Exhibit 10.1

FINANCING AGREEMENT

Dated as of December 2, 2011

by and among

BUILDERS FIRSTSOURCE—DALLAS, LLC

BUILDERS FIRSTSOURCE—FLORIDA, LLC

BUILDERS FIRSTSOURCE—OHIO VALLEY, LLC

BUILDERS FIRSTSOURCE—ATLANTIC GROUP, LLC

BUILDERS FIRSTSOURCE—RALEIGH, LLC

BUILDERS FIRSTSOURCE—SOUTHEAST GROUP, LLC

BUILDERS FIRSTSOURCE—TEXAS GROUP, L.P.

BUILDERS FIRSTSOURCE—SOUTH TEXAS, L.P.

BUILDERS FIRSTSOURCE—TEXAS INSTALLED SALES, L.P.,

as Borrowers,

BUILDERS FIRSTSOURCE, INC. AND EACH SUBSIDIARY THEREOF LISTED AS A GUARANTOR ON
THE SIGNATURE PAGES HERETO,

as Guarantors,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

as Lenders,

HIGHBRIDGE PRINCIPAL STRATEGIES, LLC,

as Collateral Agent,

and

HIGHBRIDGE PRINCIPAL STRATEGIES, LLC

as Administrative Agent

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS; CERTAIN TERMS

     1   

Section 1.01

  Definitions      1   

Section 1.02

  Terms Generally      35   

Section 1.03

  Accounting and Other Terms      36   

Section 1.04

  Time References      36   

ARTICLE II THE LOANS

     36   

Section 2.01

  Commitments      36   

Section 2.02

  Making the Loans      36   

Section 2.03

  Repayment of Loans; Evidence of Debt      37   

Section 2.04

  Interest      38   

Section 2.05

  Reduction of Commitment; Prepayment of Loans      38   

Section 2.06

  Fees      40   

Section 2.07

  [Intentionally Omitted]      41   

Section 2.08

  Taxes      41   

Section 2.09

  [Intentionally Omitted]      44   

Section 2.10

  [Intentionally Omitted]      44   

Section 2.11

  Funding Losses      44   

Section 2.12

  Impracticability or Illegality      44   

Section 2.13

  No Requirement to Match Fund      45   

ARTICLE III [INTENTIONALLY OMITTED]

     45   

ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION

     45   

Section 4.01

  [Intentionally Omitted]      45   

Section 4.02

  Payments; Computations and Statements      45   

Section 4.03

  Sharing of Payments, Defaulting Lenders, Etc      46   

Section 4.04

  Apportionment of Payments      47   

Section 4.05

  Increased Costs and Reduced Return      48   

Section 4.06

  Joint and Several Liability of the Borrowers      50   

ARTICLE V CONDITIONS TO LOANS

     51   

Section 5.01

  Conditions Precedent to Effectiveness      51   

ARTICLE VI REPRESENTATIONS AND WARRANTIES

     54   

Section 6.01

  Representations and Warranties      54   

ARTICLE VII COVENANTS OF THE LOAN PARTIES

     63   

Section 7.01

  Affirmative Covenants      63   

Section 7.02

  Negative Covenants      75   

Section 7.03

  Financial Covenants      83   

 

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ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER
COLLATERAL

     83   

Section 8.01

  Collection of Accounts Receivable; Management of Collateral      83   

Section 8.02

  Collateral Custodian      86   

ARTICLE IX EVENTS OF DEFAULT

     86   

Section 9.01

  Events of Default      86   

ARTICLE X AGENTS

     90   

Section 10.01

  Appointment      90   

Section 10.02

  Nature of Duties      91   

Section 10.03

  Rights, Exculpation, Etc      92   

Section 10.04

  Reliance      92   

Section 10.05

  Indemnification      93   

Section 10.06

  Agents Individually      93   

Section 10.07

  Successor Agent      93   

Section 10.08

  Collateral Matters      94   

Section 10.09

  Agency for Perfection      96   

Section 10.10

  No Reliance on any Agent’s Customer Identification Program      96   

Section 10.11

  No Third Party Beneficiaries      96   

Section 10.12

  No Fiduciary Relationship      96   

Section 10.13

  Reports; Confidentiality; Disclaimers      97   

Section 10.14

  Collateral Agent May File Proofs of Claim      97   

ARTICLE XI GUARANTY

     98   

Section 11.01

  Guaranty      98   

Section 11.02

  Guaranty Absolute      98   

Section 11.03

  Waiver      99   

Section 11.04

  Continuing Guaranty; Assignments      100   

Section 11.05

  Subrogation      100   

ARTICLE XII MISCELLANEOUS

     101   

Section 12.01

  Notices, Etc      101   

Section 12.02

  Amendments, Etc      102   

Section 12.03

  No Waiver; Remedies, Etc      104   

Section 12.04

  Expenses; Taxes; Attorneys’ Fees      104   

Section 12.05

  Right of Set-off      105   

Section 12.06

  Severability      105   

Section 12.07

  Assignments and Participations      106   

Section 12.08

  Counterparts      109   

Section 12.09

  GOVERNING LAW      109   

Section 12.10

  CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE      109   

Section 12.11

  WAIVER OF JURY TRIAL, ETC      110   

Section 12.12

  Consent by the Agents and Lenders      111   

Section 12.13

  No Party Deemed Drafter      111   

Section 12.14

  Reinstatement; Certain Payments      111   

 

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Section 12.15

  Indemnification; Limitation of Liability for Certain Damages      111   

Section 12.16

  Parent as Agent for Borrowers      112   

Section 12.17

  Records      113   

Section 12.18

  Binding Effect      113   

Section 12.19

  Interest      113   

Section 12.20

  Confidentiality      114   

Section 12.21

  Public Disclosure      115   

Section 12.22

  Integration      115   

Section 12.23

  USA PATRIOT Act      116   

Section 12.24

  Collateral Trust Agreement      116   

Section 12.25

  Mitigation Obligation; Replacement of Lenders      116   

Section 12.26

  Release of Liens      117   

 

- iii -

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SCHEDULE AND EXHIBITS

 

Schedule 1.01(A)

   Lenders and Lenders' Commitments

Schedule 1.01(C)

   Collateral Trust Agreement Documents

Schedule 1.01(F)

   Facilities

Schedule 1.01(P)

   Certain Leases

Schedule 1.01(S)

   Specified Properties

Schedule 6.01(e)

   Subsidiaries

Schedule 6.01(r)

   Environmental Matters

Schedule 6.01(w)

   Intellectual Property

Schedule 6.01(dd)

   Name; Jurisdiction of Organization; Organizational ID Number; Chief Place of
Business; Chief Executive Office; FEIN

Schedule 7.02(a)

   Existing Liens

Schedule 7.02(b)

   Existing Indebtedness

Schedule 8.01

   Cash Management Banks

 

Exhibit A

   Form of Joinder Agreement

Exhibit B

   Form of Notice of Borrowing

Exhibit C

   Form of Assignment and Acceptance

Exhibit D

   Form of Mortgage

Exhibit E

   Form of Deed of Trust

 

- iv -

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FINANCING AGREEMENT

Financing Agreement, dated as of December 2, 2011, by and among Builders
FirstSource, Inc., a Delaware corporation (the “Parent”), Builders
FirstSource—Dallas, LLC, a Delaware limited liability company (“Builders
Dallas”), Builders FirstSource—Atlantic Group, LLC, a Delaware limited liability
company (“Builders Atlantic”), Builders FirstSource—Raleigh, LLC, a Delaware
limited liability company (“Builders Raleigh”), Builders FirstSource—Southeast
Group, LLC, a Delaware limited liability company (“Builders Southeast”),
Builders FirstSource—Florida, LLC, a Delaware limited liability company
(“Builders Florida”), Builders FirstSource—Ohio Valley, LLC, a Delaware limited
liability company (“Builders Ohio”), Builders FirstSource—Texas Group, L.P., a
Texas limited partnership (“Builders Texas Group”), Builders FirstSource—Texas
Installed Sales, L.P., a Texas limited partnership (“Builders Texas Installed”),
Builders FirstSource—South Texas, L.P., a Texas limited partnership (“Builders
South Texas” and together with Builders Dallas, Builders Atlantic, Builders
Raleigh, Builders Southeast, Builders Florida, Builders Ohio, Builders Texas
Group and Builders Texas Installed, each a “Borrower” and collectively, the
“Borrowers”), each subsidiary of the Parent listed as a “Guarantor” on the
signature pages hereto (together with the Parent and each other Person that
executes a joinder agreement and becomes a “Guarantor” hereunder or otherwise
guaranties all or any part of the Obligations (as hereinafter defined), each a
“Guarantor” and collectively, the “Guarantors”), the lenders from time to time
party hereto (each a “Lender” and collectively, the “Lenders”), Highbridge
Principal Strategies, LLC, a Delaware limited liability company (“Highbridge”),
as collateral agent for the Lenders (in such capacity, the “Collateral Agent”),
and Highbridge, as administrative agent for the Lenders (in such capacity,
the “Administrative Agent” and together with the Collateral Agent, each an
“Agent” and collectively, the “Agents”).

RECITALS

The Borrowers have asked the Lenders to extend credit to the Borrowers
consisting of a term loan in the aggregate principal amount of $160,000,000. The
proceeds of the term loan shall be used to refinance existing indebtedness of
the Borrowers, for general working capital purposes of the Borrowers and to pay
fees and expenses related to this Agreement. The Lenders are severally, and not
jointly, willing to extend such credit to the Borrowers subject to the terms and
conditions hereinafter set forth.

In consideration of the premises and the covenants and agreements contained
herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS; CERTAIN TERMS

Section 1.01 Definitions. As used in this Agreement, the following terms shall
have the respective meanings indicated below, such meanings to be applicable
equally to both the singular and plural forms of such terms:

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“Account Debtor” means each debtor, customer or obligor in any way obligated on
or in connection with any Account Receivable.

“Account Receivable” means, with respect to any Person, any and all rights of
such Person to payment for goods sold and/or services rendered and/or vendor
rebates, including accounts, general intangibles and any and all such rights
evidenced by chattel paper, instruments or documents, whether due or to become
due and whether or not earned by performance, and whether now or hereafter
acquired or arising in the future, and any proceeds arising therefrom or
relating thereto.

“Action” has the meaning specified therefor in Section 12.12.

“Additional Amount” has the meaning specified therefor in Section 2.08(a).

“Administrative Agent” has the meaning specified therefor in the preamble
hereto, or any successor administrative agent hereunder.

“Administrative Agent’s Account” means an account at a bank designated by the
Administrative Agent from time to time as the account into which the Loan
Parties shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to
(a) vote 10% or more of the Equity Interests having ordinary voting power for
the election of members of the Board of Directors of such Person or (b) direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise.

“After Acquired Property” has the meaning specified therefor in Section 7.01(o).

“Agent” has the meaning specified therefor in the preamble hereto, and includes
any successor Administrative Agent or Collateral Agent hereunder, as applicable.

“Agreement” means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.

“Anti-Terrorism Laws” means any laws relating to terrorism or money laundering,
including, without limitation, (i) the Money Laundering Control Act of 1986
(i.e., 18 U.S.C. §§ 1956 and 1957), (ii) the Bank Secrecy Act, as amended by the
USA PATRIOT Act, (iii) the laws, regulations and Executive Orders administered
by the United States Department of the Treasury’s Office of Foreign Assets
Control (“OFAC”), (iv) the Comprehensive Iran Sanctions, Accountability, and
Divestment Act of 2010 and implementing regulations by the United States
Department of the Treasury, (v) any law prohibiting or directed against
terrorist activities or the financing of terrorist activities (e.g., 18 U.S.C.
§§ 2339A and 2339B), or (vi) any similar laws enacted in the United States or
any other jurisdictions in which the parties to this agreement operate, as any
of the foregoing laws may from time to time be amended, renewed, extended, or
replaced and all other present and future legal requirements of any Governmental
Authority governing, addressing, relating to, or attempting to eliminate,
terrorist acts and acts of war and any regulations promulgated pursuant thereto.

 

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“Applicable Prepayment Premium” means, as of any date of determination,
(a) during the period of time from and after the Effective Date up to and
including the date that is the third anniversary of the Effective Date, an
amount equal to the Make-Whole Amount, and (b) thereafter, zero.

“Assignment and Acceptance” means an assignment and acceptance entered into by
an assigning Lender and an assignee permitted hereunder, and with the consent of
any party whose consent is required in accordance with Section 12.07 hereof and
substantially in the form of Exhibit C hereto or such other form reasonably
acceptable to the Collateral Agent.

“Authorized Officer” means, with respect to any Person, the chief executive
officer, chief financial officer, president, executive vice president or senior
vice president of such Person.

“Balance Sheet Date” has the meaning specified in Section 6.01(g)(ii).

“Bankruptcy Code” means the United States Bankruptcy Code (11 U.S.C. § 101, et
seq.), as amended, and any successor statute.

“Blocked Person” has the meaning assigned to such term in Section 6.01(ii).

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

“Board of Directors” means, (a) with respect to any corporation, the board of
directors of the corporation or any committee thereof duly authorized to act on
behalf of such board, (b) with respect to a partnership, the board of directors
or managers of the general partner of the partnership, (c) with respect to a
limited liability company, the managing member or members or any controlling
committee or board of directors or managers of such company or the sole member
or the managing member thereof, and (d) with respect to any other Person, the
board or committee of such Person serving a similar function.

“Borrower” has the meaning specified therefor in the preamble hereto.

“Borrowers’ Representative” has the meaning specified therefor in Section 12.16.

“Business Day” means (a) any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close, and
(b) with respect to the borrowing, payment or continuation of, or determination
of interest rate on, LIBOR Rate Loans, any day that is a Business Day described
in clause (a) above and on which dealings in Dollars are conducted by and
between banks in the interbank eurodollar markets in New York City and London.

“Capitalized Lease” means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is (a) required under GAAP to
be capitalized on the

 

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balance sheet of such Person or (b) a transaction of a type commonly known as a
“synthetic lease” (i.e., a lease transaction that is treated as an operating
lease for accounting purposes but with respect to which payments of rent are
intended to be treated as payments of principal and interest on a loan for
Federal income tax purposes); provided, however, that, for the avoidance of
doubt, any obligations relating to a lease that was validly accounted for by
such Person as an operating lease in accordance with GAAP as in effect on the
Effective Date, and any similar lease entered into after the Effective Date by
such Person that would have been validly accounted for by such Person as an
operating lease in accordance with GAAP as in effect on the Effective Date shall
be accounted for as obligations relating to an operating lease and not as
Capitalized Lease Obligations.

“Capitalized Lease Obligations” means, with respect to any Person, obligations
of such Person and its Subsidiaries under Capitalized Leases, and, for purposes
hereof, the amount of any such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within twelve months from the date of acquisition thereof;
(b) commercial paper, maturing not more than 270 days after the date of issue
rated P-1 by Moody’s or A-1 by Standard & Poor’s; (c) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (d) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (c) above and which are secured by readily marketable direct obligations
of the United States Government or any agency thereof; (e) money market accounts
maintained with mutual funds having assets in excess of $2,500,000,000;
(f) marketable tax exempt securities rated A or higher by Moody’s or A+ or
higher by Standard & Poor’s, in each case, maturing within six months from the
date of acquisition thereof; (g) securities with maturities of one (1) year or
less from the date of acquisition backed by a standby letter of credit issued by
any Lender or any commercial bank satisfying the requirements of clause
(c) above; and (h) investments, classified in accordance with GAAP as current
assets of any Loan Party or any of its Subsidiaries, in money market investment
programs registered under the Investment Company Act of 1940, which are
administered by financial institutions, substantially all of whose assets are
invested in investments of the character, quality and maturity described in
clauses (a), (b), (c), (d), and (f) of this definition.

“Cash Management Accounts” means the bank accounts of each Loan Party (other
than Excluded Accounts) maintained at one or more Cash Management Banks listed
on Schedule 8.01.

“Cash Management Agreement” means a deposit account control agreement, in form
and substance reasonably satisfactory to the Collateral Agent, each of which is
among the Collateral Agent, a Loan Party and one of the Cash Management Banks
with respect to a Cash Management Account.

 

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“Cash Management Bank” means (i) each banking institution at which any Loan
Party maintains a Deposit Account on the Effective Date which has been disclosed
in writing to the Collateral Agent on or prior to the Effective Date, (ii) any
commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$500,000,000, and (iii) any other banking institution approved by the Collateral
Agent.

“Casualty Event” means the receipt of any cash by the Parent or any of its
Subsidiaries not in the ordinary course of business (and not consisting of
proceeds described in Section 2.05(c)(i) or (iii)) and arising from (a) proceeds
of casualty insurance, and/or (b) condemnation awards (and payments in lieu
thereof).

“Change in Law” has the meaning specified therefor in Section 4.05(a).

“Change of Control” means each occurrence of any of the following:

(a) the Permitted Holders cease beneficially and of record to own and control,
directly or indirectly, at least 25% on a fully diluted basis of the aggregate
outstanding voting or economic power of the Equity Interests of the Parent;

(b) at any time when the Permitted Holders cease beneficially and of record to
own and control, directly or indirectly, at least 40% on a fully diluted basis
of the aggregate outstanding voting or economic power of the Equity Interests of
the Parent, the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) (other than a
Permitted Holder) of beneficial ownership of more than 40% on a fully-diluted
basis of the aggregate outstanding voting or economic power of the Equity
Interests of the Parent; provided, that no Change of Control will result solely
as a result of Highbridge (either acting alone or as part of a group (within the
meaning of Section 13(d)(3) of the Exchange Act)) acquiring beneficial ownership
of more than 40% of the aggregate outstanding voting or economic power of the
Equity Interests of the Parent;

(c) during any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors of the Parent (together with
any new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Parent was approved by a vote of at
least a majority the directors of the Parent then still in office who were
either directors at the beginning of such period, or whose election or
nomination for election was previously approved) cease for any reason to
constitute a majority of the Board of Directors of the Parent;

(d) the Parent shall cease to have beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) free and clear of all Liens (other than
Permitted Specified Liens) of 100% of the aggregate voting or economic power of
the Equity Interests of each other Loan Party (other than to the extent that
(x) 100% of the Equity Interests of any Loan Party has been sold or otherwise
disposed of in a Permitted Disposition, (y) any Loan Party has been wound up,
dissolved or liquidated in a transaction permitted by Section 7.02(c), or
(z) the Parent ceases to own any Equity Interests in any Insignificant
Subsidiary that is the subject of a proceeding described in Section 9.01(f) or
(g)); or

 

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(e) a “Change of Control” (or any comparable term or provision) under or with
respect to any of the Equity Interests or Indebtedness of the Parent or any of
its Subsidiaries that results in the Parent or any of its Subsidiaries being
required to repurchase, repay or prepay Equity Interests or Indebtedness in an
amount in excess of $5,000,000.

“CIP Regulations” has the meaning specified in Section 10.10.

“Collateral” means all of the property and assets and all interests therein and
proceeds thereof now owned or hereafter acquired by any Person upon which a Lien
is granted or purported to be granted by such Person as security for all or any
part of the Obligations, but excluding, for the avoidance of doubt, Excluded
Property.

“Collateral Agent” has the meaning specified therefor in the preamble hereto, or
any successor collateral agent hereunder.

“Collateral Agent Advances” has the meaning specified therefor in
Section 10.08(a).

“Collateral Examination” means any Collateral audit, field examination,
valuation or appraisal of the Loan Parties and/or the Collateral, excluding, for
the avoidance of doubt, visits, inspections and discussions.

“Collateral Trust Agreement” shall mean the Collateral Trust Agreement, dated as
of February 11, 2005, as cured and reformed by the Confirmation of Reformation
of the Collateral Trust Agreement dated as of December 14, 2007, and effective
as of February 11, 2005, by and among Parent, the other “Pledgors” from time to
time party thereto, the Floating Rate Note Trustee, the Floating Rate Note
Collateral Trustee, as Parity Collateral Trustee, and Highbridge Principal
Strategies, LLC (as successor to Wachovia Bank, National Association, as
successor to UBS AG Stamford Branch), as Agent and Priority Collateral Trustee,
and as the same may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

“Collateral Trust Agreement Documents” means each of the documents specified on
Schedule 1.01(C) hereof.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, proceeds of cash sales, rental proceeds,
and tax refunds).

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make the Loan to the Borrowers in the amount set forth in Schedule 1.01(A)
hereto, as the same may be terminated or reduced from time to time in accordance
with the terms of this Agreement.

“Contingent Obligation” means, with respect to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations (“primary obligations”) of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly,
including, without limitation, (a) the direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making,

 

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discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (b) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (c) any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (A) for the purchase or payment of any such primary obligation or (B) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term “Contingent Obligation” shall not include any
product warranties extended in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Contribution Agreement” means the Contribution Agreement, dated as of the date
hereof, among the Loan Parties, in form and substance reasonably satisfactory to
the Collateral Agent.

“Controlled Investment Affiliate” means, as to any Person, any other Person
which directly or indirectly is in control of, is controlled by, or is under
common control with, such Person. For purposes of this definition, the word
“control” and derivatives thereof shall have the meaning specified in clause
(b) of the definition of the term “Affiliate”.

“Default” means an event which, with the giving of notice or the lapse of time
or both, would constitute an Event of Default.

“Defaulting Lender” means any Lender that (i) has otherwise failed to pay over
to any Agent or any other Lender any amount required to be paid by it hereunder
within one Business Day of the date when due, unless the subject of a good faith
dispute, and has not cured such failure prior to the date of determination, or
(ii) has been deemed insolvent or become the subject of an Insolvency
Proceeding.

“Disbursement Letter” means a Disbursement Letter, in form and substance
reasonably satisfactory to the Collateral Agent, by and among the Borrowers, the
Agents, the Lenders and the other Persons party thereto, and the related funds
flow memorandum describing the sources and uses of all cash payments in
connection with the transactions contemplated to occur on the Effective Date.

 

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“Disposition” means any transaction, or series of related transactions, pursuant
to which any Person or any of its Subsidiaries sells, assigns, transfers or
otherwise disposes of any property or assets (whether now owned or hereafter
acquired) to any other Person, in each case, whether or not the consideration
therefor consists of cash, securities or other assets owned by the acquiring
Person.

“Disqualified Equity Interests” means any Equity Interest that, by its terms (or
by the terms of any security or other Equity Interest into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition, (a) matures or is mandatorily redeemable, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date which is 180 days after
the Final Maturity Date, (b) is convertible into or exchangeable for (i) debt
securities or (ii) any Equity Interests referred to in clause (a) above, in each
case at any time prior to the date which is 180 days after the Final Maturity
Date, (c) contains any repurchase obligation that may come into effect either
(i) prior to payment in full of all Obligations or (ii) prior to the date that
is 180 days after the Final Maturity Date or (d) provides for scheduled payments
or the payment of cash dividends or distributions prior to the date that is 180
days after the Final Maturity Date.

“Disqualified Institution” means each of the financial institutions identified
as “Disqualified Institutions” by the Borrowers’ Representative to the
Collateral Agent in writing prior to the Effective Date and Controlled
Investment Affiliates thereof.

“Dollar,” “Dollars” and the symbol “$” each means lawful money of the United
States of America.

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any state thereof or the District of Columbia.

“Effective Date” means the date, on or before December 2, 2011, on which all of
the conditions precedent set forth in Section 5.01 are satisfied or waived and
the Loans are made.

“Employee Plan” means an employee benefit plan (other than a Multiemployer Plan)
covered by Title IV of ERISA and maintained (or that was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of any Loan Party or any of its ERISA Affiliates.

“Environmental Action” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding or judgment from any Person or Governmental Authority involving
violations of Environmental Laws or Releases of Hazardous Materials (a) from any
assets, properties or businesses owned or operated by any Loan Party or any of
its Subsidiaries or any predecessor in interest; (b) from adjoining properties
or businesses where such Releases are impacting the Facilities or threaten to
impact the Facilities; or (c) onto any facilities which received Hazardous
Materials generated by any Loan Party or any of its Subsidiaries or any
predecessor in interest.

“Environmental Laws” means the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. § 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. § 1801, et seq.), the Resource
Conservation and Recovery Act

 

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(42 U.S.C. § 6901, et seq.), the Federal Clean Water Act (33 U.S.C. § 1251 et
seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. § 2601 et seq.) and the Occupational Safety and Health
Act (29 U.S.C. § 651 et seq.), as such laws may be amended or otherwise modified
from time to time, and any other present or future federal, state, local or
foreign statute, ordinance, rule, regulation, order, judgment, decree, permit,
license or other binding guidance or determination of any Governmental Authority
imposing liability or establishing standards of conduct for protection of the
environment or other government restrictions relating to the protection of the
environment or the Release, deposit or migration of any Hazardous Materials into
the environment.

“Environmental Liabilities and Costs” means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition at
or a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility
which relates to any Loan Party’s or any of its Subsidiaries’ disposal of
Hazardous Materials generated by such parties.

“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities and Costs.

“Equity Interest” means (a) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (b) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.

“Equity Issuance” means either (a) the sale or issuance by any Loan Party or any
of its Subsidiaries of any shares of its Equity Interests or (b) the receipt by
Parent of any cash capital contributions.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case, as in effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.

“ERISA Affiliate” means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a “controlled group” within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.

“Event of Default” means any of the events set forth in Section 9.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Account” means any deposit account or securities account of any Loan
Party (i) specifically and exclusively used for payroll, payroll taxes and other
employee wage

 

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and benefit payments to or for the benefit of any Loan Party’s employees,
(ii) used for cash collateralizing the obligations described in clauses (f) and
(q) of the definition of “Permitted Liens” or (iii) other accounts of the Loan
Parties holding cash or Cash Equivalents; provided that the aggregate amount of
cash and Cash Equivalents held in deposit accounts and securities accounts
constituting Excluded Accounts pursuant to this clause (iii) shall not exceed
(A) $5,000,000 until the date that is 60 days following the Effective Date, or
(B) $2,000,000 at any time thereafter.

“Excluded Equipment” shall mean, as to each Borrower or Guarantor, except as
Borrowers’ Representative and Collateral Agent may otherwise agree, Equipment
owned by such Borrower or Guarantor consisting of Rolling Stock.

“Excluded Property” shall mean:

(a) any permit, lease, license, contract or other agreement held by any Borrower
or Guarantor or any contract or agreement to which any Borrower or Guarantor is
a party (including any rights thereunder) that validly prohibits the creation by
such Borrower or Guarantor of a security interest therein or under the terms of
which creation by such Borrower or Guarantor of a security interest therein or
under the terms of which the creation of a security interest therein shall
constitute or result (i) in the abandonment, invalidation or unenforceability of
any right, title or interest of any Borrower or Guarantor therein or (ii) in a
breach or termination pursuant to the terms of, or a default under, any such
permit, lease, license, contract, property rights or agreement (other than any
such permit, lease, license, contract or other agreement, the terms of which
prohibiting creation of a security interest or having the result described in
clauses (i) and (ii) above would be rendered ineffective pursuant to Sections
9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor
provision or provisions) of any relevant jurisdiction or any other applicable
law or principles of equity);

(b) any permit, lease, license, contract or other agreement held by any Borrower
or Guarantor to the extent that any law applicable thereto prohibits the
creation of a security interest therein (other than any such permit, lease,
license, contract or other agreement, to the extent that any law applicable
thereto prohibiting the creation of a security interest therein would be
rendered ineffective pursuant to Section 9-406, 9-408 or 9-409 of the Uniform
Commercial Code (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law or principles of equity;

(c) Equipment owned by any Borrower or Guarantor on the date hereof or hereafter
acquired that is subject to a purchase money Lien or security interest
(including Capital Leases) permitted under Section 7.02(a) hereof if the
contract or other agreement in which such Lien or security interest is granted
(or the related documentation) validly prohibits the creation of any other Lien
or security interest on such Equipment;

(d) Excluded Accounts;

(e) Excluded Equipment;

(f) any intent-to-use United States trademark applications for which an
amendment to allege use or statement of use has not been filed under 15

 

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U.S.C. §1051(c) or 15 U.S.C. §1051(d), respectively, or if filed, has not been
deemed in conformance with 15 U.S.C. §1051(a) or examined and accepted,
respectively, by the United States Patent and Trademark Office, provided that,
upon such filing and acceptance, such intent-to-use applications shall be
included in the definition of Collateral; and

(g) more than 65% of the voting Equity Interests of any Foreign Subsidiary.

provided, however, that in each case described in clauses (a), (b) and (c) of
this definition, such property shall constitute “Excluded Property” only to the
extent and for long as such permit, lease, license, contract or other agreement
or law applicable thereto validly prohibits the creation of a Lien or security
interest on such property in favor of Collateral Agent and, upon the termination
of such prohibition (howsoever occurring), such property shall cease to
constitute “Excluded Property.”

“Executive Order No. 13224” means the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

“Existing Credit Facility” means the Loan and Security Agreement, dated as of
December 14, 2007, by and among the Borrowers, the Guarantors, the lenders and
issuing bank from time to time party thereto, Wachovia Bank, National
Association, as administrative agent and collateral trustee and certain other
Persons party thereto.

“Expense Limitations” has the meaning specified for such term in Section 12.15.

“Facility” means each parcel of real property described on Schedule 1.01(F) and
any additional parcels of real property hereafter acquired by the Parent or any
of its Subsidiaries, including, without limitation, the land on which such
facility is located, all buildings and other improvements thereon, all fixtures
located at or used in connection with such facility, all whether now or
hereafter existing.

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code as of the
date of this Agreement and any current or future regulations or official
interpretations thereof.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, or (b) if such rate is not so
published on such next succeeding 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 it.

“Fee Letter” means the fee letter, dated as of the date hereof, among the
Borrowers and the Agents.

 

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“Final Maturity Date” means the earliest of (i) September 30, 2015, (ii) the
date on which the Loans shall become due and payable in full in accordance with
the terms of this Agreement, and (iii) the payment in full of all Obligations.

“Financial Statements” means (a) the audited consolidated balance sheet of the
Parent and its Subsidiaries for the Fiscal Year ended December 31, 2010, and the
related consolidated statement of operations, shareholders’ equity and cash
flows for the Fiscal Year then ended, and (b) the unaudited consolidated balance
sheet of the Parent and its Subsidiaries for the nine months ended September 30,
2011, and the related consolidated statement of operations and cash flows for
the nine months then ended.

“Fiscal Year” means the fiscal year of the Parent and its Subsidiaries ending on
December 31st of each year.

“Floating Rate Note Collateral Trustee” shall mean Wilmington Trust Company, as
trustee (as successor to UBS AG, Stanford Branch), and its successors and
assigns, including any Collateral Trustee with respect to Indebtedness permitted
under clause (p) of the definition of “Permitted Indebtedness”.

“Floating Rate Note Documents” shall mean the Floating Rate Notes, the Floating
Rate Note Indenture, the Floating Rate Note Guarantees and all other documents
executed and delivered with respect to the Floating Rate Notes or the Floating
Rate Note Indenture, including the Collateral Trust Agreement.

“Floating Rate Note Guarantees” shall mean the guarantees of certain Borrowers
and Guarantors pursuant to the Floating Rate Note Indenture, as amended from
time to time in accordance with the terms hereof.

“Floating Rate Note Indenture” shall mean the Indenture, dated as of January 21,
2010, by and among Parent, certain of its Subsidiaries and the Floating Rate
Note Trustee, as amended from time to time in accordance with the terms hereof.

“Floating Rate Note Trustee” shall mean Wilmington Trust Company, as trustee,
and its successors and assigns.

“Floating Rate Notes” shall mean Second Priority Senior Secured Floating Rate
Notes due 2016 issued by Parent pursuant to the Floating Rate Note Indenture in
an aggregate principal amount of $139,718,000, as amended from time to time in
accordance with the terms hereof.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“Funding Losses” has the meaning specified therefor in Section 2.11.

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States, applied on a consistent basis, provided that for the
purpose of Section 7.03 hereof and the definitions used therein, “GAAP” shall
mean generally accepted accounting principles in effect on the date hereof and
consistent with those used in the preparation of the

 

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Financial Statements, provided, further, that if there occurs after the date of
this Agreement any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 7.03 hereof, the Collateral Agent and the
Borrowers’ Representative shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.03 hereof shall be
calculated as if no such change in GAAP has occurred.

“Governing Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization, and the operating agreement; (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture agreement, declaration or other applicable agreement
or documentation evidencing or otherwise relating to its formation or
organization; and (d) with respect to any of the entities described above, any
other agreement, instrument, filing or notice with respect thereto filed in
connection with its formation or organization with the applicable Governmental
Authority in the jurisdiction of its formation or organization.

“Governmental Authority” means any nation or government, any Federal, state,
city, town, municipality, county, local or other political subdivision thereof
or thereto and any department, commission, board, bureau, instrumentality,
agency or other entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

“Guaranteed Obligations” has the meaning specified therefor in Section 11.01.

“Guarantor” means (a) the Parent and each Subsidiary of the Parent listed as a
“Guarantor” on the signature pages hereto, and (b) each other Person which
guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of the
Obligations.

“Guaranty” means (a) the guaranty of each Guarantor party hereto contained in
ARTICLE XI hereof and (b) each other guaranty, in form and substance reasonably
satisfactory to the Collateral Agent, made by any other Guarantor in favor of
the Collateral Agent for the benefit of the Agents and the Lenders guaranteeing
all or part of the Obligations.

“Hazardous Material” means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under all applicable
Environmental Laws, including, without limitation, any pollutant, contaminant,
waste, hazardous waste, toxic substance or dangerous good which is defined or
identified in any Environmental Law and which is present in the environment in
such quantity or state that it contravenes any Environmental Law; (b) petroleum
and its refined products; (c) polychlorinated biphenyls; (d) any substance
exhibiting a hazardous waste characteristic, including, without limitation,
corrosivity, ignitability, toxicity or reactivity as well as any radioactive or
explosive materials; and (e) any raw materials, building components (including,
without limitation, asbestos-containing materials) and manufactured products
containing hazardous substances listed or classified as such under Environmental
Laws.

 

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“Hedging Agreement” means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including, without limitation, any option
with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements), and any confirmation executed in connection with
any such agreement or arrangement.

“Highbridge” has the meaning specified therefor in the preamble hereto.

“Highest Lawful Rate” means, with respect to any Agent or any Lender, the
maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to such Agent or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.

“Holdout Lender” has the meaning specified therefor in Section 12.02(b).

“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money; (b) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables or other accounts payable incurred in the ordinary course of such
Person’s business and, unless such payable is being contested in good faith, not
outstanding for more than 90 days after the date such payable was created);
(c) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments or upon which interest payments are customarily made;
(d) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
may be limited to repossession or sale of such property; (e) all Capitalized
Lease Obligations of such Person; (f) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit,
acceptances and similar facilities; (g) all obligations and liabilities of such
Person (marked to market in accordance with customary market standards) under
Hedging Agreements; (h) all monetary obligations under any receivables
factoring, receivable sales or similar transactions and all monetary obligations
under any synthetic lease, tax ownership operating lease (TOOL), tax retention
operating lease (TROL), off-balance sheet financing or similar financing;
(i) all Contingent Obligations; (j) all Disqualified Equity Interests; and
(k) all obligations referred to in clauses (a) through (l) of this definition of
another Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon property
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any Person shall
include the Indebtedness of any partnership of or joint venture in which such
Person is a general partner or a joint venturer, except to the extent that the
terms of such Indebtedness expressly provide that the Person is not liable and
the Person has no liability therefor as a matter of law.

 

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“Indemnified Matters” has the meaning specified therefor in Section 12.15.

“Indemnitees” has the meaning specified therefor in Section 12.15.

“Insignificant Subsidiary” means any Subsidiary of the Parent that has total
assets of not more than $1,000,000 and that is designated by the Borrowers’
Representative as an “Insignificant Subsidiary”; provided that the total assets
of all Subsidiaries that are so designated may not in the aggregate at any time
exceed $3,000,000.”Insolvency Proceeding” means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

“Intellectual Property” means, as to each Borrower and Guarantor, such
Borrower’s and Guarantor’s now owned and hereafter arising or acquired rights,
title and interest in the following: patents, patent rights, patent
applications, copyrights, works which are the subject matter of copyrights,
copyright applications, copyright registrations, trademarks, servicemarks, trade
names, trade styles, trademark and service mark applications, and licenses and
rights to use any of the foregoing and all applications, registrations and
recordings relating to any of the foregoing as may be filed in the United States
Copyright Office, the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof, any political
subdivision thereof or in any other country or jurisdiction, together with all
rights and privileges arising under applicable law with respect to any
Borrower’s or Guarantor’s use of any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing; all rights to sue for past, present and future infringement of any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill of the business symbolized by or
associated with any trademark or servicemark, or the license of any trademark or
servicemark); proprietary and confidential customer and other lists in whatever
form maintained; trade secret rights, copyright rights, rights in works of
authorship; software and contract rights relating to computer software programs,
in whatever form created or maintained; all rights corresponding thereto
throughout the world; and any and all products and proceeds of the foregoing,
including without limitation, all damages or payments or claims by any Borrower
or Guarantor against third parties for past or future infringement.

“Intercompany Subordination Agreement” means an Intercompany Subordination
Agreement made by the Loan Parties in favor of the Collateral Agent for the
benefit of the Agents and the Lenders, in form and substance reasonably
satisfactory to the Collateral Agent.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the automatic
continuation of a LIBOR Rate Loan) and ending three (3) months thereafter;
provided, however, that (a) if any Interest Period would end on a day that is
not a Business Day, such Interest Period shall be extended (subject to clauses
(c)-(d) below) to the next succeeding Business Day, (b) interest shall accrue at
the applicable rate based upon the LIBOR Rate from and including the first day
of each Interest Period to, but excluding, the day on which any Interest Period
expires, (c) any Interest

 

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Period that would end on a day that is not a Business Day shall be extended to
the next succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, and (d) with respect to an Interest Period that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is three (3) months after the date on which the Interest Period
began, as applicable.

