT TO PURCHASE, REDEEM, RETIRE OR OTHERWISE ACQUIRE SHARES OF ITS
CAPITAL STOCK (OR OPTIONS OR RIGHTS TO ACQUIRE ITS CAPITAL STOCK) HELD BY FORMER
OFFICERS, DIRECTORS OR EMPLOYEES FOLLOWING TERMINATION OF SERVICE OR EMPLOYMENT,
IN AN AGGREGATE CASH AMOUNT NOT EXCEEDING $2,000,000 DURING ANY FISCAL YEAR OR
$5,000,000 FOR ALL SUCH PURCHASES, REDEMPTIONS, RETIREMENTS AND ACQUISITIONS
FROM AND AFTER THE CLOSING DATE, IN EACH CASE NET OF ANY PROCEEDS RECEIVED BY
THE PARENT AS A RESULT OF RESALES OF ANY SUCH CAPITAL STOCK.

 

(B)                                 EACH OF THE PARENT AND THE BORROWER WILL
NOT, AND WILL NOT PERMIT OR CAUSE ANY OF ITS SUBSIDIARIES TO, MAKE (OR GIVE ANY
NOTICE IN RESPECT OF) ANY PAYMENT OR PREPAYMENT OF PRINCIPAL ON, OR INTEREST,
FEES OR PREMIUM (IF ANY) WITH RESPECT TO, THE SENIOR SUBORDINATED NOTES OR ANY
OTHER SUBORDINATED INDEBTEDNESS, OR DIRECTLY OR INDIRECTLY MAKE ANY REDEMPTION
(INCLUDING PURSUANT TO ANY CHANGE OF CONTROL OR ASSET DISPOSITION PROVISION),
RETIREMENT, DEFEASANCE OR OTHER ACQUISITION FOR VALUE OF ANY OF THE SENIOR
SUBORDINATED NOTES OR ANY OTHER SUBORDINATED INDEBTEDNESS, OR MAKE ANY DEPOSIT
OR OTHERWISE SET ASIDE FUNDS FOR ANY OF THE FOREGOING PURPOSES; PROVIDED,
HOWEVER, THAT, (I) THE BORROWER MAY MAKE SCHEDULED PAYMENTS OF INTEREST WITH
RESPECT TO THE SENIOR SUBORDINATED NOTES TO THE EXTENT MADE OR PAID IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE SENIOR SUBORDINATED NOTE
INDENTURE (INCLUDING APPLICABLE SUBORDINATION PROVISIONS), (II) THE BORROWER AND
ITS SUBSIDIARIES MAY MAKE SCHEDULED PRINCIPAL

 

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AND INTEREST PAYMENTS ON ANY SELLER SUBORDINATED INDEBTEDNESS INCURRED OR ISSUED
PURSUANT TO (AND IN ACCORDANCE WITH THE TERMS OF) SECTION 8.2(X) AND ANY
SUBORDINATED INDEBTEDNESS EXISTING ON THE CLOSING DATE AND DESCRIBED IN
SCHEDULE 8.2, IN EACH CASE IN ACCORDANCE WITH THE TERMS OF SUCH INDEBTEDNESS
(INCLUDING ANY SUBORDINATION PROVISIONS THEREOF), (III) THE BORROWER MAY EFFECT
A PERMITTED SENIOR SUBORDINATED NOTE REDEMPTION, AND (IV) THE BORROWER MAY
REPLACE OR REFINANCE THE SENIOR SUBORDINATED NOTES AS PERMITTED UNDER
SECTION 8.2(II).

 

8.7           TRANSACTIONS WITH AFFILIATES.  EACH OF THE PARENT AND THE BORROWER
WILL NOT, AND WILL NOT PERMIT OR CAUSE ANY OF ITS SUBSIDIARIES TO, ENTER INTO
ANY TRANSACTION (INCLUDING, WITHOUT LIMITATION, ANY PURCHASE, SALE, LEASE OR
EXCHANGE OF PROPERTY OR THE RENDERING OF ANY SERVICE) WITH ANY OFFICER,
DIRECTOR, STOCKHOLDER OR OTHER AFFILIATE OF THE PARENT OR ANY OF ITS
SUBSIDIARIES, EXCEPT IN THE ORDINARY COURSE OF ITS BUSINESS AND UPON FAIR AND
REASONABLE TERMS THAT ARE NO LESS FAVORABLE TO IT THAN IT WOULD BE OBTAINED IN A
COMPARABLE ARM’S LENGTH TRANSACTION WITH A PERSON OTHER THAN AN AFFILIATE OF THE
PARENT OR ANY OF ITS SUBSIDIARIES; PROVIDED, HOWEVER, THAT NOTHING CONTAINED IN
THIS SECTION 8.7 SHALL PROHIBIT:

 

(I)            TRANSACTIONS DESCRIBED ON SCHEDULE 8.7 (AND ANY RENEWALS OR
REPLACEMENTS THEREOF ON TERMS NOT MATERIALLY MORE DISADVANTAGEOUS TO THE
APPLICABLE CREDIT PARTY) OR OTHERWISE EXPRESSLY PERMITTED UNDER THIS AGREEMENT;

 

(II)           TRANSACTIONS AMONG THE BORROWER AND THE SUBSIDIARY GUARANTORS
(PROVIDED THAT SUCH TRANSACTIONS SHALL REMAIN SUBJECT TO ANY OTHER APPLICABLE
LIMITATIONS AND RESTRICTIONS SET FORTH IN THIS AGREEMENT);

 

(III)          THE PAYMENT AND PROVISION BY THE PARENT AND ITS SUBSIDIARIES OF
REASONABLE COMPENSATION, BENEFITS, INDEMNIFICATION AND LOANS AND ADVANCES
PERMITTED BY SECTION 8.5(III) TO THEIR DIRECTORS, OFFICERS AND EMPLOYEES;

 

(IV)          EQUITY ISSUANCES WITH RESPECT TO THE PARENT’S CAPITAL STOCK TO
DIRECTORS, OFFICERS AND EMPLOYEES OF THE CREDIT PARTIES PURSUANT TO EMPLOYEE
BENEFIT PLANS, EMPLOYMENT AGREEMENTS OR OTHER EMPLOYMENT ARRANGEMENTS APPROVED
BY THE BOARD OF DIRECTORS OF THE PARENT; AND

 

(V)           ANY CONTRIBUTION TO THE CAPITAL OF THE BORROWER BY THE PARENT OR
ANY PURCHASE OF CAPITAL STOCK OF THE BORROWER BY THE PARENT.

 

8.8           LINES OF BUSINESS.

 

(A)           EACH OF THE PARENT AND THE BORROWER WILL NOT, AND WILL NOT PERMIT
OR CAUSE ANY OF ITS SUBSIDIARIES TO, ENGAGE IN ANY LINES OF BUSINESS OTHER THAN
THE BUSINESSES ENGAGED IN BY IT ON THE CLOSING DATE AND BUSINESSES AND
ACTIVITIES REASONABLY RELATED THERETO.

 

(B)           NOTWITHSTANDING THE PROVISIONS OF SECTION 8.8(A) OR ANY OTHER
PROVISION OF THIS AGREEMENT, THE PARENT SHALL NOT (I) HOLD ANY ASSETS OTHER THAN
THE CAPITAL STOCK OF THE BORROWER, CASH AND CASH EQUIVALENTS AND RIGHTS UNDER
EMPLOYMENT AGREEMENTS AND WRITTEN EMPLOYMENT ARRANGEMENTS, (II) HAVE ANY
LIABILITIES OTHER THAN (A) LIABILITIES UNDER AND AS PERMITTED BY THE CREDIT
DOCUMENTS, (B) TAX LIABILITIES IN THE ORDINARY COURSE OF BUSINESS,
(C) LIABILITIES UNDER EMPLOYMENT AGREEMENTS AND WRITTEN EMPLOYMENT ARRANGEMENTS
AND (D) CORPORATE,

 

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ADMINISTRATIVE AND OPERATING EXPENSES IN THE ORDINARY COURSE OF BUSINESS, OR
(III) ENGAGE IN ANY BUSINESS OTHER THAN (A) OWNING THE CAPITAL STOCK OF THE
BORROWER AND ACTIVITIES INCIDENTAL TO SUCH OWNERSHIP AND TO ITS PUBLIC COMPANY
STATUS, AND (B) ACTING AS A GUARANTOR OF THE OBLIGATIONS HEREUNDER AND GRANTING
TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE LENDERS, A SECURITY INTEREST
IN AND LIEN UPON ITS ASSETS PURSUANT TO THE SECURITY DOCUMENTS TO WHICH IT IS A
PARTY.

 

8.9           SALE-LEASEBACK TRANSACTIONS.  EACH OF THE PARENT AND THE BORROWER
WILL NOT, AND WILL NOT PERMIT OR CAUSE ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR
INDIRECTLY, BECOME OR REMAIN LIABLE AS LESSEE OR AS GUARANTOR OR OTHER SURETY
WITH RESPECT TO ANY LEASE, WHETHER AN OPERATING LEASE OR A CAPITAL LEASE, OF ANY
PROPERTY (WHETHER REAL, PERSONAL OR MIXED, AND WHETHER NOW OWNED OR HEREAFTER
ACQUIRED) (I) THAT ANY CREDIT PARTY HAS SOLD OR TRANSFERRED (OR IS TO SELL OR
TRANSFER) TO A PERSON THAT IS NOT A CREDIT PARTY OR (II) THAT ANY CREDIT PARTY
INTENDS TO USE FOR SUBSTANTIALLY THE SAME PURPOSE AS ANY OTHER PROPERTY THAT, IN
CONNECTION WITH SUCH LEASE, HAS BEEN SOLD OR TRANSFERRED (OR IS TO BE SOLD OR
TRANSFERRED) BY A CREDIT PARTY TO ANOTHER PERSON THAT IS NOT A CREDIT PARTY, IN
EACH CASE EXCEPT FOR TRANSACTIONS OTHERWISE EXPRESSLY PERMITTED UNDER THIS
AGREEMENT AND EXCEPT FOR ANY SUCH SALE OR TRANSFER (MADE IN CONNECTION WITH THE
CORRESPONDING LEASEBACK OF THE RELEVANT ASSET) BY THE BORROWER OR ANY SUBSIDIARY
OF ANY FIXED OR CAPITAL ASSETS ACQUIRED (OR THE CONSTRUCTION OF WHICH IS
COMPLETED) AFTER THE CLOSING DATE THAT IS MADE FOR CASH CONSIDERATION IN AN
AMOUNT NOT LESS THAN THE COST OF SUCH FIXED OR CAPITAL ASSET AND IS CONSUMMATED
WITHIN 180 DAYS AFTER THE BORROWER OR SUCH SUBSIDIARY ACQUIRES OR COMPLETES THE
CONSTRUCTION OF SUCH FIXED OR CAPITAL ASSET.

