EXHIBIT 10.1
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
Among
BANK OF AMERICA, N.A.,
as Agent,
various financial institutions party hereto from time to time,
as Lenders,
SL INDUSTRIES, INC.,
as the Parent Borrower
And
SL DELAWARE, INC.
SL DELAWARE HOLDINGS, INC.
MTE CORPORATION
RFL ELECTRONICS INC.
SL MONTEVIDEO TECHNOLOGY, INC.
CEDAR CORPORATION
TEAL ELECTRONICS CORPORATION
MEX HOLDINGS LLC
SL POWER ELECTRONICS CORPORATION
SLGC HOLDINGS, INC.
SLW HOLDINGS, INC.
SL AUBURN, INC.
SL SURFACE TECHNOLOGIES, INC.
as the Subsidiary Borrowers
Dated October 23, 2008

 

 

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

 

TABLE OF CONTENTS

            Page  
ARTICLE 1 THE REVOLVING, LOAN FACILITY
    1
Section 1.1 Commitment to Lend
    1
Section 1.2 Manner of Borrowing
    2
Section 1.3 Disbursements
    2
Section 1.4 Letters of Credit and Letter of Credit Fees
    2
Section 1.5 Swing Line Loans
    5
Section 1.6 Increase in Revolving Credit Facility
    8
ARTICLE 2 PAYMENTS AND PREPAYMENTS
    9
Section 2.1 Reductions In Commitment
    9
Section 2.2 Optional Prepayments of Loans
    9
Section 2.3 Repayment of Loans In Connection with Reductions of Commitment
    10
ARTICLE 3 INTEREST AND FEES
    10
Section 3.1 Interest
    10
Section 3.2 Election of Interest Rate
    10
Section 3.3 Interest Upon Default
    11
Section 3.4 Fees
    12
Section 3.5 Computation of Interest and Related Fees
    12
Section 3.6 Determination of Dollar Equivalent
    12
ARTICLE 4 GENERAL MATTERS CONCERNING LOANS SECTION
    13
Section 4.1 Manner of Tendering Payments by Borrowers
    13
Section 4.2 The Notes
    13
Section 4.3 Loan Account
    14
Section 4.4 Additional Provisions Concerning Certain Loans
    14
Section 4.5 Taxes
    17
Section 4.6 Payment Generally; Agent’s Clawback
    18
Section 4.7 Sharing of Payments by Lenders
    20
ARTICLE 5 CONDITIONS PRECEDENT
    21
Section 5.1 Conditions Precedent to Initial Loan
    21
Section 5.2 Payment of Fees and Costs
    23
Section 5.3 Conditions Precedent to Each Loan
    23
Section 5.4 Method of Satisfying Certain Conditions
    23

 

 

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

 

            Page  
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BORROWERS
    24
Section 6.1 Organization and Qualification
    24
Section 6.2 Capitalization and Ownership of Subsidiary Borrowers
    24
Section 6.3 Authorization and Execution
    24
Section 6.4 Enforceability; Consents
    25
Section 6.5 Security Interests in Collateral
    25
Section 6.6 Real Property of Borrowers
    25
Section 6.7 Absence of Conflict with other Agreements; Etc
    25
Section 6.8 Business
    25
Section 6.9 Condition of Assets
    26
Section 6.10 Use of Proceeds
    26
Section 6.11 Litigation
    26
Section 6.12 Indebtedness
    26
Section 6.13 Financial Statements
    26
Section 6.14 Fiscal Year
    26
Section 6.15 Title to Assets
    27
Section 6.16 Patents, Trademarks, Licenses and Franchises
    27
Section 6.17 Compliance with Law
    27
Section 6.18 Compliance with ERISA
    27
Section 6.19 Compliance with Regulations U and X
    29
Section 6.20 Investment Company Act
    29
Section 6.21 [Intentionally Omitted]
    29
Section 6.22 Absence of Default
    29
Section 6.23 Agreements with Affiliates
    29
Section 6.24 No Burdensome Agreements; Material Agreements
    29
Section 6.25 Solvency
    29
Section 6.26 Taxes
    30
Section 6.27 Environmental Compliance
    30
Section 6.28 Labor Disputes and Acts of God
    31
ARTICLE 7 FINANCIAL COVENANTS
    31
Section 7.1 Financial Covenants
    31
Section 7.2 Calculations
    32