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended (or
any successor statute thereto) and the regulations thereunder.

“Inventory” means, with respect to any Person, all goods and merchandise of such
Person, including, without limitation, all raw materials, work-in-process,
packaging, supplies, materials and finished goods of every nature used or usable
in connection with the shipping, storing, advertising or sale of such goods and
merchandise, whether now owned or hereafter acquired, and all such other
property the sale or other disposition of which would give rise to an Account
Receivable or cash.

“Joinder Agreement” means a Joinder Agreement, substantially in the form of
Exhibit A, duly executed by a Subsidiary of a Loan Party made a party hereto
pursuant to Section 7.01(b).

“L/C Facility” means the Facility Agreement, dated the date hereof, between the
Parent and SunTrust Bank.

“Lease” means any lease of real property to which any Loan Party or any of its
Subsidiaries is a party as lessor or lessee.

“Lender” has the meaning specified therefor in the preamble hereto.

“LIBOR” means, with respect to each day during each Interest Period pertaining
to a LIBOR Rate Loan, the rate of interest published in The Wall Street Journal,
Eastern Edition, two Business Days prior to such Interest Period as the “London
Interbank Offered Rate” applicable to such Interest Period. In the event that
The Wall Street Journal, Eastern Edition is not published or such rate does not
appear in The Wall Street Journal, Eastern Edition, LIBOR shall be the rate
determined by the Administrative Agent to be the rate at which deposits in
Dollars are offered to the Reference Bank, or if unavailable, to major banks in
the London interbank market, at approximately 11:00 a.m. (London time) two
Business Days prior to the beginning of such Interest Period, in an amount
approximately equal to the principal amount of the LIBOR Rate Loan to which such
Interest Period is to apply and for a period of 3 months, which determination
shall be conclusive absent manifest error.

“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the
greater of (a) the rate per annum determined by the Administrative Agent
(rounded upwards if necessary, to the next 1/100%) by dividing (i) LIBOR for
such Interest Period by (ii) 100% minus the Reserve Percentage and (b) 2.0%. The
LIBOR Rate shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.

 

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“LIBOR Rate Loan” means each portion of a Loan that bears interest at a rate
determined by reference to the LIBOR Rate.

“License Agreements” means the agreements and other arrangements of each
Borrower and Guarantor pursuant to which such Borrower or Guarantor has a
license or other right to use any trademarks, logos, designs, representations or
other Intellectual Property owned by another Person.

“Lien” means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
security interest, charge or other encumbrance or security or preferential
arrangement of any nature, including, without limitation, the existence under
the Uniform Commercial Code or any Requirement of Law of, any jurisdiction, a
financing statement (or the equivalent thereof) that names a Loan Party or any
of its Subsidiaries as debtor (other than financing statements that were filed
without the authorization of the applicable Loan Party or Subsidiary and for
which no Loan Party or any Subsidiary has granted any security interest to the
secured party named therein); the signing by any Loan Party or any Subsidiary of
any security agreement authorizing any secured party thereunder to file a
financing statement (or the equivalent thereof); the sale by any Loan Party or
any Subsidiary of any of its property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable) with recourse to a Loan Party or any of
its Subsidiaries intended as, or having the effect of, security; any conditional
sale or title retention arrangement; any Capitalized Lease; and any assignment,
deposit arrangement or financing lease intended as, or having the effect of,
security, and including, for the avoidance of doubt, any Environmental Lien.

“Loan” means the term loans made by the Lenders to the Borrowers on the
Effective Date pursuant to Section 2.01.

“Loan Account” means an account maintained hereunder by the Administrative Agent
on its books of account at the Payment Office, and with respect to the
Borrowers, in which the Borrowers will be charged with all Loans made to, and
all other Obligations incurred by, the Borrowers.

“Loan Document” means this Agreement, any Cash Management Agreement, the
Disbursement Letter, the Fee Letter, any Guaranty, any Joinder Agreement, any
Mortgage, the Perfection Certificate, the Security Agreement, the Contribution
Agreement, the Intercompany Subordination Agreement, the Collateral Trust
Agreement, the Collateral Trust Agreement Documents, and any other agreement,
instrument, certificate, report and other document executed and delivered
pursuant hereto or thereto or otherwise evidencing or securing any Loan or any
other Obligation.

“Loan Party” means any Borrower and any Guarantor.

“Make-Whole Amount” means, as of any date of determination, with respect to any
payment of the Loans (other than (x) any payment made pursuant
Section 2.05(c)(ii) and (y) any payment of up to $5,000,000 per year and
$10,000,000 in the aggregate during the term of this Agreement made pursuant to
Section 2.05(c)(i)) an amount equal to the “present value” as of the date of
such payment of all interest payments which would have accrued, from the date of

 

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such payment through the third anniversary of the Effective Date, on an amount
equal to such Loans being paid, such interest to be calculated on such amount at
the rate of interest in effect on such payment date. For purposes of this
definition, “present value” shall be computed using a discount rate, applied
quarterly, equal to the Treasury Rate as of such prepayment date plus 50 basis
points.

“Material Adverse Effect” means a material adverse effect on any of (a) the
operations, business, assets, properties, liabilities or financial condition of
the Loan Parties taken as a whole, (b) the ability of the Loan Parties to
perform their payment obligations or other material obligations under any Loan
Document to which it is a party, (c) the legality, validity or enforceability of
any of this Agreement, the Security Agreement or the Collateral Trust Agreement
or, taken as a whole, the other Loan Documents, or (d) the material rights and
remedies of any Agent or any Lender under any Loan Document.

“Material Contract” means (a) any contract or other agreement with the top
fifteen (15) suppliers (each, a “Top Supplier”) to the Parent and its
Subsidiaries (taken as a whole), determined by reference to the aggregate
payments made to such suppliers in comparison to all other suppliers of the
Parent and its Subsidiaries during the most recent Fiscal Year of the Parent and
its Subsidiaries; provided that all contracts, agreements and purchase orders,
taken as a whole, with respect to a single Top Supplier shall constitute a
single Material Contract, (b) the L/C Facility, (c) the Floating Rate Note
Documents, and (d) any other contract or other agreement (other than the Loan
Documents) to which any Borrower or Guarantor is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto would have
a Material Adverse Effect.

“Material Lease” means any lease where the annual rental payments thereunder are
in excess of $250,000 per annum.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means a mortgage, deed of trust or deed to secure debt, substantially
in the form attached hereto as Exhibit D or Exhibit E hereto, with such changes
as shall be reasonably requested by local counsel for the Loan Parties and which
are reasonably satisfactory to the Collateral Agent, made by a Loan Party in
favor of the Collateral Agent for the benefit of the Agents and the Lenders,
securing the Obligations and delivered to the Collateral Agent.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which any Loan Party or any of its ERISA
Affiliates has contributed to, or has been obligated to contribute, at any time
during the preceding six (6) years.

“Net Amount of Accounts Receivable” means the net realizable value of Accounts
Receivable of the Loan Parties at such time, calculated in accordance with GAAP.

“Net Cash Proceeds” means, (a) with respect to any Disposition by any Person or
any of its Subsidiaries or Casualty Event, the aggregate amount of cash actually
received from time to time (whether as initial consideration or cash received by
way of deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) by or on behalf of such Person or
such Subsidiary, in connection therewith after

 

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deducting therefrom only (i) the amount of all required payments owing in
respect of any Indebtedness secured by any Permitted Lien on the applicable
asset or that is otherwise subject to mandatory prepayments as a result of such
Disposition or Casualty Event (other than Indebtedness under the Loan Documents
or the Floating Rate Note Documents), (ii) reasonable fees and expenses related
thereto incurred by such Person or such Subsidiary in connection therewith,
(iii) taxes paid, payable or reasonably estimated to be payable solely as a
result of the transaction or event giving rise to the receipt of such proceeds,
(iv) the amount of any reasonable reserve established in accordance with GAAP
against any obligation to make earn out or other contingency payments (including
purchase price adjustments, non-competition and consulting agreements, or other
indemnity obligations) or any other liabilities (other than any taxes deducted
pursuant to clause (iii) above) (x) related to any of the applicable assets and
(y) retained and set aside by such Person or such Subsidiary, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations (however, the amount of any subsequent reduction of such reserve
(other than in connection with a payment in respect of any such liability) shall
be deemed to be receipt of Net Cash Proceeds of such Disposition or Casualty
Event occurring on the date of such reduction), and (v) with respect to any
Casualty Event, the amount that such Person or such Subsidiary is required to
use to replace, repair or restore applicable assets pursuant to any Contractual
Obligation with any landlord or lessor, and (b) with respect to the issuance or
incurrence of any Indebtedness by any Person or any of its Subsidiaries, the
aggregate amount of cash actually received by or on behalf of such Person or
such Subsidiary in connection therewith, after deducting therefrom only
(i) reasonable fees and expenses and underwriting discounts and commissions
related thereto incurred by such Person or such Subsidiary in connection
therewith, (ii) transfer taxes paid or payable by such Person or such Subsidiary
in connection therewith and (iii) net income taxes to be paid in connection
therewith; in each case of clause (a) and (b) to the extent, but only to the
extent, that the amounts so deducted are (x) actually paid (or in the case of
any taxes, payable or reasonably estimated to be payable) to a Person that,
except in the case of reasonable out-of-pocket fees and expenses, is not an
Affiliate of such Person or any of its Subsidiaries and (y) properly
attributable to such transaction or to the asset that is the subject thereof.

“New Lending Office” has the meaning specified therefor in Section 2.08(d).

“Non-U.S. Lender” has the meaning specified therefor in Section 2.08(d).

“Notice of Borrowing” has the meaning specified therefor in Section 2.02(a).

“Obligations” means all present and future indebtedness, obligations, and
liabilities of each Loan Party to the Agents and the Lenders arising under this
Agreement or any other Loan Document, whether or not the right of payment in
respect of such claim is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable, secured, unsecured,
and whether or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 9.01. Without limiting the generality of the
foregoing, the Obligations of each Loan Party under the Loan Documents include
(a) the obligation (irrespective of whether a claim therefor is allowed in an
Insolvency Proceeding) to pay principal, interest, charges, expenses, fees,
attorneys’ fees and disbursements, indemnities and other amounts payable by such
Person under the Loan Documents and (b) the obligation of such Person to
reimburse any amount in respect of any of the foregoing that any Agent or any
Lender (in its sole discretion) may elect to pay or advance on behalf of such
Person in accordance with the terms of this Agreement.

 

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“OFAC” has the meaning specified therefore in the definition of the term
“Anti-Terrorism Laws.”

“OFAC Sanctions Programs” means the laws, regulations and Executive Orders
administered by OFAC, including but not limited to, Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, as it has been or shall
thereafter be renewed, extended, amended, or replaced, and the list of Specially
Designated Nationals and Blocked Persons administered by OFAC, as such list may
be amended from time to time.

“Operating Lease Obligations” means all obligations for the payment of rent for
any real or personal property under leases or agreements to lease, other than
Capitalized Lease Obligations.

“Other Taxes” has the meaning specified therefor in Section 2.08(b).

“Parent” has the meaning specified therefor in the preamble hereto.

“Participant Register” has the meaning specified therefor in Section 12.07(g).

“Payment Office” means the Administrative Agent’s office located at 40 West 57th
Street, 33rd Floor, New York, NY 10019, or at such other office or offices of
the Administrative Agent as may be designated in writing from time to time by
the Administrative Agent to the Collateral Agent and the Borrowers’
Representative.

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

“Perfection Certificate” means the Perfection Certificate, dated as of the
Effective Date, and as updated pursuant to Section 7.01(a)(iv) hereof, made by
the Loan Parties in favor of the Collateral Agent.

“Permitted Acquisition” means the purchase (including by way of merger) by a
Loan Party of all or substantially all of the assets of any Person (or any
division thereof) or all of the Equity Interests of any Person (such acquisition
of assets or Equity Interests, an “Acquired Business”); provided that (i) no
Event of Default shall exist or have occurred and be continuing as of the date
of the acquisition and after giving effect thereto, (ii) such Acquired Business
shall be in a line of business permitted under Section 7.02(d), (iii) each Loan
Party and each newly created or acquired Subsidiary formed in connection with a
Permitted Acquisition shall comply with the requirements of Section 7.01(b);
(iv) the aggregate consideration paid after the Effective Date in connection
with Permitted Acquisitions (including all earn-outs and other deferred
payments, but excluding payments made with Qualified Equity Interests of the
Parent) shall not exceed the sum of $10,000,000, plus the amount of capital
contributions to the Parent, or proceeds of issuances of Qualified Equity
Interests by the Parent to Persons (other than the Loan Parties or any of their
Subsidiaries) made for such purpose; and (v) at the time of, and after giving
effect to, the acquisition of an Acquired Business, the Loan Parties shall be in
pro forma compliance with Section 7.03 as of the last day of the prior month for
which financial statements have been delivered pursuant to Section 7.01(a)(i) or
(iii).

 

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“Permitted Dispositions” shall mean each of the following:

(a) sales of Inventory in the ordinary course of business,

(b) the sale or other disposition of machinery and equipment that is worn-out,
obsolete or no longer used or useful in the conduct of the business of the
Parent and its Subsidiaries; provided, that, (i) the aggregate net book value of
all such assets sold or disposed of pursuant to this clause (b), together with
the aggregate consideration received in respect of all sales or other
dispositions permitted pursuant to clause (h) of the definition of “Permitted
Disposition”, plus the aggregate net book value of all assets disposed of
pursuant to clause (m) of the definition of “Permitted Disposition” shall not
exceed $45,000,000 in the aggregate during the term of this Agreement, (ii) the
consideration paid shall be in an amount not less than the fair market value of
the property disposed of, (iii) other than with respect to vehicle trade-ins,
not less than 80% percent of the consideration to be received by Borrowers and
Guarantors shall be paid or payable in cash and shall be paid contemporaneously
with consummation of the transaction, (iv) all of the Net Cash Proceeds of the
sale or disposition shall promptly be paid to Administrative Agent for
application to the Obligations in accordance with the terms hereof to the extent
required by Section 2.05(c)(i), and (v) as of the date of any such sale or other
disposition, and in each case after giving effect thereto, no Event of Default
shall exist or have occurred and be continuing;

(c) the sale or other disposition of property to a Borrower or Guarantor,
provided, that, the security interest and Lien of Collateral Agent on such
property shall continue in all respects and shall not be deemed released or
terminated as a result of such sale or other disposition;

(d) so long as no Event of Default has occurred and is continuing, the sale of
Accounts Receivable in connection with the collection or compromise thereof in
the ordinary course of business of Parent and its Subsidiaries;

(e) the grant by Parent and its Subsidiaries after the date hereof of a license
of any Intellectual Property consisting of trademarks owned by Parent and its
Subsidiaries, provided, that, such license is on a non-exclusive basis and the
rights of the licensee shall be subject to the rights of Collateral Agent, and
shall not adversely affect, limit or restrict the rights of Collateral Agent to
use any Intellectual Property of Parent and its Subsidiaries to sell or
otherwise dispose of any Inventory or other Collateral or otherwise in any
manner limit or interfere in any respect with the use of any such trademarks by
Collateral Agent in connection with the exercise of its rights or remedies
hereunder or under the other Loan Documents, and as of the date of the grant of
any such license, and after giving effect thereto, no Event of Default shall
exist or have occurred and be continuing;

 

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(f) the issuance and sale by Parent and its Subsidiaries of Equity Interests
after the date hereof; provided, that no Change of Control or other Event of
Default results therefrom.

(g) the abandonment of Intellectual Property that is, in the reasonable judgment
of Parent, no longer valuable in any material respect or economically
practicable to maintain or useful in the conduct of the business of Borrowers
and Guarantors, taken as a whole;

(h) sales or other dispositions of assets of Parent and its Subsidiaries not
otherwise subject to the provisions set forth above, provided, that, as to any
such sale or other disposition, each of the following conditions is satisfied:

(i) the aggregate consideration received in respect of all sales or other
dispositions permitted pursuant to this clause (h), plus the aggregate net book
value of all assets disposed of pursuant to clauses (b) and (m) of the
definition of “Permitted Disposition” shall not exceed $45,000,000 in the
aggregate during the term of this Agreement;

(ii) not less than 80% percent of the consideration to be received by Borrowers
and Guarantors shall be paid or payable in cash and shall be paid
contemporaneously with consummation of the transaction;

(iii) the consideration paid or payable shall be in an amount not less than the
fair market value of the property disposed of;

(iv) the Net Cash Proceeds from any such sale or other disposition, shall be
applied to the Obligations to the extent required by Section 2.05(c)(i);

(v) if such transaction is a Sale and Leaseback Transaction, such transaction is
not prohibited by the terms of Section 7.02(v) and the aggregate consideration
received in respect of all sales in connection with Sale and Leaseback
Transactions shall not exceed $20,000,000 in the aggregate during the term of
this Agreement, and

(vi) as of the date of any such sale or other disposition, and in each case
after giving effect thereto, no Event of Default shall exist or have occurred
and be continuing;

(i) leases or subleases permitted under clause (m) of the definition of
“Permitted Liens”;

(j) the issuance of Qualified Equity Interests by Parent consisting of common
stock pursuant to an employee stock option or grant or similar equity plan or
401(k) plans of such Parent for the benefit of its employees, directors and
consultants; provided, that, in no event shall Parent be required to issue, or
shall Parent issue, Equity Interests pursuant to such stock plans or 401(k)
plans which would result in a Change of Control or other Event of Default;

(k) following the acquisition of Accounts Receivable acquired from a Person
pursuant to a Permitted Investment or Permitted Acquisition, the sale or
transfer of such Accounts Receivable by Parent and its Subsidiaries back to such
Person; provided, that, (1) the price for such Accounts Receivable paid to
Parent or its Subsidiaries shall be no less than the fair market value of such
Accounts, and (2) the consideration to be received by Parent and its
Subsidiaries shall be paid in cash prior to or contemporaneously with the
consummation of such sale or transfer;

 

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(l) the sale or other disposition of Cash Equivalents for fair market value; and

(m) a disposition of assets in consideration for assets of another Person;
provided, that (i) the aggregate net book value of all such assets sold or
disposed of pursuant to this clause (m), together with the aggregate
consideration received in respect of all sales or other dispositions permitted
pursuant to clause (h) of the definition of “Permitted Disposition”, plus the
aggregate net book value of all assets disposed of pursuant to clause (b) of the
definition of “Permitted Disposition” shall not exceed $45,000,000 in the
aggregate during the term of this Agreement; (ii) the assets disposed of shall
have a fair market value substantially equivalent to (or less than) the fair
market value of the assets acquired; and (iii) as of the date of any such sale
or other disposition, and in each case after giving effect thereto, no Event of
Default shall exist or have occurred and be continuing.

“Permitted Holder” means JLL Partners Fund V, L.P., JLL Building Holdings, LLC
and Warburg Pincus Private Equity IX, L.P. and their respective Controlled
Investment Affiliates.

“Permitted Indebtedness” means:

(a) any Indebtedness owing to any Agent or any Lender under this Agreement and
the other Loan Documents;

(b) any other Indebtedness listed on Schedule 7.02(b), and the extension of
maturity, refinancing or modification of the terms thereof; provided, however,
that (i) such extension, refinancing or modification is pursuant to terms that
are not more burdensome or restrictive in any material respect with respect to
any Borrower or Guarantor than the Indebtedness being extended, refinanced or
modified, (ii) such extension, refinancing or modification shall be at rates and
with fees or other charges that are commercially reasonable; provided, that in
no event shall the aggregate amount of fees, interest or other amounts payable
in cash in respect of such extended, refinanced or modified Indebtedness be
greater than the aggregate amount of fees, interest or other amounts payable in
cash in respect of the Indebtedness so extended, refinanced or modified, and
(iii) after giving effect to such extension, refinancing or modification, the
amount of such Indebtedness is not greater than the amount of Indebtedness
outstanding immediately prior to such extension, refinancing or modification
(plus the amount of any accrued interest, premium, penalty and reasonable fees
and expenses incurred in connection therewith);

(c) Indebtedness evidenced by Capitalized Lease Obligations, which Indebtedness,
when aggregated with the principal amount of all Indebtedness incurred under
this clause (c) and clause (d) of this definition, does not exceed $7,500,000 at
any time outstanding;

(d) Indebtedness secured by the Liens described in clause (e) of the definition
of “Permitted Lien”;

(e) Indebtedness permitted under Section 7.02(e);

 

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(f) Subordinated Indebtedness;

(g) Indebtedness in respect of letters of credit, in an aggregate face amount
not to exceed $25,000,000; provided, that if a letter of credit is fully
backstopped by another letter of credit, the sum of the face amount of the
backstopped letter of credit and the face amount of the corresponding
backstopping letter of credit shall be deemed to be equal to the face amount of
the backstopping letter of credit;

(h) Indebtedness entered into in the ordinary course of business pursuant to
Hedging Agreements; provided, that, such arrangements are not for speculative
purposes;

(i) Indebtedness under the Floating Rate Note Documents; provided, that, (i) the
aggregate outstanding principal amount of such Indebtedness shall not exceed
$139,718,000, and (ii) such Indebtedness is, and at all times shall be, subject
to the terms and conditions of the Collateral Trust Agreement;

(j) Indebtedness arising pursuant to loans, the proceeds of which are used
exclusively for the payment of insurance premiums payable on insurance policies
maintained by Borrowers and Guarantors; provided, that, (i) in no event shall
the total aggregate amount of such Indebtedness outstanding at any time exceed
$5,000,000; and (ii) upon Collateral Agent’s request, Collateral Agent shall
have received true, correct and complete copies of all material agreements,
documents and instruments evidencing or otherwise related to such Indebtedness;

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

(l) Indebtedness 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 (i) such Indebtedness is extinguished within
two (2) Business Days of incurrence and (ii) the aggregate amount of such
Indebtedness outstanding at any time shall not exceed $2,000,000;

(m) Indebtedness in respect of obligations issued as payment-in-kind interest
payments in respect of Indebtedness otherwise constituting Permitted
Indebtedness;

(n) accretion of the principal amount of obligations evidenced by bonds,
debentures, notes or similar instruments in respect of Indebtedness otherwise
constituting Permitted Indebtedness issued at any original issued discount;

(o) contingent Indebtedness, obligations or liabilities arising pursuant to
guarantees in respect of (i) Permitted Indebtedness, or, (ii) to the extent not
constituting Indebtedness, obligations of any Loan Party not prohibited under
the terms of this Agreement;

(p) Indebtedness arising after the date hereof issued in exchange for, or the
proceeds of which are used to extend, refinance, replace or substitute for
Indebtedness permitted under clause (i), (p) or (t) hereof (the “Refinancing
Indebtedness”); provided, that, as to any such Refinancing Indebtedness, each of
the following conditions is satisfied: (i) Collateral Agent shall have received
not less than ten (10) Business Days’ prior written notice of the intention to
incur

 

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such Indebtedness, which notice shall set forth in reasonable detail
satisfactory to Collateral Agent, the amount of such Indebtedness, the schedule
of repayments and maturity date with respect thereto and such other information
with respect thereto as Collateral Agent may reasonably request, (ii) promptly
upon Collateral Agent’s request, Collateral Agent shall have received true,
correct and complete copies of all material agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, as duly
authorized, executed and delivered by the parties thereto, (iii) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity and a final maturity
equal to or greater than the Weighted Average Life to Maturity and the final
maturity, respectively, of the Indebtedness being extended, refinanced,
replaced, or substituted for, (iv) the Refinancing Indebtedness shall rank in
right of payment no more senior than, and be at least subordinated (if
subordinated) to, the Obligations as the Indebtedness being extended,
refinanced, replaced or substituted for, (v) the Refinancing Indebtedness shall
not include terms and conditions with respect to any Borrower or Guarantor which
are more burdensome or restrictive in any material respect than those contained
in this Agreement, taken as a whole, (vi) such Indebtedness incurred by any
Borrower or Guarantor shall be at rates and with fees or other charges that are
commercially reasonable; provided, that in no event shall the aggregate amount
of fees, interest or other amounts payable in cash in respect of such
Refinancing Indebtedness (excluding the amount of reasonable and customary
underwriting or closing fees) be greater than the aggregate amount of fees,
interest or other amounts payable in cash in respect of the Indebtedness
refinanced, (vii) as of the date of incurring such Indebtedness and after giving
effect thereto, no Event of Default shall exist or have occurred and be
continuing, (viii) the amount of such Refinancing Indebtedness shall not exceed
the principal amount of the Indebtedness so extended, refinanced, replaced or
substituted for (plus the amount of any accrued interest, premium, penalty and
reasonable refinancing fees and expenses and reasonable and customary
underwriting or closing fees) incurred in connection therewith outstanding on
the date of such event), (ix) the Refinancing Indebtedness shall be secured by
substantially the same assets, provided, that, such security interests (if any)
with respect to the Refinancing Indebtedness shall have a priority no more
senior than, and be at least as subordinated, if subordinated (on terms and
conditions substantially similar to, and in any event, no less favorable to the
Lenders, taken as a whole, than, the subordination provisions applicable to the
Indebtedness so extended, refinanced, replaced or substituted for or as is
otherwise acceptable to Collateral Agent) as the security interest with respect
to the Indebtedness so extended, refinanced, replaced or substituted for, and
(x) Borrowers and Guarantors may only make payments of principal, interest and
fees, if any, in respect of such Indebtedness to the extent such payments would
have been permitted hereunder in respect of the Indebtedness so extended,
refinanced, replaced or substituted for;

(q) agreements providing for indemnification, adjustment of purchase price or
similar obligations in respect of Permitted Dispositions;

(r) Indebtedness representing deferred compensation to employees of any Loan
Party and its Subsidiaries permitted by the terms of this Agreement and incurred
in the ordinary course of business and substantially consistent with past
practices;

(s) Indebtedness of the Loan Parties arising pursuant to (i) performance, bid,
or surety bonds; provided, that the aggregate amount of performance, bid and
surety bonds outstanding at any time does not exceed $25,000,000, and
(ii) appeal bonds; provided, that the aggregate amount of appeal bonds
outstanding at any time does not exceed $15,000,000;

 

 

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(t) Indebtedness of a Person existing at the time such Person is acquired
pursuant to a Permitted Acquisition, provided, that, as to any such
Indebtedness, each of the following conditions is satisfied: (1) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition, (2) the aggregate outstanding
principal amount of such Indebtedness shall not exceed $2,500,000, and (3) as of
the date of incurring such Indebtedness and after giving effect thereto, no
Event of Default shall exist or have occurred and be continuing; and

(u) additional Indebtedness of the Loan Parties in an aggregate principal amount
not to exceed $10,000,000 at any one time outstanding.

“Permitted Investments” shall mean each of the following:

(a) Accounts Receivables owing to Parent or any Subsidiary if created or
acquired in the ordinary course of business;

(b) the endorsement of instruments for collection or deposit in the ordinary
course of business;

(c) investments in cash or Cash Equivalents;

(d) deposits for (i) leases, utilities and similar matters in the ordinary
course of business, and (ii) bonding arrangements to the extent constituting
Permitted Indebtedness;

(e) obligations under Hedging Agreements to the extent constituting Permitted
Indebtedness;

(f) loans and advances by Parent and its Subsidiaries to directors, officers and
employees of Parent and its Subsidiaries: (i) for bona fide business purposes
and (ii) to purchase Equity Interests of Parent; provided, that the aggregate
amount of all such loans and advances made in cash shall not exceed $750,000 at
any time outstanding;

(g) stock or obligations issued to Parent and its Subsidiaries by any Person (or
the representative of such Person) in respect of Indebtedness or other
liabilities of such Person owing to Parent and its Subsidiaries in connection
with the insolvency, bankruptcy, receivership or reorganization of such Person
or a composition or readjustment of the debts of such Person;

(h) obligations of Account Debtors to Parent and its Subsidiaries arising from
Accounts Receivable which are past due evidenced by a promissory note made by
such Account Debtor payable to Parent or one of its Subsidiaries;

(i) investments in Persons formed at the direction of a Borrower or Guarantor
pursuant to the reasonable requirements of the business of such Borrower or
Guarantor solely for purposes of satisfying licensing requirements of a
Governmental Authority; provided, that, (i) such investments shall be limited to
the ownership of Equity Interests in such Persons and (ii) the aggregate amount
of all such investments shall not exceed $100,000 outstanding at any time;

 

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(j) the existing investments of Parent and its Subsidiaries as of the date
hereof, as set forth on Schedule 6.01(e) hereof, but not any increase under this
clause (j) in the amount thereof as set forth in such Schedule or any other
modification of the terms thereof;

(k) investments by a Borrower or Guarantor in a Borrower or Guarantor, or by a
Subsidiary that is not a Guarantor in any other Subsidiary that is not a
Guarantor, after the date hereof;

(l) investments held by Parent or any of its Subsidiaries as a result of
non-cash consideration received in connection with any Permitted Disposition;
and

(m) in addition to investments otherwise expressly permitted by this definition,
investments by the Parent or any of its Subsidiaries in an aggregate amount, not
exceeding $10,000,000 at any time outstanding; provided, that this clause
(m) may not be used to invest in Equity Interests of the Parent or to purchase
(by way of merger or otherwise) all or substantially all of the assets of any
Person (or any division thereof) or all of the Equity Interests of any Person.

“Permitted Liens” means:

(a) Liens securing the Obligations;

(b) Liens for taxes, assessments and governmental charges or levies the payment
of which is not due and owing or that are being contested in good faith by
appropriate proceedings diligently pursued, which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof; provided that
appropriate reserves are maintained on the books of the relevant Loan Party in
conformity with GAAP;

(c) Liens imposed by law (other than Liens arising under ERISA or securing the
payment of taxes), such as carriers’, warehousemen’s, mechanics’, materialmen’s,
landlords’, workmen’s suppliers’, repairmen’s and other similar Liens arising in
the ordinary course of business to the extent: (i) such Liens do not in the
aggregate materially detract from the value of the property of Borrowers and
Guarantors taken as a whole and do not materially impair the use thereof in the
operation of Borrowers and Guarantors taken as a whole, and (ii) such Liens
secure liabilities which are not for borrowed money and are (A) not overdue,
(B) are fully insured and being defended at the sole cost and expense and at the
sole risk of the insurer or (C) being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower, Guarantor or such
Subsidiary, in each case prior to the commencement of foreclosure or other
similar proceedings, which proceedings (or orders entered in connection with
such proceeding) have the effect of preventing the forfeiture or sale of the
property subject to any such Lien and with respect to which adequate reserves
have been set aside on its books in accordance with GAAP;

(d) Liens described on Schedule 7.02(a); provided that (i) no such Lien shall at
any time be extended to cover any additional property not subject thereto on the
Effective Date and (ii) the principal amount of the Indebtedness secured by such
Liens shall not be extended, renewed, refunded or refinanced other than in
accordance with clause (b) of the definition of Permitted Indebtedness;

 

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(e)(i) purchase money Liens on equipment or real property acquired or held by
any Loan Party or any of its Subsidiaries in the ordinary course of its business
to secure the purchase price of such equipment or real property or Indebtedness
incurred solely for the purpose of financing the acquisition of such equipment
or real property or (ii) Liens existing on such equipment or real property at
the time of its acquisition; provided, however, that (A) no such Lien shall
extend to or cover any other property of any Loan Party or any of its
Subsidiaries and (B) the aggregate principal amount of Indebtedness secured by
any or all such Liens, together with the Indebtedness described in clause (c) of
the definition of Permitted Indebtedness, shall not exceed at any one time
outstanding $7,500,000;

(f) deposits and pledges of cash and Cash Equivalents securing (i) obligations
incurred in respect of workers’ compensation, unemployment insurance or other
forms of governmental insurance or benefits, (ii) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and statutory
obligations, (iii) obligations on surety, stay, customs or appeal bonds, and
(iv) liabilities for reimbursement to insurance carriers of deductibles payable
to insurance carriers, but, in each case, only to the extent such deposits or
pledges are made or otherwise arise in the ordinary course of business and
secure obligations not past due, and with respect to clause (iii), only to the
extent the amount of deposits or pledges do not secure obligations in excess of
the amounts permitted by clause (s) of the definition of Permitted Indebtedness;

(g)(i) easements, rights-of-way, encroachments, covenants, conditions,
restrictions, licenses, reservations and other charges, irregularities,
deficiencies or encumbrances of title of any kind with respect to real property
that (A) do not secure obligations for the payment of money and do not
materially impair the value of such real property or its use by the applicable
Loan Party or its Subsidiary that has title to such real property in the normal
conduct of such Person’s business, or (B) are set forth on the Title Insurance
Policies or title searches confirming ownership of the Specified Properties
delivered by Borrower and accepted by the Collateral Agent in accordance with
Section 7.01(u) hereof; or

(ii) zoning, building, environmental and other land-use regulations imposed by
Governmental Authorities having jurisdiction over the applicable real property;

(h) Liens on Real Property or equipment securing Indebtedness permitted by
subsection (c) of the definition of Permitted Indebtedness;

(i) Liens arising from (i) operating leases and the precautionary UCC financing
statement filings in respect thereof and (ii) equipment or other materials which
are not owned by any Borrower, Guarantor or Subsidiary located on the premises
of such Borrower, Guarantor or Subsidiary (but not in connection with, or as
part of, the financing thereof) from time to time in the ordinary course of
business and consistent with current practices of such Borrower or Guarantor and
the precautionary UCC financing statement filings in respect thereof;

 

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(j) security interests in the Collateral in favor of Floating Rate Note
Collateral Trustee to secure the Indebtedness permitted under clauses (i) and
(p) of the definition of Permitted Indebtedness; provided, that, the security
interests in the Collateral in favor of Floating Rate Note Collateral Trustee
(or otherwise securing such Indebtedness or Refinancing Indebtedness) are and at
all times shall be subject and subordinate to the security interests therein of
Collateral Agent pursuant to the terms of the Collateral Trust Agreement;

(k) statutory or common law Liens or rights of setoff of depository banks and
other financial institutions with respect to funds of any Borrower, Guarantor or
Subsidiary at such banks to secure fees and charges in connection with returned
items or the standard fees and charges of such banks in connection with the
deposit accounts and securities accounts maintained by such Borrower, Guarantor
or Subsidiary at such banks (but not any other Indebtedness or obligations);

(l) judgments and other similar Liens arising in connection with court
proceedings that do not constitute an Event of Default; provided that (i) such
Liens are being contested in good faith and by appropriate proceedings
diligently pursued, (ii) adequate reserves have been made therefor in accordance
with GAAP, and (iii) a stay of enforcement of any such Liens is in effect;

(m) leases or subleases of Real Property granted by any Borrower or Guarantor or
Subsidiary in the ordinary course of business and consistent with past practice
to any Person so long as, other than in the case of the leases and subleases
specified on Schedule 1.01(P), any such leases or subleases are subordinate in
all respects to the security interests and Liens granted to Collateral Agent and
do not interfere in any material respect with the ordinary conduct of the
business of such Borrower or Guarantor or materially impair the value or
marketability of the Real Property subject thereto;

(n) licenses of Intellectual Property permitted under clause (e) of the
definition of Permitted Disposition;

(o) Liens to secure Indebtedness of Borrowers and Guarantors permitted under
clause (j) of the definition of Permitted Indebtedness to finance their
insurance premiums on the insurance policies maintained by Borrowers and
Guarantors; provided that (i) such Liens shall only encumber the cash surrender
value and/or unearned premiums of such insurance and (ii) such Liens shall not
in any manner affect the ability of Collateral Agent to obtain or receive
payment of proceeds of insurance with respect to any of the Collateral;

(p) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by Parent or its
Subsidiaries in the ordinary course of business in accordance with the past
practices of Parent or its Subsidiaries;

(q) Liens on cash securing Indebtedness permitted under (i) clause (g) of the
definition of “Permitted Indebtedness”; provided that the aggregate amount of
such cash does not exceed $25,000,000, and (ii) clause (h) of the definition of
“Permitted Indebtedness”;

(r) Liens on property subject to Sale and Leaseback Transactions to the extent
such Sale and Leaseback Transactions are permitted by Section 7.02(v);

 

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(s) security interests in assets of a Loan Party consisting of Equipment or Real
Property existing at the time such Loan Party is acquired pursuant to a
Permitted Acquisition after the date hereof to secure Indebtedness permitted
under clause (t) of the definition of Permitted Indebtedness (and Refinancing
Indebtedness in respect thereof); provided, that, each of the following
conditions is satisfied: (i) such security interests were not granted and did
not arise in connection with, or in anticipation or contemplation of, such
Permitted Acquisition, and (ii) the assets subject to such security interests do
not include any assets or properties of any Loan Party other than assets or
properties of the Loan Party so acquired; and

(t) Liens not otherwise permitted by this definition so long as the aggregate
outstanding amount of the obligations secured thereby does not exceed $3,500,000
at any one time.

“Permitted Specified Liens” means Permitted Liens under clauses (a), (b),
(c) and (j) of the definition of Permitted Liens.

“Person” means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

“Plan” means any Employee Plan or Multiemployer Plan.

“Portfolio Company” means any Person (other than a Loan Party or a Subsidiary of
a Loan Party) in which any Permitted Holder directly or indirectly owns equity
or debt securities and whose day-to-day operations are managed by individuals
that are not employees of any Permitted Holder.

“Post-Default Rate” means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 3.0%, or, if a rate of interest is not otherwise in effect,
interest at the highest rate specified herein for any Loan then outstanding
prior to an Event of Default plus 3.0%.