 

8.10         Certain Amendments.  Each of the Parent and the Borrower will not,
and will not permit or cause any of its Subsidiaries to, (i) amend, modify or
waive, or permit the amendment, modification or waiver of, any provision of any
of the Senior Subordinated Notes, the Senior Subordinated Note Indenture or any
other Subordinated Indebtedness, the effect of which would be (a) to increase
the principal amount due thereunder or provide for any mandatory prepayments not
already provided for by the terms thereof, (b) to shorten or accelerate the time
of payment of any amount due thereunder, (c) to increase the applicable interest
rate or amount of any fees or costs due thereunder, (d) to amend any of the
subordination provisions thereunder (including any of the definitions relating
thereto), (e) to make any covenant or event of default therein more restrictive
or add any new covenant or event of default, (f) to grant any security or
collateral to secure payment thereof, or (g) to effect any change in the rights
or obligations of the Credit Parties thereunder or of the holders thereof that,
in the reasonable determination of the Administrative Agent, would be adverse in
any material respect to the rights or interests of the Lenders, (ii) breach or
otherwise violate any of the subordination provisions applicable to the Senior
Subordinated Notes or any other Subordinated Indebtedness, including, without
limitation, restrictions against payment of principal and interest thereon,
(iii) designate any Indebtedness other than the Obligations as “Designated
Senior Indebtedness” within the meaning of the Senior Subordinated Note
Indenture, or (iv) amend, modify or change any provision of its articles or
certificate of incorporation or formation, bylaws, operating agreement or other
applicable formation or organizational documents, as applicable, or the terms of
any class or series of its Capital Stock, other than in a manner that could not
reasonably be expected to adversely affect the Lenders in any material respect
(provided that the Borrower shall give the Administrative Agent and the Lenders
notice of any such amendment, modification or change, together with certified
copies thereof).

 

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8.11         Limitation on Certain Restrictions.  Each of the Parent and the
Borrower will not, and will not permit or cause any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any restriction or encumbrance on (a) the ability of the Parent, the
Borrower and its Subsidiaries to perform and comply with their respective
obligations under the Credit Documents or (b) the ability of any Subsidiary of
the Borrower to make any dividend payment or other distribution in respect of
its Capital Stock, to repay Indebtedness owed to the Borrower or any other
Subsidiary, to make loans or advances to the Borrower or any other Subsidiary,
or to transfer any of its assets or properties to the Borrower or any other
Subsidiary, except (in the case of clause (b) above only) for such restrictions
or encumbrances existing under or by reason of (i) this Agreement and the other
Credit Documents, (ii) applicable Requirements of Law, (iii) customary
non-assignment provisions in leases and licenses of real or personal property or
other agreements entered into by the Borrower or any Subsidiary in the ordinary
course of business, restricting the assignment or transfer thereof or of
property that is the subject thereof, (iv) customary restrictions and conditions
contained in any agreement relating to the sale of assets (including Capital
Stock of a Subsidiary) pending such sale, provided that such restrictions and
conditions apply only to the assets being sold and such sale is permitted under
this Agreement, (v) customary provisions in joint venture agreements entered
into by the Borrower or any Subsidiary in the ordinary course of business, and
(vi) the Senior Subordinated Note Indenture as in effect as of the date hereof.

 

8.12         No Other Negative Pledges.  Each of the Parent and the Borrower
will not, and will not permit or cause any of its Subsidiaries to, enter into or
suffer to exist any agreement or restriction that, directly or indirectly,
prohibits or conditions the creation, incurrence or assumption of any Lien upon
or with respect to any part of its property or assets, whether now owned or
hereafter acquired, or agree to do any of the foregoing, except (in the case of
clause (b) above only) for such agreements or restrictions existing under or by
reason of (i) this Agreement and the other Credit Documents, (ii) applicable
Requirements of Law, (iii) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), (iv) customary provisions in leases and
licenses of real or personal property entered into by the Borrower or any
Subsidiary as lessee or licensee in the ordinary course of business, restricting
the granting of Liens therein or in property that is the subject thereof, (v)
customary restrictions and conditions contained in any agreement relating to the
sale of assets (including Capital Stock of a Subsidiary) pending such sale,
provided that such restrictions and conditions apply only to the assets being
sold and such sale is permitted under this Agreement, (vi) customary provisions
in joint venture agreements entered into by the Borrower or any Subsidiary in
the ordinary course of business, and (vii) the Senior Subordinated Note
Indenture as in effect as of the date hereof.

 

8.13         Fiscal Year.  Each of the Parent and the Borrower will not, and
will not permit or cause any of its Subsidiaries to, change its fiscal year or
its method of determining fiscal quarters.

 

8.14         Accounting Changes.  Other than as permitted pursuant to Section
1.2, each of the Parent and the Borrower will not, and will not permit or cause
any of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be required by GAAP.

 

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ARTICLE IX

 

EVENTS OF DEFAULT

 

9.1           Events of Default.  The occurrence of any one or more of the
following events shall constitute an “Event of Default”:

 

(A)           THE BORROWER SHALL FAIL TO PAY WHEN DUE (I) ANY PRINCIPAL OF ANY
LOAN OR ANY REIMBURSEMENT OBLIGATION, OR (II) ANY INTEREST ON ANY LOAN OR
REIMBURSEMENT OBLIGATION, ANY FEE PAYABLE UNDER THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT, OR (EXCEPT AS PROVIDED IN CLAUSE (I) ABOVE) ANY OTHER
OBLIGATION (OTHER THAN ANY OBLIGATION UNDER A HEDGE AGREEMENT), AND (IN THE CASE
OF THIS CLAUSE (II) ONLY) SUCH FAILURE SHALL CONTINUE FOR A PERIOD OF THREE (3)
BUSINESS DAYS;

 

(B)           THE BORROWER OR ANY OTHER CREDIT PARTY SHALL (I) FAIL TO OBSERVE,
PERFORM OR COMPLY WITH ANY CONDITION, COVENANT OR AGREEMENT CONTAINED IN ANY OF
SECTIONS 2.14, 6.2(F)(I), 6.3(I), 6.8, 6.9 OR 6.10 OR IN ARTICLES VII OR VIII OR
(II) FAIL TO OBSERVE, PERFORM OR COMPLY WITH ANY CONDITION, COVENANT OR
AGREEMENT CONTAINED IN ANY OF SECTIONS 6.1 OR 6.2 (OTHER THAN SECTION 6.2(F)(I))
AND (IN THE CASE OF THIS CLAUSE (II) ONLY) SUCH FAILURE SHALL CONTINUE
UNREMEDIED FOR A PERIOD OF FIVE (5) DAYS AFTER THE EARLIER OF (Y) THE DATE ON
WHICH A RESPONSIBLE OFFICER OF THE BORROWER ACQUIRES KNOWLEDGE THEREOF AND
(Z) THE DATE ON WHICH WRITTEN NOTICE THEREOF IS DELIVERED BY THE ADMINISTRATIVE
AGENT OR ANY LENDER TO THE BORROWER;

 

(C)           THE BORROWER OR ANY OTHER CREDIT PARTY SHALL FAIL TO OBSERVE,
PERFORM OR COMPLY WITH ANY CONDITION, COVENANT OR AGREEMENT CONTAINED IN THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OTHER THAN THOSE ENUMERATED IN
SECTIONS 9.1(A) AND 9.1(B), AND SUCH FAILURE (I) BY THE EXPRESS TERMS OF SUCH
CREDIT DOCUMENT, CONSTITUTES AN EVENT OF DEFAULT, OR (II) SHALL CONTINUE
UNREMEDIED FOR ANY GRACE PERIOD SPECIFICALLY APPLICABLE THERETO OR, IF NO SUCH
GRACE PERIOD IS APPLICABLE, FOR A PERIOD OF THIRTY (30) DAYS AFTER THE EARLIER
OF (Y) THE DATE ON WHICH A RESPONSIBLE OFFICER OF THE BORROWER ACQUIRES
KNOWLEDGE THEREOF AND (Z) THE DATE ON WHICH WRITTEN NOTICE THEREOF IS DELIVERED
BY THE ADMINISTRATIVE AGENT OR ANY LENDER TO THE BORROWER; OR ANY DEFAULT OR
EVENT OF DEFAULT SHALL OCCUR UNDER ANY HEDGE AGREEMENT TO WHICH THE BORROWER AND
ANY LENDER OR AFFILIATE OF ANY LENDER ARE PARTIES;

 

(D)           ANY REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY OR ON BEHALF
OF THE BORROWER OR ANY OTHER CREDIT PARTY IN THIS AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR IN ANY CERTIFICATE, INSTRUMENT, REPORT OR OTHER DOCUMENT
FURNISHED AT ANY TIME IN CONNECTION HEREWITH OR THEREWITH SHALL PROVE TO HAVE
BEEN INCORRECT, FALSE OR MISLEADING IN ANY MATERIAL RESPECT AS OF THE TIME MADE,
DEEMED MADE OR FURNISHED;

 

(E)           THE BORROWER OR ANY OTHER CREDIT PARTY SHALL (I) FAIL TO PAY WHEN
DUE (WHETHER BY SCHEDULED MATURITY, ACCELERATION OR OTHERWISE AND AFTER GIVING
EFFECT TO ANY APPLICABLE GRACE PERIOD) (Y) ANY PRINCIPAL OF OR INTEREST ON ANY
INDEBTEDNESS (OTHER THAN THE INDEBTEDNESS INCURRED PURSUANT TO THIS AGREEMENT OR
A HEDGE AGREEMENT) HAVING AN AGGREGATE PRINCIPAL AMOUNT OF AT LEAST $5,000,000
OR (Z) ANY TERMINATION OR OTHER PAYMENT UNDER ANY HEDGE AGREEMENT COVERING A
NOTIONAL AMOUNT OF INDEBTEDNESS OF AT LEAST $5,000,000 OR (II) FAIL TO OBSERVE,
PERFORM OR COMPLY WITH ANY CONDITION, COVENANT OR AGREEMENT CONTAINED IN ANY
AGREEMENT OR INSTRUMENT EVIDENCING

 

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OR RELATING TO ANY SUCH INDEBTEDNESS, OR ANY OTHER EVENT SHALL OCCUR OR
CONDITION EXIST IN RESPECT THEREOF, AND THE EFFECT OF SUCH FAILURE, EVENT OR
CONDITION IS TO CAUSE, OR PERMIT THE HOLDER OR HOLDERS OF SUCH INDEBTEDNESS (OR
A TRUSTEE OR AGENT ON ITS OR THEIR BEHALF) TO CAUSE (WITH OR WITHOUT THE GIVING
OF NOTICE, LAPSE OF TIME, OR BOTH), WITHOUT REGARD TO ANY SUBORDINATION TERMS
WITH RESPECT THERETO, SUCH INDEBTEDNESS TO BECOME DUE, OR TO BE PREPAID,
REDEEMED, PURCHASED OR DEFEASED, PRIOR TO ITS STATED MATURITY;

 

(F)            THE BORROWER OR ANY OTHER MATERIAL CREDIT PARTY SHALL (I) FILE A
VOLUNTARY PETITION OR COMMENCE A VOLUNTARY CASE SEEKING LIQUIDATION, WINDING-UP,
REORGANIZATION, DISSOLUTION, ARRANGEMENT, READJUSTMENT OF DEBTS OR ANY OTHER
RELIEF UNDER THE BANKRUPTCY CODE OR UNDER ANY OTHER APPLICABLE BANKRUPTCY,
INSOLVENCY OR SIMILAR LAW NOW OR HEREAFTER IN EFFECT, (II) CONSENT TO THE
INSTITUTION OF, OR FAIL TO CONTROVERT IN A TIMELY AND APPROPRIATE MANNER, ANY
PETITION OR CASE OF THE TYPE DESCRIBED IN SECTION 9.1(G), (III) APPLY FOR OR
CONSENT TO THE APPOINTMENT OF OR TAKING POSSESSION BY A CUSTODIAN, TRUSTEE,
RECEIVER OR SIMILAR OFFICIAL FOR OR OF ITSELF OR ALL OR A SUBSTANTIAL PART OF
ITS PROPERTIES OR ASSETS, (IV) FAIL GENERALLY, OR ADMIT IN WRITING ITS
INABILITY, TO PAY ITS DEBTS GENERALLY AS THEY BECOME DUE, (V) MAKE A GENERAL
ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR (VI) TAKE ANY CORPORATE ACTION TO
AUTHORIZE OR APPROVE ANY OF THE FOREGOING;