 

- ii -

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

 

            Page  
ARTICLE 8 COVENANTS CONCERNING REPORTING REQUIREMENTS
    32
Section 8.1 Financial Statements
    32
Section 8.2 Officer’s Compliance Certificates
    33
Section 8.3 Auditors Reports
    33
Section 8.4 Notice of Default
    33
Section 8.5 Notice Concerning Representations and Warranties
    34
Section 8.6 Notice of Litigation
    34
Section 8.7 SEC Disclosure
    34
Section 8.8 Conditions Affecting Collateral
    34
Section 8.9 ERISA Notices
    34
Section 8.10 Environmental Matters
    35
Section 8.11 Miscellaneous
    35
Section 8.12 Authorization of Third Parties to Deliver Information
    35
ARTICLE 9 BUSINESS COVENANTS
    36
Section 9.1 Indebtedness
    36
Section 9.2 Liens
    36
Section 9.3 Investments and Acquisitions
    38
Section 9.4 Restricted Payments
    39
Section 9.5 Affiliate Transactions
    40
Section 9.6 Disposition of Assets
    40
Section 9.7 Liquidation or Merger
    41
Section 9.8 Change in Organizational Documents
    41
Section 9.9 Issuance of Equity
    41
Section 9.10 Environmental Violations
    41
Section 9.11 Preservation of Existence, Etc
    42
Section 9.12 Permitted Businesses
    42
Section 9.13 Compliance with Law
    42
Section 9.14 Payment of Taxes and Claims
    42
Section 9.15 Tax Consolidation
    42
Section 9.16 Maintenance of Properties
    43
Section 9.17 Insurance
    43
Section 9.18 Compliance with ERISA
    44
Section 9.19 Maintenance of Records; Fiscal Year
    45

 

- iii -

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

 

            Page  
Section 9.20 Inspections and Field Examinations
    45
Section 9.21 Exchange of Notes
    45
Section 9.22 Compliance with Federal Reserve Regulations
    45
Section 9.23 Limitations on Certain Restrictive Provisions
    46
Section 9.24 Corporate Separateness
    46
Section 9.25 Deposit and Securities Accounts
    46
Section 9.26 Collateral; Lockbox
    46
Section 9.27 Joinder of Subsidiaries
    47
Section 9.28 Further Assurances
    48
ARTICLE 10 DEFAULT
    49
Section 10.1 Events of Default
    49
Section 10.2 Remedies
    51
Section 10.3 Cash Collateral
    52
Section 10.4 Application of Funds
    52
ARTICLE 11 DEFINITIONS
    53
Section 11.1 Defined Terms
    53
Section 11.2 Accounting Terms
    76
Section 11.3 Other Definitional Provisions
    76
ARTICLE 12 AGENT
    76
Section 12.1 Authority
    76
Section 12.2 Expenses
    77
Section 12.3 Action by Agent
    77
Section 12.4 Exculpatory Provisions
    77
Section 12.5 Investigation by Lenders
    78
Section 12.6 Notice of Events of Default
    78
Section 12.7 Resignation; Termination
    78
Section 12.8 Sharing
    79
Section 12.9 Other Relationships
    79
ARTICLE 13 MISCELLANEOUS
    79
Section 13.1 Notices
    79
Section 13.2 Duration; Survival
    80
Section 13.3 Borrower Representative
    80
Section 13.4 No Implied Waiver; Rights Cumulative
    80

 

- iv -

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

 