“Pro Forma Balance Sheet” has the meaning ascribed to such term in
Section 6.01(g).

“Pro Rata Share” means:

(a) with respect to a Lender’s obligation to make the Loan and receive payments
of interest, fees, and principal with respect thereto, the percentage obtained
by dividing (i) such Lender’s Commitment, by (ii) the Total Commitment, provided
that if the Total Commitment has been reduced to zero, the numerator shall be
the aggregate unpaid principal amount of such Lender’s portion of the Loan and
the denominator shall be the aggregate unpaid principal amount of the Loan, and

(b) with respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) the unpaid principal amount of such Lender’s portion of
the Loan, by (ii) the aggregate unpaid principal amount of the Loan.

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“Qualified Cash” means the aggregate amount of unrestricted cash and Cash
Equivalents of the Loan Parties maintained in deposit accounts or securities
accounts in the name of a Loan Party in the United States, which deposit
accounts or securities accounts are subject to control agreements in favor of
the Collateral Agent, and which are otherwise in form and substance reasonably
satisfactory to the Collateral Agent.

“Qualified Equity Interests” means, with respect to any Person, all Equity
Interests of such Person that are not Disqualified Equity Interests.

“Real Property” shall mean all now owned and hereafter acquired real property of
each Borrower and Guarantor, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located, including the
Facilities and related assets more particularly described in the Mortgages.

“Reference Bank” means JPMorgan Chase Bank, its successors or any other
commercial bank designated by the Administrative Agent to the Borrowers’
Representative from time to time.

“Reference Rate” means the greater of (a) the rate of interest publicly
announced by the Reference Bank in New York, New York from time to time as its
reference rate, base rate or prime rate, and (b) 3.0%. The reference rate, base
rate or prime rate is determined from time to time by the Reference Bank as a
means of pricing some loans to its borrowers and neither is tied to any external
rate of interest or index nor necessarily reflects the lowest rate of interest
actually charged by the Reference Bank to any particular class or category of
customers. Each change in the Reference Rate shall be effective from and
including the date such change is publicly announced as being effective.

“Refinancing Indebtedness” has the meaning specified therefore in the definition
of the term “Permitted Indebtedness.”

“Register” has the meaning specified therefor in Section 12.07(d).

“Registered Loans” has the meaning specified therefor in Section 12.07(d).

“Regulation T”, “Regulation U” and “Regulation X” mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.

“Related Fund” means, with respect to any Person, an Affiliate of such Person,
or a fund or account managed by such Person or an Affiliate of such Person.

“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, seeping, migrating, dumping or
disposing of any Hazardous Material (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Material) into the indoor or outdoor environment, including, without limitation,
the movement of Hazardous Materials through or in the ambient air, soil, surface
or ground water, or property.

 

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“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate or in any other way address Hazardous
Materials in the indoor or outdoor environment; (b) prevent or minimize a
Release or threatened Release of Hazardous Materials so they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment; (c) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities; or (d) perform any other
actions authorized by 42 U.S.C. § 9601.

“Replacement Lender” has the meaning specified therefor in Section 4.03(a).

“Reportable Event” means an event described in Section 4043 of ERISA (other than
an event not subject to the provision for 30-day notice to the PBGC under the
regulations promulgated under such Section).

“Required Lenders” means Lenders whose Pro Rata Shares (calculated in accordance
with clause (b) of the definition thereof) aggregate more than 50%.

“Requirements of Law” means, with respect to any Person, collectively, all
federal, state, provincial, local, foreign, multinational or international laws,
statutes, codes, treaties, standards, rules and regulations, guidelines,
ordinances, orders, judgments and awards (including settlements of any claims
that if breached, could give rise to a judgment or award), writs, injunctions,
decrees (including administrative or judicial precedents or authorities) and the
interpretation or administration thereof by, and other determinations,
directives, requirements or requests of, any Governmental Authority, in each
case that are applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.

“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board (or any successor Governmental Authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect to
eurocurrency funding (currently referred to as “eurocurrency liabilities”) of
that Lender, but so long as such Lender is not required or directed under
applicable regulations to maintain such reserves, the Reserve Percentage shall
be zero.

“Rolling Stock” shall mean all trucks, trailers, tractors, service vehicles,
vans, pick up trucks, forklifts, wheel loaders and other mobile equipment and
other vehicles, wherever located, which in each case is covered by a Certificate
of Title under applicable state law.

“Sale and Leaseback Transaction” shall mean, with respect to a Borrower or
Guarantor, or any Subsidiary, any arrangement, directly or indirectly, with any
Person whereby such Borrower or Guarantor or such Subsidiary shall sell or
transfer any property used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property being sold or transferred.

“SEC” means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.

 

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“Securities Act” means the Securities Act of 1933, as amended, or any similar
Federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect from time to time.

“Security Agreement” means a Pledge and Security Agreement made by a Loan Party
in favor of the Collateral Agent for the benefit of the Agents and the Lenders
securing the Obligations and delivered to the Collateral Agent in form and
substance reasonably satisfactory to the Collateral Agent.

“Solvent” means, with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (c) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.

“Specified Collateral Value” means, as of any date of determination, an amount
equal to the sum of (a) Qualified Cash at such time, plus (b) the Net Amount of
Accounts Receivable payable to the Loan Parties that are reflected on the
balance sheet of the Loan Parties at such time, plus (c) the Value of the
Inventory owned by the Loan Parties that is reflected on the balance sheet of
the Loan Parties at such time; provided, that the amount of this clause
(c) shall be limited to (and shall not exceed) (i) during the period from and
including March 2nd through October 31st of each year, an amount equal to the
amount of clause (b) at such time, and (ii) during the period from and including
November 1st through March 1st of each year, an amount equal to 122.222% of the
amount of clause (b) at such time.

“Specified Properties” means, collectively, the real property of the Loan
Parties set forth on Schedule 1.01(S) hereto.

“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc. and any successor thereto.

“Subordinated Indebtedness” means Indebtedness of any Loan Party which (a) has
been expressly subordinated in right of payment to all Indebtedness of such Loan
Party under the Loan Documents by the execution and delivery of a subordination
agreement, in form and substance reasonably satisfactory to the Collateral
Agent, and (b) is otherwise on terms and conditions (including, without
limitation, maturity, payment terms, interest rates, covenants, remedies,
defaults and other terms) reasonably satisfactory to the Collateral Agent.

“Subsidiary” means, with respect to any Person at any date, any corporation,
limited or general partnership, limited liability company, trust, estate,
association, joint venture or other business entity (a) the accounts of which
would be consolidated with those of such

 

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Person in such Person’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP or (b) of which more than 50%
of (i) the outstanding Equity Interests having (in the absence of contingencies)
ordinary voting power to elect a majority of the Board of Directors of such
Person, (ii) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (iii) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.

“Taxes” has the meaning specified therefor in Section 2.08(a).

“Termination Event” means (a) a Reportable Event with respect to any Employee
Plan, (b) any event that causes any Loan Party or any of its ERISA Affiliates to
incur liability with respect to a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, (c) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (d) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.

“Title Insurance Policy” means a mortgagee’s loan policy, in form and substance
reasonably satisfactory to the Collateral Agent, together with all endorsements
made from time to time thereto, issued by or on behalf of a title insurance
company reasonably satisfactory to the Collateral Agent, insuring the Lien
created by a Mortgage in an amount and on terms reasonably satisfactory to the
Collateral Agent.

“Top Supplier” has the meaning specified therefor in the definition of the term
“Material Contracts”.

“Total Commitment” means the sum of the amounts of the Lenders’ Commitments.

“Transferee” has the meaning specified therefor in Section 2.08(a).

“Treasury Rate” means, as of any prepayment date, the yield to maturity as of
such prepayment date of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the prepayment date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the prepayment date to the third anniversary of
the Effective Date; provided, however, that if the period from the prepayment
date to the third anniversary of the Effective Date is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the prepayment date to the third anniversary of the
Effective Date is less than one year, the weekly average yield on actually
traded United States Treasury securities adjusted to a constant maturity of one
year shall be used.

 

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“Uniform Commercial Code” has the meaning specified therefor in Section 1.03.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (PATRIOT) Act of
2001 (Title III of Pub. L. 107-56, Oct. 26, 2001).

“Value” or “value” shall mean, with respect to Inventory, the net book value
thereof, computed in accordance with GAAP; provided, that, for purposes of the
calculation of the Specified Collateral Value, the Value of the Inventory shall
not include: (x) the portion of the value of Inventory equal to the profit
earned by any Affiliate on the sale thereof to any Loan Party or (y) write-ups
or write-downs in value with respect to currency exchange rates.

“WARN” has the meaning specified therefor in Section 6.01(z).

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the then outstanding
principal amount of such Indebtedness into (ii) the total of the product
obtained by multiplying (1) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (2) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment.

Section 1.02 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
References in this Agreement to “determination” by any Agent include good faith
estimates by such Agent (in the case of quantitative determinations) and good
faith beliefs by such Agent (in the case of qualitative determinations).

 

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Section 1.03 Accounting and Other Terms.

(a) Unless otherwise expressly provided herein, each accounting term used herein
shall have the meaning given it under GAAP. Notwithstanding the foregoing, all
financial statements delivered hereunder shall be prepared, and all financial
covenants contained herein shall be calculated, without giving effect to an
election under Statement of Financial Accounting Standards 159 (or any similar
accounting principal) permitting a Person to value its financial liabilities at
the fair market value thereof.

(b) All terms used in this Agreement which are defined in Article 8 or Article 9
of the Uniform Commercial Code as in effect from time to time in the State of
New York (the “Uniform Commercial Code”) and which are not otherwise defined
herein shall have the same meanings herein as set forth therein, provided that
terms used herein which are defined in the Uniform Commercial Code as in effect
in the State of New York on the date hereof shall continue to have the same
meaning notwithstanding any replacement or amendment of such statute.

Section 1.04 Time References. Unless otherwise indicated herein, all references
to time of day refer to Eastern Standard Time or Eastern daylight saving time,
as in effect in New York City on such day. For purposes of the computation of a
period of time from a specified date to a later specified date, the word “from”
means “from and including” and the words “to” and “until” each means “to but
excluding”; provided, however, that with respect to a computation of fees or
interest payable to any Agent or any Lender, such period shall in any event
consist of at least one full day.

ARTICLE II

THE LOANS

Section 2.01 Commitments. (a) Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender severally
agrees to make the Loan to the Borrowers on the Effective Date, in an aggregate
principal amount not to exceed the amount of such Lender’s Commitment.

(b) Notwithstanding the foregoing, the aggregate principal amount of the Loan
made on the Effective Date shall not exceed the Total Commitment. Any principal
amount of the Loan which is repaid or prepaid may not be reborrowed.

Section 2.02 Making the Loans. (a) The Borrowers’ Representative shall give the
Administrative Agent prior telephonic notice (immediately confirmed in writing,
in substantially the form of Exhibit B hereto (a “Notice of Borrowing”)), not
later than 12:00 noon (New York City time) on the date which is three
(3) Business Days prior to the date of the proposed Loan (or such shorter period
as the Administrative Agent is willing to accommodate, but in no event later
than 12:00 noon (New York City time) on the borrowing date of the proposed
Loan). Such Notice of Borrowing shall specify (i) the principal amount of the
proposed Loan, and (ii) the proposed borrowing date, which must be the Effective
Date. The Administrative Agent and the Lenders may act without liability upon
the basis of written or telecopied notice believed by the Administrative Agent
in good faith to be from the Borrowers’ Representative (or from any Authorized
Officer thereof designated in writing purportedly from

 

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the Borrowers’ Representative to the Administrative Agent). The Administrative
Agent and each Lender shall be entitled to rely conclusively on any Authorized
Officer’s authority to request a Loan on behalf of the Borrowers. The
Administrative Agent and the Lenders shall have no duty to verify the
authenticity of the signature appearing on any written Notice of Borrowing.

(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be irrevocable
and the Borrowers shall be bound to make a borrowing in accordance therewith.

(c) The Loans under this Agreement shall be made by the Lenders simultaneously
and proportionately to their Pro Rata Shares of the Total Commitment, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender’s obligations to make the Loan requested hereunder,
nor shall the Commitment of any Lender be increased or decreased as a result of
the default by any other Lender in that other Lender’s obligation to make the
Loan requested hereunder, and each Lender shall be obligated to make the Loan
required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.

Section 2.03 Repayment of Loans; Evidence of Debt. (a) The outstanding unpaid
principal of the Loans shall be due and payable in full on the Final Maturity
Date.

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

(c) The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of the Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein; provided that (i) the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement, and (ii) in the event of any
conflict between the entries made in the accounts maintained pursuant to
Section 2.03(b) and the accounts maintained pursuant to Section 2.03(c), the
accounts maintained pursuant to Section 2.03(c) shall govern and control.

(e) Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrowers shall execute and deliver to such Lender a
promissory note payable to such Lender and its registered assigns in a form
furnished by the Collateral Agent and reasonably acceptable to the Borrowers’
Representative. Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 12.07) be represented by one or more promissory notes in such form
payable to such payee and its registered assigns.

 

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Section 2.04 Interest. (a) Loans. The Loans shall bear interest on the principal
amount thereof from time to time outstanding, from the date of the Loan until
repaid, at a rate per annum equal to the LIBOR Rate for the Interest Period in
effect for the Loans plus 9.5%. For the avoidance of doubt, upon the termination
of any Interest Period, a new Interest Period shall automatically commence.

(b) Default Interest. To the extent permitted by law and notwithstanding
anything to the contrary in this Section, upon the occurrence and during the
continuance of an Event of Default, the principal of, and all accrued and unpaid
interest on, all Loans, fees, indemnities or any other Obligations of the Loan
Parties under this Agreement and the other Loan Documents, shall bear interest,
from the date such Event of Default occurred until the date such Event of
Default is cured or waived in writing in accordance herewith, at a rate per
annum equal at all times to the Post-Default Rate.

(c) Interest Payment. Interest on each Loan shall be payable on the last day of
each Interest Period, commencing with the Interest Period commencing on the
Effective Date, and at maturity (whether upon demand, by acceleration or
otherwise); provided, that if interest on any Loan is calculated at the
Reference Rate pursuant to Section 2.12(b), interest on such Loan shall be
payable quarterly, in arrears, on the last day of each quarter, commencing on
the last day of the quarter following the month in which such Loan commences
bearing interest at the Reference Rate and at maturity (whether upon demand, by
acceleration or otherwise). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, so long as such Loan (or
portion thereof) is paid by the time specified in Section 4.02. Interest at the
Post-Default Rate shall be payable on demand, but in no event more frequently
than monthly.

(d) General. All interest shall be computed on the basis of a year of 360 days
for the actual number of days, including the first day but excluding the last
day, elapsed.

Section 2.05 Reduction of Commitment; Prepayment of Loans.

(a) Reduction of Commitments. The Total Commitment shall terminate upon the
earlier to occur of (A) the time at which the Loan is made and (B) 5:00 p.m.
(New York City time) on December 2, 2011.

(b) Optional Prepayment.

(i) Payment in Part. The Borrowers may, at any time and from time to time, upon
at least five (5) Business Days’ prior written notice to the Administrative
Agent, prepay the principal of the Loan in part. The Borrowers shall be
obligated to repay the amount stated in the notice on the date set forth in such
notice. Each prepayment made pursuant to this clause (b)(i) shall be accompanied
by the payment of (A) accrued interest to the date of such payment on the amount
prepaid and (B) the Applicable Prepayment Premium, if any, payable in connection
with such prepayment of the Loan.

 

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(ii) Prepayment In Full. The Borrowers may, upon at least ten (10) Business Days
prior written notice to the Administrative Agent, terminate this Agreement by
paying to the Administrative Agent, in cash, the Obligations, in full, plus the
Applicable Prepayment Premium, if any, payable in connection with such
termination of this Agreement, which notice may state that it is conditioned
upon the effectiveness of other credit facilities or the receipt of the proceeds
from the issuance of other Indebtedness, in which case such notice of prepayment
may be revoked by the Borrowers if such condition is not satisfied. If the
Borrowers’ Representative has sent a notice of termination pursuant to this
clause (ii) and the notice is not conditioned as described in the prior sentence
(or the notice is conditioned and the condition is satisfied), then the
Borrowers shall be obligated to repay the Obligations, in full, plus the
Applicable Prepayment Premium, if any, payable in connection with such
termination of this Agreement on the date set forth as the date of termination
of this Agreement in such notice.

(c) Mandatory Prepayment.

(i) Subject to the reinvestment rights pursuant to Section 2.05(c)(iv), within
two (2) Business Days after receipt by any Loan Party or any of its Subsidiaries
of any Net Cash Proceeds from any Disposition by any Loan Party or its
Subsidiaries (other than Dispositions made pursuant to clauses (a), (c), (d),
(f), (g), (i), (j), (k), (l) or (m) of the definition of Permitted Disposition),
the Borrowers shall prepay the outstanding principal amount of the Loans in an
amount equal to 100% of the Net Cash Proceeds received by such Person in
connection with such Disposition to the extent that the aggregate amount of Net
Cash Proceeds received by all Loan Parties and their Subsidiaries shall exceed
for all such Dispositions $10,000,000 in the aggregate during any Fiscal Year of
the Parent and its Subsidiaries. Nothing contained in this subsection (i) shall
permit (1) any Loan Party or any of its Subsidiaries to make any Disposition
other than a Permitted Disposition, or (2) the aggregate amount of Net Cash
Proceeds from Sale Leaseback Transactions which are excluded from the obligation
to repay Loans to exceed $10,000,000.

(ii) Subject to the reinvestment rights pursuant to Section 2.05(c)(iv), to the
extent that the aggregate amount of Net Cash Proceeds received by all Loan
Parties and their Subsidiaries shall exceed $500,000 in the aggregate (the
“Excluded Casualty Proceeds”) during any Fiscal Year of the Parent and its
Subsidiaries for all Casualty Events, (A) within two (2) Business Days after the
receipt by any Loan Party or any of its Subsidiaries of any Net Cash Proceeds
beyond the Excluded Casualty Proceeds which are in excess of $250,000 from any
Casualty Event, the Borrowers shall prepay the outstanding principal of the
Loans in an amount equal to 100% of the Net Cash Proceeds from such Casualty
Event, and (B) on the last Business Day of each fiscal quarter, the Borrowers
shall prepay the outstanding principal of the Loans in an amount equal to 100%
of the Net Cash Proceeds received by any Loan Party or any of its Subsidiaries
during such fiscal quarter that were not required to be paid to the Agents
during such fiscal quarter pursuant to clause (A) above.

(iii) Upon the issuance or incurrence by any Loan Party or any of its
Subsidiaries of any Indebtedness (other than Permitted Indebtedness), the
Borrowers shall prepay the outstanding amount of the Loans in an amount equal to
100% of the Net Cash Proceeds received by such Person in connection therewith.
The provisions of this subsection (iii) shall not be deemed to be implied
consent to any such issuance, incurrence or sale otherwise prohibited by the
terms and conditions of this Agreement.

 

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(iv) Notwithstanding the foregoing, up to $45,000,000 of the Net Cash Proceeds
received by any Loan Party or any of its Subsidiaries in connection with
Dispositions (other than Net Cash Proceeds resulting from Sale and Leaseback
Transactions), and all Net Cash Proceeds received by any Loan Party or any of
its Subsidiaries in connection with Casualty Events that would otherwise have
been required to be used to prepay the Obligations pursuant to
Section 2.05(c)(i) or Section 2.05(c)(ii), as the case may be, shall not be
required to be so used to prepay the Obligations to the extent that such Net
Cash Proceeds are used to replace, repair or restore properties or assets or to
otherwise reinvest in assets used or useful in such Person’s business; provided
that (A) no Event of Default has occurred and is continuing on the date such
Person receives such Net Cash Proceeds, (B) the Borrowers’ Representative
delivers a certificate to the Administrative Agent on (or prior to) the date
such Net Cash Proceeds otherwise would have been required to have been paid to
the Agents pursuant to Section 2.05(c)(i) or 2.05(c)(ii) above, stating that
such Net Cash Proceeds are intended to be used to replace, repair or restore
properties or assets or to otherwise reinvest in assets used or useful in such
Person’s business within a period specified in such certificate not to exceed
365days after the date of receipt of such Net Cash Proceeds (which certificate
shall set forth estimates of the Net Cash Proceeds to be so expended), (C) such
Net Cash Proceeds are deposited in a Cash Management Account subject to a Cash
Management Agreement in favor of the Collateral Agent or a securities account
that is subject to a control agreement in favor of the Collateral Agent, and
(D) upon the earlier of (1) the expiration of the period specified in the
relevant certificate furnished to the Administrative Agent pursuant to
clause (B) above or (2) the occurrence of an Event of Default, such Net Cash
Proceeds, if not theretofore so used, shall be used to prepay the Obligations in
accordance with Section 2.05(c)(i) or Section 2.05(c)(ii), as applicable.

(d) Interest and Fees. Any prepayment made pursuant to this Section 2.05 shall
be accompanied by (i) accrued interest on the principal amount being prepaid to
the date of prepayment, (ii) any Funding Losses payable pursuant to
Section 2.11, (iii) the Applicable Prepayment Premium, if any, payable in
connection with such prepayment of the Loans (it being understood that no
Applicable Prepayment Premium shall be payable in respect of payments made
pursuant to Section 2.05(c)(ii)), and (iv) if such prepayment would reduce the
amount of the outstanding Loans to zero, such prepayment shall be accompanied by
the payment of all fees accrued to such date pursuant to Section 2.06.

(e) Cumulative Prepayments. Except as otherwise expressly provided in this
Section 2.05, payments with respect to any subsection of this Section 2.05 are
in addition to payments made or required to be made under any other subsection
of this Section 2.05.

Section 2.06 Fees.

(a) Applicable Prepayment Premium. In the event any repayment of the Loans is
made prior to the Final Maturity Date (other than (x) repayments made pursuant
to Section 2.05(c)(ii) and (y) repayments of up to $5,000,000 per year and
$10,000,000 in the aggregate during the term of this Agreement made pursuant to
Section 2.05(c)(i)), including as a

 

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result of the termination of this Agreement and repayment of the Obligations at
any time prior to the Final Maturity Date, for any reason, including
(i) termination upon the election of the Required Lenders to terminate after the
occurrence and during the continuation of an Event of Default (or, in the case
of the occurrence of any Event of Default described in Section 9.01(f) or
Section 9.01(g) with respect to any Loan Party, automatically upon the
occurrence thereof), (ii) foreclosure and sale of Collateral, (iii) sale of the
Collateral in any Insolvency Proceeding, or (iv) restructure, reorganization, or
compromise of the Obligations by the confirmation of a plan of reorganization or
any other plan of compromise, restructure, or arrangement in any Insolvency
Proceeding, then, in view of the impracticability and extreme difficulty of
ascertaining the actual amount of damages to the Agents and the Lenders or
profits lost by the Agents and the Lenders as a result of such early payment or
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of the Agents and the
Lenders, the Borrowers shall pay to the Administrative Agent, for the account of
the Lenders in accordance with their respective Pro Rata Shares, the Applicable
Prepayment Premium, measured as of the date of such payment or termination.

(b) Fee Letter. As and when due and payable under the terms of the Fee Letter,
the Borrowers shall pay the fees set forth in the Fee Letter.

Section 2.07 [Intentionally Omitted].

Section 2.08 Taxes. (a) Any and all payments by any Loan Party hereunder or
under any other Loan Document shall be made 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
(A) taxes imposed on or measured by the net income of any Agent or any Lender
(or any transferee or assignee thereof, including a participation holder (any
such entity, a “Transferee”)) and franchise taxes and branch profits taxes
imposed on such Agent, Lender or Transferee, in each case, (i) by the
jurisdiction (or any political subdivision thereof) in which such Person is
organized or has its principal lending office or in which its applicable lending
office is located, or (iii) otherwise with which it has a present or former
connection giving rise to the imposition of tax (other than connections arising
from such Agent, Lender or Transferee having executed, delivered, become a party
to, performed its obligations under, received payments under, received or
perfected a security interest under, engaged in any other transaction pursuant
to or enforced any Loan Document, or sold or assigned an interest in any Loan or
Loan Document) and (B) any taxes imposed under FATCA (or any amended or
successor version of FATCA that is substantively comparable and not materially
more onerous to comply with) (all such nonexcluded taxes, levies, imposts,
deductions, charges withholdings and liabilities, collectively or individually,
“Taxes”). If any Loan Party shall be required to deduct any Taxes from or in
respect of any sum payable hereunder to any Agent or any Lender (or any
Transferee), (i) the sum payable shall be increased by the amount (an
“Additional Amount”) necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.08) such Agent or such Lender (or such Transferee) shall receive an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Loan Party shall make such deductions and (iii) such Loan Party shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

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(b) In addition, each Loan Party agrees to pay to the relevant Governmental
Authority in accordance with applicable law any present or future stamp or
documentary taxes, an transfer, recording or filing taxes or fees, or any other
excise or property taxes, charges or similar levies that arise from any payment
made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or any other Loan Document (“Other Taxes”). Each
Loan Party shall deliver to each Agent and each Lender copies of official
receipts or other evidence reasonably satisfactory to the Administrative Agent
indicating that such payment has been made, in respect of any Taxes or Other
Taxes payable hereunder promptly after payment of such Taxes or Other Taxes.

(c) The Loan Parties hereby jointly and severally indemnify and agree to hold
each Agent and each Lender harmless from and against Taxes and Other Taxes
(including, without limitation, Taxes and Other Taxes imposed on any amounts
payable under this Section 2.08) paid by such Person, whether or not such
Indemnified Taxes were correctly or legally asserted. Such indemnification shall
be paid within 10 days from the date on which any such Person makes written
demand therefore specifying in reasonable detail the nature and amount of such
Indemnified Taxes.

(d) Each Lender (or Transferee) that is organized under the laws of a
jurisdiction outside the United States (a “Non-U.S. Lender”) agrees that it
shall, no later than the Effective Date (or, in the case of a Non-U.S. Lender
which becomes a party hereto pursuant to Section 12.07 hereof after the
Effective Date, promptly after the date upon which such non-U.S. Lender becomes
a party hereto) deliver to the Agents one properly completed and duly executed
copy of either U.S. Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY or
any subsequent versions thereof or successors thereto, in each case claiming
complete exemption from, or reduced rate of, U.S. Federal withholding tax on
payments of interest hereunder. In addition, in the case of a Non-U.S. Lender
claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Internal Revenue Code, such Non-U.S. Lender hereby represents to
the Agents and the Loan Parties that such Non-U.S. Lender is not a bank for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Parent and is not a controlled foreign corporation related to the
Parent (within the meaning of Section 864(d)(4) of the Internal Revenue Code),
and such Non-U.S. Lender agrees that it shall promptly notify the Agents in the
event any such representation is no longer accurate. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee, on or before the date such
Person becomes a Transferee hereunder) and on or before the date, if any, such
Non-U.S. Lender changes its applicable lending office by designating a different
lending office (a “New Lending Office”). In addition, such Non-U.S. Lender shall
deliver such forms within 20 days after receipt of a written request therefor
from any Agent, the assigning Lender or the Lender granting a participation, as
applicable. Notwithstanding any other provision of this Section 2.08, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this
Section 2.08(d) that such Non-U.S. Lender is not legally able to deliver.

(e) The Loan Parties shall not be required to indemnify any Lender, or pay any
Additional Amounts to any Lender, in respect of United States Federal
withholding tax pursuant to this Section 2.08 to the extent that (i) the
obligation to withhold amounts with respect

 

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to United States Federal withholding tax existed on the date such Lender became
a party to this Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a
participation holder hereunder) or, with respect to payments to a New Lending
Office, the date such Lender designated such New Lending Office with respect to
a Loan; provided, however, that this clause (i) shall not apply to the extent
the indemnity payment or Additional Amounts any Transferee, or Lender (or
Transferee) through a New Lending Office, 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
Transferee, or Lender (or Transferee) making the designation of such New Lending
Office, would have been entitled to receive in the absence of such assignment,
participation, transfer or designation, or (ii) the obligation to pay such
Additional Amounts would not have arisen but for a failure by such Lender to
comply with the provisions of clause (d) above.

(f) Any Agent or any Lender (or Transferee) claiming any indemnity payment or
additional payment amounts payable pursuant to this Section 2.08 shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document reasonably requested in writing by the Borrowers’
Representative or to change the jurisdiction of its applicable lending office if
the making of such a filing or change would avoid the need for or reduce the
amount of any such indemnity payment or additional amount that may thereafter
accrue, would not require such Agent or such Lender (or Transferee) to disclose
any information such Agent or such Lender (or Transferee) deems confidential and
would not, in the sole determination of such Agent or such Lender (or
Transferee), be otherwise disadvantageous to such Agent or such Lender (or
Transferee).

(g) If any Agent or any Lender (or a Transferee) shall become aware that it is
entitled to claim a refund from a Governmental Authority in respect of Taxes or
Other Taxes with respect to which any Loan Party has paid additional amounts,
pursuant to this Section 2.08, it shall promptly notify the Borrowers’
Representative of the availability of such refund claim and shall, within 30
days after receipt of a request by the Borrowers’ Representative, make a claim
to such Governmental Authority for such refund at the Loan Parties’ expense. If
any Lender or any Agent (or a Transferee) receives a refund (including pursuant
to a claim for refund made pursuant to the preceding sentence) in respect of any
Taxes or Other Taxes with respect to which any Loan Party has paid additional
amounts pursuant to this Section 2.08, it shall within 30 days from the date of
such receipt pay over such refund to the Borrowers’ Representative, net of all
out-of-pocket expenses of such Agent or such Lender (or Transferee).

(h) If a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding tax imposed by FATCA if such Lender fails to comply
with the applicable reporting requirements of FATCA (including those contained
in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable) such
Lender shall deliver to the Administrative Agent such documentation that is
reasonably requested by the Administrative Agent sufficient for the
Administrative Agent and the Borrower to comply with their obligations under
FATCA and to determine that such Lender has complied with such applicable
reporting requirements.

 

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(i) The obligations of the Loan Parties under this Section 2.08 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

(j) FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE,
THE LOAN IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. REQUESTS FOR INFORMATION
REGARDING THE ORIGINAL ISSUE DISCOUNT ON THE LOAN MAY BE DIRECTED TO BORROWERS’
REPRESENTATIVE AT 2001 BRYAN STREET, SUITE 1600, DALLAS, TX 75201, ATTENTION:
CHIEF FINANCIAL OFFICER.

Section 2.09 [Intentionally Omitted].

Section 2.10 [Intentionally Omitted].

Section 2.11 Funding Losses. In connection with each LIBOR Rate Loan, the
Borrowers shall indemnify, defend, and hold the Agents and the Lenders harmless
against any loss, cost, or expense, without duplication, incurred by any Agent
or any Lender as a result of (a) the payment of any principal of any LIBOR Rate
Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), or (b) the failure to borrow or
prepay any LIBOR Rate Loan on the date specified in any notice delivered
pursuant hereto (such losses, costs, and expenses, collectively, “Funding
Losses”). Funding Losses shall, with respect to any Agent or any Lender, be
deemed to equal the amount reasonably determined by such Agent or such Lender to
be the excess, if any, of (i) the amount of interest that would have accrued on
the principal amount of such LIBOR Rate Loan had such event not occurred, at the
LIBOR Rate that would have been applicable thereto, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period therefor), minus (ii) the amount of interest
that would accrue on such principal amount for such period at the interest rate
which such Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and period
in the London interbank market. A certificate of an Agent or a Lender delivered
to the Borrowers’ Representative setting forth any amount or amounts that such
Agent or such Lender is entitled to receive pursuant to this Section 2.11 shall
be conclusive absent manifest error.

Section 2.12 Impracticability or Illegality.

(a) In the event that any law, regulation, treaty, or directive, or any change
therein or in the interpretation of application thereof, shall at any time after
the date hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Rate Loans or to continue
such funding or maintaining, or to determine or charge interest rates at the
LIBOR Rate, such Lender shall give notice of such changed circumstances to the
Borrowers’ Representative and the Administrative Agent, and the Administrative
Agent promptly shall transmit the notice to each other Lender and (i) the date
specified in such Lender’s notice shall be deemed to be the last day of the
Interest Period of all of such Lender’s LIBOR Rate Loans then outstanding, and
interest upon all Loans of such Lender thereafter shall accrue interest at a
rate equal to the Reference Rate plus 8.5%, and (ii) all Loans shall thereafter
accrue interest at a rate equal to the Reference Rate plus 8.5% until such
Lender determines that it would no longer be unlawful or impractical to do
otherwise.

 

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(b) If the Required Lenders determine that for any reason in connection with any
LIBOR Rate Loan that (a) deposits are not being offered to banks in the London
interbank market for Dollars for the applicable amount and Interest Period,
(b) adequate and reasonable means do not exist for determining the LIBOR Rate or
(c) the LIBOR Rate does not adequately and fairly reflect the cost to such
Lenders of funding such LIBOR Rate Loan, the Administrative Agent will promptly
so notify the Borrowers’ Representative and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon such notice, (i) the date specified in such
notice shall be deemed to be the last day of the Interest Period of all LIBOR
Rate Loans then outstanding, and interest upon all Loans thereafter shall accrue
interest at a rate equal to the Reference Rate plus 8.5%, and (ii) all Loans
shall thereafter accrue interest at a rate equal to the Reference Rate plus 8.5%
until such notice is revoked.

Section 2.13 No Requirement to Match Fund. Anything to the contrary contained
herein notwithstanding, neither any Agent nor any Lender, nor any of their
participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Article II shall apply as if each Lender or its
participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.

ARTICLE III

[INTENTIONALLY OMITTED]

ARTICLE IV

FEES, PAYMENTS AND OTHER COMPENSATION

Section 4.01 [Intentionally Omitted].

Section 4.02 Payments; Computations and Statements. (a) The Borrowers will make
each payment under this Agreement not later than 2:00 P.M. (New York City time)
on the day when due, in lawful money of the United States of America and in
immediately available funds, to the Administrative Agent’s Account. All payments
received by the Administrative Agent after 2:00 P.M. (New York City time) on any
Business Day will be credited to the Loan Account on the next succeeding
Business Day. All payments shall be made by the Borrowers without set-off,
counterclaim, recoupment, deduction or other defense to the Agents and the
Lenders. Except as provided in Section 2.02, after receipt, the Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal ratably to the Lenders in accordance with their Pro
Rata Shares and like funds relating to the payment of any other amount payable
to any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement, provided that the Administrative Agent

 

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will cause to be distributed all interest and fees received from or for the
account of the Borrowers not less than once each month and in any event promptly
after receipt thereof. The Lenders and the Borrowers hereby authorize the
Administrative Agent to, and the Administrative Agent may, from time to time,
charge the Loan Account of the Borrowers with any amount due and payable by the
Borrowers under any Loan Document. Each of the Lenders and the Borrowers agrees
that the Administrative Agent shall have the right to make such charges whether
or not any Default or Event of Default shall have occurred and be continuing.
Any amount charged to the Loan Account of the Borrowers shall be deemed an
Obligation hereunder. The Lenders and the Borrowers confirm that any charges
which the Administrative Agent may so make to the Loan Account of the Borrowers
as herein provided will be made as an accommodation to the Borrowers and solely
at the Administrative Agent’s discretion; provided that the Administrative Agent
shall from time to time upon the request of the Collateral Agent, charge the
Loan Account of the Borrowers with any amount due and payable under any Loan
Document. Whenever any payment to be made under any such Loan Document shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall in such
case be included in the computation of interest or fees, as the case may be. All
computations of fees shall be made by the Administrative Agent on the basis of a
year of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such fees are payable.
Each determination by the Administrative Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.

(b) The Administrative Agent shall provide the Borrowers’ Representative,
promptly after the end of each calendar month, a summary statement (in the form
from time to time used by the Administrative Agent) of the opening and closing
daily balances in the Loan Account of the Borrowers during such month, the
amounts and dates of all payments on account of the Loans to the Borrowers
during such month and the Loans to which such payments were applied, the amount
of interest accrued on the Loans to the Borrowers during such month, and the
amount and nature of any charges to the Loan Account made during such month on
account of fees, commissions, expenses and other Obligations. All entries on any
such statement shall be presumed to be correct and, thirty (30) days after the
same is sent, shall be final and conclusive absent manifest error.

Section 4.03 Sharing of Payments, Defaulting Lenders, Etc.

(a) The Collateral Agent shall have the right to permanently replace a
Defaulting Lender with one or more substitute Lenders (each, a “Replacement
Lender”), and the Defaulting Lender shall have no right to refuse to be replaced
hereunder. Such notice to replace the Defaulting Lender shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given. Prior to the effective date
of such replacement, the Defaulting Lender and each Replacement Lender shall
execute and deliver an Assignment and Acceptance, subject only to the Defaulting
Lender being repaid its share of the outstanding Obligations without any premium
or penalty of any kind whatsoever. If the Defaulting Lender shall refuse or fail
to execute and deliver any such Assignment and Acceptance prior to the effective
date of such replacement, the Defaulting Lender shall be deemed to have executed
and delivered such Assignment and Acceptance. The replacement of any Defaulting
Lender shall be made in accordance with the terms of Section 12.07(b); provided,
that any amounts then owing to any Agent from the Defaulting Lender shall be
deducted from the purchase price for the Obligations under this Agreement
payable to the Defaulting Lender.

 

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(b) Except as provided in Section 2.02 hereof, if any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender’s ratable share (according to the proportion of (i) the amount of
such Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender of any interest or other amount paid by the purchasing Lender
in respect of the total amount so recovered). The Borrowers agree that any
Lender so purchasing a participation from another Lender pursuant to this
Section 4.03(b) may, to the fullest extent permitted by law, exercise all of its
rights (including the Lender’s right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.