 

(G)           ANY INVOLUNTARY PETITION OR CASE SHALL BE FILED OR COMMENCED
AGAINST THE BORROWER OR ANY OTHER MATERIAL CREDIT PARTY SEEKING LIQUIDATION,
WINDING-UP, REORGANIZATION, DISSOLUTION, ARRANGEMENT, READJUSTMENT OF DEBTS, THE
APPOINTMENT OF A CUSTODIAN, TRUSTEE, RECEIVER OR SIMILAR OFFICIAL FOR IT OR ALL
OR A SUBSTANTIAL PART OF ITS PROPERTIES OR ANY OTHER RELIEF UNDER THE BANKRUPTCY
CODE OR UNDER ANY OTHER APPLICABLE BANKRUPTCY, INSOLVENCY OR SIMILAR LAW NOW OR
HEREAFTER IN EFFECT, AND SUCH PETITION OR CASE SHALL CONTINUE UNDISMISSED AND
UNSTAYED FOR A PERIOD OF SIXTY (60) DAYS; OR AN ORDER, JUDGMENT OR DECREE
APPROVING OR ORDERING ANY OF THE FOREGOING SHALL BE ENTERED IN ANY SUCH
PROCEEDING;

 

(H)           ANY ONE OR MORE MONEY JUDGMENTS, WRITS OR WARRANTS OF ATTACHMENT,
EXECUTIONS OR SIMILAR PROCESSES INVOLVING AN AGGREGATE AMOUNT IN EXCESS OF
$2,500,000 SHALL BE ENTERED OR FILED AGAINST THE BORROWER OR ANY OTHER CREDIT
PARTY OR ANY OF THEIR RESPECTIVE PROPERTIES AND THE SAME SHALL NOT BE PAID,
DISMISSED, BONDED, VACATED, STAYED OR DISCHARGED WITHIN A PERIOD OF THIRTY (30)
DAYS OR IN ANY EVENT LATER THAN FIVE (5) DAYS PRIOR TO THE DATE OF ANY PROPOSED
SALE OF SUCH PROPERTY THEREUNDER;

 

(I)            ANY SECURITY DOCUMENT TO WHICH THE BORROWER OR ANY OTHER CREDIT
PARTY IS NOW OR HEREAFTER A PARTY SHALL FOR ANY REASON CEASE TO BE IN FULL FORCE
AND EFFECT OR CEASE TO BE EFFECTIVE TO GIVE THE ADMINISTRATIVE AGENT A VALID AND
PERFECTED SECURITY INTEREST IN AND LIEN UPON COLLATERAL PURPORTED TO BE COVERED
THEREBY WITH AN AGGREGATE VALUE OF $1,000,000 OR MORE, SUBJECT TO NO LIENS OTHER
THAN PERMITTED LIENS, IN EACH CASE UNLESS ANY SUCH CESSATION OCCURS IN
ACCORDANCE WITH THE TERMS THEREOF OR IS DUE TO ANY ACT OR FAILURE TO ACT ON THE
PART OF THE ADMINISTRATIVE AGENT OR ANY LENDER, OR THE BORROWER OR ANY OTHER
CREDIT PARTY SHALL ASSERT ANY OF THE FOREGOING; OR THE GUARANTY AGREEMENT SHALL
FOR ANY REASON CEASE TO BE IN FULL FORCE AND EFFECT AS TO ANY GUARANTOR, OR ANY
GUARANTOR OR ANY PERSON ACTING ON ITS BEHALF SHALL DENY OR DISAFFIRM SUCH
GUARANTOR’S OBLIGATIONS THEREUNDER;

 

(J)            ANY ERISA EVENT SHALL OCCUR OR EXIST WITH RESPECT TO ANY PLAN OR
MULTIEMPLOYER PLAN AND, AS A RESULT THEREOF, TOGETHER WITH ALL OTHER ERISA
EVENTS THEN EXISTING, ANY CREDIT PARTY

 

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AND ITS ERISA AFFILIATES HAVE INCURRED, OR COULD REASONABLY BE EXPECTED TO
INCUR, LIABILITY (INCLUDING LIABILITY TO ANY ONE OR MORE PLANS OR MULTIEMPLOYER
PLANS OR TO THE PBGC (OR TO ANY COMBINATION THEREOF)) IN EXCESS OF $1,000,000;

 

(K)           ANY ONE OR MORE LICENSES, PERMITS, ACCREDITATIONS OR
AUTHORIZATIONS OF THE BORROWER OR ANY OTHER CREDIT PARTY SHALL BE SUSPENDED,
LIMITED OR TERMINATED OR SHALL NOT BE RENEWED, OR ANY OTHER ACTION SHALL BE
TAKEN, BY ANY GOVERNMENTAL AUTHORITY IN RESPONSE TO ANY ALLEGED FAILURE BY THE
BORROWER OR ANY OTHER CREDIT PARTY TO BE IN COMPLIANCE WITH APPLICABLE
REQUIREMENTS OF LAW, AND SUCH ACTION, INDIVIDUALLY OR IN THE AGGREGATE, HAS OR
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; OR

 

(L)            ANY OF THE FOLLOWING SHALL OCCUR:

 

(I)            THE PARENT SHALL CEASE TO OWN DIRECTLY 100% OF THE ISSUED AND
OUTSTANDING CAPITAL STOCK OF THE BORROWER;

 

(II)           ANY PERSON OR GROUP OF PERSONS ACTING IN CONCERT AS A PARTNERSHIP
OR OTHER GROUP (OTHER THAN INVESTOR AND ITS AFFILIATES) SHALL HAVE BECOME, AS A
RESULT OF A TENDER OR EXCHANGE OFFER, OPEN MARKET PURCHASES, PRIVATELY
NEGOTIATED PURCHASES OR OTHERWISE, THE BENEFICIAL OWNER (WITHIN THE MEANING
GIVEN TO SUCH TERM IN RULE 13D-3 UNDER THE EXCHANGE ACT), DIRECTLY OR
INDIRECTLY, OF CAPITAL STOCK OF THE PARENT HAVING 25% OR MORE OF THE TOTAL
VOTING POWER OF THE PARENT AND AT SUCH TIME INVESTOR AND ITS AFFILIATES ARE THE
BENEFICIAL OWNERS (DEFINED AS PROVIDED ABOVE), DIRECTLY OR INDIRECTLY, OF
CAPITAL STOCK OF THE PARENT HAVING A LESSER PERCENTAGE OF THE TOTAL VOTING POWER
OF THE PARENT THAN SUCH OTHER PERSON OR GROUP OF PERSONS;

 

(III)          DURING ANY PERIOD OF UP TO TWELVE (12) CONSECUTIVE MONTHS,
INDIVIDUALS ON THE BOARD OF DIRECTORS OF THE PARENT (TOGETHER WITH ANY NEW
DIRECTORS WHOSE ELECTION BY SUCH BOARD OF DIRECTORS WAS APPROVED BY A VOTE OF A
MAJORITY OF THE DIRECTORS THEN STILL IN OFFICE WHO WERE EITHER DIRECTORS AT THE
BEGINNING OF SUCH PERIOD OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS
PREVIOUSLY SO APPROVED) SHALL CEASE TO CONSIST OF A MAJORITY OF THE INDIVIDUALS
WHO CONSTITUTED THE BOARD OF DIRECTORS AT THE BEGINNING OF SUCH PERIOD; OR

 

(IV)          A CHANGE OF CONTROL (AS DEFINED IN THE SENIOR SUBORDINATED NOTE
INDENTURE) SHALL HAVE OCCURRED UNDER THE SENIOR SUBORDINATED NOTE INDENTURE.

 

9.2           Remedies: Termination of Commitments, Acceleration, etc.  Upon and
at any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:

 

(A)           DECLARE THE COMMITMENTS, THE SWINGLINE COMMITMENT, AND THE ISSUING
LENDER’S OBLIGATION TO ISSUE LETTERS OF CREDIT, TO BE TERMINATED, WHEREUPON THE
SAME SHALL TERMINATE; PROVIDED THAT, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT
PURSUANT TO SECTION 9.1(F) OR SECTION 9.1(G), THE COMMITMENTS, THE SWINGLINE
COMMITMENT AND THE ISSUING LENDER’S OBLIGATION TO ISSUE LETTERS OF CREDIT SHALL
AUTOMATICALLY BE TERMINATED;

 

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(B)           DECLARE ALL OR ANY PART OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE
LOANS TO BE IMMEDIATELY DUE AND PAYABLE, WHEREUPON THE PRINCIPAL AMOUNT SO
DECLARED TO BE IMMEDIATELY DUE AND PAYABLE, TOGETHER WITH ALL INTEREST ACCRUED
THEREON AND ALL OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS (BUT EXCLUDING ANY AMOUNTS OWING UNDER ANY HEDGE AGREEMENT), SHALL
BECOME IMMEDIATELY DUE AND PAYABLE WITHOUT PRESENTMENT, DEMAND, PROTEST, NOTICE
OF INTENT TO ACCELERATE OR OTHER NOTICE OR LEGAL PROCESS OF ANY KIND, ALL OF
WHICH ARE HEREBY KNOWINGLY AND EXPRESSLY WAIVED BY THE BORROWER; PROVIDED THAT,
UPON THE OCCURRENCE OF AN EVENT OF DEFAULT PURSUANT TO SECTION 9.1(F) OR
SECTION 9.1(G), ALL OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOANS AND ALL
OTHER AMOUNTS DESCRIBED IN THIS SECTION 9.2(B) SHALL AUTOMATICALLY BECOME
IMMEDIATELY DUE AND PAYABLE WITHOUT PRESENTMENT, DEMAND, PROTEST, NOTICE OF
INTENT TO ACCELERATE OR OTHER NOTICE OR LEGAL PROCESS OF ANY KIND, ALL OF WHICH
ARE HEREBY KNOWINGLY AND EXPRESSLY WAIVED BY THE BORROWER;

 

(C)           DIRECT THE BORROWER TO DEPOSIT (AND THE BORROWER HEREBY AGREES,
FORTHWITH UPON RECEIPT OF NOTICE OF SUCH DIRECTION FROM THE ADMINISTRATIVE
AGENT, TO DEPOSIT) WITH THE ADMINISTRATIVE AGENT FROM TIME TO TIME SUCH
ADDITIONAL AMOUNT OF CASH AS IS EQUAL TO 105% OF THE AGGREGATE LETTER OF CREDIT
EXPOSURE THEN OUTSTANDING (WHETHER OR NOT ANY BENEFICIARY UNDER ANY LETTER OF
CREDIT SHALL HAVE DRAWN OR BE ENTITLED AT SUCH TIME TO DRAW THEREUNDER) PLUS ALL
ACCRUED AND UNPAID INTEREST AND FEES THEREON, SUCH AMOUNT TO BE HELD BY THE
ADMINISTRATIVE AGENT IN THE CASH COLLATERAL ACCOUNT AS SECURITY FOR THE LETTER
OF CREDIT EXPOSURE AS DESCRIBED IN SECTION 3.8;

 

(D)           APPOINT OR DIRECT THE APPOINTMENT OF A RECEIVER FOR THE PROPERTIES
AND ASSETS OF THE CREDIT PARTIES, BOTH TO OPERATE AND TO SELL SUCH PROPERTIES
AND ASSETS, AND THE BORROWER, FOR ITSELF AND ON BEHALF OF ITS SUBSIDIARIES,
HEREBY CONSENTS TO SUCH RIGHT AND SUCH APPOINTMENT AND HEREBY WAIVES ANY
OBJECTION THE BORROWER OR ANY SUBSIDIARY MAY HAVE THERETO OR THE RIGHT TO HAVE A
BOND OR OTHER SECURITY POSTED BY THE ADMINISTRATIVE AGENT ON BEHALF OF THE
LENDERS, IN CONNECTION THEREWITH; AND

 

(E)           EXERCISE ALL RIGHTS AND REMEDIES AVAILABLE TO IT UNDER THIS
AGREEMENT, THE OTHER CREDIT DOCUMENTS AND APPLICABLE LAW.