            Page  
Section 13.5 Amendments, etc
    80
Section 13.6 Successors and Assigns
    82
Section 13.7 Descriptive Headings
    85
Section 13.8 Governing Law
    85
Section 13.9 Payments Due on Non-Business Days
    85
Section 13.10 Counterparts
    85
Section 13.11 Maximum Lawful Interest Rate
    86
Section 13.12 Set-off of Bank Accounts
    86
Section 13.13 Severability
    86
Section 13.14 Payment and Reimbursement of Costs and Expenses; Indemnification
    87
Section 13.15 Consent to Jurisdiction
    88
Section 13.16 Termination
    88
Section 13.17 Waiver of Right to Jury Trial
    88
Section 13.18 Confidentiality
    89
Section 13.19 USA Patriot Act
    89
Section 13.20 Conversion of Currencies
    89
Section 13.21 Amendment and Restatement
    90

 

- v -

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

 

         
SCHEDULES
       
 
       
A Commitments and Applicable Percentages
       
6.1 Organization and Qualification
       
6.2 Capitalization and Ownership of Subsidiary Borrowers
       
6.6 Real Property
       
6.11 Litigation
       
6.16 Intellectual Property
       
6.18 ERISA
       
6.23 Agreements with Affiliates
       
6.24 Material Agreements
       
6.27 Environmental
       
9.1 Indebtedness
       
9.2 Liens; Foreign Subsidiary Intellectual Property
       
 
       
EXHIBITS
       
 
       
A Form of Notes
       
B Form of Request for Advance
       
C Form of Conversion Notice
       
D Form of Compliance Certificate
       
E Form of Assignment and Assumption
       
F Form of Joinder Agreement
       

 

- vi -

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

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amended and Restated Revolving Credit Agreement (this “Agreement”), made
October 23, 2008, by and among SL INDUSTRIES, INC., a New Jersey corporation
(“Parent Borrower”), the Subsidiaries of the Parent Borrower listed on the
signature pages to this Agreement (together with such other Subsidiaries which
join this Agreement pursuant to Section 9.27 hereof, each a “Subsidiary
Borrower” and collectively, the “Subsidiary Borrowers” and together with the
Parent Borrower, each a “Borrower” and collectively, the “Borrowers”), BANK OF
AMERICA, N.A., a national banking association (the “Bank”), individually, as
Agent, Issuer and a Lender, and the other financial institutions listed on the
signature pages to this Agreement. The Bank and the financial institutions
listed on the signature pages to this Agreement, and any other financial
institutions which may become parties to this Agreement from time to time, are
sometimes collectively, referred to as the “Lenders” and individually as a
“Lender”. The Bank, when acting in its capacity as administrative agent or
collateral agent for the Lenders, the Issuer and the other Secured Parties, or
any successor or assign that assumes such position pursuant to the terms of this
Agreement, is hereinafter sometimes referred to as the “Agent”.
RECITALS:
WHEREAS, the Borrowers desire that the Lenders amend and restate the Revolving
Credit Agreement, dated August 3, 2005, among the Agent, the Borrowers and
Lenders, as amended through the date hereof (the “Existing Agreement”), to
provide for an increase in the facility size and certain other changes; and
WHEREAS, the Borrowers desire to borrow, and the Lenders are willing to extend
credit from time to time on a revolving credit basis until the Revolving Credit
Termination Date (as defined below), an aggregate principal amount not to exceed
Sixty Million Dollars ($60,000,000) outstanding at any time. The loans and
credit are to be secured by the assets of the Parent Borrower and the assets and
stock of the Subsidiary Borrowers. Certain terms used herein are defined in
Article 11 below.
NOW THEREFORE, the Borrowers, jointly and severally, and Agent and the Lenders,
severally but not jointly, intending to be legally bound, agree as follows:
ARTICLE 1
THE REVOLVING, LOAN FACILITY
Section 1.1 Commitment to Lend. The Lenders severally agree, upon the terms and
conditions set forth below, from time to time until the Revolving Credit
Termination Date, to make Revolving Credit Loans to the Borrowers in such
amounts as the Borrowers may request, subject to the limitation that: (a) at no
time shall Revolving Credit Outstandings exceed the amount of the Commitment;
and (b) the amount and Percentage of the Commitment which each Lender is
obligated to lend shall not exceed at any time the amount or Percentages set
forth opposite the name of such Lender on Schedule A hereto (as supplemented and
amended by giving effect to any assignment made in accordance with this
Agreement). Revolving Credit Loans may be requested in any Approved Currency,
however, the amount of any Loan shall be the Dollar Equivalent of ($500,000) or
an integral multiple of ($100,000) in excess thereof. Within such limitations
and subject to the terms and conditions set forth below, the Borrowers may
borrow, prepay and reborrow, from time to time, on a revolving basis. The
Lenders shall have no obligation to make any Revolving Credit Loans at any time
that a Default exists.