Section 4.04 Apportionment of Payments. Subject to any written agreement among
the Agents and/or the Lenders:

(a) all payments of principal and interest in respect of outstanding Loans, all
payments of fees (other than the fees set forth in Section 2.06 hereof, and the
audit and collateral monitoring fee provided for in Section 4.01) and all other
payments in respect of any other Obligations, shall be allocated by the
Administrative Agent among such of the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein
or, in respect of payments not made on account of Loans, as designated by the
Person making payment when the payment is made.

(b) After the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, and upon the direction of the Required Lenders shall,
apply all proceeds of the Collateral, subject to the provisions of this
Agreement: (i) first, ratably to pay the Obligations in respect of any fees,
expense reimbursements, indemnities and other amounts then due and payable to
the Agents until paid in full; (ii) second, ratably to pay the Obligations in
respect of any fees (including any Applicable Prepayment Premium) and
indemnities then due and payable to the Lenders until paid in full; (iii) third,
ratably to pay interest then due and payable in respect of Collateral Agent
Advances until paid in full; (iv) fourth, ratably to pay principal of Collateral
Agent Advances until paid in full; (v) fifth, ratably to pay interest then due
and payable in respect of the Loan until paid in full; (vi) sixth, ratably to
pay principal of the Loan until paid in full; and (vii) seventh, to the ratable
payment of all other Obligations then due and payable.

(c) In each instance, so long as no Event of Default has occurred and is
continuing, Section 4.04(b) shall not be deemed to apply to any payment by the
Borrowers

 

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specified by the Borrowers’ Representative to the Administrative Agent to be for
the payment of Obligations then due and payable under any provision of this
Agreement or the prepayment of all or part of the principal of the Loan in
accordance with the terms and conditions of Section 2.05.

(d) For purposes of Section 4.04(b), (other than clause (vi)), “paid in full”
means payment in cash of all amounts owing under the Loan Documents according to
the terms thereof (other than in respect of contingent indemnification and
expense reimbursement obligations as to which no claim has been made), including
loan fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not same
would be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding, except to the extent that default or overdue interest (but not any
other interest) and loan fees, each arising from or related to a default, are
disallowed in any Insolvency Proceeding; provided, however, that for the
purposes of clause (vi), “paid in full” means payment in cash of all amounts
owing under the Loan Documents according to the terms thereof, including loan
fees, service fees, professional fees, interest (and specifically including
interest accrued after the commencement of any Insolvency Proceeding), default
interest, interest on interest, and expense reimbursements, whether or not the
same would be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.

(e) In the event of a direct conflict between the priority provisions of this
Section 4.04 and other provisions contained in any other Loan Document, it is
the intention of the parties hereto that both such priority provisions in such
documents shall be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable
conflict that cannot be resolved as aforesaid, the terms and provisions of this
Section 4.04 shall control and govern.

Section 4.05 Increased Costs and Reduced Return. (a) If any Lender or any Agent
shall have determined that, after the date on which such Person becomes a party
to this Agreement, the adoption or implementation of, or any change in, any law,
rule, treaty or regulation, or any policy, guideline or directive of, or any
change in, the interpretation or administration thereof by, any court, central
bank or other administrative or Governmental Authority, or compliance by any
Lender or any Agent or any Person controlling any such Agent or any such Lender
with any directive of, or guideline from, any central bank or other Governmental
Authority or the introduction of, or change in, any accounting principles
applicable to any Lender or any Agent or any Person controlling any such Agent
or any such Lender (in each case, whether or not having the force of law) (each
a “Change in Law”), shall (i) change the basis of taxation of payments to such
Agent or such Lender or any Person controlling such Agent or such Lender of any
amounts payable hereunder (except for Taxes or Other Taxes described in Sections
2.08(a) and (c) or any tax specifically excluded from “Taxes” under Sections
2.08(a) and 2.08(c)), (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any Loan, or against assets of or
held by, or deposits with or for the account of, or credit extended by, such
Agent, such Lender or any Person controlling such Agent or such or (iii) impose
on such Agent or such Lender or any Person controlling such Agent or such Lender
any other condition regarding this Agreement or any Loan, and the result of any
event referred to in clauses (i), (ii) or (iii) above shall be to increase the
cost to such Agent or such Lender of making any Loan, or agreeing to make any
Loan, or to reduce any amount

 

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received or receivable by such Agent or such Lender hereunder, then, upon demand
by such Agent or such Lender the Borrowers shall pay to such Agent or such
Lender such additional amounts as will compensate such Agent or such Lender for
such increased costs or reductions in amount; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines or directives
thereunder or issued in connection therewith and (y) all requests, rules,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case,
pursuant to Basel III, shall, in each case, be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued, except, in each case, to the
extent enacted prior to the date on which such Person becomes a party to this
Agreement.

(b) If any Agent or any Lender shall have determined that any Change in Law
either (i) affects or would affect the amount of capital required or expected to
be maintained by such Agent or such Lender or any Person controlling such Agent
or such Lender, and such Agent or such Lender determines that the amount of such
capital is increased as a direct or indirect consequence of any Loans made or
maintained or such Agent’s, such Lender’s or such other controlling Person’s
other obligations hereunder, or (ii) has or would have the effect of reducing
the rate of return on such Agent’s or such Lender’s or such other controlling
Person’s capital to a level below that which such Agent or such Lender or such
controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, or any agreement to make Loans, or
such Agent’s or such Lender’s or such other controlling Person’s other
obligations hereunder (in each case, taking into consideration, such Agent’s or
such Lender’s or such other controlling Person’s policies with respect to
capital adequacy), then, upon demand by such Agent or such Lender, the Borrowers
shall pay to such Agent or such Lender from time to time such additional amounts
as will compensate such Agent or such Lender for such cost of maintaining such
increased capital or such reduction in the rate of return on such Agent’s, such
Lender’s or such other controlling Person’s capital.

(c) A certificate of such Agent or such Lender claiming compensation under this
Section 4.05, specifying the event herein above described in reasonable detail
and the nature of such event shall be submitted by such Agent or such Lender to
the Borrowers’ Representative, setting forth the additional amount due and an
explanation of the calculation thereof, and such Agent’s or such Lender’s
reasons for invoking the provisions of this Section 4.05, and shall be final and
conclusive absent manifest error.

(d) Failure or delay on the part of any Lender or Agent to demand compensation
pursuant to the foregoing provisions of this Section shall not constitute a
waiver of such Lender’s or Agent’s right to demand such compensation, provided
that the Borrowers shall not be required to compensate a Lender or Agent
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than 180 days prior to the date that such
Lender or the Agent, as the case may be, notifies the Borrowers of the Change in
Law giving rise to such increased costs or reductions and of such Lender’s or
Agent’s intention to claim compensation therefor (except that, if the Change in
Law giving rise to such increased costs or reductions is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof). The provisions set out in Section 4.05 above shall
not apply to the extent any increased cost is already compensated for by an
increase in the Reserve Percentage.

 

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Section 4.06 Joint and Several Liability of the Borrowers. (a) Notwithstanding
anything in this Agreement or any other Loan Document to the contrary, each of
the Borrowers hereby accepts joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be
provided by the Agents and the Lenders under this Agreement and the other Loan
Documents, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of the other Borrowers to
accept joint and several liability for the Obligations. Each of the Borrowers,
jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability with the
other Borrowers, with respect to the payment and performance of all of the
Obligations (including, without limitation, any Obligations arising under this
Section 4.06), it being the intention of the parties hereto that all of the
Obligations shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them. If and to the extent that any of
the Borrowers shall fail to make any payment with respect to any of the
Obligations as and when due or to perform any of the Obligations in accordance
with the terms thereof, then in each such event, the other Borrowers will make
such payment with respect to, or perform, such Obligation. Subject to the terms
and conditions hereof, the Obligations of each of the Borrowers under the
provisions of this Section 4.06 constitute the absolute and unconditional, full
recourse Obligations of each of the Borrowers, enforceable against each such
Person to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement, the other Loan
Documents or any other circumstances whatsoever.

(b) The provisions of this Section 4.06 are made for the benefit of the Agents,
the Lenders and their successors and assigns, and may be enforced by them from
time to time against any or all of the Borrowers as often as occasion therefor
may arise and without requirement on the part of the Agents, the Lenders or such
successors or assigns first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Borrowers or to exhaust any
remedies available to it or them against any of the other Borrowers or to resort
to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 4.06
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied.

(c) Each of the Borrowers hereby agrees that it will not enforce any of its
rights of contribution or subrogation against the other Borrowers with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agents or the Lenders with respect to
any of the Obligations or any Collateral, until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to the Agents or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.

 

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ARTICLE V

CONDITIONS TO LOANS

Section 5.01 Conditions Precedent to Effectiveness. This Agreement shall become
effective as of the Business Day (the “Effective Date”) when each of the
following conditions precedent shall have been satisfied in a manner
satisfactory to the Agents:

(a) Payment of Fees, Etc. The Borrowers shall have paid on or before the date of
this Agreement all fees, costs and expenses then payable pursuant to
Section 2.06(b) and Section 12.04.

(b) Representations and Warranties; No Event of Default. The following
statements shall be true and correct: (i) the representations and warranties
contained in ARTICLE VI and in each other Loan Document, certificate or other
writing delivered to any Agent pursuant hereto or thereto on or prior to the
Effective Date are true and correct on and as of the Effective Date as though
made on and as of such date, except to the extent that any such representation
or warranty expressly relates solely to an earlier date (in which case such
representation or warranty shall be true and correct on and as of such earlier
date) and (ii) no Default or Event of Default shall have occurred and be
continuing on the Effective Date or would result from this Agreement or the
other Loan Documents becoming effective in accordance with its or their
respective terms.

(c) Legality. The making of the Loans shall not contravene any law, rule or
regulation applicable to any Agent or any Lender.

(d) Delivery of Documents. The Collateral Agent shall have received on or before
the Effective Date the following, each in form and substance satisfactory to the
Collateral Agent and, unless indicated otherwise, dated the Effective Date:

(i) the Contribution Agreement, duly executed by each Loan Party;

(ii) the Disbursement Letter, duly executed by each of the parties thereto;

(iii) the Fee Letter, duly executed by the Borrowers;

(iv) the Intercompany Subordination Agreement, duly executed by each Loan Party;

(v) a Security Agreement and a Perfection Certificate, in each case, duly
executed by each Loan Party, together with the original stock certificates
representing all of the common stock of such Loan Party’s subsidiaries and all
intercompany promissory notes of such Loan Parties, accompanied by undated stock
powers executed in blank and other proper instruments of transfer;

 

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(vi) (A) appropriate financing statements on Form UCC-1 duly filed in such
office or offices as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be created by
the Security Agreement and (B) evidence reasonably satisfactory to the
Collateral Agent of the filing of such UCC-1 financing statements (it being
understood that such evidence need not include file-stamped copies of the
financing statements);

(vii) certified copies of request for copies of information on Form UCC-11,
listing all effective financing statements which name as debtor any Loan Party
and which are filed in the offices referred to in paragraph (vii) above,
together with copies of such financing statements, and the results of searches
for any tax Lien and judgment Lien filed against such Person or its property,
which results, shall not show any such Liens (other than Permitted Liens and
Liens in respect of the Existing Credit Facility);

(viii) a copy of the resolutions of each Loan Party, certified as of the
Effective Date by an Authorized Officer thereof, authorizing (A) the borrowings
hereunder and the transactions contemplated by the Loan Documents to which such
Loan Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document to which such Loan Party is
or will be a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;

(ix) a certificate of an Authorized Officer of each Loan Party, certifying the
names and true signatures of the representatives of such Loan Party authorized
to sign each Loan Document to which such Loan Party is or will be a party and
the other documents to be executed and delivered by such Loan Party in
connection herewith and therewith, together with evidence of the incumbency of
such authorized officers;

(x) a certificate of the appropriate official(s) of the jurisdiction of
organization and each jurisdiction of foreign qualification of each Loan Party
(other than foreign jurisdictions where the failure to be so qualified could not
reasonably be expected to result in a Material Adverse Effect) certifying as of
a recent date not more than 45 days prior to the Effective Date as to the
subsistence in good standing of, and, to the extent available to be included in
such certificate, the payment of taxes by, such Loan Party in such
jurisdictions, and bringdowns thereof from the jurisdiction of organization of
each Loan Party on the Effective Date;

(xi) a true and complete copy of the charter, certificate of formation,
certificate of limited partnership or other publicly filed organizational
document of each Loan Party certified as of a recent date not more than 30 days
prior to the Effective Date by an appropriate official of the jurisdiction of
organization of such Loan Party which shall set forth the same complete name of
such Loan Party as is set forth herein and the organizational number of such
Loan Party, if an organizational number is issued in such jurisdiction;

(xii) a copy of the Governing Documents of each Loan Party, together with all
amendments thereto, certified as of the Effective Date by an Authorized Officer
of such Loan Party;

 

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(xiii) an opinion of Skadden Arps Slate Meagher & Flom LLP, counsel to the Loan
Parties, as to such matters as the Collateral Agent may reasonably request

(xiv) a certificate of an Authorized Officer of each Loan Party, certifying as
to the matters set forth in subsection (b) of this Section 5.01;

(xv) a copy of (A) the Financial Statements, (B) the Pro Forma Balance Sheet,
and (C) the financial projections described in Section 6.01(g) hereof, certified
as true and correct copies thereof (or references thereto) by an Authorized
Officer of the Parent;

(xvi) a certificate of the chief financial officer of the Parent, setting forth
in reasonable detail the calculations required to establish compliance, on a pro
forma basis after giving effect to the Loans, with each of the financial
covenants contained in Section 7.03 as of October 31, 2011;

(xvii) a certificate of the chief financial officer of the Parent, certifying as
to the solvency of the Loan Parties, taken as a whole, which certificate shall
be reasonably satisfactory in form and substance to the Collateral Agent;

(xviii) evidence of the insurance coverage required by Section 7.01 and the
terms of the Security Agreement, together with endorsements evidencing that the
Collateral Agent has been named as additional insured and loss payee thereunder;

(xix) copies of the Floating Rate Note Documents, the L/C Facility and the other
material written documents (other than purchase orders) with respect to the Top
Suppliers as in effect on the Effective Date, certified as true and correct
copies thereof by an Authorized Officer of the Parent;

(xx) evidence of the payment in full of all Indebtedness under the Existing
Credit Facility (it being understood that the letters of credit issued
thereunder shall be backstopped by letters of credit issued under the L/C
Facility), together with (A) termination and release agreements,
(B) satisfaction of mortgages, (C) a terminations of security interest in
intellectual property, and (D) UCC-3 termination statements;

(xxi) evidence, in form and substance reasonably satisfactory to the Collateral
Agent that Wachovia Bank, National Association has been removed as Priority
Collateral Trustee as defined in and in accordance with the terms of the
Collateral Trust Agreement, and the Collateral Agent has been appointed as
Priority Collateral Trustee as defined in and in accordance with the terms of
the Collateral Trust Agreement, including, without limitation, evidence of the
execution and delivery of the Collateral Trust Agreement Documents by each of
the parties thereto;

(xxii) the Officers’ Certificate (as defined in the Collateral Trust Agreement)
described in clause (1) of the definition of “Priority Lien Debt” in the
Collateral Trust Agreement;

(xxiii) such depository account, blocked account, lockbox account and similar
agreements and other documents, each in form and substance reasonably
satisfactory to the Agents, as the Agents may request with respect to the Loan
Parties’ cash management system; and

 

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(xxiv) a duly executed Notice of Borrowing pursuant to Section 2.02 hereof.

(e) Material Adverse Effect. The Collateral Agent shall have determined, in its
sole judgment, that no event or development shall have occurred since
December 31, 2010 which could reasonably be expected to have a Material Adverse
Effect.

(f) Approvals. All consents, authorizations and approvals of, and filings and
registrations with, and all other actions in respect of, any Governmental
Authority or other Person required in connection with the making of the Loans
shall have been obtained and shall be in full force and effect.

(g) Proceedings; Receipt of Documents. All proceedings in connection with the
making of the initial Loans and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be satisfactory to the Collateral Agent and its counsel, and the
Collateral Agent and such counsel shall have received all such information and
such counterpart originals or certified or other copies of such documents as the
Collateral Agent or such counsel may reasonably request.

(h) Due Diligence. The Agents shall have completed their business, legal and
collateral due diligence with respect to each Loan Party and the results thereof
shall be acceptable to the Agents, in their sole and absolute discretion.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.01 Representations and Warranties. As of the Effective Date, each Loan
Party hereby represents and warrants to the Agents and the Lenders as follows:

(a) Organization, Good Standing, Etc. Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the state or jurisdiction of its
organization, (ii) has all requisite power and authority to conduct its business
as now conducted and as presently contemplated and, in the case of the
Borrowers, to make the borrowings hereunder, and to execute and deliver each
Loan Document to which it is a party, and to consummate the transactions
contemplated thereby, and (iii) is duly qualified to do business and is in good
standing in each jurisdiction (to the extent the concept of good standing is
applicable to such Borrower or Guarantor under the laws of the relevant state or
jurisdiction) in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary and
where the failure to so qualify could reasonably be expected to result in a
Material Adverse Effect.

(b) Authorization, Etc. The execution, delivery and performance by each Loan
Party of each Loan Document to which it is a party, (i) have been duly
authorized by all

 

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necessary action, (ii) do not and will not contravene any of its Governing
Documents in any respect or any applicable Requirement of Law in any material
respect or any material Contractual Obligation binding on or otherwise affecting
it or any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any Loan Document) upon or with
respect to any of its properties, and (iv) do not and will not result in any
default, noncompliance, suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval that is
necessary to its operations or any of its properties.

(c) Governmental and Other Approvals. Other than (i) the filings necessary to
perfect the security interests in favor of the Collateral Agent contemplated
hereby, or (ii) as to which the failure to obtain could not reasonably be
expected to result in a Material Adverse Effect, no authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority or
any other Person is required in connection with (A) the due execution, delivery
and performance by any Loan Party of any Loan Document to which it is a party,
(B) the grant by any Loan Party of the security interest purported to be created
under any Loan Document in the Collateral or (C) the exercise by the Collateral
Agent of any of its rights and remedies under any Loan Document, in accordance
with the terms thereof and applicable law, except, in the case of this clause
(C), as may be required in connection with any sale of any Equity Interests by
laws affecting the offering and sale of securities generally or in connection
with any notice to any Person expressly provided for in any Loan Document.

(d) Enforceability of Loan Documents. This Agreement is, and each other Loan
Document to which any Loan Party is a party, when delivered hereunder, will be,
a legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors’ rights generally.

(e) Subsidiaries. Schedule 6.01(e) is a complete and correct description of the
name, jurisdiction of incorporation and ownership of the outstanding Equity
Interests of such Subsidiaries of the Parent in existence. All of the issued and
outstanding shares of Equity Interests of such Subsidiaries have been validly
issued and are fully paid and nonassessable, and the holders thereof are not
entitled to any preemptive, first refusal or other similar rights. All such
Equity Interests are owned by the Parent or one or more of its wholly-owned
Subsidiaries, free and clear of all Liens (other than Permitted Liens described
in clauses (a), (b) and (j) of the definition of Permitted Liens). There are no
(i) outstanding debt or equity securities, (ii) outstanding obligations
convertible into or exchangeable for, (iii) warrants, options or other rights
for the purchase or acquisition from, or (iv) other obligations of any
Subsidiary, in each case, to issue, directly or indirectly, any shares of Equity
Interests of any Subsidiary of the Parent.

(f) Litigation. There is no pending or, to the knowledge of any Loan Party,
threatened (in writing) action, suit or proceeding affecting any Loan Party or
any of its properties before any court or other Governmental Authority or any
arbitrator that (i) could reasonably be expected to have a Material Adverse
Effect or (ii) relates to this Agreement or any other Loan Document or any
transaction hereunder or thereunder.

 

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(g) Financial Condition.

(i) The Financial Statements, copies of which have been delivered to each Agent,
fairly present in all material respects the consolidated financial condition of
the Parent and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations of the Parent and its Subsidiaries for the
fiscal periods ended on such respective dates, all in accordance with GAAP
except for, with respect to the interim financial statements, the absence of
footnotes and customary year-end adjustments, and, except as disclosed in the
interim financial statements, since December 31, 2010 no event or development
has occurred that has had or could reasonably be expected to have a Material
Adverse Effect.

(ii) The Parent has heretofore delivered to each Agent the unaudited pro forma
consolidated balance sheet of the Parent and its Subsidiaries as of October 31,
2011 (the “Balance Sheet Date”) after giving effect to the transactions
contemplated to occur on the Effective Date as if they had occurred on the
Balance Sheet Date (the “Pro Forma Balance Sheet”). Such Pro Forma Balance Sheet
accurately reflects, to Parent’s knowledge, all adjustments (other than
immaterial adjustments) required to be made to give effect to the transactions
contemplated to occur on the Effective Date and presents fairly in all material
respects the pro forma consolidated financial position of the Parent and its
Subsidiaries as of the Balance Sheet Date, assuming that the transactions
contemplated to occur on the Effective Date had occurred at the Balance Sheet
Date.

(iii) The Parent has heretofore furnished to each Agent (A) projected quarterly
balance sheets, income statements and statements of cash flows of the Parent and
its Subsidiaries for the period from September 30, 2011 through December 31,
2013, and (B) projected annual balance sheets, income statements and statements
of cash flows of the Parent and its Subsidiaries for the Fiscal Years ending in
2014 and 2015. Such projections shall be believed by the Parent at the time
furnished to be reasonable, shall have been prepared in light of the past
operations of the business of Parent and are based upon estimates and
assumptions stated therein, all of which Parent believes to be reasonable and
fair in light of the then current conditions and current facts and reflect the
good faith and reasonable estimates of Parent of the future financial
performance of Parent and its Subsidiaries and of the other information
projected therein for the periods set forth therein.

(h) Compliance with Law, Etc. No Loan Party or any of its Subsidiaries is in
violation of (i) any of its Governing Documents, (ii) any domestic or foreign
material Requirement of Law, including, without limitation, any material
Environmental Laws, any material statute, legislation or treaty, any material
guideline, directive, rule, standard, requirement, policy, order, judgment,
injunction, award or decree of any Governmental Authority, in each case,
applicable to it or any of its property or assets, except where the failure to
so comply could not reasonably be expected to have material consequences to the
Loan Parties, or (iii) any material term of any Contractual Obligation
(including, without limitation, any Material Contract) binding on or otherwise
affecting it or any of its properties, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.

(i) ERISA. (i) Each Employee Plan is in substantial compliance with ERISA and
the Internal Revenue Code, (ii) no Termination Event has occurred nor is
reasonably expected to occur with respect to any Employee Plan, (iii) the most
recent annual report (Form

 

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5500 Series) with respect to each Employee Plan, including any required
Schedule B (Actuarial Information) thereto, copies of which have been filed with
the Internal Revenue Service and delivered to the Agents, is complete and
correct in all material respects and fairly presents the funding status of such
Employee Plan, and since the date of such report there has been no material
adverse change in such funding status, (iv) copies of each agreement entered
into with the PBGC, the U.S. Department of Labor or the Internal Revenue Service
with respect to any Employee Plan have been delivered to the Agents, (v) no
Employee Plan had an accumulated or waived funding deficiency or permitted
decrease which would create a deficiency in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Internal Revenue Code at any time during the previous
60 months, and (vi) no Lien imposed under the Internal Revenue Code or ERISA
exists or is likely to arise on account of any Employee Plan within the meaning
of Section 412 of the Internal Revenue Code. No Loan Party or any of its ERISA
Affiliates has incurred any withdrawal liability under ERISA with respect to any
Multiemployer Plan, or is aware of any facts indicating that it or any of its
ERISA Affiliates may in the future incur any such withdrawal liability. No Loan
Party or any of its ERISA Affiliates nor any fiduciary of any Employee Plan has
with respect to an Employee Plan (i) engaged in a nonexempt prohibited
transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code, (ii) failed to pay any required installment or other payment required
under Section 412 of the Internal Revenue Code on or before the due date for
such required installment or payment, (iii) engaged in a transaction within the
meaning of Section 4069 of ERISA or (iv) incurred any liability to the PBGC
which remains outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid. There are no pending
or, to the knowledge of any Loan Party, threatened claims, actions, proceedings
or lawsuits (other than claims for benefits in the normal course) asserted or
instituted against (i) any Employee Plan or its assets, (ii) any fiduciary with
respect to any Employee Plan, or (iii) any Loan Party or any of its ERISA
Affiliates with respect to any Employee Plan. Except as required by
Section 4980B of the Internal Revenue Code, section 601 of ERISA or other
applicable law, no Loan Party or any of its ERISA Affiliates maintains an
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of any Loan Party or any of its
ERISA Affiliates or coverage after a participant’s termination of employment.

(j) Taxes, Etc. All Federal and all material state and local tax returns and
other material reports required by applicable Requirements of Law to be filed by
any Loan Party have been filed, or extensions have been obtained, and all taxes,
assessments and other governmental charges imposed upon any Loan Party or any
property of any Loan Party in an aggregate amount in excess of $2,000,000 and
which are due and payable have been paid, other than any taxes that are being
contested in good faith by appropriate proceedings which stay the imposition of
any penalty, fine or Lien resulting from the non-payment thereof; provided that
appropriate reserves are maintained on the books of the relevant Loan Party in
conformity with GAAP.

(k) Regulations T, U and X. No Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation T, U or X), and no proceeds of any Loan will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

 

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(l) Nature of Business. No Loan Party is engaged in any business other than
supplying, manufacturing and installing structural and other building products
for new construction in the United States or any business reasonably related or
incidental thereto or constituting a reasonable extension thereof.

(m) Adverse Agreements, Etc. No Loan Party or any of its Subsidiaries is a party
to any Contractual Obligation or subject to any restriction or limitation in any
Governing Document or any judgment, order, regulation, ruling or other
requirement of a court or other Governmental Authority, which (either
individually or in the aggregate) has, or in the future could reasonably be
expected (either individually or in the aggregate) to have, a Material Adverse
Effect.

(n) Permits, Etc. Each Loan Party has, and is in compliance with, all material
permits, licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to be
acquired, by such Person if the failure to have or be in compliance therewith
could reasonably be expected to result in a Material Adverse Effect. All of the
permits, licenses, authorizations, approvals, entitlements and accreditations
are valid and subsisting and in full force and effect, except where the failure
to be so valid and subsisting could not be reasonably expected to have a
Material Adverse Effect. There are no actions, claims or proceedings pending or,
to the knowledge of any Loan Party, threatened in writing that seek the
revocation, cancellation, suspension or modification of any of the permits,
licenses, authorizations, approvals, entitlements and accreditations where any
of the same would have a Material Adverse Effect.

(o) Properties. Each Loan Party has good and marketable title to, valid
leasehold interests in, or valid licenses to use, all property and assets
material to its business, free and clear of all Liens, except Permitted Liens.
All such properties and assets are maintained in accordance with industry
standards.

(p) Full Disclosure. Each Loan Party has disclosed to the Agents all agreements,
instruments and corporate or other restrictions to which it is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Loan Party to the Agents in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished), taken as a whole and when furnished, contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which it
was made, not materially misleading; provided that, with respect to projected
financial information, each Loan Party represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time prepared, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount.

 

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(q) Operating Lease Obligations. On the Effective Date, none of the Loan Parties
has any Operating Lease Obligations having payment obligations in excess of
$50,000 per Fiscal Year, other than the Operating Lease Obligations disclosed in
writing to the Collateral Agent prior to the Effective Date.

(r) Environmental Matters. Except as set forth on Schedule 6.01(r), (i) there
has been no Release at any of the properties owned or operated by any Loan Party
or a predecessor in interest, or at any disposal or treatment facility which
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could reasonably be expected to have a Material Adverse Effect;
(ii) no Environmental Action has been asserted against any Loan Party or any
predecessor in interest nor does any Loan Party have knowledge or notice of any
threatened in writing or pending Environmental Action against any Loan Party or
any predecessor in interest which could reasonably be expected to have a
Material Adverse Effect; (iii) to the knowledge of each Loan Party, no
Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could reasonably be expected to have a Material Adverse Effect;
(iv) no property now or, to the knowledge of each Loan Party, formerly owned or
operated by a Loan Party has been used as a treatment or disposal site for any
Hazardous Material; (v) no Loan Party has failed to report to the proper
Governmental Authority any Release which is required to be so reported by any
Environmental Laws which could reasonably be expected to have a Material Adverse
Effect; (vi) each Loan Party holds all licenses, permits and approvals required
under any Environmental Laws in connection with the operation of the business
carried on by it, except for such licenses, permits and approvals as to which a
Loan Party’s failure to maintain or comply with could not reasonably be expected
to have a Material Adverse Effect; and (vii) no Loan Party has received any
written notification pursuant to any Environmental Laws that (A) any work,
repairs, construction or capital expenditures are required to be made in respect
thereof as a condition of continued compliance with any Environmental Laws, or
any license, permit or approval issued pursuant thereto or (B) any license,
permit or approval referred to above is about to be reviewed, made, subject to
limitations or conditions, revoked, withdrawn or terminated, in each case,
except as could not reasonably be expected to have a Material Adverse Effect.

(s) Insurance. Each Loan Party maintains the insurance required by
Section 7.01(h). All insurance maintained by each Loan Party on the Effective
Date has been disclosed to the Collateral Agent in writing prior to the
Effective Date.

(t) Use of Proceeds. The proceeds of the Loans shall be used to (a) refinance
existing indebtedness of the Borrowers, (b) pay fees and expenses in connection
with the transactions contemplated hereby, (c) fund working capital of the
Borrowers, and (d) for general corporate purposes.

(u) Solvency. After giving effect to the transactions contemplated by this
Agreement and before and after giving effect to the Loan, the Loan Parties on a
consolidated basis are Solvent.

 

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(v) [Intentionally Omitted.]

(w) Intellectual Property. Except as set forth on Schedule 6.01(w), each Loan
Party owns or licenses or otherwise has the right to use all patents, patent
applications, trademarks, trademark applications, service marks, tradenames,
copyrights, copyright applications and other intellectual property rights that
are necessary in all material respects for the operation of its business,
without infringement upon or conflict with the rights of any other Person with
respect thereto, and all such intellectual property owned by a Loan Party is
subsisting and, to the knowledge of such Loan Party, valid and enforceable, has
not been abandoned, and is not subject to any outstanding order, judgment or
decree restricting its use or adversely affecting such Loan Party’s rights
thereto, except, in each case, for such failure to possess such rights,
infringements, conflicts, nonsubsistence, invalidity, unenforceability,
abandonment or outstanding orders, judgments or decrees, which, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. Except as set forth in Schedule 6.01(w) hereto, no such intellectual
property is the subject of any material licensing agreement as to which a Loan
Party is a party. Set forth on Schedule 6.01(w) is a complete and accurate list
of all such material licenses patents, patent applications, trademarks,
trademark applications, service marks, tradenames, copyrights, copyright
applications and other intellectual property rights of each Loan Party. To the
knowledge of any Loan Party, no slogan or other advertising device, product,
process, method, substance or other Intellectual Property or goods bearing or
using any Intellectual Property presently contemplated to be sold by or employed
by any Loan Party infringes any patent, trademark, servicemark, tradename,
copyright, license or other Intellectual Property owned by any other Person in
any material respect, and no claim or litigation regarding any of the foregoing
is pending or, to the knowledge of any Loan Party, threatened in writing, except
for such infringements and conflicts which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

(x) Material Contracts. The Loan Parties have delivered to the Collateral Agent
a complete and accurate list of the Top Suppliers and a list of the material
written documents with respect thereto, and copies thereof to the extent
requested by the Collateral Agent. Each such Material Contract (i) is in full
force and effect and is binding upon and enforceable against each Loan Party
that is a party thereto, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditor’s rights generally and (ii) except (A) as disclosed to the
Agents in writing prior to the Effective Date, and (B) to the extent of good
faith disputes, is not in material default due to the action of any Loan Party
or, to the best knowledge of any Loan Party, any other party thereto.

(y) Investment Company Act. None of the Loan Parties is (i) an “investment
company” or an “affiliated person” or “promoter” of, or “principal underwriter”
of or for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940, as amended, or (ii) subject to regulation under any
Requirement of Law that limits in any respect its ability to incur Indebtedness
or which may otherwise render all or a portion of the Obligations unenforceable.

(z) Employee and Labor Matters. There is (i) no unfair labor practice complaint
pending or, to the knowledge of any Loan Party, threatened in writing against
any Loan Party before any Governmental Authority and no grievance or arbitration
proceeding

 

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pending or threatened in writing against any Loan Party which arises out of or
under any collective bargaining agreement, (ii) no strike, labor dispute,
slowdown, stoppage or similar action or grievance pending or, to the knowledge
of any Loan Party, threatened in writing against any Loan Party or (iii) to the
knowledge of each Loan Party, no union representation question existing with
respect to the employees of any Loan Party and no union organizing activity
taking place with respect to any of the employees of any Loan Party. No Loan
Party has incurred any material liability or obligation under the Worker
Adjustment and Retraining Notification Act (“WARN”) or similar state law, which
remains unpaid or unsatisfied. The hours worked and payments made to employees
of any Loan Party have not been in violation of the Fair Labor Standards Act or
any other applicable legal requirements, except to the extent such violations
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect. All material payments due from any Loan Party on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of such Loan Party, except
where the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

(aa) [Intentionally Omitted].

(bb) No Bankruptcy Filing. No Loan Party is contemplating either an Insolvency
Proceeding or the liquidation of all or a major portion of such Loan Party’s
assets or property, and no Loan Party has any knowledge of any Person
contemplating an Insolvency Proceeding against it.

(cc) Interrelated Business. The Loan Parties make up a related organization of
various entities constituting a single economic and business enterprise so that
the Loan Parties share an identity of interests such that any benefit received
by any one of them benefits the others. From time to time each Loan Party may
render services to or for the benefit of the other Loan Parties, purchase or
sell and supply goods to or from or for the benefit of the others, make loans,
advances and provide other financial accommodations to or for the benefit of the
other Loan Parties (including inter alia, the payment by such Loan Party of
creditors of the other Loan Parties and guarantees by such Loan Party of
indebtedness of the other Loan Parties and provides administrative, marketing,
payroll and management services to or for the benefit of the other Loan
Parties). The Loan Parties have the same chief executive office, centralized
accounting and legal services, certain common officers and directors and
generally do not provide consolidating financial statements to creditors.

(dd) Name; Jurisdiction of Organization; Organizational ID Number; Chief Place
of Business; Chief Executive Office; FEIN. Schedule 6.01(dd) sets forth a
complete and accurate list of (i) the exact legal name of each Loan Party,
(ii) the jurisdiction of organization of each Loan Party, (iii) the
organizational identification number of each Loan Party (or indicates that such
Loan Party has no organizational identification number), (iv) each place of
business of each Loan Party (identifying the chief place of business of each
Loan Party), (v) the chief executive office of each Loan Party and (vi) the
federal employer identification number of each Loan Party.

(ee) [Intentionally Omitted]

 

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(ff) Security Interests. The Security Agreement creates in favor of the
Collateral Agent, for the benefit of the Agents and the Lenders, a legal, valid
and enforceable security interest in the Collateral secured thereby, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally. To the extent provided in the Security Agreement,
upon the filing of the UCC-1 financing statements described in Section 5.01(d)
and the recording of the Collateral Assignments for Security referred to in the
Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, such security interests in and
Liens on the Collateral granted thereby shall be perfected, first priority
security interests (subject only to Permitted Liens), and no further recordings
or filings are or will be required in connection with the creation, perfection
or enforcement of such security interests and Liens, other than (i) the filing
of continuation statements in accordance with applicable law, (ii) the recording
of the Collateral Assignments for Security pursuant to each Security Agreement
in the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, with respect to after-acquired U.S. patent and trademark
applications and registrations and U.S. copyrights and (iii) the recordation of
appropriate evidence of the security interest in the appropriate foreign
registry with respect to all foreign intellectual property.

(gg) Classification as Priority Lien Obligations; etc. The Obligations
constitute “Priority Lien Obligations” under and as defined in the Collateral
Trust Agreement and constitute “Senior Indebtedness” and “Designated Senior
Indebtedness” (or any comparable term) under and as defined in any agreement
governing any outstanding Subordinated Indebtedness, and the subordination
provisions set forth in the Collateral Trust Agreement and each such other
agreement are legally valid and enforceable against the parties thereto, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditor’s rights
generally. Except for the Obligations there are no other “Priority Lien
Obligations”. Except for Collateral Agent, there is no, and there shall not at
any time be any, other “Priority Lien Representative” or “Priority Collateral
Trustee” under and as defined in the Collateral Trust Agreement. The Collateral
Agent is the “Priority Lien Representative” and “Priority Collateral Trustee”
under the Collateral Trust Agreement. The outstanding amount of the Obligations
under the Financing Agreement does not exceed the “Priority Lien Cap” under and
as defined in the Floating Rate Note Indenture. Except for the obligations under
the Floating Rate Note Documents, there is no other “Parity Lien Debt” under and
as defined in the Collateral Trust Agreement. Except for the Floating Rate Note
Collateral Trustee, there is no other Parity Collateral Trustee or Parity Lien
Representative (as each such term is defined in the Collateral Trust Agreement).
The Liens and security interests of Collateral Agent securing the Obligations
constitute Permitted Liens (as defined in the Floating Rate Note Indenture). No
Borrower or Guarantor has granted control to any Parity Lien Trustee or Parity
Lien Representative with respect to any deposit account, investment account,
securities account, commodity account or similar account, other than any account
for which such Borrower or Guarantor has granted control to both the Priority
Collateral Trustee and the Parity Collateral Trustee pursuant to a single
account control agreement.