 

9.3           Remedies: Set-Off.  In addition to all other rights and remedies
available under the Credit Documents or applicable law or otherwise, upon and at
any time after the occurrence and during the continuance of any Event of
Default, each Lender or any of its Affiliates may, and each is hereby authorized
by the Borrower, at any such time and from time to time, to the fullest extent
permitted by applicable law, without presentment, demand, protest or other
notice of any kind, all of which are hereby knowingly and expressly waived by
the Borrower (on behalf of itself and the other Credit Parties) to set off and
to apply any and all deposits (general or special, time or demand, provisional
or final) and any other property at any time held (including at any branches or
agencies, wherever located), and any other indebtedness at any time owing, by
such Lender or Affiliate to or for the credit or the account of the Borrower or
any other Credit Party against any or all of the Obligations to such Lender or
Affiliate now or hereafter existing, whether or not such Obligations may be
contingent or unmatured, the Borrower (on behalf of itself and the other Credit
Parties) hereby granting to each Lender a continuing security interest in and
Lien upon all such deposits and other property as security for such
Obligations.  Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-

 

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off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

10.1         Appointment.  Each Lender hereby irrevocably appoints and
authorizes Wachovia to act as Administrative Agent hereunder and under the other
Credit Documents and to take such actions as agent on its behalf hereunder and
under the other Credit Documents, and to exercise such powers and to perform
such duties, as are specifically delegated to the Administrative Agent by the
terms hereof or thereof, together with such other powers and duties as are
reasonably incidental thereto.  The provisions of this Article are solely for
the benefit of the Administrative Agent and the Lenders, and no Credit Party
shall have any rights as a third party beneficiary of any of such provisions.

 

10.2         Nature of Duties.  The Administrative Agent shall have no duties or
responsibilities other than those expressly set forth in this Agreement and the
other Credit Documents.  The Administrative Agent shall not have, by reason of
this Agreement or any other Credit Document, a fiduciary relationship in respect
of any Lender or any other Person; and nothing in this Agreement or any other
Credit Document, express or implied, is intended to or shall be so construed as
to impose upon the Administrative Agent any obligations or liabilities in
respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein.  The Administrative Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care.  The
Administrative Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.  The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do so by
the Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders).

 

10.3         Exculpatory Provisions.  Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action taken or omitted to be taken by it or such
Person under or in connection with the Credit Documents, except for its or such
Person’s own gross negligence or willful misconduct, (ii) responsible in any
manner to any Lender or any other Person for any recitals, statements,
information, representations or warranties herein or in any other Credit
Document or in any document, instrument, certificate, report or other writing
delivered in connection herewith or therewith, for the execution, effectiveness,
genuineness, validity, enforceability or sufficiency of this Agreement or any
other Credit Document, or for the financial condition of the Borrower, any other
Credit Party or any other Person, or (iii) required to ascertain or make any
inquiry concerning the performance or observance of any of the terms, provisions
or conditions of this

 

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Agreement or any other Credit Document or the existence or possible existence of
any Default or Event of Default, or to inspect the properties, books or records
of the Borrower or any other Credit Party.

 

10.4         Reliance by Administrative Agent.  The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any notice,
statement, consent or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons.  The Administrative Agent may deem and treat each
Lender as the owner of its interest hereunder for all purposes hereof unless and
until a written notice of the assignment, negotiation or transfer thereof shall
have been given to the Administrative Agent in accordance with the provisions of
this Agreement.  The Administrative Agent shall be entitled to refrain from
taking or omitting to take any action in connection with this Agreement or any
other Credit Document (i) if such action or omission would, in the reasonable
opinion of the Administrative Agent, violate any applicable law or any provision
of this Agreement or any other Credit Document or (ii) unless and until it shall
have received such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first have been indemnified to its
satisfaction by the Lenders against any and all liability and expense (other
than liability and expense arising from its own gross negligence or willful
misconduct) that may be incurred by it by reason of taking, continuing to take
or omitting to take any such action.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent’s acting or refraining from acting hereunder
or under any other Credit Document in accordance with the instructions of the
Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders), and such instructions and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders
(including all subsequent Lenders).

 

10.5         Non-Reliance on Administrative Agent and Other Lenders.  Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representation or warranty to it and that no act by the Administrative
Agent or any such Person hereinafter taken, including any review of the affairs
of the Borrower and the other Credit Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender.  Each
Lender represents to the Administrative Agent that (i) it has, independently and
without reliance upon the Administrative Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
properties, financial and other condition and creditworthiness of the Borrower
and the other Credit Parties and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder, and (ii) it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action hereunder and under the other Credit Documents
and to make such investigation as it deems necessary to inform itself as to the
business, prospects, operations, properties, financial and other condition and
creditworthiness of the Borrower and the other Credit Parties.  Except as
expressly provided in this Agreement and the other Credit Documents, the
Administrative Agent shall have no duty or responsibility, either

 

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INITIALLY OR ON A CONTINUING BASIS, TO PROVIDE ANY LENDER WITH ANY CREDIT OR
OTHER INFORMATION CONCERNING THE BUSINESS, PROSPECTS, OPERATIONS, PROPERTIES,
FINANCIAL OR OTHER CONDITION OR CREDITWORTHINESS OF THE BORROWER, THE OTHER
CREDIT PARTIES OR ANY OTHER PERSON THAT MAY AT ANY TIME COME INTO THE POSSESSION
OF THE ADMINISTRATIVE AGENT OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ATTORNEYS-IN-FACT OR AFFILIATES.

 

10.6         Notice of Default.  The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless the Administrative Agent shall have received written notice from the
Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default.”  In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto.  The Administrative Agent shall (subject to Sections 10.4
and 11.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; provided that, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Required
Lenders or all of the Lenders.

 

10.7         Indemnification.  To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrower, and without limiting the obligation
of the Borrower to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
reasonable attorneys’ fees and expenses) or disbursements of any kind or nature
whatsoever that may at any time (including, without limitation, at any time
following the repayment in full of the Loans and the termination of the Letters
of Credit and the Commitments) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or any other Credit Document or any documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby or any action taken or
omitted by the Administrative Agent under or in connection with any of the
foregoing, and (ii) to reimburse the Administrative Agent upon demand, ratably
in proportion to their respective percentages as used in determining the
Required Lenders as of the date of determination, for any reasonable expenses
incurred by the Administrative Agent in connection with the preparation,
negotiation, execution, delivery, administration, amendment, modification,
waiver or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Credit Documents (including, without
limitation, reasonable attorneys’ fees and expenses and compensation of agents
and employees paid for services rendered on behalf of the Administrative Agent
hereunder and/or the Lenders); provided, however, that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent

 

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DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
PARTY TO BE INDEMNIFIED.

 

10.8         The Administrative Agent in its Individual Capacity.  With respect
to its Commitments, the Loans made by it and the Letters of Credit issued or
participated in by it, the Administrative Agent in its individual capacity and
not as Administrative Agent shall have the same rights and powers under the
Credit Documents as any other Lender and may exercise the same as though it were
not performing the agency duties specified herein; and the terms “Lenders,”
“Required Lenders” and any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent in its individual
capacity.  The Administrative Agent and its Affiliates may accept deposits from,
lend money to, make investments in, and generally engage in any kind of banking,
trust, financial advisory or other business with the Borrower, any of its
Subsidiaries or any of their respective Affiliates as if the Administrative
Agent were not performing the agency duties specified herein, and may accept
fees and other consideration from any of them for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.

 

10.9         Successor Administrative Agent.  The Administrative Agent may
resign at any time upon written notice to the Borrower and the Lenders.  Upon
any such notice of resignation, the Required Lenders shall, with the prior
written consent of the Borrower (which consent shall not be unreasonably
withheld), have the right to appoint a successor to the Administrative Agent
(provided that the Borrower’s consent shall not be required in the event a
Default or Event of Default shall have occurred and be continuing).  If no
successor to the Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may, on behalf of the Lenders and after
consulting with the Lenders and the Borrower, appoint a successor Administrative
Agent, which shall be a financial institution having a rating of not less than
“A” or its equivalent by Standard & Poor’s Ratings Services or any of the
Lenders.  Upon the acceptance of any appointment as Administrative Agent by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents.  After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Article shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent.  If no successor to the Administrative Agent has accepted
appointment as Administrative Agent by the thirtieth (30th) day following a
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall thereafter perform all of the duties of the
Administrative Agent hereunder and under the other Credit Documents until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided for hereinabove.

 

10.10       COLLATERAL MATTERS.

 

(A)           THE ADMINISTRATIVE AGENT IS HEREBY AUTHORIZED ON BEHALF OF THE
LENDERS, WITHOUT THE NECESSITY OF ANY NOTICE TO OR FURTHER CONSENT FROM THE
LENDERS, FROM TIME TO TIME (BUT WITHOUT ANY OBLIGATION) TO TAKE ANY ACTION WITH
RESPECT TO THE COLLATERAL AND THE SECURITY DOCUMENTS THAT

 

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MAY BE DEEMED BY THE ADMINISTRATIVE AGENT IN ITS DISCRETION TO BE NECESSARY OR
ADVISABLE TO PERFECT AND MAINTAIN PERFECTED THE LIENS UPON THE COLLATERAL
GRANTED PURSUANT TO THE SECURITY DOCUMENTS.

 

(B)           THE LENDERS HEREBY AUTHORIZE THE ADMINISTRATIVE AGENT, AT ITS
OPTION AND IN ITS DISCRETION, TO RELEASE OR, IN THE CASE OF CLAUSE (III) BELOW,
SUBORDINATE ANY LIEN GRANTED TO OR HELD BY THE ADMINISTRATIVE AGENT UPON ANY
COLLATERAL (I) UPON TERMINATION OF THE COMMITMENTS, TERMINATION, EXPIRATION OR
CASH COLLATERALIZATION OF ALL OUTSTANDING LETTERS OF CREDIT AND PAYMENT IN FULL
OF ALL OF THE OBLIGATIONS THEN DUE AND PAYABLE, (II) CONSTITUTING PROPERTY SOLD
OR TO BE SOLD OR DISPOSED OF AS PART OF OR IN CONNECTION WITH ANY DISPOSITION
EXPRESSLY PERMITTED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR TO WHICH THE
REQUIRED LENDERS HAVE CONSENTED, (III) CONSTITUTING PROPERTY TO BE SUBJECT TO
LIENS PERMITTED BY SECTION 8.3(VII), OR (IV) OTHERWISE PURSUANT TO AND IN
ACCORDANCE WITH THE PROVISIONS OF ANY APPLICABLE CREDIT DOCUMENT.  UPON REQUEST
BY THE ADMINISTRATIVE AGENT AT ANY TIME, THE LENDERS WILL CONFIRM IN WRITING THE
ADMINISTRATIVE AGENT’S AUTHORITY TO RELEASE OR SUBORDINATE ITS LIENS UPON
COLLATERAL PURSUANT TO THIS SECTION 10.10(B).