 

 

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

 

Section 1.2 Manner of Borrowing.
(a) To request a Revolving Credit Loan, the Borrowers shall, prior to, 12:00
noon at least (i) one (1) Business Day prior to the desired date of a Base Rate
Loan, (ii) three (3) Business Days prior to the desired date for a LIBOR Loan to
be made in Dollars, or (iii) four (4) Business Days prior to the desired date
for a LIBOR Loan to be made in an Alternative Currency, (a) deliver to the Agent
a Request for Advance or (b) give the Agent telephonic notice of the information
specified in any Request for Advance followed immediately by delivery of such a
Request for Advance, provided, however, that the Borrowers failure to confirm
any telephonic notice with a Request for Advance shall not invalidate any notice
so given if acted upon by the Agent. Any notice given to the Agent pursuant to
this Section shall be given prior to 11:00 a.m. on the requisite Business Day
and shall be irrevocable once given.
(b) The Agent in turn shall give prompt written or telephonic (promptly
confirmed in writing) notice to each Lender of its pro rata share of the
borrowing, the interest rate option selected and the scheduled date of the
funding. After receipt of such notice, each Lender shall make such arrangements
as are necessary to assure that its share of the funding shall be immediately
available (in the requested Approved Currency) to the Agent no later than 1:30
p.m., on the date on which the funding is to occur.
Section 1.3 Disbursements. Prior to 2:00 p.m. on the date of a Revolving Credit
Loan, the Agent shall, subject to the satisfaction of the conditions set forth
in Article 7 below, disburse the funds to the Borrowers (a) by wire transfer
pursuant to the Borrowers instructions, or (b) in the absence of such
instructions, by crediting the account of the Parent Borrower maintained with
the Agent.
Section 1.4 Letters of Credit and Letter of Credit Fees.
(a) Letter of Credit. On the terms and subject to the conditions set forth
herein, the Issuer agrees, in reliance upon the agreements of the Lenders set
forth in this Section 1.4, prior to the Revolving Credit Termination Date, to
issue standby or, documentary Letters of Credit, in any Approved Currency, so
long as:
(i) Issuer shall have received a Notice of LC Credit Event at least two
(2) Business Days before the relevant date of issuance;
(ii) After giving effect to such issuance (A) the aggregate Letter of Credit
Liabilities under all Letters of Credit do not exceed the Letter of Credit
Sublimit and (B) the Revolving Credit Outstandings, do not exceed the amount of
the Commitment;
(iii) no order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the Issuer from issuing such
Letter of Credit, no Law applicable to the Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuer shall prohibit, or request that the Issuer refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuer with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the Issuer is not
otherwise compensated hereunder) not in effect on the date hereof, or shall
impose upon the Issuer any unreimbursed loss, cost or expense which was not
applicable on the date hereof and which the Issuer in good faith deems material
to it;

 

- 2 -

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

 