(hh) Schedules. All of the information which is required to be scheduled to this
Agreement is set forth on the Schedules attached hereto, and, taken as a whole,
(i) is correct and accurate (other than immaterial errors), and (ii) does not
omit to state any material fact necessary to make the information contained
therein not materially misleading.

 

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(ii) Anti-Terrorism Laws.

(i) General. None of the Loan Parties nor, to the knowledge of any Loan Party,
any Affiliates of any Loan Parties (other than Portfolio Companies of the
Permitted Holders), is in violation of any Anti-Terrorism Law or engages in or
conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the Anti-Terrorism Laws.

(ii) None of the Loan Parties, nor, to the knowledge of any Loan Party, any
Affiliates of any Loan Parties (other than Portfolio Companies of the Permitted
Holders) is any of the following (each a “Blocked Person”):

(A) a Person that is prohibited pursuant to any of the OFAC Sanctions Programs,
including a Person named on OFAC’s list of Specially Designated Nationals and
Blocked Persons;

(B) a Person that is controlled by, or that owns or controls, or that is acting
for or on behalf of, any Person described in (A), above;

(C) a Person with which any U.S. Person is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(D) a Person that is affiliated or associated with a Person described in
(A) through (C), above;

(iii) To the best of their knowledge, none of the Loan Parties (i) conducts any
business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, or (ii) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to any OFAC Sanctions Programs.

(jj) No Default. No Event of Default has occurred and is continuing and no
condition exists which constitutes a Default or an Event of Default.

ARTICLE VII

COVENANTS OF THE LOAN PARTIES

Section 7.01 Affirmative Covenants. So long as any principal of or interest on
any Loan or any other Obligation (whether or not due) shall remain unpaid, each
Loan Party will, unless the Required Lenders shall otherwise consent in writing:

(a) Reporting Requirements. Furnish to Administrative Agent:

(i) within 45 days after the end of the first three fiscal quarters of the
Parent and its Subsidiaries of each Fiscal Year commencing with fiscal quarter
ending

 

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March 31, 2012, unaudited consolidated financial statements (including balance
sheets, statements of operations and retained earnings and statements of cash
flows of the Parent and its Subsidiaries) as at the end of such quarter, and
setting forth in each case in comparative form the figures for the corresponding
date or period set forth in (x) the financial statements for the immediately
preceding Fiscal Year and (y) the budget delivered pursuant to clause (vii) of
this Section 7.01(a), all in reasonable detail and certified by an Authorized
Officer of the Parent as fairly presenting, in all material respects, the
financial position of the Parent and its Subsidiaries as of the end of such
quarter and the results of operations and cash flows of the Parent and its
Subsidiaries for such quarter, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements of the
Parent and its Subsidiaries furnished to the Agents and the Lenders, subject to
the absence of footnotes and normal year-end adjustments;

(ii) within 90 days after the end of each Fiscal Year of the Parent and its
Subsidiaries, consolidated balance sheets, consolidated statements of operations
and retained earnings and consolidated statements of cash flows of the Parent
and its Subsidiaries as at the end of such Fiscal Year, setting forth in each
case in comparative form the figures for the corresponding date or period set
forth in the financial statements for the immediately preceding Fiscal Year, all
in reasonable detail and prepared in accordance with GAAP, and accompanied by a
report and an opinion, prepared in accordance with generally accepted auditing
standards, of PricewaterhouseCoopers LLP, Deloitte & Touche, Ernst & Young,
KPMG, or such other independent certified public accountants of recognized
standing selected by the Parent and reasonably satisfactory to the Collateral
Agent (which opinion shall be without (A) a “going concern” or like
qualification or exception (provided that any “going concern” or like
qualification or exception to the extent arising from the maturity of the Loans
or the L/C Facility (or any refinancing or replacement thereof) or any projected
financial covenant default under this Agreement shall not constitute a violation
of this clause (a)(ii)), or (B) any qualification or exception as to the scope
of such audit, together with a written statement of such accountants (1) to the
effect that, in making the examination necessary for their certification of such
financial statements, they have not obtained any knowledge of the existence of
an Event of Default or a Default and (2) if such accountants shall have obtained
any knowledge of the existence of an Event of Default or such Default,
describing the nature thereof;

(iii) within 30 days after the end of each fiscal month of the Parent and its
Subsidiaries commencing with the first fiscal month of the Parent and its
Subsidiaries ending after the Effective Date, unaudited consolidated financial
statements (including balance sheets, statements of operations and retained
earnings and statements of cash flows of the Parent and its Subsidiaries) as at
the end of such fiscal month, and setting forth in each case in comparative form
the figures for the corresponding date or period set forth in (x) the financial
statements for the immediately preceding Fiscal Year and (y) the projections
delivered pursuant to clause (vii) of this Section 7.01(a), all in reasonable
detail and certified by an Authorized Officer of the Parent as fairly
presenting, in all material respects, the financial position of the Parent and
its Subsidiaries as at the end of such fiscal month and the results of
operations, retained earnings and cash flows of the Parent and its Subsidiaries
for such fiscal month, in accordance with GAAP applied in a manner consistent
with that of the most recent audited financial statements furnished to the
Agents and the Lenders, subject to the absence of footnotes and normal year-end
adjustments;

 

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(iv) simultaneously with the delivery of the financial statements of the Parent
and its Subsidiaries required by clauses (i), (ii) and (iii) of this
Section 7.01(a), a certificate of an Authorized Officer of the Parent
(A) stating that such Authorized Officer has reviewed the provisions of this
Agreement and the other Loan Documents and has made or caused to be made under
his or her supervision a review of the condition and operations of the Parent
and its Subsidiaries during the period covered by such financial statements with
a view to determining whether the Parent and its Subsidiaries were in compliance
with all of the provisions of this Agreement and such Loan Documents at the
times such compliance is required hereby and thereby, and that such review has
not disclosed, and such Authorized Officer has no knowledge of, the existence
during such period of an Event of Default or Default or, if an Event of Default
or Default existed, describing the nature and period of existence thereof and
the action which the Parent and its Subsidiaries propose to take or have taken
with respect thereto, (B) attaching a schedule showing the calculation of the
financial covenants specified in Section 7.03, and (C) in the case of financial
statements delivered pursuant to Section 7.01(a)(ii), attaching (1) a summary of
all material insurance coverage maintained as of the date thereof by the Loan
Parties, and (2) an updated Perfection Certificate identifying any such changes
to the information contained in the most recently delivered Perfection
Certificate.

(v) within 15 Business Days after the end of each fiscal month of the Parent and
its Subsidiaries (the last Business Day of such fiscal month being the “Report
Date”), commencing with the first fiscal month of the Parent and its
Subsidiaries ending after the Effective Date, reports in form and detail
reasonably satisfactory to the Collateral Agent and certified by an Authorized
Officer of the Borrowers’ Representative as being accurate and complete in all
material respects, setting forth

(A) the calculation of the Specified Collateral Value as of the last Business
Day of the immediately preceding fiscal month and the calculation of Qualified
Cash as of each Business Day of the immediately preceding fiscal month;

(B) (1) the consolidated Accounts Receivable aging by geographic market as of
the Report Date, (2) Account Receivable aging for any customer with a balance in
excess of $300,000 as of the Report Date, (3) Account Receivable aging for any
customer account with a balance more than 60 days past due in excess of $50,000
which is also greater than 10% of the customer’s total balance as of the Report
Date, (4) a “gross-to-net” reconciliation between all Accounts Receivable and
the Net Amount of Accounts Receivable (and in any event, including progress
billings) as of the Report Date and (5) a reconciliation of the schedule
delivered under (v)(B)(4) with the general ledger as of the Report Date;

(C) the aggregate balance of all accounts payable of the Loan Parties as of
Report Date and identifying each account payable by Loan Party and vendor in an
amount in excess of $250,000 (and listing the amount and age of each such
account payable as of the Report Date);

(D) the aggregate Value of all Inventory of the Loan Parties as of the Report
Date, showing a breakdown of such Inventory by category and amount, the value
thereof (by location), and including turnover by location and category;

 

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(E) a summary aging of all installation jobs in progress by customer; and

(F) such other information as the Collateral Agent may reasonably request, in
detail and in form reasonably satisfactory to the Collateral Agent;

(vi) within fifteen (15) Business Days after the end of each calendar month), on
a monthly basis, a certificate of an Authorized Officer of the Borrowers’
Representative consisting of: (A) a statement confirming the payment of rent and
other amounts due to owners and lessors of real property (including amounts in
excess of $25,000 owing to warehouses, processors and other third parties in
possession of Collateral) used by any Borrower in the immediately preceding
month, subject to year-end or monthly percentage rent payment adjustments,
except as specifically described in such certificate, (B) the addresses of all
distribution center locations of Borrowers and Guarantors acquired or opened
since the date of the most recent certificate delivered to Collateral Agent
containing the information required under this clause, and (C) a statement that
all sales and use taxes have been paid when due as of the date of the
certificate, except as specifically described in such certificate;

(vii) not later than 60 days after the beginning of each Fiscal Year, an annual
budget for the Parent and its Subsidiaries for such Fiscal Year, prepared on a
monthly basis and otherwise in form reasonably satisfactory to the Collateral
Agent, all such financial projections to be reasonable, to be prepared on a
reasonable basis and in good faith, and to be based on assumptions believed by
the Parent to be reasonable at the time made and from the best information then
available to the Parent;

(viii) promptly following the date on which any Loan Party obtains knowledge
thereof, notice of the commencement by any Governmental Authority of any
criminal proceeding, or any civil proceeding in which the penalties could
reasonably be expected to exceed $500,000, and thereafter, promptly following a
reasonable request by the Collateral Agent therefor, copies of all documents
furnished to such Governmental Authority in connection with such investigation,
to the extent the Loan Parties are able to identify such documents and are able
to provide the Collateral Agent such documents under applicable law;

(ix) within 3 Business Days after any Loan Party obtains knowledge of the
occurrence of an Event of Default or Default or the occurrence of any event or
development that could reasonably be expected to have a Material Adverse Effect,
the written statement of an Authorized Officer of the Borrowers’ Representative
setting forth the details of such Event of Default or Default or other event or
development having a Material Adverse Effect and the action, if any, which the
affected Loan Party proposes to take with respect thereto;

(x) (A) as soon as possible and in any event within 10 days after any Loan Party
or any ERISA Affiliate thereof knows or has reason to know that (1) any
Reportable Event with respect to any Employee Plan has occurred, (2) any other
Termination Event with respect to any Employee Plan has occurred, or (3) an
accumulated funding deficiency has been incurred or an application has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including installment payments) or an extension of any
amortization period under Section 412 of the Internal Revenue Code with

 

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respect to an Employee Plan, a statement of an Authorized Officer of the
Borrowers’ Representative setting forth the details of such occurrence and the
action, if any, which such Loan Party or such ERISA Affiliate proposes to take
with respect thereto, (B) promptly and in any event within 3 days after receipt
thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies
of each notice received by any Loan Party or any ERISA Affiliate thereof of the
PBGC’s intention to terminate any Plan or to have a trustee appointed to
administer any Plan, (C) promptly and in any event within 10 days after the
filing thereof with the Internal Revenue Service if requested by any Agent,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Employee Plan, (D) promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that a required installment within the meaning of Section 412 of
the Internal Revenue Code has not been made when due with respect to an Employee
Plan, (E) promptly and in any event within 3 days after receipt thereof by any
Loan Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer Plan
or from the PBGC, a copy of each notice received by any Loan Party or any ERISA
Affiliate thereof concerning the imposition or amount of withdrawal liability
under Section 4202 of ERISA or indicating that such Multiemployer Plan may enter
reorganization status under Section 4241 of ERISA, and (F) promptly and in any
event within 10 days after any Loan Party sends notice of a plant closing or
mass layoff (as defined in WARN) to employees, copies of each such notice sent
by such Loan Party;

(xi) not later than five (5) Business Days after any Loan Party obtains
knowledge that service of process has been made upon any Loan Party, notice of
each action, suit or proceeding before any court or other Governmental Authority
or other regulatory body or any arbitrator that could reasonably be expected to
have a Material Adverse Effect; provided, that if the service of process that is
made upon any Loan Party does not contain the relevant pleadings, such five
(5) Business Day period shall be extended an additional five (5) Business Days;

(xii) within 5 days after execution, receipt or delivery thereof, copies of any
material notices that any Loan Party executes or receives in connection with the
sale or other Disposition of the Equity Interests of, or all or substantially
all of the assets of, any Loan Party (other than notices in connection with
Dispositions of Equity Interests of the Parent);

(xiii) promptly after the sending or filing thereof, copies of all statements,
reports and other information any Loan Party sends to any holders of its
Indebtedness or its securities or files with the SEC or any national (domestic
or foreign) securities exchange;

(xiv) promptly upon receipt thereof, copies of all management letters, if any,
submitted to any Loan Party by its auditors in connection with any annual or
interim audit of the books thereof; and

(xv) promptly upon request, such other information concerning the condition or
operations, financial or otherwise, of any Loan Party as Collateral Agent may
from time to time may reasonably request.

To the extent any documents required to be delivered pursuant to this
Section 7.01(a) are included in materials otherwise filed with the Securities
and Exchange Commission, such

 

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documents may be delivered electronically and if so delivered, shall be deemed
to have been delivered on the date on which such documents are posted on a Loan
Party’s behalf on an Internet or intranet website, if any, to which each Lender
and Agent has access (whether commercial, third-party website or whether
sponsored by Agent).

(b) Additional Guaranties and Collateral Security. Cause:

(i) each Domestic Subsidiary of any Loan Party not in existence on the Effective
Date, to execute and deliver to the Collateral Agent (A) within ten
(10) Business Days after the formation, acquisition or change in status thereof
(or within such additional period of time reasonably consented to by the
Collateral Agent), (1) a Joinder Agreement, pursuant to which such Subsidiary
shall be made a party to this Agreement as a Guarantor, (2) a Perfection
Certificate with respect to such Subsidiary, and (3) a supplement to the
Security Agreement, together with (x) certificates evidencing all of the Equity
Interests of any Person owned by such Subsidiary (subject to the limitations set
forth below with respect to Equity Interests of Foreign Subsidiaries), and
(y) undated stock powers executed in blank, and (B) promptly following request
therefor, such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by the Collateral Agent in order to create,
perfect, establish the first priority of or otherwise protect any Lien purported
to be covered by any such Security Agreement or otherwise to effect the intent
that such Subsidiary shall become bound by all of the terms, covenants and
agreements contained in the Loan Documents and that all property and assets of
such Subsidiary shall become Collateral for the Obligations; and

(ii) each owner of the Equity Interests of any such Subsidiary to execute and
deliver (A) within ten (10) Business Days after the formation or acquisition of
such Subsidiary (or within such additional period of time reasonably consented
to by the Collateral Agent) a Pledge Amendment (as defined in the Security
Agreement), together with (1) certificates evidencing all of the Equity
Interests of such Subsidiary, and (2) undated stock powers or other appropriate
instruments of assignment executed in blank, and (B) promptly following request
therefor, such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by the Collateral Agent.

Notwithstanding the foregoing, no Foreign Subsidiary shall be required to become
a Guarantor hereunder (and, as such, shall not be required to deliver the
documents required by clause (i) above); provided, however, that if the Equity
Interests of a Foreign Subsidiary are owned by a Loan Party, such Loan Party
shall deliver, all such documents, instruments, agreements (including, without
limitation, at the reasonable request of the Collateral Agent, a pledge
agreement governed by the laws of the jurisdiction of organization of such
Foreign Subsidiary), and certificates described in clause (ii) above to the
Collateral Agent, and take all commercially reasonable actions reasonably
requested by the Collateral Agent or otherwise necessary to grant and to perfect
a first-priority Lien (subject to Permitted Liens) in favor of the Collateral
Agent, for the benefit of the Agents and the Lenders, in 65% of the voting
Equity Interests of such Foreign Subsidiary and 100% of all other Equity
Interests of such Foreign Subsidiary owned by such Loan Party.

(c) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, with all material Requirements of Law (including, without limitation,
all

 

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material Environmental Laws), except to the extent such failure could not
reasonably be expected to result in material consequence to the Loan Parties,
such compliance to include, without limitation, (A) paying before the same
become delinquent all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any of its properties in
an aggregate amount in excess of $5,000,000 (excluding such amounts that are
(i) being contested in good faith by appropriate proceedings diligently pursued,
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and for which appropriate reserves are maintained on the
books of the relevant Loan Party in conformity with GAAP, or (ii) determined to
be delinquent only following an audit, so long as immediately following the
conclusion of such audit such amounts are either paid or contested as described
in clause (i) above), and (B) paying all lawful claims which if unpaid might
become a Lien or charge upon any of its properties, except to the extent such
claims are being contested in good faith by appropriate proceedings diligently
pursued, which stay the imposition of any penalty, fine or Lien resulting from
the non-payment thereof and for which appropriate reserves are maintained on the
books of the relevant Loan Party in conformity with GAAP).

(d) Preservation of Existence, Etc. Except as otherwise expressly permitted by
Section 7.02(c), (i) maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, its existence, (ii) maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve its rights and privileges
(other than existence), and all permits, licenses, authorizations, approvals,
entitlements and accreditations which are necessary in the proper conduct of its
business, and (iii) become or remain, and cause each of its Subsidiaries to
become or remain, duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except, in the
case of clauses (ii) and (iii), to the extent that the failure to maintain and
preserve the foregoing could not reasonably be expected to result in a Material
Adverse Effect.

(e) Keeping of Records and Books of Account. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account, with complete
entries in all material respects made to permit the preparation of financial
statements in accordance with GAAP.

(f) Inspection Rights. Permit, and cause each of its Subsidiaries to permit, the
agents and representatives of the Agents (acting together) at any time and from
time to time, to examine and make copies of and abstracts from its records and
books of account, to visit and inspect its properties, to conduct Collateral
Examinations, and to discuss its affairs, finances and accounts with any of its
directors, officers, managerial employees, independent accountants or any of its
other representatives, in each case, in a manner so as not to unduly disrupt the
business of the Loan Parties. In furtherance of the foregoing, each Loan Party
hereby authorizes its independent accountants, and the independent accountants
of each of its Subsidiaries, to discuss the affairs, finances and accounts of
such Person (independently or together with representatives of such Person) with
the agents and representatives of any Agent in accordance with this
Section 7.01(f). The Borrowers agree to pay the reasonable costs (including all
fees, out-of-pocket costs and reasonable expenses incurred in connection
therewith) of all such visits, inspections, Collateral Examinations and
discussions conducted by or on behalf of the Agents; provided, that
notwithstanding the foregoing, so long as no Event of Default is continuing,
(i) the Borrowers

 

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shall not be required to pay for more than two (or in the case of the first
Fiscal Year following the Effective Date, one) Collateral Examinations during
any Fiscal Year, (ii) the Agents shall not be permitted to conduct more than
three (or in the case of the first Fiscal Year following the Effective Date,
two) Collateral Examinations during any Fiscal Year (including those Collateral
Examinations described in clause (i) above) (it being understood that multiple
types of Collateral Examinations that are conducted simultaneously shall
constitute a single Collateral Examination), (iii) the Agents shall not be
permitted to conduct more than two visits and inspections during any Fiscal
Year, and (iv) such visits, inspections, Collateral Examinations and discussions
will be scheduled during normal business and upon reasonable notice to the Loan
Parties.

(g) Maintenance of Properties, Etc. Maintain and preserve in all material
respects, and cause each of its Subsidiaries to maintain and preserve in all
material respects, all of its material properties which are necessary in the
proper conduct of its business in good working order and condition consistent
with industry standards, ordinary wear and tear and casualty excepted and
subject to the ability to consummate Permitted Dispositions, and comply, and
cause each of its Subsidiaries to comply, at all times with the provisions of
all Material Leases (other than lease locations where the Value of Inventory is
less than $200,000) to which it is a party as lessee or under which it occupies
property, so as to prevent any loss or forfeiture thereof or thereunder (other
than (i) leased property subject to a landlord waiver or collateral access
agreement in favor of the Collateral Agent, (ii) leases that are being contested
in good faith and (iii) such leases as disclosed to the Collateral Agent on or
prior to the Effective Date).

(h) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies
reasonably satisfactory to the Collateral Agent, with respect to the Collateral
against loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by companies of established reputation
engaged in the same or a similar business and, in any event, which (i) is
required by any Governmental Authority having jurisdiction with respect thereto,
and (ii) provides coverage that is not less (taking into account amount of
insurance, self insured retention amounts and deductibles) in any material
respect than the insurance coverage maintained by the Loan Parties and their
Subsidiaries on the Effective Date, unless (x) otherwise approved by the
Collateral Agent, (y) such insurance is no longer available, or (z) such
insurance is no longer available on commercially reasonable terms. All policies
covering the Collateral are to be made payable to the Collateral Agent for the
benefit of the Agents and the Lenders, as its interests may appear, in case of
loss, under a standard non-contributory “lender” or “secured party” clause. All
certificates of insurance are to be delivered to the Collateral Agent and the
policies are to be premium prepaid, with the loss payable and additional insured
endorsement in favor of the Collateral Agent and such other Persons as the
Collateral Agent may designate from time to time, and the Loan Parties shall use
commercially reasonable efforts to have such certificates provide for not less
than 30 days’ prior written notice to the Collateral Agent of the exercise of
any right of cancellation. Each Loan Party will, if so reasonably requested by
the Collateral Agent, deliver to the Collateral Agent original or duplicate
insurance policies and, as often as the Collateral Agent may reasonably request,
a report of an insurance broker with respect to such insurance. If any Loan
Party or any of its Subsidiaries fails to maintain the insurance required
hereunder, the Collateral Agent may arrange for such insurance, but at the
Borrowers’ expense and without any responsibility on the Collateral Agent’s part
for obtaining

 

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the insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims (it being understood that to the extent
practicable, the Collateral Agent shall use commercially reasonable efforts to
provide prior notice of its intent to arrange for such insurance, but the
failure to provide such notice shall not result in a breach of this Agreement or
affect the Borrowers’ reimbursement obligations hereunder). Upon the occurrence
and during the continuance of an Event of Default, the Collateral Agent shall
have the sole right, in the name of the Lenders, any Loan Party and its
Subsidiaries, to file claims under any insurance policies, to receive, receipt
and give acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.

(i) [Intentionally Omitted].

(j) Environmental. (i) Provide written notice to the Collateral Agent within
five (5) Business Days after any Loan Party obtains knowledge of any material
Release of a Hazardous Material in excess of any reportable quantity from or
onto property at any time owned or operated by it or any of its Subsidiaries and
take any Remedial Actions required at property owned by a Loan Party and to the
extent required of a Loan Party at leased property under applicable
Environmental Laws to abate said Release; (ii) provide the Collateral Agent with
written notice within 10 days of the receipt of any of the following: (A) notice
that a material Environmental Lien has been filed against any property of any
Loan Party or any of its Subsidiaries; (B) written notice of commencement of any
Environmental Action or written notice that an Environmental Action will be
filed against any Loan Party or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect; and (C) written notice of a
violation, citation or other administrative order which could reasonably be
expected to have a Material Adverse Effect; and (iii) upon the occurrence and
during the continuance of an Event of Default, within ten (10) Business Days
following the request of the Collateral Agent therefor, retain an independent
firm satisfactory to the Collateral Agent to perform, and cooperate with such
firm in its performance of, an ASTM 1527-00 Phase I Environmental Site
Assessment (“Phase I ESA”) (and, if requested by the Collateral Agent based upon
the results of such Phase I ESA, an ASTM 1527-00 Phase II Environmental Site
Assessment) of each Facility subject to a Mortgage.

(k) Further Assurances. Take such action and execute, acknowledge and deliver,
and cause each of its Subsidiaries to take such action and execute, acknowledge
and deliver, at its sole cost and expense, such agreements, instruments or other
documents as the Collateral Agent may reasonably require from time to time in
order (i) to carry out the purposes of this Agreement and the other Loan
Documents, (ii) to subject to valid and perfected first priority Liens any of
the Collateral or any other property of any Loan Party and its Subsidiaries
(other than Excluded Property), (iii) to establish and maintain the validity and
effectiveness of any of the Loan Documents and the validity, perfection and
priority of the Liens intended to be created thereby, and (iv) to better assure,
convey, grant, assign, transfer and confirm unto each Agent and each Lender the
rights now or hereafter intended to be granted to it under this Agreement or any
other Loan Document.

 

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(l) Change in Collateral; Collateral Records. Give the Collateral Agent not less
than 10 days’ (or such shorter time as the Collateral Agent may agree) prior
written notice of any change in the location of any Collateral with a value in
excess of $500,000, other than to locations identified to the Collateral Agent
in writing prior to the Effective Date or other locations that the Collateral
Agent has previously been notified of pursuant to this Section 7.01(l);
provided, that no such Collateral may be moved unless all actions have been
taken to grant to the Collateral Agent a perfected first priority security
interest in such Collateral (subject to Permitted Liens).

(m) Landlord Waivers; Collateral Access Agreements. At any time any Collateral
(other than Collateral in transit) with a book value in excess of $500,000 (when
aggregated with all other Collateral at the same location) is located on any
real property of a Loan Party (whether such real property is now existing or
acquired after the Effective Date) which is not owned by a Loan Party, or is
stored on the premises of a bailee, warehouseman, or similar party, use
commercially reasonable efforts to obtain written subordinations or waivers or
collateral access agreements, as the case may be, in form and substance
reasonably satisfactory to the Collateral Agent.

(n) Subordination. Cause all Indebtedness (other than the Floating Rate Notes)
now or hereafter owed by it to any of its Affiliates, to be subordinated in
right of payment and security to the Indebtedness and other Obligations owing to
the Agents and the Lenders in accordance with a subordination agreement in form
and substance reasonably satisfactory to the Collateral Agent.

(o) After Acquired Real Property. Within five (5) Business Days following the
acquisition (whether made directly or owned by a Subsidiary that is acquired
after the Effective Date) of any fee owned interest in any real property
(wherever located) (each such interest being an “After Acquired Property”) with
a purchase price in excess of $2,000,000, so notify the Collateral Agent,
setting forth with specificity a description of the interest acquired, the
location of the real property, any structures or improvements thereon and the
purchase price of such real property. The Collateral Agent shall notify such
Loan Party whether it intends to require a Mortgage and the other documents
referred to below; provided that the Collateral Agent may not require a Mortgage
on such real property to the extent there is a Lien thereon pursuant to clause
(e) of the definition of Permitted Liens. Upon receipt of such notice requesting
a Mortgage, the Person that has acquired such After Acquired Property shall
promptly (and in any event, within 30 days) furnish to the Collateral Agent the
following, each in form and substance reasonably satisfactory to the Collateral
Agent: (i) a Mortgage with respect to such real property and related assets
located at the After Acquired Property, duly executed by such Person and in
recordable form, accompanied by all necessary recording taxes and other filing
fees; (ii) a Title Insurance Policy, (iii) unless the issuer of the Title
Insurance Policy is willing to issue such policy without a survey exception, a
survey of such real property, certified to the Collateral Agent and to the
issuer of the Title Insurance Policy by a licensed professional surveyor
reasonably satisfactory to the Collateral Agent, (iv) Phase I Environmental Site
Assessments with respect to such real property, certified to the Collateral
Agent by a company reasonably satisfactory to the Collateral Agent, and (v) such
other documents or instruments (including opinions of counsel) as the Collateral
Agent may reasonably require. The Borrowers shall pay all actual out-of-pocket
fees and expenses actually incurred, including reasonable attorneys’ fees and
expenses, and all title insurance charges and premiums, in connection with each
Loan Party’s obligations under this Section 7.01(o).

 

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(p) Fiscal Year. Cause the Fiscal Year of the Parent and its Subsidiaries to end
on December 31st of each calendar year unless the Collateral Agent consents to a
change in such Fiscal Year (and appropriate related changes to this Agreement
with respect to which the Collateral Agent is hereby authorized to make without
any further Lender consent).

(q) Lenders Meetings. Upon the request of Administrative Agent or Required
Lenders, participate in quarterly conference calls with the Administrative Agent
and the Lenders, in each case at such times as may be agreed to by Borrowers’
Representative and Administrative Agent.

(r) License Agreements.

(i) With respect to a material License Agreement applicable to Intellectual
Property that is owned by a third party and licensed to a Borrower or Guarantor
and that is affixed to or otherwise necessary for the manufacture, sale or
distribution of any Inventory or the collection of Account Receivables (other
than an off-the-shelf product with a shrink wrap license or that is generally
available), (A) give Collateral Agent not less than sixty (60) days prior
written notice of its intention to not renew or to terminate, cancel, surrender
or release its rights under any such License Agreement, or to amend any such
License Agreement or related arrangements to limit the scope of the right of
such Borrower or Guarantor to use the Intellectual Property subject to such
License Agreement in any material respect, either with respect to product,
territory, term or otherwise, or to increase in any material respect the amounts
to be paid by such Borrower or Guarantor thereunder or in connection therewith,
(B) give Collateral Agent prompt written notice of any such License Agreement
entered into by such Borrower or Guarantor after the date hereof, or any
material amendment to any such License Agreement existing on the date hereof, in
each case together with a true, correct and complete copy thereof and such other
information with respect thereto as Collateral Agent may in good faith request,
(C) give Collateral Agent prompt written notice of any material breach of any
obligation, or any default, by the third party that is the licensor or by the
Borrower or Guarantor that is the licensee or any other party under any such
License Agreement, and deliver to Collateral Agent (promptly upon the receipt
thereof by such Borrower or Guarantor in the case of a notice to such Borrower
or Guarantor and concurrently with the sending thereof in the case of a notice
from such Borrower or Guarantor) a copy of each notice of default and any other
notice received or delivered by such Borrower or Guarantor in connection with
any such a License Agreement that relates to the scope of the right, or the
continuation of the right, of such Borrower or Guarantor to use the Intellectual
Property subject to such License Agreement or the amounts required to be paid
thereunder.

(ii) With respect to a License Agreement applicable to Intellectual Property
that is owned by a third party and licensed to a Borrower or Guarantor and that
is affixed to or otherwise necessary for the manufacture, sale or distribution
of any Inventory or the collection of Account Receivables (other than an
off-the-shelf product with a shrink wrap license or that is generally
available), at any time an Event of Default shall exist or have occurred and be
continuing, Collateral Agent shall have, and is hereby granted, the irrevocable
right and

 

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authority, at its option, to renew or extend the term of such License Agreement,
whether in its own name and behalf, or in the name and behalf of a designee or
nominee of Collateral Agent or in the name and behalf of such Borrower or
Guarantor, subject to and in accordance with the terms of such License
Agreement. Collateral Agent may, but shall not be required to, perform any or
all of such obligations of such Borrower or Guarantor under any of the License
Agreements, including, but not limited to, the payment of any or all sums due
from such Borrower or Guarantor thereunder. Any sums so paid by Agent shall
constitute part of the Obligations.

(s) Maintenance of Ratings. Promptly following the request of the Required
Lenders, (i) use commercially reasonable efforts to obtain (and thereafter
maintain) ratings (which, at the request of the Collateral Agent, may include a
shadow rating) issued by a rating agency satisfactory to the Collateral Agent
with respect to the Loans and the Loan Parties, and (ii) pay all reasonable and
customary out-of-pocket costs in connection with obtaining and/or maintaining
such rating.

(t) Anti-Terrorism Laws.

(i) Undertake reasonable steps to ensure that it does not:

(A) conduct any business or engage in any transaction or dealing with any
Blocked Person, including the making or receiving any contribution of funds,
goods or services to or for the benefit of any Blocked Person;

(B) deal in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to the OFAC Sanctions Programs;

(C) engage in or conspire to engage in any transaction that evades or avoids, or
has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in the OFAC Sanctions Programs, the USA PATRIOT Act or
any other Anti-Terrorism Law;

(D) permit any of their respective Subsidiaries to do any of the foregoing; and

(ii) deliver to the Lenders any certification and other evidence requested from
time to time by any Lender in its sole discretion, confirming the Borrowers’
compliance with this Section 7.01(t)

(u) Post-Closing Deliverables.

(i) Within 30 days following the Effective Date (or such later date as the
Collateral Agent may agree), deliver to the Collateral Agent, in form and
substance reasonably satisfactory to the Collateral Agent, (A) evidence that the
operating agreement of each Loan Party organized under the laws of the State of
Delaware has been amended to permit the Collateral Agent to become a member of
such Loan Party in connection with the exercise of its enforcement rights and
remedies, and (B) revised property insurance certificates and lender loss
payable endorsements in favor of the Collateral Agent with respect to the
property insurance required to be maintained by the Loan Parties under the Loan
Documents; and

 

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(ii) Within 60 days following the Effective Date (or such later date as the
Collateral Agent may agree), deliver to the Collateral Agent, in form and
substance reasonably satisfactory to the Collateral Agent, the following
documents:

(A) Mortgages, duly executed by the applicable Loan Party and in recordable form
with respect to each Facility (other than those Facilities identified with an
asterisk on Schedule 1.01(F)), accompanied by all necessary recording taxes and
other filing fees;

(B) except with respect to the Specified Properties, a Title Insurance Policy
with respect to each Mortgage, dated as of the date of each Mortgage;

(C) to the extent requested by the issuer of the Title Insurance Policies, and
to the extent that the Loan Party is able to make the required factual
statements contained therein, certifications and/or indemnities in favor of such
issuer to the extent necessary for such issuer to remove the so-called “survey
exception” from the Title Insurance Policies issued in respect of Facilities for
which a survey is available;

(D) evidence of the insurance coverage required by each Mortgage, together with
endorsements evidencing that the Collateral Agent has been named as additional
insured and loss payee thereunder;

(E) an opinion of counsel to the Loan Parties, as to such matters as the
Collateral Agent may reasonably request in connection with the Mortgages to be
delivered pursuant to Section 7.01(u)(ii)(A) above; and

(F) evidence that (1) all funds in each deposit account and securities account
maintained by any Loan Party at Wells Fargo Bank, N.A. have been transferred to
a Cash Management Account that is subject to a Cash Management Agreement, and
(2) the Loan Parties have used commercially reasonable efforts to permanently
close each deposit account and securities account maintained by any Loan Party
at Wells Fargo Bank, N.A.

Section 7.02 Negative Covenants. So long as any principal of or interest on any
Loan or any other Obligation (whether or not due) shall remain unpaid, each Loan
Party shall not, unless the Required Lenders shall otherwise consent in writing:

(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired, other
than Permitted Liens.

(b) Indebtedness. Create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness.

 

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(c) Fundamental Changes; Dispositions. Wind-up, liquidate or dissolve, or merge,
consolidate or amalgamate with any Person, or convey, sell, lease or sublease,
transfer or otherwise dispose of, whether in one transaction or a series of
related transactions, all or any part of its business, property or assets,
whether now owned or hereafter acquired (or agree to do any of the foregoing,
unless such agreement is expressly conditioned upon obtaining the consent of the
Lenders hereunder (in the percentages required by Section 12.02 hereof), without
penalty to any Loan Party or any Subsidiary for failing to obtain such consent),
or purchase or otherwise acquire, whether in one transaction or a series of
related transactions, all or substantially all of the assets of any Person (or
any division thereof) (or agree to do any of the foregoing, unless such
agreement is expressly conditioned upon obtaining the consent of the Lenders
hereunder (in the percentages required by Section 12.02 hereof)), or permit any
of its Subsidiaries to do any of the foregoing; provided, however, that

(i) any Loan Party may be merged into or may consolidate with, any other Loan
Party, so long as (A) no other provision of this Agreement would be violated
thereby, (B) such Loan Party gives the Collateral Agent at least 10 days’ prior
written notice of such merger or consolidation, accompanied by true, correct and
complete copies of all material agreements, documents and instruments relating
to such merger or consolidation, including, but not limited to, the certificate
or certificates of merger to be filed with each appropriate Secretary of State
(with a copy as filed promptly after such filing), (C) no Event of Default shall
have occurred and be continuing either before or after giving effect to such
transaction, (D) the Lenders’ rights in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon, are not
adversely affected by such merger or consolidation, (E) if the Parent is a party
to such merger or consolidation, the Parent is surviving Person, and (F) at
least one Borrower shall remain in existence following such merger or
consolidation;

(ii) any Loan Party and its Subsidiaries may consummate (A) Permitted
Dispositions, so long as the Net Cash Proceeds therefrom are applied to repay
the Loans to the extent required by Section 2.05(c)(i), (B) Permitted
Investments, and (C) Permitted Acquisitions; and

(iii) any Subsidiary of Parent may wind up, liquidate and dissolve; provided,
that, each of the following conditions is satisfied, (A) Collateral Agent shall
have received not less than five (5) Business Days’ prior written notice of the
intention to wind up, liquidate or dissolve, with such information with respect
thereto as Collateral Agent may reasonably require, (B) the winding up,
liquidation and dissolution of such Subsidiary shall not violate any law or any
order or decree of any court or other Governmental Authority in any material
respect and shall not conflict with or result in the breach of, or constitute a
default under, any indenture, mortgage, deed of trust, or any other agreement or
instrument to which any Borrower or Guarantor is a party or may be bound,
(C) such winding up, liquidation or dissolution shall be done in accordance with
the requirements of all applicable material laws and regulations, (D) effective
upon such winding up, liquidation or dissolution, all of the assets and
properties of such Subsidiary shall be duly and validly transferred and assigned
to another Loan Party, free and clear of any Liens, restrictions or encumbrances
other than the security interest and Liens of Collateral Agent or as are
otherwise permitted hereunder (and Collateral Agent shall have received such
evidence thereof as Collateral Agent may reasonably require) and

 

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Collateral Agent shall have received such deeds, assignments or other agreements
as Collateral Agent may reasonably request to evidence and confirm the transfer
of such assets and Collateral Agent shall maintain and have a perfected security
interests in and Liens upon all such assets and properties as so transferred on
the same terms and with the same priority, (E) Collateral Agent shall have
received all material documents and agreements that any Borrower or Guarantor
has filed with any Governmental Authority or as are otherwise required to
effectuate such winding up, liquidation or dissolution, (F) no Borrower or
Guarantor shall assume any Indebtedness, obligations or liabilities as a result
of such winding up, liquidation or dissolution, or otherwise become liable in
respect of any obligations or liabilities of the entity that is winding up,
liquidating or dissolving, unless such Indebtedness is otherwise expressly
permitted hereunder, (G) as of the date of such winding up, liquidation or
dissolution and after giving effect thereto, no Event of Default shall exist or
have occurred and be continuing, and (H) at least one Borrower shall remain in
existence following any such dissolution.