 

10.11       Issuing Lender and Swingline Lender.  The provisions of this Article
X (other than Sections 10.9 and 10.10) shall apply to the Issuing Lender and the
Swingline Lender mutatis mutandis to the same extent as such provisions apply to
the Administrative Agent.

 

10.12       Other Agents, Managers.  Notwithstanding any other provision of this
Agreement or any of the other Credit Documents, any Lenders identified on the
cover page of this Agreement or elsewhere herein as a “Syndication Agent,”
“Documentation Agent,” “Co-Agent,” “Lead Manager” or in any similar capacity are
named as such for recognition purposes only, and in their respective capacities
as such shall have no powers, rights, duties, responsibilities or liabilities
with respect to this Agreement and the other Credit Documents and the
transactions contemplated hereby and thereby.  Without limitation of the
foregoing, none of the Lenders so identified shall have, by reason of this
Agreement or any other Credit Document, a fiduciary relationship in respect of
any Lender or any other Person.  Each Lender hereby makes the same
acknowledgments with respect to any Lenders so identified as it makes in Section
10.5 with respect to the Administrative Agent.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1         Fees and Expenses.  The Borrower agrees (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent and the Arranger (including, without limitation, the reasonable fees and
expenses of counsel to the Administrative Agent and the Arranger) in connection
with the preparation, negotiation, execution, delivery and syndication of this
Agreement and the other Credit Documents and any amendment, modification or
waiver hereof or thereof or consent with respect hereto or thereto, (ii) after
the occurrence and during the continuance of an Event of Default, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent and each Lender (including, without limitation, reasonable attorneys’ fees
and expenses) in connection with (y) any refinancing or restructuring

 

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OF THE CREDIT ARRANGEMENTS PROVIDED UNDER THIS AGREEMENT, WHETHER IN THE NATURE
OF A “WORK-OUT,” IN ANY INSOLVENCY OR BANKRUPTCY PROCEEDING OR OTHERWISE AND
WHETHER OR NOT CONSUMMATED, AND (Z) THE ENFORCEMENT, ATTEMPTED ENFORCEMENT OR
PRESERVATION OF ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS, WHETHER IN ANY ACTION, SUIT OR PROCEEDING (INCLUDING ANY
BANKRUPTCY OR INSOLVENCY PROCEEDING) OR OTHERWISE, AND (III) TO PAY AND HOLD THE
ADMINISTRATIVE AGENT, THE ARRANGER AND EACH LENDER HARMLESS FROM AND AGAINST ALL
LIABILITY FOR ANY INTANGIBLES, DOCUMENTARY, STAMP OR OTHER SIMILAR TAXES, FEES
AND EXCISES, IF ANY, INCLUDING ANY INTEREST AND PENALTIES, AND ANY FINDER’S OR
BROKERAGE FEES, COMMISSIONS AND EXPENSES (OTHER THAN ANY FEES, COMMISSIONS OR
EXPENSES OF FINDERS OR BROKERS ENGAGED BY THE ADMINISTRATIVE AGENT OR ANY
LENDER), THAT MAY BE PAYABLE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

 

11.2         Indemnification.  The Borrower agrees, whether or not the
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold the Administrative Agent, the Arranger and each Lender and each of
their respective directors, officers, employees, agents and Affiliates (each, an
“Indemnified Person”) harmless from and against any and all claims, losses,
damages, obligations, liabilities, penalties, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses) of any kind or
nature whatsoever, whether direct, indirect or consequential (collectively,
“Indemnified Costs”), that may at any time be imposed on, incurred by or
asserted against any such Indemnified Person as a result of, arising from or in
any way relating to the preparation, execution, performance, enforcement of or
preservation of rights under this Agreement or any of the other Credit
Documents, any of the transactions contemplated herein or therein or any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Loans or Letters of Credit (including,
without limitation, in connection (i) with the actual or alleged generation,
presence, storage, treatment, disposal, transport, discharge or release of any
Hazardous Substances on, in, to or from any real property at any time owned,
operated or leased by any Credit Party, (ii) any other Environmental Claims and
(iii) any violation of or liability under any Environmental Law), or any action,
suit or proceeding (including any inquiry or investigation) by any Person,
whether threatened or initiated, related to any of the foregoing, and in any
case whether or not such Indemnified Person is a party to any such action,
proceeding or suit or a subject of any such inquiry or investigation; provided,
however, that no Indemnified Person shall have the right to be indemnified
hereunder for any Indemnified Costs to the extent determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnified Person.  All of
the foregoing Indemnified Costs of any Indemnified Person shall be paid or
reimbursed by the Borrower, as and when incurred and upon demand; but shall be
repaid to the Borrower by any Indemnified Person who is finally determined to be
not entitled to indemnification hereby as provided in the proviso to the
preceding sentence.  To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnified Person,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any of the other Credit Documents,
any of the transactions contemplated herein or therein or any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Loans or Letters of Credit.

 

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11.3         Governing Law; Consent to Jurisdiction.  THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS SHALL (EXCEPT AS MAY BE EXPRESSLY OTHERWISE PROVIDED IN
ANY CREDIT DOCUMENT) BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES); PROVIDED THAT EACH LETTER OF CREDIT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE
INTERNATIONAL STANDBY PRACTICES OF THE INTERNATIONAL CHAMBER OF COMMERCE, AS IN
EFFECT FROM TIME TO TIME (THE “ISP”), AND, AS TO MATTERS NOT GOVERNED BY THE
ISP, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND
CONFLICTS OF LAW RULES).  EACH OF THE PARENT AND THE BORROWER HEREBY CONSENTS TO
THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN MECKLENBURG COUNTY,
NORTH CAROLINA, OR ANY FEDERAL COURT LOCATED WITHIN THE WESTERN DISTRICT OF THE
STATE OF NORTH CAROLINA FOR ANY PROCEEDING INSTITUTED HEREUNDER OR UNDER ANY OF
THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY PROCEEDING TO WHICH THE
ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER, THE PARENT OR THE BORROWER IS
A PARTY, INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER, THE PARENT OR
THE BORROWER.  EACH OF THE PARENT AND THE BORROWER IRREVOCABLY AGREES TO BE
BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT RENDERED OR
RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY HAVE BASED
ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY SUCH PROCEEDING.  EACH OF THE PARENT AND THE BORROWER CONSENTS THAT ALL
SERVICE OF PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO IT AT THE
ADDRESS SET FORTH IN SECTION 11.5, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED.  NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT, THE ARRANGER OR ANY LENDER TO BRING ANY ACTION OR
PROCEEDING AGAINST THE PARENT OR THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.

 

11.4         Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ITS RESPECTIVE RIGHTS TO
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION

 

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ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS TO WHICH IT IS A PARTY.

 

11.5         NOTICES.

 

(A)           EXCEPT IN THE CASES OF NOTICES AND OTHER COMMUNICATIONS EXPRESSLY
PERMITTED TO BE GIVEN BY TELEPHONE, AND EXCEPT AS PROVIDED IN SECTION 11.5(B),
ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR HEREUNDER SHALL BE IN WRITING
(INCLUDING FACSIMILE TRANSMISSION) AND MAILED BY CERTIFIED OR REGISTERED MAIL,
SENT BY OVERNIGHT DELIVERY, TELECOPIED OR DELIVERED BY HAND TO THE PARTY TO BE
NOTIFIED AT THE FOLLOWING ADDRESSES:

 

(I)            IF TO THE BORROWER, TO DJ ORTHOPEDICS, LLC, 2985 SCOTT STREET,
VISTA, CALIFORNIA 92081, ATTENTION: CHIEF FINANCIAL OFFICER, TELECOPY NO. (760)
734-3536;

 

(II)           IF TO THE ADMINISTRATIVE AGENT, TO WACHOVIA BANK, NATIONAL
ASSOCIATION, CHARLOTTE PLAZA BUILDING, 201 SOUTH COLLEGE STREET, 8TH FLOOR NC
0680, CHARLOTTE, NORTH CAROLINA 28288, ATTENTION: SYNDICATION AGENCY SERVICES,
TELEPHONE NO. (704) 383-3721, TELECOPY NO. (704) 383-0288; AND

 

(III)          IF TO ANY LENDER, TO IT AT THE ADDRESS SET FORTH ON
SCHEDULE 1.1(A) (OR IF TO ANY LENDER NOT A PARTY HERETO AS OF THE DATE HEREOF,
AT THE ADDRESS DESIGNATED IN OR IN CONNECTION WITH ITS ASSIGNMENT AND
ACCEPTANCE);

 

or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto.  Except as provided in Section 11.5(b),
all such notices and communications shall be deemed to have been given (i) if
mailed by certified or registered mail, on the third (3rd) Business Day after
deposit in the mails, (ii) if sent by overnight delivery service or telecopied,
when delivered to the courier for overnight delivery or transmitted by
telecopier, respectively, or (iii) if delivered by hand, upon delivery; provided
that notices and communications to the Administrative Agent shall not be
effective until received by the Administrative Agent.

 

(B)           NOTICES AND COMMUNICATIONS TO THE LENDERS HEREUNDER MAY BE
DELIVERED OR FURNISHED BY ELECTRONIC COMMUNICATION (INCLUDING E-MAIL AND
INTERNET OR INTRANET WEBSITES) PURSUANT TO PROCEDURES APPROVED BY THE
ADMINISTRATIVE AGENT; PROVIDED THAT THE FOREGOING SHALL NOT APPLY TO NOTICES TO
ANY LENDER PURSUANT TO ARTICLE II IF SUCH LENDER HAS NOTIFIED THE ADMINISTRATIVE
AGENT THAT IT IS INCAPABLE OF RECEIVING NOTICES THEREUNDER BY ELECTRONIC
COMMUNICATION.  THE ADMINISTRATIVE AGENT OR THE BORROWER MAY, IN ITS DISCRETION,
AGREE TO ACCEPT NOTICES AND OTHER COMMUNICATIONS TO IT HEREUNDER BY ELECTRONIC
COMMUNICATION PURSUANT TO PROCEDURES APPROVED BY IT; PROVIDED THAT APPROVAL OF
SUCH PROCEDURES MAY BE LIMITED TO PARTICULAR NOTICES OR COMMUNICATIONS.  UNLESS
THE ADMINISTRATIVE AGENT OTHERWISE PRESCRIBES, (I) NOTICES AND OTHER
COMMUNICATIONS SENT TO AN E-MAIL ADDRESS SHALL BE DEEMED TO HAVE BEEN GIVEN UPON
THE SENDER’S RECEIPT OF AN ACKNOWLEDGEMENT FROM THE INTENDED RECIPIENT (SUCH AS
BY THE “RETURN RECEIPT REQUESTED” FUNCTION, AS AVAILABLE, RETURN E-MAIL OR OTHER
WRITTEN ACKNOWLEDGEMENT), AND (II) NOTICES OR OTHER COMMUNICATIONS POSTED TO AN
INTERNET OR INTRANET WEBSITE SHALL BE DEEMED TO HAVE BEEN GIVEN UPON THE DEEMED
RECEIPT BY THE INTENDED RECIPIENT AT ITS E-MAIL ADDRESS AS DESCRIBED IN THE
FOREGOING CLAUSE (I) OF NOTIFICATION THAT SUCH NOTICE OR COMMUNICATION IS
AVAILABLE AND IDENTIFYING THE WEBSITE ADDRESS THEREFOR.

 

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11.6         Amendments, Waivers, etc.  No amendment, modification, waiver or
discharge or termination of, or consent to any departure by any Credit Party
from, any provision of this Agreement or any other Credit Document shall be
effective unless in a writing signed by the Required Lenders (or by the
Administrative Agent at the direction or with the consent of the Required
Lenders), and then the same shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, modification, waiver, discharge, termination or consent shall:

 

(A)           UNLESS AGREED TO BY EACH LENDER DIRECTLY AFFECTED THEREBY,
(I) REDUCE OR FORGIVE THE PRINCIPAL AMOUNT OF ANY LOAN OR REIMBURSEMENT
OBLIGATION, REDUCE THE RATE OF OR FORGIVE ANY INTEREST THEREON, OR REDUCE OR
FORGIVE ANY FEES HEREUNDER (OTHER THAN FEES PAYABLE TO THE ADMINISTRATIVE AGENT,
THE ARRANGER OR THE ISSUING LENDER FOR ITS OWN ACCOUNT), (II) EXTEND THE FINAL
SCHEDULED MATURITY DATE OR ANY OTHER SCHEDULED DATE FOR THE PAYMENT OF ANY
PRINCIPAL OF OR INTEREST ON ANY LOAN (INCLUDING ANY SCHEDULED DATE FOR THE
MANDATORY REDUCTION OR TERMINATION OF ANY COMMITMENTS, BUT EXCLUDING ANY
MANDATORY PREPAYMENT OF THE LOANS PURSUANT TO SECTIONS 2.6(D) THROUGH 2.6(G) OR
REDUCTION OR TERMINATION OF THE REVOLVING CREDIT COMMITMENTS IN CONNECTION
THEREWITH), EXTEND THE TIME OF PAYMENT OF ANY REIMBURSEMENT OBLIGATION OR ANY
INTEREST THEREON, EXTEND THE EXPIRY DATE OF ANY LETTER OF CREDIT BEYOND THE
LETTER OF CREDIT MATURITY DATE, OR EXTEND THE TIME OF PAYMENT OF ANY FEES
HEREUNDER (OTHER THAN FEES PAYABLE TO THE ADMINISTRATIVE AGENT, THE ARRANGER OR
THE ISSUING LENDER FOR ITS OWN ACCOUNT), OR (III) MODIFY THE AMORTIZATION
SCHEDULE SET FORTH IN SECTION 2.6(A);

 

(B)           UNLESS AGREED TO BY ALL OF THE LENDERS, (I) EXCEPT AS MAY BE
OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT OR IN ANY OTHER CREDIT
DOCUMENT, RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL, RELEASE ANY
GUARANTOR FROM ITS OBLIGATIONS UNDER THE GUARANTY AGREEMENT, (II) CHANGE THE
PERCENTAGE OF THE AGGREGATE COMMITMENTS OR OF THE AGGREGATE UNPAID PRINCIPAL
AMOUNT OF THE LOANS, OR THE NUMBER OR PERCENTAGE OF LENDERS, THAT SHALL BE
REQUIRED FOR THE LENDERS OR ANY OF THEM TO TAKE OR APPROVE, OR DIRECT THE
ADMINISTRATIVE AGENT TO TAKE, ANY ACTION HEREUNDER (INCLUDING AS SET FORTH IN
THE DEFINITION OF “REQUIRED LENDERS”), (III) CHANGE ANY OTHER PROVISION OF THIS
AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS REQUIRING, BY ITS TERMS, THE
CONSENT OR APPROVAL OF ALL THE LENDERS FOR SUCH AMENDMENT, MODIFICATION, WAIVER,
DISCHARGE, TERMINATION OR CONSENT, (IV) CHANGE OR WAIVE ANY PROVISION OF
SECTION 2.15, ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
REQUIRING PRO RATA TREATMENT OF ANY LENDERS, OR THIS SECTION 11.6, OR
(V) INCREASE OR EXTEND ANY COMMITMENT OF ANY LENDER (IT BEING UNDERSTOOD THAT A
WAIVER OF ANY CONDITION PRECEDENT SET FORTH IN SECTION 4.2 OR OF ANY DEFAULT OR
EVENT OF DEFAULT OR MANDATORY REDUCTION IN THE COMMITMENTS, IF AGREED TO BY THE
REQUIRED LENDERS, REQUIRED REVOLVING CREDIT LENDERS OR ALL LENDERS (AS MAY BE
REQUIRED HEREUNDER WITH RESPECT TO SUCH WAIVER), SHALL NOT CONSTITUTE SUCH AN
INCREASE);

 

(C)           UNLESS AGREED TO BY ALL OF THE REVOLVING CREDIT LENDERS, CHANGE
THE PERCENTAGE SET FORTH IN THE DEFINITION OF “REQUIRED REVOLVING CREDIT
LENDERS” (IT BEING UNDERSTOOD THAT NO CONSENT OF ANY OTHER LENDER OR THE
ADMINISTRATIVE AGENT IS REQUIRED);

 

(D)           UNLESS AGREED TO BY THE REQUIRED REVOLVING CREDIT LENDERS,
(I) EXCEPT FOR ANY SUCH CHANGES TO WHICH SECTION 11.6(A) APPLIES, CHANGE ANY
PROVISION OF ARTICLE III OR ANY TERMS OR PROVISIONS OF ANY LETTER OF CREDIT OR
ANY SUPPORTING DOCUMENTATION RELATING THERETO (IT BEING UNDERSTOOD THAT NO
CONSENT OF ANY OTHER LENDER OR THE ADMINISTRATIVE AGENT IS REQUIRED), OR

 

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(II) AMEND, MODIFY OR WAIVE ANY CONDITION PRECEDENT TO ANY BORROWING OF
REVOLVING LOANS OR ISSUANCE OF A LETTER OF CREDIT SET FORTH IN SECTION 4.2
(INCLUDING IN CONNECTION WITH ANY WAIVER OF AN EXISTING DEFAULT OR EVENT OF
DEFAULT); AND

 

(E)           UNLESS AGREED TO BY THE ISSUING LENDER, THE SWINGLINE LENDER OR
THE ADMINISTRATIVE AGENT IN ADDITION TO THE LENDERS REQUIRED AS PROVIDED
HEREINABOVE TO TAKE SUCH ACTION, AFFECT THE RESPECTIVE RIGHTS OR OBLIGATIONS OF
THE ISSUING LENDER, THE SWINGLINE LENDER OR THE ADMINISTRATIVE AGENT, AS
APPLICABLE, HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS;

 

and provided further that (i) if any amendment, modification, waiver or consent
would adversely affect the holders of Loans of a particular Class (the “affected
Class”) relative to holders of Loans of another Class (including, without
limitation, by way of reducing the relative proportion of any payments,
prepayments or Commitment reductions to be applied for the benefit of holders of
Loans of the affected Class under Sections 2.6(d) through 2.6(g)), then such
amendment, modification, waiver or consent shall require the consent of Lenders
holding at least a majority of the aggregate outstanding principal amount of all
Loans (and unutilized Commitments, if any) of the affected Class, and (ii) the
Fee Letter may only be amended or modified, and any rights thereunder waived, in
a writing signed by the parties thereto.

 

11.7         ASSIGNMENTS, PARTICIPATIONS.

 

(A)           EACH LENDER MAY ASSIGN TO ONE OR MORE OTHER ELIGIBLE ASSIGNEES
(EACH, AN “ASSIGNEE”) ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT (INCLUDING, WITHOUT LIMITATION, ALL OR A PORTION OF ITS COMMITMENTS,
THE OUTSTANDING LOANS MADE BY IT AND ITS PARTICIPATIONS IN LETTERS OF CREDIT);
PROVIDED, HOWEVER, THAT:

 

(I)            EACH SUCH ASSIGNMENT BY A LENDER OF ANY OF ITS INTERESTS RELATING
TO LOANS OF A PARTICULAR CLASS SHALL BE MADE IN SUCH MANNER SO THAT THE SAME
PORTION OF ITS COMMITMENT, LOANS AND OTHER INTERESTS UNDER AND WITH RESPECT TO
SUCH CLASS IS ASSIGNED TO THE RELEVANT ASSIGNEE (BUT ASSIGNMENTS NEED NOT BE PRO
RATA AS AMONG CLASSES OF LOANS);

 

(II)           EXCEPT IN THE CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF
A LENDER OR AN APPROVED FUND WITH RESPECT TO A LENDER, WITHOUT THE WRITTEN
CONSENT (TO BE EVIDENCED BY ITS COUNTEREXECUTION OF THE RELEVANT ASSIGNMENT AND
ACCEPTANCE AND NOT TO BE UNREASONABLY WITHHELD OR DELAYED) OF EACH OF THE
ADMINISTRATIVE AGENT AND, SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED
AND IS CONTINUING, THE BORROWER, NO SUCH ASSIGNMENT SHALL BE IN AN AGGREGATE
PRINCIPAL AMOUNT (DETERMINED AS OF THE DATE OF THE ASSIGNMENT AND ACCEPTANCE
WITH RESPECT TO SUCH ASSIGNMENT) LESS THAN (X) IN THE CASE OF TERM LOANS,
$1,000,000 (OR, IF LESS, THE FULL AMOUNT OF THE ASSIGNING LENDER’S OUTSTANDING
TERM LOANS), PROVIDED THAT, FOR PURPOSES OF THIS CLAUSE (X), A SERIES OF
ASSIGNMENTS BY ANY LENDER, ITS AFFILIATES AND ITS APPROVED FUNDS ON OR ABOUT THE
SAME DAY TO SEVERAL ASSIGNEES THAT ARE AFFILIATES OF ONE ANOTHER OR ARE RELATED
AS APPROVED FUNDS SHALL BE DEEMED TO BE A SINGLE ASSIGNMENT, (Y) IN THE CASE OF
REVOLVING CREDIT COMMITMENTS, $2,500,000 (OR, IF LESS, THE ENTIRE REVOLVING
CREDIT COMMITMENT OF THE ASSIGNING LENDER), OR (Z) IN THE CASE OF SWINGLINE
LOANS, THE ENTIRE SWINGLINE COMMITMENT AND THE FULL AMOUNT OF THE OUTSTANDING
SWINGLINE LOANS; AND

 

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(III)          THE PARTIES TO EACH SUCH ASSIGNMENT WILL EXECUTE AND DELIVER TO
THE ADMINISTRATIVE AGENT, FOR ITS ACCEPTANCE AND RECORDING IN THE REGISTER, AN
ASSIGNMENT AND ACCEPTANCE AND WILL PAY A NONREFUNDABLE PROCESSING FEE OF $3,500
TO THE ADMINISTRATIVE AGENT FOR ITS OWN ACCOUNT; PROVIDED THAT ANY SERIES OF
ASSIGNMENTS BY ANY LENDER, ITS AFFILIATES AND ITS APPROVED FUNDS ON OR ABOUT THE
SAME DAY TO SEVERAL ASSIGNEES THAT ARE AFFILIATES OF ONE ANOTHER OR ARE RELATED
AS APPROVED FUNDS SHALL BE DEEMED TO BE A SINGLE ASSIGNMENT FOR PURPOSES OF
CALCULATING SUCH PROCESSING FEE.