(d) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any change in the nature of its business as described in Section 6.01(l).

(e) Loans, Advances, Investments, Etc. Make (or commit or agree to make, unless
such commitment or agreement is expressly conditioned upon obtaining the consent
of the Lenders hereunder (in the percentages required by Section 12.02 hereof),
without penalty to any Loan Party or any Subsidiary for failing to obtain such
consent) any loan, advance guarantee of obligations, other extension of credit
or capital contributions to, or hold or invest in (or commit or agree to hold or
invest in, unless such commitment or agreement is expressly conditioned upon
obtaining the consent of the Lenders hereunder (in the percentages required by
Section 12.02 hereof), without penalty to any Loan Party or any Subsidiary for
failing to obtain such consent), or purchase or otherwise acquire (or commit or
agree to purchase or otherwise acquire unless such commitment or agreement is
expressly conditioned upon obtaining the consent of the Lenders hereunder (in
the percentages required by Section 12.02 hereof), without penalty to any Loan
Party or any Subsidiary for failing to obtain such consent) any shares of the
Equity Interests, bonds, notes, debentures or other securities of, or make (or
commit or agree to make unless such commitment or agreement is expressly
conditioned upon obtaining the consent of the Lenders hereunder (in the
percentages required by Section 12.02 hereof), without penalty to any Loan Party
or any Subsidiary for failing to obtain such consent) any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) loans and advances by Loan Parties to
Subsidiaries of Loan Parties that are not Loan Parties, made in the ordinary
course of business and not exceeding in the aggregate at any one time
outstanding $2,500,000, (ii) Permitted Investments, and (iii) Permitted
Acquisitions.

(f) Lease Obligations. Permit the aggregate amount of Operating Lease
Obligations payable by the Parent and its Subsidiaries during any Fiscal Year to
exceed $40,000,000; provided, that there shall be no limitation on the aggregate
amount of Operating Lease Obligations payable by the Parent and its Subsidiaries
at any time when the Specified Collateral Value is greater than $200,000,000.

(g) [Intentionally Omitted].

 

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(h) Restricted Payments. (i) Declare or pay any dividend or other distribution,
direct or indirect, on account of any Equity Interests of any Loan Party or any
of its Subsidiaries, now or hereafter outstanding, (ii) make any repurchase,
redemption, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any Equity Interests of any
Loan Party or any direct or indirect parent of any Loan Party, now or hereafter
outstanding, (iii) make any payment to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights for the purchase or
acquisition of shares of any class of Equity Interests of any Loan Party, now or
hereafter outstanding, (iv) return any Equity Interests to any shareholders or
other equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Equity Interests, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Loan Party or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement to any of the shareholders or
other equityholders of any Loan Party or any of its Subsidiaries or other
Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party;
provided, however, that (A) any Subsidiary of Parent may make dividends and
other distributions to any Borrower or Guarantor; (B) each Loan Party and each
Subsidiary may declare and make dividend payments or other distributions payable
solely in the Equity Interests of such Person or options, warrants or other
rights to purchase or receive Equity Interests or options, warrants or other
rights to purchase or receive Equity Interests, or exchange Equity Interests or
options, warrants or other rights to purchase or receive Equity Interests for
Equity Interests, or options, warrants or other rights to purchase or receipt
Equity Interests, in each case, so long as no Change of Control would result
therefrom, (C) so long as no Event of Default has occurred and is continuing or
would result from such payment or transaction, Parent may make payments to
repurchase or redeem Equity Interests and options to purchase Equity Interests
of Parent held by officers, directors or employees or former officers, directors
or employees (or their transferees, estates or beneficiaries under their
estates) of any Loan Party, upon their death, disability, retirement, severance
or termination of employment or service; provided, that, the aggregate cash
consideration paid for all such payments, repurchases or redemptions, together
with the aggregate amounts paid under clause (D) hereof, shall not exceed
(1) $3,000,000 in any fiscal year of Parent or (2) $5,000,000 during the term of
this Agreement; (D) Parent may pay the withholding taxes owed by current or
former officers, directors and employees of any Borrower or Guarantor (or their
transferees, estates or beneficiaries under their estates) upon the vesting or
exercise of Equity Interests (including restricted stock) so long as the person
owing such withholding taxes tenders Equity Interests to the Parent in an amount
equal to the fair market value of such withholding taxes; provided, that, the
aggregate amount of such payments, together with the aggregate amounts paid
under clause (C) hereof, shall not exceed (i) $3,000,000 in any fiscal year of
Parent or (ii) $5,000,000 during the term of this Agreement; (E) Parent may
repurchase Equity Interests of Parent deemed to occur upon the exercise of stock
options or warrants if such Equity Interests represent a portion of the exercise
price of such options or warrants and (F) so long as no Event of Default has
occurred and is continuing or would result from such payment or transaction,
Borrowers and Guarantors may make other dividend payments, distributions and
other restricted payments not otherwise permitted under this Section 7.02(h) in
an aggregate amount not to exceed $1,000,000.

 

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(i) Federal Reserve Regulations. Permit any Loan or the proceeds of any Loan
under this Agreement to be used for any purpose that would cause such Loan to be
a margin loan under the provisions of Regulation T, U or X of the Board.

(j) Transactions with Affiliates. Enter into, renew, extend or be a party to, or
permit any of its Subsidiaries to enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease, transfer or exchange of property or
assets of any kind or the rendering of services of any kind) with any Affiliate,
except (i) in the ordinary course of business, for fair consideration and on
terms no less favorable to it or its Subsidiaries than would be obtainable in a
comparable arm’s length transaction with a Person that is not an Affiliate
thereof, (ii) transactions with another Loan Party that are not prohibited by
the terms of this Agreement, (iii) transactions permitted by Sections 7.02(e)
and 7.02(h), (iv) sales or issuances of Equity Interests of the Parent (or
warrants or other rights to purchase or acquire Equity Interests of the Parent)
to Affiliates of the Parent not otherwise prohibited by the Loan Documents, the
granting of registration and other customary rights in connection therewith, and
the payment of reasonable backstop fees in connection with any related rights
offering, and (v) reasonable and customary director, officer and employee
compensation (including bonuses, restricted stock and stock option programs),
benefits and indemnification arrangements, in each case approved by the Board of
Directors (or a committee thereof) of such Borrower or Guarantor.

(k) Limitations on Dividends and Other Payment Restrictions Affecting
Subsidiaries. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary of any Loan Party (i) to pay dividends or to
make any other distribution on any shares of Equity Interests of such Subsidiary
owned by any Loan Party or any of its Subsidiaries (other than dividends or
distributions paid or made by the Parent), (ii) to pay or to subordinate to the
Obligations any Indebtedness owed to any Loan Party or any of its Subsidiaries,
(iii) to make loans or advances to any Loan Party or any of its Subsidiaries or
(iv) to transfer any of its property or assets to any Loan Party or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
provided, however, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict compliance with:

(A) this Agreement, the other Loan Documents and the Floating Rate Note
Documents (as in effect on the date hereof);

(B) any applicable law, rule or regulation (including, without limitation,
applicable currency control laws and applicable state corporate statutes
restricting the payment of dividends in certain circumstances);

(C) in the case of clause (iv) any agreement setting forth customary
restrictions on the subletting, assignment or transfer of any property or asset
that is a lease, license, conveyance or contract of similar property or assets;

(D) in the case of clause (iv) any agreement, instrument or other document
evidencing a Permitted Lien (or the Indebtedness secured thereby) from
restricting on customary terms the transfer of any property or assets subject
thereto;

 

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(E) customary restrictions on dispositions of real property interests found in
reciprocal easement agreements of such Borrower or Guarantor or any Subsidiary
of such Borrower or Guarantor;

(F) customary restrictions in agreements for the sale of assets on the transfer
or encumbrance of such assets during an interim period prior to the closing of
the sale of such assets;

(G) customary restrictions in contracts that prohibit the assignment of such
contract;

(H) customary restrictions in agreements relating to purchase money financing
arrangements of Borrower or contained in security agreements providing for the
grant of a security interest to secure other Indebtedness owing to a person that
is not an Affiliate to the extent such restrictions restrict the transfer of, or
the granting of Liens on, the property subject to such purchase money financing
arrangements or security agreements; and

(I) the extension, replacement or continuation of contractual obligations in
existence on the date hereof; provided, that, any such encumbrances or
restrictions contained in such extension, replacement or continuation, are,
taken as a whole, no less favorable to Agent and Lenders than those encumbrances
and restrictions under or pursuant to the contractual obligations so extended,
replaced or continued.

(l) [Intentionally Omitted.]

(m) Modifications of Indebtedness, Organizational Documents and Certain Other
Agreements; Etc.

(i) Except for the Obligations and Indebtedness exclusively among Loan Parties,
amend, modify or otherwise change (or permit the amendment, modification or
other change in any manner of) any of the provisions of any of its or any of its
Subsidiaries’ Indebtedness having a principal amount in excess of $5,000,000, or
of any instrument or agreement relating to any such Indebtedness; provided,
that, any Loan Party, and any Subsidiary, may, after prior written notice to the
Collateral Agent, amend, modify, alter or change the terms thereof (A) in a
manner that is not adverse, taken as a whole, to the interests of the Loan
Parties, the Agents or the Lenders, (B) to forgive, or cancel any portion of
such Indebtedness (other than pursuant to payments thereof), (C) to reduce the
interest rate or any fees in connection therewith, or (D) to make the terms
thereof less restrictive or burdensome to such Loan Party or such Subsidiary,

(ii) except for the Obligations and Indebtedness exclusively among Loan Parties,
(A) make any voluntary or optional payment (including, without limitation, any
payment of interest in cash that, at the option of the issuer, may be paid in
cash or in kind), prepayment, redemption, defeasance, sinking fund payment or
other acquisition for value of any of its or its Subsidiaries’ Indebtedness
(including, without limitation, by way of depositing money or securities with
the trustee therefor before the date required for the purpose of paying any
portion of such Indebtedness when due), or refund, refinance, replace or
exchange any other Indebtedness for any such Indebtedness (except to the extent
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expressly permitted by the definition of “Permitted Indebtedness”), (B) make any
payment, prepayment, redemption, defeasance, sinking fund payment or repurchase
of any Subordinated Indebtedness in violation of the subordination provisions
thereof or any subordination agreement with respect thereto, or (C) make any
payment, prepayment, redemption, defeasance, sinking fund payment or repurchase
of any Indebtedness as a result of any asset sale, change of control, issuance
and sale of debt or equity securities or similar event, or give any notice of
such payment, prepayment, redemption, defeasance, sinking fund payment or
repurchase with respect to any of the foregoing (unless such notice provides
that any such payment, prepayment, redemption, defeasance, sinking fund payment
or repurchase is conditioned upon the repayment in full of the Obligations);

(iii) amend, modify or otherwise change any of its Governing Documents,
including, without limitation, by the filing or modification of any certificate
of designation, or any agreement or arrangement entered into by it, with respect
to any of its Equity Interests (including any shareholders’ agreement), or enter
into any new agreement with respect to any of its Equity Interests, except any
such amendments, modifications or changes or any such new agreements or
arrangements pursuant to this clause (iii) that (A) do not adversely affect the
rights and privileges of any Borrower or Guarantor, or its Subsidiaries in any
material respect, (B) do not adversely affect the ability of a Borrower,
Guarantor or such Subsidiary to amend, modify, renew or supplement the terms of
this Agreement or any of the other Loan Documents, (C) do not otherwise
adversely affect the interests of Agents or Lenders in any material respect and
(D) are consummated at a time when no Event of Default shall exist or have
occurred and be continuing; provided, that the Parent shall be permitted to
amend, modify or otherwise change any of its Governing Documents and enter into
any new agreement with respect to any of its Equity Interests so long as such
amendments, modifications, changes or new agreements do not adversely affect the
interests of Agents or Lenders in any material respect.

(n) Investment Company Act of 1940. Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of its
Subsidiaries to do any of the foregoing, that would cause it or any of its
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an “investment
company” or a company “controlled” by an “investment company” not entitled to an
exemption within the meaning of such Act.

(o) Compromise of Accounts Receivable. Compromise or adjust any Account
Receivable (or extend the time of payment thereof) or grant any discounts,
allowances or credits or permit any of its Subsidiaries to do so other than,
provided no Event of Default has occurred and is continuing, in its good faith
reasonable business judgment.

(p) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any
transaction described in Section 4069 of ERISA with respect to any Employee
Plan; (ii) engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction described in Section 406 of ERISA or 4975 of the Internal Revenue
Code for which a statutory or class exemption is not available or a private
exemption has not previously been obtained from the U.S. Department of Labor
with respect to any Employee Plan; (iii) adopt or permit any ERISA Affiliate to
adopt any employee welfare benefit plan within the meaning of Section 3(1) of
ERISA which provides benefits to employees after termination of employment other
than as required by Section 601 of

 

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ERISA, Section 4980B of the Internal Revenue Code or other applicable law;
(iv) fail to make any contribution or payment to any Multiemployer Plan which it
or any ERISA Affiliate may be required to make under any agreement relating to
such Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment with respect to any Employee
Plan.

(q) Environmental. Permit the use, handling, generation, storage, treatment,
Release or disposal of Hazardous Materials at any property owned or leased by it
or any of its Subsidiaries, except in material compliance with Environmental
Laws or otherwise where the failure to so comply could not reasonably be
expected to have material consequences to the Loan Parties.

(r) Certain Agreements. Agree to any material amendment or other material change
to or material waiver of any of its rights under any Material Contract that
could reasonably be expected to have a Material Adverse Effect.

(s) Limitations on Negative Pledges. Enter into, incur or permit to exist, or
permit any Subsidiary to enter into, incur or permit to exist, directly or
indirectly, any agreement, instrument, deed, lease or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Loan Party
or any Subsidiary of any Loan Party to create, incur or permit to exist any Lien
upon any of its owned property or revenues, whether now owned or hereafter
acquired, or that requires the grant of any security for an obligation if
security is granted for another obligation, except the following: (i) this
Agreement, the other Loan Documents and the Floating Rate Note Documents (as in
effect on the date hereof), (ii) restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by Section 7.02(a) of this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (iii) any customary restrictions and
conditions contained in agreements relating to the sale or other disposition of
assets or of a Subsidiary pending such sale or other disposition; provided that
such restrictions and conditions apply only to the assets or Subsidiary to be
sold or disposed of and such sale or disposition is permitted hereunder,
(iv) customary provisions in leases restricting the assignment or sublet
thereof, (v) covenants in any Permitted Indebtedness to the extent such
restrictions or conditions are no more restrictive than the restrictions and
conditions in the Loan Documents, (vi) any prohibition or limitation that exists
pursuant to applicable law, (vii) customary provisions in joint venture
agreements and other similar agreements applicable to joint ventures and
applicable solely to such joint venture entered into in the ordinary course of
business, and (viii) the extension, replacement or continuation of contractual
obligations in existence on the date hereof; provided, that, any such
encumbrances or restrictions contained in such extension, replacement or
continuation, are, taken as a whole, no less favorable to Agent and Lenders than
those encumbrances and restrictions under or pursuant to the contractual
obligations so extended, replaced or continued.

(t) Designation of Designated Senior Debt. Designate any Indebtedness, other
than the Obligations, as “Designated Senior Debt”, “Priority Lien Debt” or any
similar term under and as defined in the agreements relating to the Floating
Rate Notes.

 

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(u) Sale Leasebacks. Enter into any Sale and Leaseback Transaction, unless
(i) the sale of such property is a Permitted Disposition under clause (h) of the
definition of the term “Permitted Disposition”, (ii) the proceeds thereof are
paid to the Administrative Agent in accordance with, and to the extent required
by, Section 2.05(c)(i), (iii) no Event of Default has occurred and is continuing
at the time of such Sale and Leaseback Transaction, and (iv) the Liens arising
in connection with such Sale and Leaseback Transaction are Permitted Liens.

Section 7.03 Financial Covenants. So long as any principal of or interest on any
Loan or any other Obligation (whether or not due) shall remain unpaid or any
Lender shall have any Commitment hereunder, each Loan Party shall not, unless
the Required Lenders shall otherwise consent in writing:

(a) Minimum Qualified Cash. Permit Qualified Cash to be less than $35,000,000 on
any Business Day; provided, however, that if Qualified Cash is less than
$35,000,000 on a Business Day, no breach of this covenant shall be deemed to
have occurred so long as within three (3) Business Days Qualified Cash is not
less than $35,000,000; provided further, that there shall not be more than two
such periods during any fiscal month in which Qualified Cash is less than
$35,000,000.

(b) Minimum Specified Collateral Value. Permit the Specified Collateral Value to
be less than $160,000,000 (or, during the period from November 1st through
March 1st of each year, $150,000,000) on the last Business Day of any fiscal
month.

(c) Compliance Confirmation. Without limiting any of the other delivery
requirements contained in this Agreement, fail to deliver to the Collateral
Agent, within one (1) Business Day following request therefor, any certification
or other evidence requested from time to time by the Collateral Agent in its
sole discretion, confirming the Borrowers’ compliance with Section 7.03(a);
provided, that, so long as no Event of Default has occurred and is continuing,
such requests shall not be made more frequently than monthly if the most recent
calculation of Specified Collateral Value pursuant to Section 7.01(a)(v) was
greater than $200,000,000.

ARTICLE VIII

MANAGEMENT, COLLECTION AND STATUS OF

ACCOUNTS RECEIVABLE AND OTHER COLLATERAL

Section 8.01 Collection of Accounts Receivable; Management of Collateral. (a)
The Loan Parties shall (i) establish and maintain cash management services of a
type and on terms reasonably satisfactory to the Collateral Agent at one or more
Cash Management Banks, and (ii) deposit or cause to be deposited all proceeds in
respect of any Collateral and all Collections (of a nature susceptible to a
deposit in a bank account) and other amounts received by any Loan Party
(including payments made by the Account Debtors directly to any Loan Party) into
a Cash Management Account, such that the Loan Parties do not have any
Collections or other amounts (whether in the form of cash, checks or otherwise)
outstanding in excess of $500,000 in the aggregate at any time that is not on
deposit in a Cash Management Account in the name of a Loan Party. No Loan Party
shall commingle proceeds in excess of $75,000 from any asset not included in the
Collateral with Collections or proceeds of Collateral. (It is understood and
agreed that the cash management services of the Loan Parties in effect on the
Effective Date, as disclosed in writing to the Collateral Agent, are reasonably
satisfactory to the Collateral Agent.)

 

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(b) On or prior to the Effective Date, the Loan Parties shall, with respect to
each Cash Management Account existing on the Effective Date, deliver to the
Collateral Agent a Cash Management Agreement with respect to such Cash
Management Account.

(c) Following the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right to require each Cash Management Bank
to wire, on each Business Day, all amounts received in each Cash Management
Account into the Administrative Agent’s Account, or such other account as the
Collateral Agent may specify (it being acknowledged by the Loan Parties that the
Collateral Agent may be unable to terminate such daily sweeps once the Event of
Default is no longer continuing).

(d) If any default by any Loan Party shall occur under any Cash Management
Agreement or any agreement between a Loan Party and a Cash Management Bank and
as a result of such default, such Cash Management Bank (the “Terminating Bank”)
notifies the Collateral Agent in writing that it intends to terminate such Cash
Management Agreement, the Collateral Agent promptly notifies the applicable Loan
Party that it has received such notice, and such Loan Party fails to transfer
the Cash or Cash Equivalents deposited in such Terminating Bank to a new Cash
Management Bank with a Cash Management Agreement or another existing Cash
Management Bank at least five (5) days prior to the scheduled termination date
of such Cash Management Agreement, then Collateral Agent shall have the right to
send a notice of exclusive control (or any equivalent thereto) to such
Terminating Bank pursuant to the applicable Cash Management Agreement; provided
that the Collateral Agent shall thereafter direct the transfer of Cash or Cash
Equivalents deposited in such Terminating Bank to a new Cash Management Bank
with a Cash Management Agreement or another existing Cash Management Bank.

(e) The Borrowers may amend Schedule 8.01 to add or replace a Cash Management
Bank or Cash Management Account; provided, however, that prior to the time of
the opening of such Cash Management Account, each Loan Party and such
prospective Cash Management Bank shall have executed and delivered to the
Collateral Agent a Cash Management Agreement; provided, that the Loan Parties
shall not be required to deliver a Cash Management Agreement with respect to any
Excluded Account. For the avoidance of doubt, it is understood and agreed that
the Collateral Agent shall not be required to approve any new Cash Management
Bank of the Loan Parties.

(f) The Cash Management Accounts which are Deposit Accounts shall be cash
collateral accounts, with all cash, checks and similar items of payment in such
accounts securing payment of the Obligations, and in which the Loan Parties have
granted a Lien to Collateral Agent for the benefit of the Agents and the Lenders
pursuant to the Security Agreement. No checks, drafts or other instrument
received by the Administrative Agent shall constitute final payment to the
Administrative Agent unless and until such instruments have actually been
collected.

 

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(g) Each Loan Party will, except as otherwise provided in this subsection (f),
continue to collect, at its own expense, all amounts due or to become due under
the Accounts Receivable. In connection with such collections, each Loan Party
may take such action as such Loan Party may deem reasonably necessary or
advisable to enforce collection or performance of the Accounts Receivable;
provided, however, that after the occurrence and during the continuance of an
Event of Default, the Collateral Agent may send a notice of assignment and/or
notice of the Lenders’ security interest to any and all Account Debtors or third
parties holding or otherwise concerned with any of the Collateral, and
thereafter, and for so long as an Event of Default is continuing, the Collateral
Agent or its designee shall have the sole right to collect the Accounts
Receivable and/or take possession of the Collateral and the books and records
relating thereto to enforce collection of any such Accounts Receivable and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Loan Party might have done. After receipt by any
Loan Party of a notice from the Collateral Agent that the Collateral Agent has
notified, intends to notify, or has enforced or intends to enforce a Loan
Party’s rights against the Account Debtors or obligors under any Accounts
Receivable as referred to in the proviso to the immediately preceding sentence,
all amounts and proceeds (including instruments) received by such Loan Party in
respect of the Accounts Receivable shall be received in trust for the benefit of
the Collateral Agent hereunder, shall be segregated from other funds of such
Loan Party and shall be forthwith paid over to the Collateral Agent or its
designated agent in the same form as so received (with any necessary
endorsement) to be held as cash collateral or applied to the Obligations.

(h) Nothing herein contained shall be construed to constitute any Agent as agent
of any Loan Party for any purpose whatsoever, and the Agents shall not be
responsible or liable for any shortage, discrepancy, damage, loss or destruction
of any part of the Collateral wherever the same may be located and regardless of
the cause thereof (other than from acts of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agents shall not, under any circumstance
or in any event whatsoever, have any liability for any error or omission or
delay of any kind occurring in the settlement, collection or payment of any of
the Accounts Receivable or any instrument received in payment thereof or for any
damage resulting therefrom (other than acts of omission or commission
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agents, by anything herein
or in any assignment or otherwise, do not assume any of the obligations under
any contract or agreement assigned to any Agent and shall not be responsible in
any way for the performance by any Loan Party of any of the terms and conditions
thereof.

(i) If any Account Receivable that is received by any Agent includes a charge
for any tax payable to any Governmental Authority, each Agent is hereby
authorized (but in no event obligated) in its discretion to pay the amount
thereof to the proper taxing authority for the Loan Parties’ account and to
charge the Loan Parties therefor. The Loan Parties shall notify the Collateral
Agent if any such Account Receivable includes any taxes due to any such
Governmental Authority and, in the absence of such notice, the Agents shall have
the right to retain the full proceeds of such Account Receivable and shall not
be liable for any taxes that may be due by reason of the sale and delivery
creating such Account Receivable.

 

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(j) Notwithstanding any other terms set forth in the Loan Documents, the rights
and remedies of the Agents and the Lenders herein provided, and the obligations
of the Loan Parties set forth herein, are cumulative of, may be exercised singly
or concurrently with, and are not exclusive of, any other rights, remedies or
obligations set forth in any other Loan Document or as provided by law.

Section 8.02 Collateral Custodian. Upon the occurrence and during the
continuance of any Event of Default, the Collateral Agent or its designee may at
any time and from time to time employ and maintain on the premises of any Loan
Party a custodian selected by the Collateral Agent or its designee who shall
have full authority to do all acts reasonably necessary to protect the Agents’
and the Lenders’ interests. Each Loan Party hereby agrees to, and to cause its
Subsidiaries to, cooperate with any such custodian and to do whatever the
Collateral Agent or its designee may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Collateral Agent or its
designee by reason of the employment of the custodian shall be the
responsibility of the Borrowers and charged to the Loan Account.

ARTICLE IX

EVENTS OF DEFAULT

Section 9.01 Events of Default. If any of the following Events of Default shall
occur and be continuing:

(a) any Borrower shall fail to pay (i) any principal of any Loan or any
Collateral Agent Advance when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), or (ii) any interest on any
Loan, any fee, indemnity or other amount payable under this Agreement or any
other Loan Document when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) within two (2) Business Days
after the due date thereof;

(b) any representation or warranty made or deemed made by or on behalf of any
Loan Party or by any officer of the foregoing under or in connection with any
Loan Document or under or in connection with any report, certificate or other
document delivered to any Agent or any Lender pursuant to any Loan Document,
which representation or warranty is subject to a materiality or a Material
Adverse Effect qualification, shall have been incorrect in any respect when made
or deemed made; or any representation or warranty made or deemed made by or on
behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Loan Document or under or in connection with any report,
certificate or other document delivered to any Agent or any Lender pursuant to
any Loan Document, which representation or warranty is not subject to a
materiality or a Material Adverse Effect qualification, shall have been
incorrect or misleading in any material respect when made or deemed made;

(c) any Loan Party shall fail to perform or comply with any covenant or
agreement contained in Sections 7.01(a) (other than Sections 7.01(a)(vi),
(vii) and (x)), 7.01(d), 7.01(f), 7.01(h), 7.01(l), 7.01(n), 7.01(q), 7.01(s),
7.01(t), 7.01(u), 7.02 or 7.03 or ARTICLE VIII, or any Loan Party shall fail to
perform or comply with any covenant or agreement contained in Section 4,
Section 6(a), 6(c), 6(e), 6(g), 6(h) or Section 7 of the Security Agreement to
which it is a party or Article VI of any Mortgage to which it is a party;

 

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(d) any Loan Party shall fail to perform or comply with (i) any covenant or
agreement contained Section 7.01(c), and such failure, if capable of being
remedied, shall remain unremedied for three (3) Business Days, (ii) any covenant
or agreement contained Section 7.01(a)(vi), (vii) or (x), and such failure, if
capable of being remedied, shall remain unremedied for five (5) Business Days,
or (iii) any term, covenant or agreement in any Loan Document to be performed or
observed by it and, except as set forth in subsections (a), (b), (c) and (d)(i)
or (ii) of this Section 9.01, such failure, if capable of being remedied, shall
remain unremedied for 25 days;

(e) (i) any Loan Party shall fail to pay any of its Indebtedness (excluding
Indebtedness evidenced by this Agreement) in excess of $5,000,000, or any
payment of principal, interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness, or any other
default under any agreement or instrument relating to any such Indebtedness, or
any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be made, in
each case, prior to the stated maturity thereof, or (ii) any default by any Loan
Party under any Material Contract shall occur, which default could reasonably be
expected to have a Material Adverse Effect;

(f) any Loan Party (other than an Insignificant Subsidiary) (i) shall institute
any proceeding or voluntary case seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, (ii) shall be generally not paying its
debts as such debts become due or shall admit in writing its inability to pay
its debts generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);

(g) any proceeding shall be instituted against any Loan Party (other than an
Insignificant Subsidiary) seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its property, and
any of the following shall occur (i) such proceeding shall remain undismissed or
unstayed for a period of 60 days, (ii) a receiver, trustee, custodian or other
similar official shall be appointed for such Loan Party or for any substantial
part of its property, or (iii) an order for relief in favor of any creditor of
any Loan Party (other than orders for administrative or ministerial relief)
shall be granted;

 

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(h) any material provision of any Loan Document shall at any time for any reason
(other than pursuant to the express terms thereof) cease to be valid and binding
on or enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any Loan Party, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document;

(i) the Security Agreement, any Mortgage or any other security document, after
delivery thereof pursuant hereto, shall for any reason (other than pursuant to
the terms thereof or as a result of the gross negligence of any Agent) fail or
cease to create a valid and perfected and, except to the extent permitted by the
terms hereof or thereof, first priority Lien in favor of the Collateral Agent
for the benefit of the Agents and the Lenders on any Collateral purported to be
covered thereby having a value in excess of $5,000,000;

(j) (i) one or more judgments, orders or awards (or any settlement of any claim
that, if breached, could result in a judgment, order or award) for the payment
of money exceeding $5,000,000 in the aggregate shall be rendered against any
Loan Party (other than an Insignificant Subsidiary) and remain unsatisfied and
either (A) enforcement proceedings shall have been commenced by any creditor
upon any such judgment, order, award or settlement, or (B) there shall be a
period of 10 consecutive days after entry thereof during which a stay of
enforcement of any such judgment, order, award or settlement, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment, order, award or settlement shall not give rise to an Event of
Default under this subsection (j) if and for so long as (x) the amount of such
judgment, order, award or settlement (other than customary amounts in respect of
deductibles) is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (y) such insurer has
been notified, and has not disputed the claim made for payment, of the amount of
such judgment, order, award or settlement; or (ii) any judgment other than for
the payment of money, or injunction, attachment, garnishment or execution is
rendered against any of the Collateral which is for a claim in excess of
$5,000,000 and either (A) is made or rendered against any Collateral having a
value in excess of $5,000,000 or (B) in the case of a deposit account,
securities account or similar account, the bank or financial intermediary
maintaining such account shall refuse to remit funds in such account in excess
of such claim to any Borrower or Guarantor;

(k) except as expressly permitted pursuant to Section 7.02(c), any Borrower or
Guarantor (other than an Insignificant Subsidiary or any Subsidiary or group of
Subsidiaries whose revenue during the prior twelve month period was less than
10% of the total revenue of the Parent and its Subsidiaries) involuntarily
dissolves, or suspends or discontinues doing business for 15 days or more;

(l) any Borrower or Guarantor is prohibited or otherwise restrained from
conducting the business theretofore conducted by it in any manner that has or
could reasonably be expected to result in a Material Adverse Effect by virtue of
any determination, ruling, decision, decree or order of any court or
Governmental Authority of competent jurisdiction;

 

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(m) (i) the indictment of any Loan Party (excluding Insignificant Subsidiaries
and any Subsidiary or group of Subsidiaries whose revenue during the prior
twelve month period was less than 5% of the total revenue of the Parent and its
Subsidiaries) under any criminal statute, or (ii) the commencement of criminal
proceedings against any Loan Party (excluding Insignificant Subsidiaries and any
Subsidiary or group of Subsidiaries whose revenue during the prior twelve month
period was less than 5% of the total revenue of the Parent and its
Subsidiaries), pursuant to which statute or proceedings the penalties or
remedies sought include forfeiture to any Governmental Authority of any portion
of the property of such Person having a value in excess of $10,000,000;

(n) any Loan Party or any of its ERISA Affiliates shall have made a complete or
partial withdrawal from a Multiemployer Plan, and, as a result of such complete
or partial withdrawal, any Loan Party or any of its ERISA Affiliates incurs a
withdrawal liability in an annual amount exceeding $5,000,000; or a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof any Loan Party’s or any of its ERISA Affiliates’ annual
contribution requirements with respect to such Multiemployer Plan increases in
an annual amount exceeding $5,000,000;

(o) any Termination Event with respect to any Employee Plan shall have occurred,
and, 30 days after notice thereof shall have been given to any Loan Party by any
Agent, (i) such Termination Event (if correctable) shall not have been
corrected, and (ii) the then current value of such Employee Plan’s vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $5,000,000 (or, in the case of a Termination
Event involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064 or 4069 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, the
liability is in excess of such amount);

(p) (i) any of the Obligations for any reason shall cease to be “Priority Lien
Debt”, “Senior Indebtedness” or “Designated Senior Indebtedness” (or any
comparable terms) under, and as defined in the Floating Rate Note Documents,
(ii) any Indebtedness other than the Obligations shall constitute “Designated
Senior Indebtedness” (or any comparable term) under, and as defined in, the
Floating Rate Note Documents, (iii) the Floating Rate Note Collateral Trustee
shall fail to perform or comply with any of the subordination provisions of the
Floating Rate Notes or the Collateral Trust Agreement, or (iv) the subordination
provisions of the Floating Rate Note Documents (including the Collateral Trust
Agreement) shall, in whole or in part, terminate, cease to be effective or cease
to be legally valid, binding and enforceable against the Floating Rate Note
Collateral Trustee any holder of the Floating Rate Notes; or

(q) a Change of Control shall have occurred;

then, and in any such event, the Collateral Agent may, and shall at the request
of the Required Lenders, by notice to the Borrowers’ Representative, declare all
or any portion of the Loans then outstanding to be due and payable, whereupon
all or such portion of the aggregate principal of all Loans, all accrued and
unpaid interest thereon, all fees and all other amounts payable under this

 

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Agreement and the other Loan Documents shall become due and payable immediately,
together with the payment of the Applicable Prepayment Premium (if any) with
respect to the Commitments so terminated and the Loans so repaid, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by each Loan Party and (iii) exercise any and all of its
other rights and remedies under applicable law, hereunder and under the other
Loan Documents; provided, however, that upon the occurrence of any Event of
Default described in subsection (f) or (g) of this Section 9.01 with respect to
any Loan Party, without any notice to any Loan Party or any other Person or any
act by any Agent or any Lender, all Commitments shall automatically terminate
and all Loans then outstanding, together with all accrued and unpaid interest
thereon, all fees and all other amounts due under this Agreement and the other
Loan Documents shall become due and payable automatically and immediately,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by each Loan Party.

ARTICLE X

AGENTS

Section 10.01 Appointment. Each Lender (and each subsequent maker of any Loan by
its making thereof) and each Agent hereby irrevocably appoints, authorizes and
empowers Highbridge as the Administrative Agent and the Collateral Agent (and
Highbridge hereby accept such appointment, authorization and empowerment) to
perform the duties of each such Agent as set forth in this Agreement and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto, including: (i) to receive on behalf of each Lender any
payment of principal of or interest on the Loans outstanding hereunder and all
other amounts accrued hereunder for the account of the Lenders and paid to such
Agent, and, subject to Section 2.02 of this Agreement, to distribute promptly to
each Lender its Pro Rata Share of all payments so received; (ii) to distribute
to each Lender copies of all material notices and agreements received by such
Agent and not required to be delivered to each Lender pursuant to the terms of
this Agreement, provided that the Agents shall not have any liability to the
Lenders for any Agent’s inadvertent failure to distribute any such notices or
agreements to the Lenders; (iii) to maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the
Obligations, the Loans, and related matters and to maintain, in accordance with
its customary business practices, ledgers and records reflecting the status of
the Collateral and related matters; (iv) to execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to this Agreement or any other Loan Document; (v) to make the Loans
and Collateral Agent Advances, for such Agent or on behalf of the applicable
Lenders as provided in this Agreement or any other Loan Document; (vi) to
perform, exercise, and enforce any and all other rights and remedies of the
Lenders with respect to the Loan Parties, the Obligations, or otherwise related
to any of same to the extent reasonably incidental to the exercise by such Agent
of the rights and remedies specifically authorized to be exercised by such Agent
by the terms of this Agreement or any other Loan Document; (vii) to incur and
pay such fees necessary or appropriate for the performance and fulfillment of
its functions and powers pursuant to this Agreement or any other Loan Document;
(viii) subject to Section 10.03 of this Agreement, to take such action as such
Agent deems appropriate on its behalf to administer the Loans and the Loan
Documents and to exercise such other powers delegated to such Agent by

 

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the terms hereof or the other Loan Documents (including, without limitation, the
power to give or to refuse to give notices, waivers, consents, approvals and
instructions and the power to make or to refuse to make determinations and
calculations); (ix) to act with respect to all Collateral under the Loan
Documents, including for purposes of acquiring, holding and enforcing any and
all Liens on Collateral granted by any of the Loan Parties to secure any of the
Obligations. As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including, without limitation, enforcement or
collection of the Loans), the Agents shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents), and such instructions of the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents) shall be binding upon all Lenders and all
makers of Loans; provided, however, that the Agents shall not be required to
take any action which, in the reasonable opinion of any Agent, exposes such
Agent to liability or which is contrary to this Agreement or any other Loan
Document or applicable law.