 

Upon such execution, delivery, acceptance and recording of the Assignment and
Acceptance, from and after the effective date specified therein, (A) the
Assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of the assigning Lender
hereunder with respect thereto and (B) the assigning Lender shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (other than rights under the
provisions of this Agreement and the other Credit Documents relating to
indemnification or payment of fees, costs and expenses, to the extent such
rights relate to the time prior to the effective date of such Assignment and
Acceptance) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of such assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto, except that such assigning Lender shall
continue to be entitled to the protections of Sections 2.16(a), 2.16(b), 2.17,
11.1 and 11.2 for matters arising during the periods while it was a Lender
hereunder).  The terms and provisions of each Assignment and Acceptance shall,
upon the effectiveness thereof, be incorporated into and made a part of this
Agreement, and the covenants, agreements and obligations of each Lender set
forth therein shall be deemed made to and for the benefit of the Administrative
Agent and the other parties hereto as if set forth at length herein.

 

(B)           THE ADMINISTRATIVE AGENT, ACTING SOLELY FOR THIS PURPOSE AS AN
AGENT OF THE BORROWER, WILL MAINTAIN AT ITS ADDRESS FOR NOTICES REFERRED TO IN
SECTION 11.5(A)(II) A COPY OF EACH ASSIGNMENT AND ACCEPTANCE DELIVERED TO AND
ACCEPTED BY IT AND A REGISTER FOR THE RECORDATION OF THE NAMES AND ADDRESSES OF
THE LENDERS AND THE COMMITMENTS OF, AND PRINCIPAL AMOUNT OF THE LOANS OWING TO,
EACH LENDER FROM TIME TO TIME (THE “REGISTER”).  THE ENTRIES IN THE REGISTER
SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES, ABSENT MANIFEST ERROR, AND THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS MAY TREAT EACH PERSON WHOSE
NAME IS RECORDED IN THE REGISTER AS A LENDER HEREUNDER FOR ALL PURPOSES OF THIS
AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE REGISTER SHALL BE
AVAILABLE FOR INSPECTION BY THE BORROWER AND EACH LENDER AT ANY REASONABLE TIME
AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(C)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ACCEPTANCE
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE AND, IF REQUIRED,
COUNTEREXECUTED BY THE BORROWER AND THE ISSUING LENDER, TOGETHER WITH THE
PROCESSING FEE REFERRED TO IN SECTION 11.7(A), THE ADMINISTRATIVE AGENT WILL
(I) ACCEPT SUCH ASSIGNMENT AND ACCEPTANCE, (II) ON OR AS OF THE EFFECTIVE DATE
THEREOF, RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER AND (III) GIVE
NOTICE THEREOF TO THE BORROWER AND THE LENDERS.  IF REQUESTED BY OR ON BEHALF OF
THE ASSIGNEE, THE BORROWER, AT ITS OWN EXPENSE, WILL EXECUTE AND DELIVER TO THE
ADMINISTRATIVE AGENT A NEW NOTE OR NOTES TO THE ORDER OF THE ASSIGNEE (AND, IF
THE ASSIGNING LENDER HAS RETAINED ANY PORTION OF ITS RIGHTS AND OBLIGATIONS
HEREUNDER, TO THE ORDER OF THE ASSIGNING LENDER), PREPARED IN ACCORDANCE

 

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WITH THE APPLICABLE PROVISIONS OF SECTION 2.4 AS NECESSARY TO REFLECT, AFTER
GIVING EFFECT TO THE ASSIGNMENT, THE COMMITMENTS AND/OR OUTSTANDING LOANS, AS
THE CASE MAY BE, OF THE ASSIGNEE AND (TO THE EXTENT OF ANY RETAINED INTERESTS)
THE ASSIGNING LENDER, IN SUBSTANTIALLY THE FORM OF EXHIBITS A-1, A-2, A-3 AND/OR
A-4, AS APPLICABLE.  THE ADMINISTRATIVE AGENT WILL RETURN CANCELED NOTES TO THE
BORROWER.  AT THE TIME OF EACH ASSIGNMENT PURSUANT TO THIS SECTION 11.7 TO A
PERSON THAT IS A NON-U.S. LENDER AND IS NOT ALREADY A LENDER HEREUNDER, THE
ASSIGNEE LENDER SHALL PROVIDE TO THE BORROWER AND THE ADMINISTRATIVE AGENT THE
APPROPRIATE INTERNAL REVENUE SERVICE FORMS DESCRIBED IN SECTION 2.17.

 

(D)           EACH LENDER MAY, WITHOUT THE CONSENT OF THE BORROWER, THE
ADMINISTRATIVE AGENT OR ANY OTHER LENDER, SELL TO ONE OR MORE OTHER PERSONS
(EACH, A “PARTICIPANT”) PARTICIPATIONS IN ALL OR A PORTION OF ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, ALL OR A
PORTION OF ITS COMMITMENTS, THE OUTSTANDING LOANS MADE BY IT AND ITS
PARTICIPATIONS IN LETTERS OF CREDIT); PROVIDED, HOWEVER, THAT (I) SUCH LENDER’S
OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED AND SUCH LENDER SHALL
REMAIN SOLELY RESPONSIBLE FOR THE PERFORMANCE OF SUCH OBLIGATIONS, (II) THE
BORROWER, THE ADMINISTRATIVE AGENT AND THE OTHER LENDERS SHALL CONTINUE TO DEAL
SOLELY AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT, AND NO LENDER SHALL PERMIT ANY PARTICIPANT TO
HAVE ANY VOTING RIGHTS OR ANY RIGHT TO CONTROL THE VOTE OF SUCH LENDER WITH
RESPECT TO ANY AMENDMENT, MODIFICATION, WAIVER, CONSENT OR OTHER ACTION
HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT (EXCEPT AS TO ACTIONS DESCRIBED IN
SECTION 11.6(A) AND CLAUSES (I) AND (II) OF SECTION 11.6(B) THAT AFFECT SUCH
PARTICIPANT OR THE LENDER SELLING THE PARTICIPATION), AND (IV) NO PARTICIPANT
SHALL HAVE ANY RIGHTS UNDER THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS,
EACH PARTICIPANT’S RIGHTS AGAINST THE GRANTING LENDER IN RESPECT OF ANY
PARTICIPATION TO BE THOSE SET FORTH IN THE PARTICIPATION AGREEMENT, AND ALL
AMOUNTS PAYABLE BY THE BORROWER HEREUNDER SHALL BE DETERMINED AS IF SUCH LENDER
HAD NOT GRANTED SUCH PARTICIPATION.  NOTWITHSTANDING THE FOREGOING, EACH
PARTICIPANT SHALL HAVE THE RIGHTS OF A LENDER FOR PURPOSES OF SECTIONS 2.16(A),
2.16(B), 2.17, 2.18 AND 9.3, AND SHALL BE ENTITLED TO THE BENEFITS THERETO, TO
THE EXTENT THAT THE LENDER GRANTING SUCH PARTICIPATION WOULD BE ENTITLED TO SUCH
BENEFITS IF THE PARTICIPATION HAD NOT BEEN MADE, PROVIDED THAT NO PARTICIPANT
SHALL BE ENTITLED TO RECEIVE ANY GREATER AMOUNT PURSUANT TO ANY OF SUCH SECTIONS
THAN THE LENDER GRANTING SUCH PARTICIPATION WOULD HAVE BEEN ENTITLED TO RECEIVE
IN RESPECT OF THE AMOUNT OF THE PARTICIPATION MADE BY SUCH LENDER TO SUCH
PARTICIPANT HAD SUCH PARTICIPATION NOT BEEN MADE.

 

(E)           NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO PROHIBIT ANY
LENDER FROM PLEDGING OR ASSIGNING ALL OR ANY PORTION OF ITS RIGHTS AND INTEREST
HEREUNDER AS SECURITY FOR BORROWINGS OR OTHER OBLIGATIONS, INCLUDING ANY PLEDGE
OR ASSIGNMENT TO SECURE OBLIGATIONS TO A FEDERAL RESERVE BANK OR, IN THE CASE OF
ANY LENDER THAT IS AN FUND, TO THE TRUSTEE UNDER ANY INDENTURE TO WHICH SUCH
FUND IS A PARTY IN SUPPORT OF ITS OBLIGATIONS TO THE TRUSTEE FOR THE BENEFIT OF
THE APPLICABLE TRUST BENEFICIARIES; PROVIDED, HOWEVER, THAT NO SUCH PLEDGE OR
ASSIGNMENT SHALL RELEASE A LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER; AND
PROVIDED FURTHER THAT ANY FORECLOSURE OR SIMILAR ACTION BY ANY SUCH TRUSTEE
SHALL BE SUBJECT TO THE PROVISIONS OF THIS SECTION 11.7 CONCERNING ASSIGNMENTS
AND NO SUCH TRUSTEE SHALL HAVE ANY VOTING RIGHTS HEREUNDER SOLELY ON ACCOUNT OF
SUCH PLEDGE.

 

(F)            ANY LENDER OR PARTICIPANT MAY, IN CONNECTION WITH ANY ASSIGNMENT,
PARTICIPATION, PLEDGE OR PROPOSED ASSIGNMENT, PARTICIPATION OR PLEDGE PURSUANT
TO THIS SECTION 11.7, DISCLOSE TO

 

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THE ASSIGNEE, PARTICIPANT OR PLEDGEE OR PROPOSED ASSIGNEE, PARTICIPANT OR
PLEDGEE ANY INFORMATION RELATING TO THE BORROWER AND ITS SUBSIDIARIES FURNISHED
TO IT BY OR ON BEHALF OF ANY OTHER PARTY HERETO, PROVIDED THAT SUCH ASSIGNEE,
PARTICIPANT OR PLEDGEE OR PROPOSED ASSIGNEE, PARTICIPANT OR PLEDGEE AGREES IN
WRITING TO KEEP SUCH INFORMATION CONFIDENTIAL TO THE SAME EXTENT REQUIRED OF THE
LENDERS UNDER SECTION 11.13.

 

(G)           NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IF
WACHOVIA ASSIGNS ALL OF ITS COMMITMENTS AND LOANS IN ACCORDANCE WITH THIS
SECTION 11.7, WACHOVIA MAY RESIGN AS ISSUING LENDER UPON WRITTEN NOTICE TO THE
BORROWER AND THE LENDERS.  UPON ANY SUCH NOTICE OF RESIGNATION, THE BORROWER
SHALL HAVE THE RIGHT TO APPOINT FROM AMONG THE LENDERS A SUCCESSOR ISSUING
LENDER; PROVIDED THAT NO FAILURE BY THE BORROWER TO MAKE SUCH APPOINTMENT SHALL
AFFECT THE RESIGNATION OF WACHOVIA AS ISSUING LENDER.  WACHOVIA SHALL RETAIN ALL
OF THE RIGHTS AND OBLIGATIONS OF THE ISSUING LENDER HEREUNDER WITH RESPECT TO
ALL LETTERS OF CREDIT ISSUED BY IT AND OUTSTANDING AS OF THE EFFECTIVE DATE OF
ITS RESIGNATION AND ALL OBLIGATIONS OF THE BORROWER AND THE REVOLVING CREDIT
LENDERS WITH RESPECT THERETO (INCLUDING THE RIGHT TO REQUIRE THE REVOLVING
CREDIT LENDERS TO MAKE REVOLVING LOANS OR FUND PARTICIPATION INTERESTS PURSUANT
TO ARTICLE III).