Section 10.02 Nature of Duties. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. The Agents shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agents any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into their possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any Agent
seeks the consent or approval of the Required Lenders (or such other number or
percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents) to the taking or refraining from taking any action
hereunder, such Agent shall send notice thereof to each Lender. Each Agent shall
promptly notify each Lender any time that the Required Lenders (or such other
number or percentage of the Lenders as shall be expressly provided for herein or
in the other Loan Documents) have instructed such Agent to act or refrain from
acting pursuant hereto. Each Agent may, upon any term or condition it specifies,
delegate or exercise any of its rights, powers and remedies under, and delegate
or perform any of its duties or any other action with respect to, any Loan
Document by or through any trustee, co-agent, employee, attorney-in-fact and any
other Person (including any Lender). Any such Person shall benefit from this
Article X to the extent provided by the applicable Agent.

 

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Section 10.03 Rights, Exculpation, Etc. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents
(i) may treat the payee of any Loan as the owner thereof until the Collateral
Agent receives written notice of the assignment or transfer thereof, pursuant to
Section 12.07 hereof, signed by such payee and in form satisfactory to the
Collateral Agent; (ii) may consult with legal counsel (including, without
limitation, counsel to any Agent or counsel to the Loan Parties), independent
public accountants, and other experts selected by any of them and shall not be
liable for any action taken or omitted to be taken in good faith by any of them
in accordance with the advice of such counsel or experts; (iii) make no warranty
or representation to any Lender and shall not be responsible to any Lender for
any statements, certificates, warranties or representations made in or in
connection with this Agreement or the other Loan Documents; (iv) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Person, the existence or possible existence of any
Default or Event of Default, or to inspect the Collateral or other property
(including, without limitation, the books and records) of any Person; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (vi) shall not be deemed to have made any representation or
warranty regarding the existence, value or collectibility of the Collateral, the
existence, priority or perfection of the Collateral Agent’s Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Agents be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral. The Agents shall not be liable for any
apportionment or distribution of payments made in good faith pursuant to
Section 4.04, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any payment
in excess of the amount which they are determined to be entitled. The Agents may
at any time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the other Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the Loan
Documents until they shall have received such instructions from the Required
Lenders. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of the Required Lenders (or such other
number or percentage of the Lenders as shall be expressly provided for herein or
in the other Loan Documents).

Section 10.04 Reliance. Each Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the other Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.

 

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Section 10.05 Indemnification. To the extent that any Agent is not reimbursed
and indemnified by any Loan Party, and whether or not such Agent has made demand
on any Loan Party for the same, the Lenders will, within five days of written
demand by such Agent, reimburse and indemnify such Agent from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, client charges
and expenses of counsel or any other advisor to such Agent), advances or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted against such Agent in any way relating to or arising out of this
Agreement or any of the other Loan Documents or any action taken or omitted by
such Agent under this Agreement or any of the other Loan Documents, in
proportion to each Lender’s Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 10.08; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements for which there has been a final judicial determination that
such liability resulted from such Agent’s gross negligence or willful
misconduct. The obligations of the Lenders under this Section 10.05 shall
survive the payment in full of the Loans and the termination of this Agreement.

Section 10.06 Agents Individually. With respect to its Pro Rata Share of the
Total Commitment hereunder and the Loans made by it, each Agent shall have and
may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms “Lenders” or “Required Lenders” or any
similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders. Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with any
Borrower as if it were not acting as an Agent pursuant hereto without any duty
to account to the other Lenders.

Section 10.07 Successor Agent. (a) Each Agent may resign from the performance of
all its functions and duties hereunder and under the other Loan Documents at any
time by giving at least thirty (30) Business Days’ prior written notice to the
Borrowers’ Representative and each Lender. Such resignation shall take effect
upon the acceptance by a successor Agent of appointment pursuant to clauses
(b) and (c) below or as otherwise provided below.

(b) Upon any such notice of resignation, the Required Lenders shall appoint a
successor Agent with the consent of the Borrowers’ Representative (which consent
shall only be required so long as no Event of Default has occurred and is
continuing). Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After any Agent’s resignation
hereunder as an Agent, the provisions of this ARTICLE X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement and the other Loan Documents.

(c) If a successor Agent shall not have been so appointed within said thirty
(30) Business Day period, the retiring Agent, with the consent of the other
Agent, on behalf of the Lenders, and the Borrowers’ Representative (which
consent of the Borrowers’ Representative shall only be required so long as no
Event of Default has occurred and is continuing) shall then appoint a successor
Agent who shall serve as an Agent until such time, if any, as the Required
Lenders, with the consent of the other Agent, appoint a successor Agent as
provided above.

 

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(d) Upon the acceptance of a successor’s appointment as an Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the applicable retiring (or retired) Agent, and the
retiring Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Loan Parties to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrowers’ Representative and such successor.

Section 10.08 Collateral Matters.

(a) The Collateral Agent may from time to time make such disbursements and
advances (“Collateral Agent Advances”) which the Collateral Agent, in its
reasonable discretion, deems necessary or desirable (i) to preserve or protect
the Collateral or any portion thereof or to pay any other amount chargeable to
the Borrowers pursuant to the terms of this Agreement, including, without
limitation, costs, fees and expenses as described in Section 12.04, or
(ii) following the occurrence and during the continuance of an Event of Default,
to prepare for sale or lease or dispose of the Collateral or any portion thereof
or to enhance the likelihood or maximize the amount of repayment by the
Borrowers of the Loans and other Obligations. The Collateral Agent Advances
shall be repayable on demand and be secured by the Collateral and shall bear
interest at a rate per annum equal to the rate then applicable to the Loan. The
Collateral Agent Advances shall constitute Obligations hereunder which may be
charged to the Loan Account in accordance with Section 4.02. The Collateral
Agent shall notify each Lender and the Borrowers’ Representative in writing of
each such Collateral Agent Advance, which notice shall include a description of
the purpose of such Collateral Agent Advance. Without limitation to its
obligations pursuant to Section 10.05, each Lender agrees that it shall make
available to the Collateral Agent, upon the Collateral Agent’s demand, in
Dollars in immediately available funds, the amount equal to such Lender’s Pro
Rata Share of each such Collateral Agent Advance. If such funds are not made
available to the Collateral Agent by such Lender, the Collateral Agent shall be
entitled to recover such funds on demand from such Lender, together with
interest thereon for each day from the date such payment was due until the date
such amount is paid to the Collateral Agent, at the Federal Funds Rate for three
Business Days and thereafter at the Reference Rate.

(b) Without limiting the provisions of Section 12.26, the Lenders hereby
irrevocably authorize the Collateral Agent, at its option and in its discretion,
to release any Lien granted to or held by the Collateral Agent upon any
Collateral upon termination of the Total Commitment and payment and satisfaction
of all Loans and all other Obligations in accordance with the terms hereof; or
constituting property being sold or disposed of in the ordinary course of any
Loan Party’s business or otherwise in compliance with the terms of this
Agreement and the other Loan Documents; or constituting property in which the
Loan Parties owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the Lenders.
Upon request by the Collateral Agent at any time, the Lenders will confirm in
writing the Collateral Agent’s authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).

 

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(c) Without in any manner limiting the Collateral Agent’s authority to act
without any specific or further authorization or consent by the Lenders (as set
forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral
Agent of confirmation from the Lenders of its authority to release any
particular item or types of Collateral, and upon prior written request by any
Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Agents and the Lenders upon such Collateral; provided, however, that (i) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent’s reasonable opinion, would expose the Collateral
Agent to liability or create any obligations or entail any consequence other
than the release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Lien upon (or obligations of any Loan Party in respect of) all interests in
the Collateral retained by any Loan Party.

(d) Anything contained in any of the Loan Documents to the contrary
notwithstanding, the Loan Parties, each Agent and each Lender hereby agree that
(i) no Lender shall have any right individually to realize upon any of the
Collateral under any Loan Document or to enforce any Guaranty, it being
understood and agreed that all powers, rights and remedies under the Loan
Documents may be exercised solely by the Collateral Agent for the benefit of the
Lenders in accordance with the terms thereof, (ii) in the event of a foreclosure
by the Collateral Agent on any of the Collateral pursuant to a public or private
sale, the Administrative Agent, the Collateral Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and (iii) the
Collateral Agent, as agent for and representative of the Agents and the Lenders
(but not any other Agent or any Lender or Lenders in its or their respective
individual capacities unless the Required Lenders shall otherwise agree in
writing) shall be entitled (either directly or through one or more acquisition
vehicles) for the purpose of bidding and making settlement or payment of the
purchase price for all or any portion of the Collateral to be sold (A) at any
public or private sale, (B) at any sale conducted by the Collateral Agent under
the provisions of the Uniform Commercial Code (including pursuant to Sections
9-610 or 9-620 of the Uniform Commercial Code), (C) at any sale or foreclosure
conducted by the Collateral Agent (whether by judicial action or otherwise) in
accordance with applicable law or (D) any sale conducted pursuant to the
provisions of the Bankruptcy Code (including Section 363 of the Bankruptcy
Code), to use and apply all or any of the Obligations as a credit on account of
the purchase price for any Collateral payable by the Collateral Agent at such
sale.

(e) The Collateral Agent shall have no obligation whatsoever to any Lender to
assure that the Collateral exists or is owned by the Loan Parties or is cared
for, protected or insured or has been encumbered or that the Lien granted to the
Collateral Agent pursuant to this Agreement or any other Loan Document has been
properly or sufficiently or lawfully created, perfected, protected or enforced
or is entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 10.08 or in any other Loan
Document, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, the Collateral Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Collateral
Agent’s own interest in the Collateral as one of the Lenders and that the
Collateral Agent shall have no duty or liability whatsoever to any other Lender,
except as otherwise provided herein.

 

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Section 10.09 Agency for Perfection. Each Agent and each Lender hereby appoints
each other Agent and each other Lender as agent and bailee for the purpose of
perfecting the security interests in and Liens upon the Collateral in assets
which, in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and each Agent and each Lender hereby acknowledges
that it holds possession of or otherwise controls any such Collateral for the
benefit of the Agents and the Lenders as secured party. Should the
Administrative Agent or any Lender obtain possession or control of any such
Collateral, the Administrative Agent or such Lender shall notify the Collateral
Agent thereof, and, promptly upon the Collateral Agent’s request therefor shall
deliver such Collateral to the Collateral Agent or in accordance with the
Collateral Agent’s instructions. In addition, the Collateral Agent shall also
have the power and authority hereunder to appoint such other sub-agents as may
be necessary or required under applicable state law or otherwise to perform its
duties and enforce its rights with respect to the Collateral and under the Loan
Documents. Each Loan Party by its execution and delivery of this Agreement
hereby consents to the foregoing.

Section 10.10 No Reliance on any Agent’s Customer Identification Program. Each
Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on any Agent to carry out such
Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other requirements imposed by the USA PATRIOT Act or the regulations
issued thereunder, including the regulations set forth in 31 CFR § 103.121, as
hereafter amended or replaced (“CIP Regulations”), or any other Anti-Terrorism
Laws, including any programs involving any of the following items relating to or
in connection with any of the Loan Parties, their Affiliates or their agents,
the Loan Documents or the transactions hereunder or contemplated hereby: (1) any
identity verification procedures, (2) any recordkeeping, (3) comparisons with
government lists, (4) customer notices or (5) other procedures required under
the CIP Regulations or other regulations issued under the USA PATRIOT Act. Each
Lender, Affiliate, participant or assignee subject to Section 326 of the USA
PATRIOT Act will perform the measures necessary to satisfy its own
responsibilities under the CIP Regulations.

Section 10.11 No Third Party Beneficiaries. The provisions of this Article X are
solely for the benefit of the Agents and the Lenders, and no Loan Party shall
have rights as a third-party beneficiary of any of such provisions.

Section 10.12 No Fiduciary Relationship. It is understood and agreed that the
use of the term “agent” herein or in any other Loan Document (or any other
similar term) with reference to any Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead such term is used as a matter of market
custom, and is intended to create or reflect only an administrative relationship
between contracting parties.

 

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Section 10.13 Reports; Confidentiality; Disclaimers. By becoming a party to this
Agreement, each Lender:

(a) is deemed to have requested that each Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report
with respect to the Parent or any of its Subsidiaries (each, a “Report”)
prepared by or at the request of such Agent, and each Agent shall so furnish
each Lender with each such Report,

(b) expressly agrees and acknowledges that the Agents (i) do not make any
representation or warranty as to the accuracy of any Reports, and (ii) shall not
be liable for any information contained in any Reports,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that any Agent or other party performing any audit or
examination will inspect only specific information regarding the Parent and its
Subsidiaries and will rely significantly upon the Parent’s and its Subsidiaries’
books and records, as well as on representations of their personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding the Parent and its Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with Section 12.19, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold any Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of the Borrowers, and (ii) to pay and protect, and indemnify, defend and
hold any Agent and any other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including, attorneys fees and costs) incurred by any such Agent and any
such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.

Section 10.14 Collateral Agent May File Proofs of Claim. In case of the pendency
of any proceeding under any Insolvency Proceeding or any other judicial
proceeding relative to any Loan Party, the Collateral Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether any Agent
shall have made any demand on the Borrowers) shall be entitled and empowered
(but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Agents and the Lenders (including
any claim for the compensation, expenses, disbursements and advances of the
Agents, the Lenders and their respective agents and counsel and all other
amounts due the Agents and the Lenders hereunder and under the other Loan
Documents) allowed in such judicial proceeding; and

 

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(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Agent and each Lender to make such payments to the Collateral Agent and, in
the event that the Collateral Agent shall consent to the making of such payments
directly to the Agents and the Lenders, to pay to the Collateral Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Collateral Agent and its agents and counsel, and any other amounts due
the Collateral Agent hereunder and under the other Loan Documents.

ARTICLE XI

GUARANTY

Section 11.01 Guaranty. Each Guarantor hereby jointly and severally and
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
the Borrowers now or hereafter existing under any Loan Document, whether for
principal, interest (including, without limitation, all interest that accrues
after the commencement of any Insolvency Proceeding of any Borrower, whether or
not a claim for post-filing interest is allowed in such Insolvency Proceeding),
fees, commissions, expense reimbursements, indemnifications or otherwise (such
obligations, to the extent not paid by the Borrowers, being the “Guaranteed
Obligations”), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agents and the Lenders in enforcing
any rights under the guaranty set forth in this ARTICLE XI to the extent such
expenses would be otherwise due and owing pursuant to the terms of
Section 12.04(a). Without limiting the generality of the foregoing, each
Guarantor’s liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrowers to the Agents and the
Lenders under any Loan Document but for the fact that they are unenforceable or
not allowable due to the existence of an Insolvency Proceeding involving any
Borrower. In no event shall the obligation of any Guarantor hereunder exceed the
maximum amount such Guarantor could guarantee under any bankruptcy, insolvency
or other similar law.

Section 11.02 Guaranty Absolute. Each Guarantor jointly and severally guarantees
that the Guaranteed Obligations will be paid strictly in accordance with the
terms of the Loan Documents, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agents and the Lenders with respect thereto. Each Guarantor agrees
that this ARTICLE XI constitutes a guaranty of payment when due and not of
collection and waives any right to require that any resort be made by any Agent
or any Lender to any Collateral. The obligations of each Guarantor under this
ARTICLE XI are independent of the Guaranteed Obligations, and a separate action
or actions may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against any Loan
Party or whether any Loan Party is joined in any such action or

 

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actions. The liability of each Guarantor under this ARTICLE XI shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations, or any other amendment or waiver
of or any consent to departure from any Loan Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Loan Party or otherwise;

(c) any taking, exchange, release or non-perfection of any Collateral, or any
taking, release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;

(d) the existence of any claim, set-off, defense or other right that any
Guarantor may have at any time against any Person, including, without
limitation, any Agent or any Lender;

(e) any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Loan Party; or

(f) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the Agents
or the Lenders that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety (other than
payment in full of the Guaranteed Obligations).

This ARTICLE XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agents, the Lenders, or any other Person
upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise,
all as though such payment had not been made.

Section 11.03 Waiver. Each Guarantor hereby waives (i) promptness and diligence,
(ii) notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this ARTICLE XI and any requirement that the Agents
or the Lenders exhaust any right or take any action against any Loan Party or
any other Person or any Collateral, (iii) any right to compel or direct any
Agent or any Lender to seek payment or recovery of any amounts owed under this
ARTICLE XI from any one particular fund or source or to exhaust any right or
take any action against any other Loan Party, any other Person or any
Collateral, (iv) any requirement that any Agent or any Lender protect, secure,
perfect or insure any security interest or Lien on any property subject thereto
or exhaust any right to take any action against any Loan Party, any other Person
or any Collateral, and (v) any other defense available to any Guarantor (other
than payment in full of the Guaranteed Obligations). Each Guarantor agrees that
the Agents and the Lenders shall have no obligation to marshal any assets in
favor of any Guarantor or against, or in payment of, any or all of the
Obligations. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing

 

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arrangements contemplated herein and that the waiver set forth in this
Section 11.03 is knowingly made in contemplation of such benefits. Each
Guarantor hereby waives any right to revoke this ARTICLE XI, and acknowledges
that this ARTICLE XI is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.

Section 11.04 Continuing Guaranty; Assignments. This ARTICLE XI is a continuing
guaranty and shall (a) remain in full force and effect until the later of the
cash payment in full of the Guaranteed Obligations (other than indemnification
obligations as to which no claim has been made) and all other amounts payable
under this ARTICLE XI and the Final Maturity Date, (b) be binding upon each
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Agents and the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing
clause (c), any Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or any portion of its Commitments, its Loans owing to it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted such Lender herein or otherwise, in each
case as provided in Section 12.07.

Section 11.05 Subrogation. No Guarantor will exercise any rights that it may now
or hereafter acquire against any Loan Party or any other guarantor that arise
from the existence, payment, performance or enforcement of such Guarantor’s
obligations under this ARTICLE XI, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Agents and the Lenders
against any Loan Party or any other guarantor or any Collateral, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from any
Loan Party or any other guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security solely on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this ARTICLE XI shall have been
paid in full in cash (other than in respect of contingent indemnification and
expense reimbursement obligations as to which no claim has been made) and the
Final Maturity Date shall have occurred. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior
to the later of the payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this ARTICLE XI and the Final Maturity Date,
such amount shall be held in trust for the benefit of the Agents and the Lenders
and shall forthwith be paid to the Agents and the Lenders to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
ARTICLE XI, whether matured or unmatured, in accordance with the terms of this
Agreement, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this ARTICLE XI thereafter arising. If (i) any Guarantor
shall make payment to the Agents and the Lenders of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this ARTICLE XI shall be paid in full in cash and
(iii) the Final Maturity Date shall have occurred, the Agents and the Lenders
will, at such Guarantor’s request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.

 

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ARTICLE XII

MISCELLANEOUS

Section 12.01 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be mailed (certified mail, postage
prepaid and return receipt requested), sent by facsimile or email to a current
fax number or e-mail address for the recipient or delivered by hand, Federal
Express or other reputable overnight courier, if to any Loan Party, at the
following address:

2001 Bryan Street

Suite 1600

Dallas, TX 75201

Attention: Chief Financial Officer

Telephone: 214-880-3585

Facsimile: 214-880-3588

Email: chad.crow@bldr.com

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP

4 Times Square

New York, NY 10036

Attention: David Almroth

Telephone: 212-735-2294

Facsimile: 917-777-2194

Email: david.almroth@skadden.com

if to the Administrative Agent or the Collateral Agent, to it at the following
address:

Highbridge Principal Strategies, LLC

40 West 57th Street—33rd Floor

New York, NY 10019

Attention: Vikas Keswani

Telephone: 212-287-6773

Facsimile: 646.495.4469

Email: vikas.keswani@highbridge.com

 

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in each case, with a copy to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Attention: Frederic L. Ragucci

Telephone: 212-756-2000

Facsimile: 212-593-5955

Email: frederic.ragucci@srz.com

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other parties complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed (certified mail, postage prepaid and return receipt
requested), when received or 3 days after deposited in the mails, whichever
occurs first, (ii) if telecopied, when transmitted and confirmation received, or
(iii) if delivered by hand, Federal Express or other reputable overnight
courier, upon delivery, except that notices to any Agent pursuant to ARTICLE II
shall not be effective until received by such Agent.

Notices and other 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 under such Article by electronic communication. The
Administrative Agent or the Borrowers’ Representative may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

Section 12.02 Amendments, Etc. (a) No amendment or waiver of any provision of
this Agreement, and no consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Borrowers’ Representative and/or other applicable Loan Parties and the
Required Lenders or by the Collateral Agent with the consent of the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given, provided, however, that
no amendment, waiver or consent shall (i) increase the Commitment of any Lender,
reduce the principal of, or interest on, the Loans payable to any Lender, reduce
the

 

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amount of any fee payable for the account of any Lender, or postpone or extend
any scheduled date fixed for any payment of principal of, or interest or fees
on, the Loans payable to any Lender, in each case without the written consent of
any Lender affected thereby, (ii) increase the Total Commitment without the
written consent of each Lender, (iii) change any provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder
without the written consent of each Lender, (iv) amend the definition of
“Required Lenders” or “Pro Rata Share” without the written consent of each
Lender, (v) release all or a substantial portion of the Collateral (except as
otherwise provided in this Agreement and the other Loan Documents), subordinate
any Lien granted in favor of the Collateral Agent for the benefit of the Agents
and the Lenders, or release any Borrower or any Guarantor (except as otherwise
provided in this Agreement and the other Loan Documents) without the written
consent of each Lender, or (vi) amend, modify or waive Section 4.04 or this
Section 12.02 of this Agreement without the written consent of each Lender;
provided, further that Administrative Agent may, with the written consent of the
Borrowers’ Representative only, amend, modify or supplement this Agreement to
cure any ambiguity, omission, defect or inconsistency, so long as such
amendment, modification or supplement does not adversely affect the rights of
any Lender. Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing and signed by an Agent, affect the rights or duties of
such Agent (but not in its capacity as a Lender) under this Agreement or the
other Loan Documents. Solely for the purposes of voting or consenting to matters
with respect to the Loan Documents, a Defaulting Lender shall be deemed not to
be a “Lender” and such Lender’s Commitment shall be deemed to be zero.

(b) If any action to be taken by the Lenders hereunder requires the consent,
authorization, or agreement of all of the Lenders or any Lender affected
thereby, and a Lender other than the Collateral Agent and the Administrative
Agent and their respective Affiliates and Related Funds (the “Holdout Lender”)
fails to give its consent, authorization, or agreement, then the Collateral
Agent, upon at least 5 Business Days prior irrevocable notice to the Holdout
Lender, may permanently replace the Holdout Lender with one or more substitute
Replacement Lenders, and the Holdout Lender shall have no right to refuse to be
replaced hereunder. Such notice to replace the Holdout Lender shall specify an
effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given. Prior to the effective date
of such replacement, the Holdout Lender and each Replacement Lender shall
execute and deliver an Assignment and Acceptance, subject only to the Holdout
Lender being repaid its share of the outstanding Obligations without any premium
or penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance prior to the effective
date of such replacement, the Holdout Lender shall be deemed to have executed
and delivered such Assignment and Acceptance. The replacement of any Holdout
Lender shall be made in accordance with the terms of Section 12.07(b). Until
such time as the Replacement Lenders shall have acquired all of the Obligations,
the Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make its Pro Rata Share of Loans.

 

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Section 12.03 No Waiver; Remedies, Etc. No failure on the part of any Agent or
any Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agents and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agents and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.

Section 12.04 Expenses; Taxes; Attorneys’ Fees. The Borrowers will pay on
demand, all reasonable and documented out-of-pocket costs and expenses incurred
by or on behalf of each Agent (and, in the case of clauses (c), (d) and
(i) below, each Lender), regardless of whether the transactions contemplated
hereby are consummated, including, without limitation, reasonable and documented
fees, costs, client charges and expenses of one counsel for the Agents and the
Lenders (it being understood that such limitations shall not apply in the event
of a (x) a disagreement between the Agents and the Lenders, in which case the
Lenders may hire one separate counsel to represent their interests, or (y) a
conflict of interests or possible conflict of interests, in which case each
Lender that has such a conflict or possible conflict may hire one counsel to
represent its interests (it being understood that conflicts of interests do not
include disagreements regarding strategy)), accounting, due diligence, periodic
field audits, physical counts, valuations, investigations, searches and filings,
monitoring of assets, appraisals of Collateral (it being understood that
Collateral Examinations shall be subject to the limitations contained in
Section 7.01(f)), title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including, without limitation, the preparation of any additional Loan Documents
pursuant to Section 7.01(b) or the review of any of the agreements, instruments
and documents referred to in Section 7.01(f)), (b) any requested amendments,
waivers or consents to this Agreement or the other Loan Documents whether or not
such documents become effective or are given, (c) the preservation and
protection of the Agents’ or any of the Lenders’ rights under this Agreement or
the other Loan Documents, (d) subject to the Expense Limitations, the defense of
any claim or action asserted or brought against any Agent or any Lender by any
Person that arises from or relates to this Agreement, any other Loan Document,
the Agents’ or the Lenders’ claims against any Loan Party, or any and all
matters in connection therewith, (e) subject to the Expense Limitations, the
commencement or defense of, or intervention in, any court proceeding arising
from or related to this Agreement or any other Loan Document, (f) the filing of
any petition, complaint, answer, motion or other pleading by any Agent or any
Lender in connection with this Agreement or any other Loan Document, or the
taking of any action in respect of the Collateral or other security, in
connection with this Agreement or any other Loan Document, (g) the protection,
and during the continuance of an Event of Default, the collection, lease, sale,
taking possession of or liquidation of, any Collateral or other security in
connection with this Agreement or any other Loan Document, (h) during the
continuance of an Event of Default, any attempt to enforce any Lien or security
interest in any Collateral or other security in connection with this Agreement
or any other Loan Document, (i) during the continuance of an Event of Default,
any attempt to collect from any Loan Party, (j) subject to the Expense
Limitations, all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
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Hazardous Materials on, upon or into such property, (k) subject to the Expense
Limitations, any Environmental Liabilities and Costs incurred in connection with
the investigation, removal, cleanup and/or remediation of any Hazardous
Materials present or arising out of the operations of any facility of any Loan
Party, (l) subject to the Expense Limitations, any Environmental Liabilities and
Costs incurred in connection with any Environmental Lien, or (m) the receipt by
any Agent of any advice from professionals with respect to any of the foregoing.
Without limitation of the foregoing or any other provision of any Loan Document:
(x) the Borrowers agree to pay all broker fees that may become due in connection
with the transactions contemplated by this Agreement and the other Loan
Documents (for the avoidance of doubt, it is understood and agreed that each
Agent and Lender severally represents to the Loan Parties that such Agent or
such Lender, as applicable, has not engaged the services of any broker in
connection with the Loan Documents), and (y) if the Borrowers fail to perform
any covenant or agreement contained herein or in any other Loan Document, any
Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of such Agent incurred in connection therewith shall be reimbursed
on demand by the Borrowers (it being understood that to the extent practicable,
the Collateral Agent shall use commercially reasonable efforts to provide prior
notice of its intent to perform any such agreement or covenant, but the failure
to provide such notice shall not result in a breach of this Agreement or affect
the Borrowers’ reimbursement obligations hereunder). The obligations of the
Borrowers under this Section 12.04 shall survive the repayment of the
Obligations and discharge of any Liens granted under the Loan Documents.

Section 12.05 Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, any Agent or any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to any Loan Party (any
such notice being expressly waived by the Loan Parties) and to the fullest
extent permitted by law, set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not such Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. Each
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by such Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agents and the Lenders under this Section 12.05
are in addition to the other rights and remedies (including other rights of
set-off) which the Agents and the Lenders may have under this Agreement or any
other Loan Documents of law or otherwise.

Section 12.06 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

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Section 12.07 Assignments and Participations.

(a) This Agreement and the other Loan Documents shall be binding upon and inure
to the benefit of each Loan Party and each Agent and each Lender and their
respective successors and assigns; provided, however, that (i) none of the Loan
Parties may assign or transfer any of its rights hereunder or under the other
Loan Documents without the prior written consent of each Lender and any such
assignment without the Lenders’ prior written consent shall be null and void,
and (ii) no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except to an assignee or by way of participation or in
connection with a pledge of its Loans, in any such case, in accordance with and
subject to the restrictions of this Section 12.07 (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, participants to the extent provided in this Section 12.07 and,
to the extent expressly contemplated hereby, the respective Affiliates,
officers, directors, employees, attorneys, consultants and agents of each of the
Agents, and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

(b) Each Lender may with the written consent of the Collateral Agent (such
consent not to be unreasonably withheld or delayed), assign to one or more other
lenders or other entities all or a portion of its rights and obligations under
this Agreement with respect to all or a portion of its Commitment and any Loan
made by it; provided, however, that (i) such assignment is in an amount which is
at least $1,000,000 or a multiple of $500,000 in excess thereof (or the
remainder of such Lender’s Commitment or Loans held by such Lender) (except such
minimum amount shall not apply to an assignment by a Lender to (x) a Lender, an
Affiliate of such Lender or a Related Fund of such Lender or (y) a group of new
Lenders, each of whom is an Affiliate or Related Fund of each other to the
extent the aggregate amount to be assigned to all such new Lenders is at least
$1,000,000 or a multiple of $500,000 in excess thereof), (ii) the parties to
each such assignment shall execute and deliver to the Collateral Agent, for its
acceptance, an Assignment and Acceptance, together with any promissory note
subject to such assignment and such parties shall deliver to the Collateral
Agent, for the benefit of the Collateral Agent, a processing and recordation fee
of $3,500 (except the payment of such fee shall not be required in connection
with an assignment by a Lender to a Lender, an Affiliate of such Lender or a
Related Fund of such Lender) and (iii) no written consent of the Collateral
Agent shall be required (1) in connection with any assignment by a Lender to a
Lender, an Affiliate of such Lender or a Related Fund of such Lender or (2) if
such assignment is in connection with any merger, consolidation, sale, transfer,
or other disposition of all or any substantial portion of the business or loan
portfolio of such Lender. Notwithstanding the foregoing, no assignments may be
made to a natural person or to a Disqualified Institution; provided, that, with
respect to Lenders that were not identified to the Agents by the Borrowers in
writing prior to the Effective Date, the Agents and the Lenders shall be
entitled to rely upon the representations made by any Lender in the Assignment
and Acceptance that such Lender is not a Disqualified Institution without any
further investigation. Upon such execution, delivery and acceptance, from and
after the effective date specified in each Assignment and Acceptance and
recordation on the Register, which effective date shall be at least 3 Business
Days after the delivery thereof to the Collateral Agent (or such shorter period
as shall be agreed to by the Collateral Agent and the parties to such
assignment), (A) the assignee thereunder shall become a “Lender” hereunder and,
in addition to the rights and obligations hereunder held by it immediately prior
to such effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance,

 

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relinquish its rights 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 an assigning Lender’s rights and obligations under this Agreement,
such Lender shall cease to be a party hereto). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 12.07(i).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender and the assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto; (ii) the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any
Loan Party or any of its Subsidiaries or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement and the other Loan Documents, together with
such other documents and information it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the assigning
Lender, any Agent or any Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents; (v) such assignee appoints, authorizes and empowers the Agents to
take such action as agents on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agents by the
terms hereof and thereof, together with such powers as are reasonably incidental
hereto and thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by it as a
Lender.

(d) The Administrative Agent shall, acting solely for this purpose as a
non-fiduciary agent of the Borrowers, maintain, or cause to be maintained at the
Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitments of, and the principal amount of
the Loans (and stated interest thereon) (the “Registered Loans”) owing to each
Lender from time to time. The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrowers, the Agents
and the Lenders shall treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes. The Register shall be available for
inspection by the Borrowers’ Representative and any Lender at any reasonable
time and from time to time upon reasonable prior notice.

(e) Upon receipt by the Administrative Agent of a completed Assignment and
Acceptance, and subject to any consent from any Person required pursuant to
Section 12.07(b) (which consent must be evidenced by such Person’s execution of
an acceptance to such Assignment and Acceptance), the Administrative Agent shall
accept such assignment, record the information contained therein in the Register
and provide to the Collateral Agent and the Borrowers’ Representative a copy of
the fully executed Assignment and Acceptance.

 

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(f) A Registered Loan (and the registered note, if any, evidencing the same) may
be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register (and each registered note shall expressly so provide).
Any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any, evidencing the same), the Agents shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered on the Register as the owner thereof for
the purpose of receiving all payments thereon, notwithstanding notice to the
contrary.

(g) In the event that any Lender sells participations in a Registered Loan, such
Lender shall, acting for this purpose as a non-fiduciary agent on behalf of the
Borrowers, maintain, or cause to be maintained, a register, on which it enters
the name of all participants in the Registered Loans held by it and the
principal amount (and stated interest thereon) of the portion of the Registered
Loan that is the subject of the participation (the “Participant Register”). A
Registered Loan (and the registered note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each registered note shall expressly so provide).
Any participation of such Registered Loan (and the registered note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register. The Participant Register shall be
available for inspection by the Borrowers’ Representative and any Lender at any
reasonable time and from time to time upon reasonable prior notice.

(h) Any Non-U.S. Lender who purchases or is assigned or participates in any
portion of such Registered Loan shall comply with Section 2.08(d).

(i) Each Lender may sell participations to one or more banks or other entities
(other than Disqualified Institutions) in or to all or a portion of its rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Commitments and the Loans made by
it); provided, that (i) such Lender’s obligations under this Agreement
(including without limitation, its Commitments hereunder) and the other Loan
Documents shall remain unchanged; and (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
and the Borrowers, the Agents 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 the other Loan Documents. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this Agreement
except with respect to any (A) action directly effecting an extension of the
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decrease in the principal amount of the Loans, (B) action directly effecting an
extension of the due dates or a decrease in the rate of interest payable on the
Loans or the fees payable under this Agreement, or (C) actions directly
effecting a release of all or a substantial portion of the Collateral or any
Loan Party (except as set forth in Section 10.08 of this Agreement or any other
Loan Document). Subject to subsection (j) below, the Loan Parties agree that
each participant shall be entitled to the benefits of Section 2.08 and
Section 4.05 of this Agreement with respect to its participation in any portion
of the Commitments and the Loans as if it was a Lender.

(j) A participant shall not be entitled to receive any greater payment under
Section 2.08 or 4.05 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such participant, unless
(i) the sale of the participation to such participant is made (A) with the
Borrowers’ Representative’s prior written consent, or (B) during the continuance
of an Event of Default, or (ii) such entitlement to a greater amount result from
a Change in Law after the participant became a participant.

(k) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank or loans made to such Lender pursuant to a credit facility;
provided that no such pledge or assignment shall release such Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.

Section 12.08 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by facsimile or electronic mail shall be equally as effective as
delivery of an original executed counterpart of this Agreement. Any party
delivering an executed counterpart of this Agreement by facsimile or electronic
mail also shall deliver an original executed counterpart of this Agreement but
the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement. The foregoing
shall apply to each other Loan Document mutatis mutandis.

Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.

Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK
OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE

 

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JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO HEREBY IRREVOCABLY
APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR
SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADDRESS FOR NOTICES AS SET
FORTH IN SECTION 12.01 AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK,
SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. THE PARTIES
HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY HERETO
IN ANY OTHER JURISDICTION. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY
PARTY HERETO HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, EACH AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN
PARTY CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK
TO ENFORCE THE FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO
THIS AGREEMENT.

 

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Section 12.12 Consent by the Agents and Lenders. Except as otherwise expressly
set forth herein to the contrary or in any other Loan Document, if the consent,
approval, satisfaction, determination, judgment, acceptance or similar action
(an “Action”) of any Agent or any Lender shall be permitted or required pursuant
to any provision hereof or any provision of any other agreement to which any
Loan Party is a party and to which any Agent or any Lender has succeeded
thereto, such Action shall be required to be in writing and may be withheld or
denied by such Agent or such Lender, in its sole discretion, with or without any
reason, and without being subject to question or challenge on the grounds that
such Action was not taken in good faith.

Section 12.13 No Party Deemed Drafter. Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments. If any claim is ever made upon
any Agent or any Lender for repayment or recovery of any amount or amounts
received by such Agent or such Lender in payment or on account of any of the
Obligations, such Agent or such Lender shall give prompt notice of such claim to
each other Agent and Lender and the Borrowers’ Representative, and if such Agent
or such Lender repays all or part of such amount by reason of (i) any judgment,
decree or order of any court or administrative body having jurisdiction over
such Agent or such Lender or any of its property, or (ii) any good faith
settlement or compromise of any such claim effected by such Agent or such Lender
with any such claimant, then and in such event each Loan Party agrees that
(A) any such judgment, decree, order, settlement or compromise shall be binding
upon it notwithstanding the cancellation of any Indebtedness hereunder or under
the other Loan Documents or the termination of this Agreement or the other Loan
Documents, and (B) it shall be and remain liable to such Agent or such Lender
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Agent or such Lender.

Section 12.15 Indemnification; Limitation of Liability for Certain Damages.