 

11.8         No Waiver.  The rights and remedies of the Administrative Agent and
the Lenders expressly set forth in this Agreement and the other Credit Documents
are cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise.  No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or be
construed to be a waiver of any Default or Event of Default.  No course of
dealing between any Credit Party, the Administrative Agent or the Lenders or
their agents or employees shall be effective to amend, modify or discharge any
provision of this Agreement or any other Credit Document or to constitute a
waiver of any Default or Event of Default.  No notice to or demand upon any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
right of the Administrative Agent or any Lender to exercise any right or remedy
or take any other or further action in any circumstances without notice or
demand.

 

11.9         Successors and Assigns.  This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i)
neither the Parent nor the Borrower shall sell, assign or transfer any of its
rights, interests, duties or obligations under this Agreement without the prior
written consent of all of the Lenders and (ii) Assignees and Participants shall
have such rights and obligations with respect to this Agreement and the other
Credit Documents as are provided for under and pursuant to the provisions of
Section 11.7.

 

11.10       Survival.  All representations, warranties and agreements made by or
on behalf of the Borrower or any other Credit Party in this Agreement and in the
other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit.  In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the

 

110

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OTHER CREDIT DOCUMENTS RELATING TO INDEMNIFICATION OR PAYMENT OF COSTS AND
EXPENSES, INCLUDING, WITHOUT LIMITATION, THE PROVISIONS OF SECTIONS 2.16(A),
2.16(B), 2.17, 2.18, 10.7, 11.1 AND 11.2, SHALL SURVIVE THE PAYMENT IN FULL OF
ALL LOANS AND LETTERS OF CREDIT, THE TERMINATION OF THE COMMITMENTS AND ALL
LETTERS OF CREDIT, AND ANY TERMINATION OF THIS AGREEMENT OR ANY OF THE OTHER
CREDIT DOCUMENTS.

 

11.11       Severability.  To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.

 

11.12       Construction.  The headings of the various articles, sections and
subsections of this Agreement and the table of contents have been inserted for
convenience only and shall not in any way affect the meaning or construction of
any of the provisions hereof.  Except as otherwise expressly provided herein and
in the other Credit Documents, in the event of any inconsistency or conflict
between any provision of this Agreement and any provision of any of the other
Credit Documents, the provision of this Agreement shall control.

 

11.13       Confidentiality.  Each of the Administrative Agent and each Lender
agrees to keep confidential, pursuant to its customary procedures for handling
confidential information of a similar nature and in accordance with safe and
sound banking practices, all nonpublic information provided to it by or on
behalf of the Borrower or any other Credit Party in connection with this
Agreement or any other Credit Document; provided, however, that each of the
Administrative Agent and each Lender may disclose such information (i) to its
Affiliates, and to its and its Affiliates’ respective directors, officers,
partners, employees, agents, auditors, counsel and other advisors so long such
parties are informed of the confidential nature of such information and
instructed to keep such information confidential, (ii) at the demand or request
of any bank regulatory authority, court or other Governmental Authority having
or asserting jurisdiction over the Administrative Agent or such Lender or any of
their respective Affiliates, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with the exercise of any remedies hereunder or under
any other Credit Document or any Hedge Agreement or any action or proceeding
relating to this Agreement, any other Credit Document or any Hedge Agreement or
the enforcement of rights hereunder or thereunder, (iv) to the Administrative
Agent, the Arranger or any other Lender, (v) to the extent the same has become
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower or has become publicly available other
than as a result of a breach of this Agreement, (vi) subject to an agreement
containing provisions substantially the same as those in this Section, to any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations hereunder, (vii) with
the consent of the Borrower, and (viii) pursuant to and in accordance with the
provisions of Section 11.7(f).  Notwithstanding anything herein to the contrary,
the information subject to this Section 11.13 shall not include, and the
Borrower, the other Credit Parties, the Administrative Agent, each Lender and
the respective Affiliates of each of the foregoing (and the respective partners,
directors, officers, employees, agents, advisors and other representatives of
each of the foregoing and their Affiliates) may disclose to any and all Persons,
without limitation of any kind, (a) any

 

111

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INFORMATION WITH RESPECT TO THE U.S. FEDERAL AND STATE INCOME TAX TREATMENT OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND ANY FACTS THAT MAY BE RELEVANT TO
UNDERSTANDING SUCH TAX TREATMENT, WHICH FACTS SHALL NOT INCLUDE FOR THIS PURPOSE
THE NAMES OF THE PARTIES OR ANY OTHER PERSON NAMED HEREIN, OR INFORMATION THAT
WOULD PERMIT IDENTIFICATION OF THE PARTIES OR SUCH OTHER PERSONS, OR ANY PRICING
TERMS OR OTHER NONPUBLIC BUSINESS OR FINANCIAL INFORMATION THAT IS UNRELATED TO
SUCH TAX TREATMENT OR FACTS, AND (B) ALL MATERIALS OF ANY KIND (INCLUDING
OPINIONS OR OTHER TAX ANALYSES) RELATING TO SUCH TAX TREATMENT OR FACTS THAT ARE
PROVIDED TO ANY OF THE PERSONS REFERRED TO ABOVE.

 

11.14       Counterparts; Effectiveness.  This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.  This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto and receipt by the Administrative Agent and the Borrower of
written or telephonic notification of such execution and authorization of
delivery thereof.

 

11.15       Disclosure of Information.  The Borrower agrees and consents to the
Administrative Agent’s and the Arranger’s disclosure of information relating to
this transaction to Gold Sheets and other similar bank trade publications.  Such
information will consist of deal terms and other information customarily found
in such publications.

 

11.16       Entire Agreement.  THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF (BUT SPECIFICALLY EXCLUDING THE FEE LETTER),
AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED OR OTHERWISE MODIFIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

112

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

 

 

 

DJ ORTHOPEDICS, LLC

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

 

 

 

 

DJ ORTHOPEDICS, INC.

 

 

 

 

 

By:

 

 

 

 

Title:

 

 

(signatures continued)

 

S-1

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

 

 

WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender and
as a Lender

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

S-2

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

 

 

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Syndication Agent and as a
Lender

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

S-3

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

 

 

BANK OF AMERICA, N.A., as Documentation
Agent and as a Lender

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

S-4

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

 

 

BANK OF THE WEST, as Documentation Agent
and as a Lender

 

 

 

 

 

By:

 

 

 

 

 

 

Title:

 

 

S-5

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

 

 

UNION BANK OF CALIFORNIA, N.A., as
Documentation Agent and as a Lender

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

S-6

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

 

 

COMERICA BANK, as a Lender

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

S-7

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

 

 

GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

S-8

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

 

Schedule 1.1(a)

 

Commitments and

Notice Addresses

 

 

Lender

 

Term Loan
Commitment

 

Revolving Credit
Commitment

 

Wachovia Bank, National Association

 

$

90,000,000.00

 

$

6,000,000.00

 

Wells Fargo Bank, National Association

 

$

2,000,000.00

 

$

4,000,000.00

 

Bank of America, N.A.

 

$

0

 

$

4,000,000.00

 

Bank of the West

 

$

2,000,000.00

 

$

4,000,000.00

 

Union Bank of California, N.A.

 

$

2,000,000.00

 

$

4,000,000.00

 

Comerica Bank

 

$

2,000,000.00

 

$

4,000,000.00

 

General Electric Capital Corporation

 

$

2,000,000.00

 

$

4,000,000.00

 

Total

 

$

100,000,000.00

 

$

30,000,000.00

 

 

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

 

Notice Addresses

 

 

Lender

 

Address

Wachovia Bank, National Association

 

Instructions for wire transfers to the Administrative Agent:

Wachovia Bank, National Association

ABA Routing No. 053000219

Charlotte, North Carolina

Account Number:  5000000018246

Account Name:  dj Orthopedics, LLC

Attention:  Syndication Agency Services

Address for notices as a Lender:

Wachovia Bank, National Association

One Wachovia Center, 6th Floor

301 South College Street

Charlotte, North Carolina  28288-0760

Attention:  Glenn Edwards

Telephone:  (704) 383-3810

Telecopy:  (704) 374-4793

Lending Office:

Wachovia Bank, National Association

Charlotte Plaza Building

201 South College Street, 8th Floor NC0680

Charlotte, North Carolina  28288

Attention:  Syndication Agency Services

Telephone:  (704) 383-3721

Telecopy:  (704) 383-0288

 

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

 

Wells Fargo Bank, National Association

 

Address for notices as a Lender:

Wells Fargo Bank, National Association

111 W. Ocean Blvd., Suite 300

Long Beach, CA 90802

Attention:  William Hutchinson

Telephone:  (562) 628-2111

Telecopy:  (562) 437-6698

Lending Office:

Wells Fargo Bank, National Association

201 Third St. 8th Floor

San Francisco, CA  94163

Attention:  Judy Chan

Telephone:  (415) 477-5433

Telecopy:  (415) 979-0675

 

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

 

Bank of America, N.A.

 

Address for notices as a Lender:

Bank of America, N.A.

450 B Street Suite 1500

San Diego, CA 92101

Attention:  Susan J. Pepping

Telephone:  (619) 515-7518

Telecopy:  (619) 515-7524

Lending Office:

Bank of America, N.A.

333 S. Beaudry Ave 11th Floor

Los Angeles, CA 90017-1466

Attention:  Susan J. Pepping

Telephone:  (619) 515-7518

Telecopy:  (619) 515-7524

 

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

 

Bank of the West

 

Address for notices as a Lender:

Bank of the West

1280 Fourth Avenue

San Diego, CA 92101

Attention:  Alyssa Lange

Telephone:  (619) 235-2564

Telecopy:  (619) 595-1918

Lending Office:

Bank of the West

1280 Fourth Avenue

San Diego, CA 92101

Attention:  Alyssa Lange

Telephone:  (619) 235-2564

Telecopy:  (619) 595-1918

 

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

 

Union Bank of California, N.A.

 

Address for notices as a Lender:

Union Bank of California, N.A

530 ‘B’ Street, 4th Floor

San Diego, California 92101

Attention:  Douglas S. Lambell

Telephone:  (619) 230-3029

Telecopy:  (619) 230-3766

Lending Office:

Union Bank of California, N.A

530 ‘B’ Street, 4th Floor

San Diego, California 92101

Attention:  Douglas S. Lambell

Telephone:  (619) 230-3029

Telecopy:  (619) 230-3766

 

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

 

Comerica Bank

 

Address for notices as a Lender:

Comerica Bank

701 B Street #600

San Diego, California 92101

Attention:  Stephen M. Cusato, SVP

Telephone:  619-338-1501

Telecopy:  (619) 234-2234

Lending Office:

Comerica Bank

701 B Street #600

San Diego, California 92101

Attention:  Stephen M. Cusato, SVP

Telephone:  619-338-1501

Telecopy:  (619) 234-2234

 

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

 

General Electric Capital Corporation

 

Address for notices as a Lender:

General Electric Capital Corporation

500 W. Monroe Street, 29th Floor

Chicago, IL 60611

Attention:  Matthew Nels

Telephone:  (312) 441-7697

Telecopy:  (312) 441-7598

Lending Office:

General Electric Capital Corporation

500 W. Monroe Street, 29th Floor

Chicago, IL 60611

Attention:  Matthew Nels

Telephone:  (312) 441-7697

Telecopy:  (312) 441-7598

 

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