(a) In addition to each Loan Party’s other Obligations under this Agreement,
each Loan Party agrees to, jointly and severally, defend, protect, indemnify and
hold harmless each Agent and each Lender and all of their respective Affiliates,
officers, directors, employees, attorneys, consultants and agents (collectively
called the “Indemnitees”) from and against any and all losses, damages,
liabilities, obligations, penalties, fees, reasonable and documented costs and
expenses (including, without limitation, reasonable and documented attorneys’
fees, costs and expenses) incurred by such Indemnitees, whether prior to or from
and after the Effective Date, whether direct, indirect or consequential, as a
result of or arising from or relating to or in connection with any of the
following: (i) the negotiation, preparation, execution or performance or
enforcement of this Agreement, any other Loan Document or of any other document
executed in connection with the transactions contemplated by this Agreement,
(ii) any Agent’s or any Lender’s furnishing of funds to the Borrowers under this
Agreement or the other Loan Documents, including, without limitation, the
management of any such Loans, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, (iv) any presence or release of Hazardous

 

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Materials on or from any property owned or operated by any Loan Party or any of
its Subsidiaries, or any Environmental Liability directly attributable in any
way to any Loan Party or any of its Subsidiaries, or (v) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the “Indemnified Matters”);
provided, however, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter (x) caused by
the gross negligence or willful misconduct of such Indemnitee, any Affiliate of
such Indemnitee that is controlled by such Indemnitee or any of its or their
respective officers, directors, employees or attorneys, in each case, as
determined by a final judgment of a court of competent jurisdiction or
(y) disputes exclusively among Indemnitees (such limitations on Indemnified
Matters, the “Expense Limitations”).

(b) The indemnification for all of the foregoing losses, damages, fees, costs
and expenses of the Indemnitees set forth in this Section 12.15 are chargeable
against the Loan Account. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in this Section 12.15 may be unenforceable because
it is violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.

(c) No party hereto or Indemnitee shall assert, and each such Person hereby
waives, any claim against any Loan Party or any of its Subsidiaries or any of
their respective Affiliates, officers, directors, employees, attorneys,
consultants and agents or against any Indemnitees, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) (whether or not the claim therefor is based on contract, tort
or duty imposed by any applicable legal requirement) arising out of, in
connection with, as a result of, or in any way related to, this Agreement or any
other Loan Document or any agreement or instrument contemplated hereby or
thereby or referred to herein or therein, the transactions contemplated hereby
or thereby, any Loan or the use of the proceeds thereof or any act or omission
or event occurring in connection therewith, and each such Person hereby waives,
releases and agrees not to sue upon any such claim or seek any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.

(d) The indemnities and waivers set forth in this Section 12.15 shall survive
the repayment of the Obligations and discharge of any Liens granted under the
Loan Documents.

Section 12.16 Parent as Agent for Borrowers. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for the Borrowers
(the “Borrowers’ Representative”) which appointment shall remain in full force
and effect unless and until the Agents shall have received prior written notice
signed by all of the Borrowers that such appointment has been revoked and that
another Loan Party has been appointed Borrowers’ Representative. Each Borrower
hereby irrevocably appoints and authorizes the Borrowers’ Representative (i) to
provide to the Agents and receive from the Agents all notices with respect to
Loans obtained for the benefit of any Borrower and all other notices and
instructions under this Agreement and (ii) to take such action as the Borrowers’
Representative deems appropriate on its behalf to obtain Loans and to exercise
such other powers as are reasonably incidental

 

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thereto to carry out the purposes of this Agreement. It is understood that the
handling of the Loan Account and Collateral of the Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
the Borrowers in order to utilize the collective borrowing powers of the
Borrowers in the most efficient and economical manner and at their request, and
that neither the Agents nor the Lenders shall incur liability to the Borrowers
as a result hereof. Each of the Borrowers expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the
Agents and the Lenders to do so, and in consideration thereof, each of the
Borrowers hereby jointly and severally agrees to indemnify the Indemnitees and
hold the Indemnitees harmless against any and all liability, expense, loss or
claim of damage or injury, made against such Indemnitee by any of the Borrowers
or by any third party whosoever, arising from or incurred by reason of (a) the
handling of the Loan Account and Collateral of the Borrowers as herein provided,
(b) the Agents and the Lenders relying on any instructions of the Borrowers’
Representative, or (c) any other action taken by any Agent or any Lender
hereunder or under the other Loan Documents.

Section 12.17 Records. The unpaid principal of and interest on the Loans, the
interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06 hereof, including, without limitation, the fees
set forth in the Fee Letter and the Applicable Prepayment Premium, shall at all
times be ascertained from the records of the Agents, which shall be conclusive
and binding absent manifest error.

Section 12.18 Binding Effect. This Agreement shall become effective when it
shall have been executed by each Loan Party, each Agent and each Lender and when
the conditions precedent set forth in Section 5.01 hereof have been satisfied or
waived in writing by the Agents, and thereafter shall be binding upon and inure
to the benefit of each Loan Party, each Agent and each Lender, and their
respective successors and assigns, except that the Loan Parties shall not have
the right to assign their rights hereunder or any interest herein without the
prior written consent of each Agent and each Lender, and any assignment by any
Lender shall be governed by Section 12.07 hereof.

Section 12.19 Interest. It is the intention of the parties hereto that each
Agent and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to any Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to such
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to any Agent
or any Lender that is contracted for, taken, reserved, charged or received by
such Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Agent or such Lender on

 

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the principal amount of the Obligations (or, to the extent that the principal
amount of the Obligations shall have been or would thereby be paid in full,
refunded by such Agent or such Lender, as applicable, to the Borrowers); and
(ii) in the event that the maturity of the Obligations is accelerated by reason
of any Event of Default under this Agreement or otherwise, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Agent or any Lender may never include more
than the maximum amount allowed by such applicable law, and excess interest, if
any, provided for in this Agreement or otherwise shall be canceled automatically
by such Agent or such Lender, as applicable, as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited by such Agent or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Agent or such Lender to the
Borrowers). All sums paid or agreed to be paid to any Agent or any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (x) the amount of interest payable to any
Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to such Agent or such Lender pursuant to this Section 12.19 and
(y) in respect of any subsequent interest computation period the amount of
interest otherwise payable to such Agent or such Lender would be less than the
amount of interest payable to such Agent or such Lender computed at the Highest
Lawful Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of interest
which would have been payable to such Agent or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.19.

For purposes of this Section 12.19, the term “applicable law” shall mean that
law in effect from time to time and applicable to the loan transaction between
the Borrowers, on the one hand, and the Agents and the Lenders, on the other,
that lawfully permits the charging and collection of the highest permissible,
lawful non-usurious rate of interest on such loan transaction and this
Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not include the
right to accelerate any interest that has not accrued as of the date of
acceleration.

Section 12.20 Confidentiality. Each Agent and each Lender agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound practices of comparable commercial finance
companies, and to not use for any purpose other than in connection with the
Loans, any non-public information supplied to it by the Loan Parties pursuant to
this Agreement or the other Loan Documents (and which at the time is not, and
does not thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to such
Person not to disclose such

 

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information (other than as a result of a breach by such Agent or Lender of the
provisions of this Section 12.20)), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by any Requirement
of Law or judicial process or as otherwise requested by any Governmental
Authority purporting to have jurisdiction over it; provided that such Agent or
Lender shall, to the extent practical and not prohibited by applicable law,
(A) promptly notify the Borrowers’ Representative prior to such disclosure,
(B) consult with the Borrowers’ Representative on the advisability of taking
legally available steps to resist or narrow such requirement or request, and
(C) make such requests to resist or narrow such requirement or request as the
Borrowers’ Representative may reasonably request (it being understood and agreed
that, notwithstanding the foregoing, no Agent or Lender shall be required to
commence or prosecute any action or proceeding), (ii) to counsel, examiners,
auditors, accountants for any Agent or any Lender or any parties to a
securitization (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such information and
instructed to keep such information confidential), (iii) in connection with the
exercise of any remedies hereunder or under any of the other Loan Documents or
any action or proceeding relating to this Agreement or any of the other Loan
Documents or applicable law or the enforcement of rights hereunder or
thereunder, (iv) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first agrees, in writing, to be bound by confidentiality provisions
substantially the same to those set forth in this Section 12.20, or (v) to its
affiliates and related funds, and to their respective investors, limited
partners, directors, officers, employees and representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential).

Section 12.21 Public Disclosure. Each Loan Party agrees that neither it nor any
of its Affiliates that it controls, nor any of the Permitted Holders
(collectively, the “Restricted Persons”), will now or in the future issue any
press release or other public disclosure using the name of an Agent, any Lender
or any of their respective Affiliates or referring to this Agreement or any
other Loan Document without the prior written consent of such Agent or such
Lender, except to the extent that such Restricted Person is required to do so
under applicable law (in which event, such Restricted Person will consult with
such Agent or such Lender before issuing such press release or other public
disclosure). Agents may disclose information relating to this Agreement and the
other Loan Documents to Gold Sheets and other publications with such information
to consist of deal terms and other information customarily found in such
publications. In addition, Agents may otherwise use the corporate names and
logos of Borrowers and Guarantors and such information in “tombstones” or other
advertisements, public statements or other marketing materials, and in
connection with obtaining a published CUSIP from the CUSIP Bureau.

Section 12.22 Integration. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.

 

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Section 12.23 USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA PATRIOT Act hereby notifies the Borrowers that pursuant to the
requirements of the USA PATRIOT Act, it is required to obtain, verify and record
information that identifies the entities composing the Borrowers, which
information includes the name and address of each such entity and other
information that will allow such Lender to identify the entities composing the
Borrowers in accordance with the USA PATRIOT Act. Each Loan Party agrees to take
such action and execute, acknowledge and deliver at its sole cost and expense,
such instruments and documents as any Lender may reasonably require from time to
time in order to enable such Lender to comply with the USA PATRIOT Act.

Section 12.24 Collateral Trust Agreement.

(a) Each Lender agrees to the appointment of the Collateral Agent as Priority
Collateral Trustee, for the benefit of the Lenders under the Collateral Trust
Agreement. The Collateral Agent may act as collateral trustee, collateral agent
or any similar title that the Collateral Agent deems necessary or convenient for
the purpose of perfecting the security interests in the Collateral. Each Lender
consents to and authorizes, empowers and directs the Collateral Agent to perform
its obligations under the Collateral Trust Agreement and the Security Documents
(as defined therein) and authorizes the Collateral Agent and Priority Collateral
Trustee, as applicable, each in such capacity, through its agents or employees,
to execute and deliver any Loan Documents and take such actions on its behalf
under the provisions of this Agreement, the Collateral Trust Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Collateral Agent or Priority Collateral Trustee, as
applicable, by the terms of this Agreement, the Collateral Trust Agreement and
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto.

(b) Pursuant to an “Act of Required Debtholders” under (and as defined in) the
Collateral Trust Agreement, each Lender hereby irrevocably designates and
appoints Highbridge as Priority Collateral Trustee (as defined in the Collateral
Trust Agreement) and authorizes Highbridge to act as Priority Collateral Trustee
with such powers as are specifically delegated to Priority Collateral Trustee by
the terms of the Collateral Trust Agreement, together with such other powers as
are reasonably incidental thereto, and Highbridge hereby accepts such
appointment and authorization.

(c) The Lenders hereby authorize Highbridge, as Priority Collateral Trustee (as
defined in the Collateral Trust Agreement), to release and terminate all
Priority Liens (as defined in the Collateral Trust Agreement) in the deposit
account or securities account of any Loan Party that is used exclusively to cash
collateralize letters of credit to the extent permitted under clause (q)(i) of
the definition of Permitted Liens.

Section 12.25 Mitigation Obligation; Replacement of Lenders.

(a) If any Lender requests compensation under Section 4.05, or any Loan Party is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.08, or if any
Lender gives a notice pursuant to Section 2.12, then such Lender shall, as
applicable, use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder, to assign its rights and obligations
hereunder to another of its offices, branches or affiliates or to take such
other actions as such Lender determines, if, in the good faith judgment of such
Lender, such designation, assignment

 

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or other action (i) would eliminate or reduce amounts payable pursuant to
Section 2.08 or 4.05, as the case may be, in the future, or eliminate the need
for the notice pursuant to Section 2.12, as applicable, and (ii) in each case,
would not subject such Lender to any unreimbursed cost or expense and such
Lender would not suffer any economic, legal or regulatory disadvantage in any
material respect. The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

(b) If (i) any Lender requests compensation under Section 4.05, or (ii) any Loan
Party is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.08, then the
Borrowers’ Representative may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 12.07), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided, that:

(A) the assignment fee specified in Section 12.07(b) shall have been paid or
waived;

(B) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 2.11) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts);

(C) in the case of any such assignment resulting from a claim for compensation
under Section 4.05 or payments required to be made pursuant to Section 2.08,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(D) such assignment does not conflict with applicable Laws.

(c) A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

Section 12.26 Release of Liens. (a) Upon the date on which all of the
Obligations (other than unasserted contingent indemnification obligations and
unasserted contingent expense reimbursement obligations) have been paid in full
in immediately available funds, (b) in the event any property of any Loan Party
is conveyed, sold, leased, assigned, transferred or disposed of in a Permitted
Disposition (other than a Permitted Disposition to another Loan Party) or (c) in
the case of a transaction permitted under this Agreement the result of which is
that a Loan Party ceases to be a Subsidiary hereunder, the Collateral Agent
shall, in the case of clauses (a), (b) and (c), upon the Borrowers’
Representative’s request and at the Borrowers’ expense, without any
representation, warranty or recourse whatsoever, (A) promptly return to the
Borrowers’ Representative (or whomsoever shall be lawfully entitled to receive
the same or as a court of competent jurisdiction shall direct) such of the
released Collateral as shall

 

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not have been sold or otherwise Disposed of or applied pursuant to the terms
hereof and (B) promptly execute and deliver to the Borrowers’ Representative
such documents, in form and substance reasonably satisfactory to Collateral
Agent, as the Borrowers’ Representative shall reasonably request to evidence
such release (including, in the case of clause (c), a release of the Guaranty of
the applicable Subsidiary.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

BORROWERS:

 

BUILDERS FIRSTSOURCE—DALLAS, LLC

 

BUILDERS FIRSTSOURCE—FLORIDA, LLC

 

BUILDERS FIRSTSOURCE—OHIO VALLEY, LLC

 

BUILDERS FIRSTSOURCE—ATLANTIC GROUP, LLC

 

BUILDERS FIRSTSOURCE—RALEIGH, LLC

 

BUILDERS FIRSTSOURCE—SOUTHEAST GROUP, LLC

 

BUILDERS FIRSTSOURCE—TEXAS GROUP, L.P.

 

By: Builders FirstSource—Texas GenPar,

LLC, its General Partner

 

BUILDERS FIRSTSOURCE—SOUTH TEXAS, L.P.

 

By: BFS Texas, LLC, its General Partner

 

BUILDERS FIRSTSOURCE—TEXAS INSTALLED SALES, L.P.

 

By: BFS Texas, LLC, its General Partner

By:     /s/ Chad Crow   Name:    Chad Crow   Title:   Senior Vice
President—Finance and Chief Financial Officer of each of the foregoing companies

Signature Page to Financing Agreement

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

GUARANTORS:

 

BUILDERS FIRSTSOURCE—NORTHEAST GROUP, LLC

 

BUILDERS FIRSTSOURCE, INC.

 

BUILDERS FIRSTSOURCE HOLDINGS, INC.

 

BUILDERS FIRSTSOURCE—COLORADO GROUP, LLC

 

BUILDERS FIRSTSOURCE—COLORADO, LLC

BFS, LLC

 

BUILDERS FIRSTSOURCE—FLORIDA DESIGN CENTER, LLC

 

BUILDERS FIRSTSOURCE—TEXAS GENPAR, LLC

 

BUILDERS FIRSTSOURCE—MBS, LLC

 

BFS TEXAS, LLC

 

BFS IP, LLC

 

BUILDERS FIRSTSOURCE—INTELLECTUAL PROPERTY, L.P.

 

By: BFS IP, LLC, its General Partner

 

CCWP INC.

By:     /s/ Chad Crow   Name:    Chad Crow   Title:   Senior Vice
President—Finance and Chief Financial Officer of each of the foregoing companies
and corporations

Signature Page to Financing Agreement

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

COLLATERAL AGENT AND

ADMINISTRATIVE AGENT:

 

HIGHBRIDGE PRINCIPAL STRATEGIES, LLC

By:     /s/ Michael Patterson   Name:    Michael Patterson   Title:   Managing
Director

Signature Page to Financing Agreement

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

LENDERS:

 

HIGHBRIDGE ONSHORE SENIOR INVESTMENTS, LLC

 

By:     Highbridge Principal Strategies Mezzanine

 Partners GP, L.P., its managing member

 

By:     Highbridge Principal Strategies, LLC, its

 general partner

By:     /s/ Scot French   Name:    Scot French   Title:   Managing Director

 

HIGHBRIDGE PRINCIPAL STRATEGIES— SENIOR LOAN FUND II, L.P.

 

By:     Highbridge Principal Strategies, LLC, its

 investment manager

By:     /s/ Michael Patterson   Name:    Michael Patterson   Title:   Managing
Director

 

HIGHBRIDGE SENIOR LOAN SECTOR A INVESTMENT FUND, L.P.

By:  

  Highbridge Principal Strategies, LLC, its investment manager By:     /s/
Michael Patterson   Name:    Michael Patterson   Title:   Managing Director

Signature Page to Financing Agreement

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

Schedule 1.01(A)

Lenders and Lenders’ Commitments

 

September 30,

Lender

     Commitment   Highbridge Onshore Senior Investments, LLC      $ 80,000,000
   Highbridge Principal Strategies—Senior Loan Fund II, L.P.      $ 49,812,000
  

Highbridge Senior Loan Sector A Investment Fund, L.P.

     $ 30,188,000        

 

 

 

Total

     $ 160,000,000        

 

 

 

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

Schedule 1.01(C)

Collateral Trust Agreement Documents

 

  1. Partial Collateral Release

 

  2. Officer’s Certificate

 

  3. Collateral Trust Joinder

 

  4. Act of Required Debt Holders

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

Schedule 1.01(F)

Facilities

 

September 30, September 30, September 30,

Address

    

City

     State      Mortgaged

3302 Ballenger Creek Pike

     Frederick      MD      Yes

6550 Roosevelt Blvd

     Jacksonville      FL      Yes

11501 Ryland Court

     Orlando      FL      Yes

941—945 West State Street

     Bristol      VA      Yes

5415 Market Street

     Wilmington      NC      Yes

1609 Howe Street, SE

     Southport      NC      Yes

1.9349 acres @ Old Hendersonville Hwy & Wilson Rd*

     Pisgah Forest      NC      No

332 Haywood Road

     Asheville      NC      Yes

114-116 Myrtle Beach Highway

     Sumter      SC      Yes

8035 Howard Street

     Spartanburg      SC      Yes

101 Dewberry Road

     Cowpens      SC      Yes

151 Dewberry Road

     Cowpens      SC      Yes

1724 West Lucas Street

     Florence      SC      Yes

150 Ole Woodward Avenue*

     Conway      SC      No

226 Tiller Drive

     Pawleys Island      SC      Yes

801 South Washington

     Greenville      SC      Yes

101 Lumber Lane

     Seneca      SC      Yes

2651 North Okatie Highway

     Ridgeland      SC      Yes

195 Davis Road*

     LaGrange      GA      No

252 County Road 308 West*

     Shelby      AL      No

407 East State of Franklin Road

     Johnson City      TN      Yes

260 Piney Flats Road

     Piney Flats      TN      Yes

902 N. Mill St.

     Lewisville      TX      Yes

2910 Highway 65 & Highway 701 North*

     Conway      SC      No

956 Hwy 501 E*

     Conway      SC      No

295 Prosperity Drive

     Orangeburg      SC      Yes

Shepherds Vineyard;L11 PH1 (Rocky Lane)*

     Asheboro      NC      No

1242 Reading Rd.

     Mason      OH      Yes

5930 Orlando Street

     Jacksonville      FL      Yes

8.26 acres of vacant land in Walton County

     DeFuniak Springs      FL      Yes

Lakeshore Hills; Lot 12, Blk 007 (Lakeshore Drive)*

     Weatherford      TX      No

0 Nain Road*

     Jacksonville      FL      No

 

* Properties that are not required to be mortgaged.

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

Schedule 1.01(P)

Certain Leases

 

Address

  

Lease/Sublease

3615 Lamar Avenue, Memphis, TN

   Sublessee: Cumberland Materials Inc. dated 12/29/05; First Amendment dated
11/22/10. Expires 11/30/11.

3615 Lamar Avenue, Memphis, TN

   Sublessee: Process Systems Inc. dated 8/1/10; Expires 7/31/12.

10149 Toebben, Independence, KY

   Sublessee: Ziegler Tire & Supply Company dated 4/1/07. Expires 9/30/14.

1242 Reading Rd., Mason, OH

   Lessee: Strait & Lamp Mason Inc. dated 6/30/09. Expires 6/30/12.

5230 Feldwood Rd, College Park, GA

   Sublessee: Jones Transportation Inc. dated 6/1/11. Expires 9/30/16.

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

Schedule 1.01(S)

Specified Properties

 

Address

  

City

  

State

1.9349 acres @ Old Hendersonville Hwy & Wilson Rd

   Pisgah Forest    NC

150 Ole Woodward Avenue

   Conway    SC

195 Davis Road

   LaGrange    GA

252 County Road 308 West

   Shelby    AL

2910 Highway 65 & Highway 701 North

   Conway    SC

956 Hwy 501 E

   Conway    SC

295 Prosperity Drive

   Orangeburg    SC

Shepherds Vineyard; L11 PH1 (Rocky Lane)

   Asheboro    NC

1242 Reading Rd.

   Mason    OH

5930 Orlando Street

   Jacksonville    FL

8.26 acres of vacant land in Walton County

   DeFuniak Springs    FL

Lakeshore Hills; Lot 12, Blk 007 (Lakeshore Drive)

   Weatherford    TX

0 Nain Road

   Jacksonville    FL

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

Schedule 6.01(e)

Existing Investments of Parent and its Subsidiaries

 

Issuer

  

Owner

  

Type of
Interest

   Number
of Shares/
Interests    Certificate
Number

Builders FirstSource Holdings, Inc.

   Builders FirstSource, Inc.    Corp    100    1

CCWP Inc.

  

Builders FirstSource—

Southeast Group, LLC

   Close Corp    260,000    2

Builders FirstSource—Northeast Group, LLC

   Builders FirstSource, Inc.    LLC    100    1

Builders FirstSource—Texas GenPar, LLC

   Builders FirstSource, Inc.    LLC    1,000    2

Builders FirstSource—MBS, LLC

   Builders FirstSource, Inc.    LLC    1,000    2

Builders FirstSource—Dallas, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Florida, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Ohio Valley, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Atlantic Group, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Raleigh, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Southeast Group, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Colorado Group, LLC

   Builders FirstSource Holdings, Inc.    LLC    100    1

Builders FirstSource—Colorado, LLC

   Builders FirstSource—Colorado Group, LLC    LLC    100    2

BFS, LLC

   Builders FirstSource—Ohio Valley, LLC    LLC    100    2

Builders FirstSource—Florida Design Center, LLC

   Builders FirstSource—Florida, LLC    LLC    100    2

BFS Texas, LLC

   Builders FirstSource—Texas Group, L.P.    LLC    1,000    1

BFS IP, LLC

   Builders FirstSource—Texas Group, L.P.    LLC    1,000    1

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

Issuer

  

Owner

  

Type of
Interest

   Number
of Shares/
Interests      Certificate
Number  

Builders FirstSource—Texas Group, L.P.

   Builders FirstSource—MBS, LLC    LP      9,900         6      
Builders FirstSource—Texas GenPar, LLC    LP      100         5   

Builders FirstSource—South Texas, L.P.

   Builders FirstSource—Texas Group, L.P.    LP      9,900         4       BFS
Texas, LLC    LP      100         3   

Builders FirstSource—Intellectual Property, L.P.

   Builders FirstSource—Texas Group, L.P.    LP      9,900         4       BFS
IP, LLC    LP      100         3   

Builders FirstSource—Texas Installed Sales, L.P.

   Builders FirstSource—Texas Group, L.P.    LP      9,900         4       BFS
Texas, LLC    LP      100         3   

Schedule 6.01(dd) sets forth the state of formation for each of the subsidiaries
listed above.

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

Schedule 6.01(r)

Environmental Matters

In response to Section 6.01(r)(iv), but not the other subsections of
Section 6.01(r), the facility owned by CCWP Inc. located at 2910 Highway 65 &
Highway 701 North, Conway, South Carolina was previously used for treating
lumber.

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

Schedule 6.01(w)

Intellectual Property

 

Company Name

  

Trademark

   Serial No.      Registration
Date      Status  

Builders FirstSource—Intellectual Property, LP

   Builders FirstSource      75/756,802         4/5/2005         Active   

Builders FirstSource—Intellectual Property, LP

   Builders FirstSource and Design      75/777,476         4/5/2005        
Active   

Builders FirstSource—Atlantic Group, LLC

   Synboard      76/497,366         9/21/2004         Active   

Builders FirstSource—Southeast Group, LLC

   Build Right and Design      73/361,303         7/26/1983         Active   

The Companies license a wide variety of standard business software (e.g.
Microsoft Outlook, Excel, and Windows) in the ordinary course of business that
the Companies believe will continue to be readily available on reasonable terms.
The Companies license Mitek software that assists in the manufacture of trusses
and wall panels.

Computer Software License Agreement dated January 17, 2000 between Builders
FirstSource, Inc. and its subsidiaries and Online Computing, Inc.

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

Schedule 6.01(dd)

Name; Jurisdiction of Organization; Organizational ID Number;

Chief Place of Business; Chief Executive Office; FEIN

 

September 30, September 30, September 30,

Legal Name

     Organizational
Identification
Number        Federal
Taxpayer
Identification
Number        State of Formation

Builders FirstSource, Inc.

       2867244           52-2084569         Delaware

BFS IP, LLC

       3327678           75-2922461         Delaware

BFS Texas, LLC

       3281425           75-2896779         Delaware

BFS, LLC

       3219070           61-1367103         Delaware

Builders FirstSource—Atlantic Group, LLC

       2824544           52-2080519         Delaware

Builders FirstSource—Colorado Group, LLC

       3744620           84-0387679         Delaware

Builders FirstSource—Colorado, LLC

       3195448           None         Delaware

Builders FirstSource—Dallas, LLC

       2982305           75-2794867         Delaware

Builders FirstSource—Florida Design Center, LLC

       3743703           59-3534078         Delaware

Builders FirstSource—Florida, LLC

       3048031           52-2172981         Delaware

Builders FirstSource—Intellectual Property, L.P.

       143161-10           75-2922458         Texas

Builders FirstSource—MBS, LLC

       3068901           None         Delaware

Builders FirstSource—Northeast Group, LLC

       3743704           22-1604491         Delaware

Builders FirstSource—Ohio Valley, LLC

       2921263           31-1610525         Delaware

Builders FirstSource—Raleigh, LLC

       3744625           56-1454419         Delaware

Builders FirstSource—South Texas, L.P.

       143865-10           75-2916346         Texas

Builders FirstSource—Southeast Group, LLC

       2546473           57-0618425         Delaware

Builders FirstSource—Texas GenPar, LLC

       3068899           75-2831211         Delaware

Builders FirstSource—Texas Group, L.P.

       122561-10           75-2831224         Texas

Builders FirstSource—Texas Installed Sales, L.P.

       139083-10           75-2896780         Texas

Builders FirstSource Holdings, Inc.

       3743710           20-0484735         Delaware

CCWP Inc.

       Inactive           57-1011512         South Carolina

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

The chief executive office for each Company is 2001 Bryan Street, Suite 1600,
Dallas, Dallas County, Texas, 75201.

 

Company

  

Address of Chief Place of Business

   County    State

Builders FirstSource, Inc.

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

BFS IP, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

BFS Texas, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

BFS, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Atlantic Group, LLC

   5330 Spectrum Drive, Suite L, Frederick    Frederick    Maryland 21703

Builders FirstSource—Colorado Group, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Colorado, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Dallas, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Florida Design Center, LLC

   6550 Roosevelt Blvd., Jacksonville    Duval    Florida 32244

Builders FirstSource—Florida, LLC

   6550 Roosevelt Blvd., Jacksonville    Duval    Florida 32244

Builders FirstSource—Intellectual Property, L.P.

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—MBS, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Northeast Group, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Ohio Valley, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Raleigh, LLC

   5330 Spectrum Drive, Suite L, Frederick    Frederick    Maryland 21703

Builders FirstSource—South Texas, L.P.

   6305 Camp Bullis Rd., San Antonio    Bexar    Texas 78257

Builders FirstSource—Southeast Group, LLC

   4430-4450 Arco Lane, Charleston    Charleston    South Carolina 29418

Builders FirstSource—Texas GenPar, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

Builders FirstSource—Texas Group, L.P.

   3403 E. Abram, Arlington    Tarrant    Texas 76010

Builders FirstSource—Texas Installed Sales, L.P.

   1750 Westpark, Suite 100, Grand Prairie    Dallas    Texas 75050

Builders FirstSource Holdings, Inc.

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

CCWP, Inc.

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201

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

In addition to the locations referenced above, chattel paper, inventory,
equipment, and/or fixtures are located at the following locations:

 

Company/Subsidiary

  

Address

   County    State

Builders FirstSource, Inc.

   None      

BFS IP, LLC

   None      

BFS Texas, LLC

   None      

BFS, LLC

   None      

Builders FirstSource—Atlantic Group, LLC

   6870 Mimms Drive, Atlanta    Dekalb    Georgia 30340   

17750 Creamery Road

(1 Seton Square Drive),

Suite 5A, Emmitsburg

   Frederick    Maryland 21727    9320 W&W Industrial Rd., LaPlata    Charles   
Maryland 20646    7770 Caldwell Road, Harrisburg    Cabarrus   
North Carolina 28075    5650 Highway 49 South, Harrisburg    Cabarrus    North
Carolina 28075    13234 Airpark Drive, Elkwood    Culpeper    Virginia 22718   
10381 Central Park Dr., Ste. 101, 103 & 105, Manassas    Independent city   
Virginia 20110    10381 Central Park Dr., Ste. 107, Manassas    Independent city
   Virginia 20110    3302 Ballenger Creek Pike, Frederick    Frederick   
Maryland 21703    3135 Highway 109N, Lebanon    Wilson    Tennessee 37090   
6010 E. Division Street, Lebanon    Wilson    Tennessee 37090    18 Industrial
Drive, North East    Cecil    Maryland 21901    4011 Rock Hall Road, Point of
Rocks    Frederick    Maryland 21777   
4016 Rock Hall Road, Bldg. 2, Point of Rocks    Frederick    Maryland 21777   
2351 Button Gwinnett Dr., Suite 500    DeKalb    Georgia   
914 South Burhans Blvd., Hagerstown    Washington    Maryland 217401

Builders FirstSource—Colorado Group, LLC

   None      

Builders FirstSource—Colorado, LLC

   None      

Builders FirstSource—Dallas, LLC

   5330 Spectrum, Frederick    Frederick    Maryland 21703

 

 

1 

There are no business operations at this facility. However, certain equipment
and fixtures may still be located there.

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

Company/Subsidiary

  

Address

   County    State    2323 Bryan St., Suite 2350, Dallas    Dallas   
Texas 75201

Builders FirstSource—Florida Design Center, LLC

   None      

Builders FirstSource—Florida, LLC

   5930 Orlando Street, Jacksonville    Duval    Florida 322081    1700 N State
Street, Bunnell    Flagler    Florida 32110    16676 US Hwy 331, Freeport   
Walton    Florida 32439    6550 Roosevelt Dr., Jacksonville    Duval    Florida
32208    8275 Forshee Dr. Jacksonville    Duval    Florida 32208    1602
Industrial Drive, Plant City    Hillsborough    Florida 33566    2901 Aileron
Circle, Sanford    Seminole    Florida 327732    11501 Ryland Court, Orlando   
Orange    Florida 32824    3661 West Blue Heron Blvd, Riviera Beach    Palm
Beach    Florida 33404    2525 E. Duval St., Lake City    Columbia   
Florida2 32055    701 S. Kings Hwy., Fort Pierce    Saint Lucie   
Florida2 34945

Builders FirstSource—Intellectual Property, L.P.

   None      

Builders FirstSource—MBS, LLC

   None      

Builders FirstSource—Northeast Group, LLC

   None      

Builders FirstSource—Ohio Valley

   None      

Builders FirstSource—Raleigh, LLC

   12816 US Hwy 64 West, Apex    Chatham    North Carolina 27502    401 Valley
Forge Road, Hillsborough    Orange    North Carolina 27278

Builders FirstSource—South Texas, L.P.

   5525 Brittmore, Houston    Harris    Texas 77041    5515 Brittmore, Houston
   Harris    Texas 77041    6450 Camp Bullis Road, San Antonio    Bexar    Texas
78257    6305 Camp Bullis Road, San Antonio    Bexar    Texas 78257    6448 Camp
Bullis Road, San Antonio    Bexar    Texas 78257

 

 

2 

There are no business operations at this facility. However, certain equipment
and fixtures may still be located there.

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

Company/Subsidiary

  

Address

   County    State    900 N. Pinehurst Street, Aberdeen    Moore   
North Carolina 28315

Builders FirstSource – Southeast Group

   1510 Pearman Dairy Road, Anderson    Anderson    South Carolina 29625    1865
East Glenn Ave., Auburn, AL    Lee    Alabama 36830    332 Haywood Road,
Asheville    Buncombe    North Carolina 28806    1 Parris Island Gateway,
Beaufort    Beaufort    South Carolina 299032    52 Cleveland Street,
Blairsville    Union    Georgia 30512    180 Hobart Road, Blythewood    Richland
   South Carolina 29016    941-945 West State Street, Bristol    Bristol   
Virginia 24201    181 Highway 64 West, Cashiers    Jackson    North Carolina
28717    1450 Ecusta Road, Pisgah Forest    Transylvania    North Carolina 28712
   651 Century Circle Conway    Horry    South Carolina 29526    5515 Veterans
Parkway, Columbus    Muscogee    Georgia 31904    150 Ole Woodward Ave., Conway
   Horry    South Carolina 29526    101 Dewberry Road, Cowpens    Spartanburg   
South Carolina 29330    151 Dewberry Road, Cowpens    Spartanburg    South
Carolina 29330    796 Highway 174, Edisto Island    Charleston    South Carolina
29438    1135 Robeson Street, Fayettville    Cumberland    North Carolina 28305
   114 &116 Myrtle Beach Hwy, Sumter    Sumter    South Carolina 29153    1724
West Lucas Street, Florence    Florence    South Carolina 29501    1285 W. Ridge
Road, Gainesville    Hall    Georgia 30501    111 Lumber Lane, Goose Creek   
Berkeley    South Carolina 29445    801 S. Washington Avenue, Greenville   
Greenville    South Carolina 29611    108 White Horse Court, Greenville   
Greenville    South Carolina 29611    433 4th Avenue East, Hendersonville   
Henderson    North Carolina 28793    1601 S. Main Street, High Point    Guliford
   North Carolina 27260    3155 Maybank Hwy., Johns Island    Charleston   
South Carolina 29455    407 East State of Franklin Road, Johnson City   
Washington    Tennessee 37601

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

Company/Subsidiary

  

Address

   County    State    3010 Gov. John Sevier Hwy., Knoxville    Knox   
Tennessee 37914    230 West Main, Mt. Carmel    Hawkins    Tennessee 37645   
195 Davis Road, LaGrange    Troup    Georgia 30240    150 Santee Cooper Lane,
Loris    Horry    South Carolina 29569    4920 Hwy 17 Bypass South, Myrtle Beach
   Horry    South Carolina 29588    295 Prosperity Drive Orangeburg   
Orangeburg    South Carolina 291151    226 Tiller Drive, Pawleys Island   
Georgetown    South Carolina 29585    2651 North Okatie Hwy, Ridgeland    Jaspar
   South Carolina 29936    101 Lumber Lane, Seneca    Oconee    South Carolina
29672    1609 Howe Street, SE, Southport    Brunswick    North Carolina 28461   
8035 Howard Street, Spartanburg    Spartanburg    South Carolina 29303    1507
W. 5th North Street, Summerville    Dorchester    South Carolina 294832    515
E. Water Street, Washington    Beaufort    North Carolina 27889    10391
Greenville Hwy., Wellford    Spartanburg    South Carolina 29385    5415 Market
Street, Wilmington    New Hanover    North Carolina 28405    260 Piney Flats
Road, Piney Flats    Sullivan    Tennessee 37686    252 County Road 308 West,
Shelby    Shelby    Alabama 35143    315 Hwy 433, Chelsea    Shelby    Alabama
35043

Builders FirstSource—Texas GenPar, LLC

   2001 Bryan Street, Suite 1600, Dallas    Dallas    Texas 75201    2323 Bryan
Street, Dallas    Dallas    Texas 75201

Builders FirstSource—Texas Group, L.P.

   902 North Mill Street, Lewisville    Dallas    Texas 75067    1750 Westpark,
Grand Prairie    Dallas    Texas 75050

Builders FirstSource—Texas Installed Sales, L.P.

   None      

Builders FirstSource Holdings, Inc.

   None      

CCWP, Inc.

   None      

 

 

3 

There are no business operations at this facility. However, certain equipment
and fixtures may still be located there.

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

Schedule 7.02(a)

Existing Liens

None

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

Schedule 7.02(b)

Existing Indebtedness

Lease regarding the facility located at 701 South Kings Highway, Fort Pierce,
Florida between NSHE Hardinsburg, LLC, as successor to James D. Crawford,
Trustee, and Builders FirstSource—Southeast Group, LLC, as successor to Builders
FirstSource—Southeast Group, Inc., dated April 28, 2004, as amended by the First
Amendment to Lease dated as of April 28, 2004. This lease is an operating lease.
However, under GAAP, the Company is required to account for this location as if
it was an owned facility financed with debt.

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

Schedule 8.01

Cash Management Banks

Bank of America

Wells Fargo Bank, N.A.

Regions Bank

Fifth Third Bank

SunTrust Bank

Commercial Bank & Trust

United Community Bank

Enterprise Bank

Columbus Bank & Trust