(iv) the issuance of such Letter of Credit would not violate one or more
policies of the Issuer applicable to letters of credit generally except as
otherwise agreed by the Agent and the Issuer;
(v) such Letter of Credit is not in an initial stated amount less than $100,000;
(vi) such Letter of Credit does not contain any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; and
(vii) no default of any Lender’s obligations to fund any amounts under this
Agreement exists nor is any Lender at such time a defaulting Lender hereunder,
unless the Issuer has entered into satisfactory arrangements with the Borrowers
or such Lender to eliminate the Issuer’s risk with respect to such Lender.
(b) Letter of Credit Fee. Borrowers shall pay to the Agent, for the account of
the Lenders, a letter of credit fee (the “Letter of Credit Fee”) with respect to
the Letter of Credit Liabilities for each Letter of Credit, computed for each
day from the date of issuance of such Letter of Credit to the date that is the
last day a drawing is available under such Letter of Credit, at a rate per annum
equal to the Applicable Margin then applicable to LIBOR Loans. Such fee shall be
payable in arrears on the first Business Day of each fiscal quarter prior to the
Revolving Credit Termination Date and on such date. In addition, the Issuer
shall receive a fronting fee equal to 0.125% of the face amount of each
outstanding Letter of Credit (“Fronting Fee”), payable upon issuance. The
Borrowers shall also pay to the Issuer all of the Issuer’s standard fees and
charges for the opening, amendment, modification, presentation or cancellation
of a Letter of Credit, and otherwise in respect of a Letter of Credit, and shall
execute all of the Issuer’s standard agreements in connection with the issuance
of the Letter of Credit.
(c) Reimbursement Obligations of Borrowers. If Issuer shall make a payment
pursuant to a Letter of Credit, the Borrowers shall promptly reimburse Issuer,
following notice from Issuer to Borrowers of the amount of such payment, for the
amount of such payment and, to the extent that so doing would not cause the
Revolving Credit Outstandings to exceed the amount of the Commitment, and there
is no outstanding Default, Borrowers shall be deemed to have requested a
Revolving Credit Loan, the proceeds of which will be used to satisfy such
Reimbursement Obligations. To the extent that such Reimbursement Obligations are
not so satisfied, the Borrowers shall pay interest, on demand, on all amounts so
paid by Issuer for each day until Borrowers reimburse Issuer therefor at a rate
per annum equal to the sum of two percent (2%) plus the interest rate applicable
to Base Rate Loans for such day. The obligations of the Borrowers to the Issuer,
the Agent and the Lenders in respect of Letters of Credit shall be guaranteed
pursuant to the Loan Documents and shall be secured by the Collateral.

 

- 3 -

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

 

(d) Objections Absolute. The obligations of Borrowers under this Section 1.4
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including the following:
(i) any lack of validity or enforceability of, or any amendment or waiver of or
any consent to departure from, any Letter of Credit or any related document;
(ii) the existence of any claim, set-off, defense or other right which Borrowers
may have at any time against the beneficiary of any Letter of Credit, the
Issuer, the Agent, or any Lender (including any claim for improper payment), or
any other Person, whether in connection with any Loan Document or any unrelated
transaction, provided, that nothing herein shall prevent the assertion of any
such claim by separate suit or compulsory counterclaim;
(iii) any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or, insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever; or
(iv) to the extent permitted under applicable law, any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.
(e) Deposit Obligations of Borrowers. In the event any Letters of Credit are
outstanding at the time that Borrowers prepay, or are required to repay, the
Obligations or the Commitment is terminated, Borrowers shall (i) Cash
Collateralize all Letter of Credit Liabilities, in an amount equal to one
hundred and two percent (102%) of the aggregate outstanding Letter of Credit
Liabilities, to be available to Issuer to reimburse payments of drafts drawn
under such Letters of Credit and pay any fees and expenses related thereto, and
(ii) prepay the fee payable under Section 1.4(b) with respect to such Letters of
Credit for the full remaining terms of such Letters of Credit. Upon termination
of any such Letter of Credit, the unearned portion of such prepaid fee
attributable to such Letter of Credit shall be refunded to Borrowers, together
with the deposit described in the preceding clause (i) to the extent not
previously applied by Issuer in the manner described herein.
(f) Participation by Lenders.
(i) Effective immediately upon the issuance of each Letter of Credit and without
further action on the part of the Issuer, the Issuer shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have irrevocably
purchased and received from the Issuer, without recourse or warranty, an
undivided interest and participation in such Letter of Credit to the extent of
each Lender’s Percentage of the Commitment. Further, each Lender acknowledges
and agrees that it shall be absolutely liable, to the extent of its Percentage
of the Commitment, to fund on demand or reimburse the Issuer on demand for the
amount of each draft paid by the Issuer under each Letter of Credit to the
extent that such amount is not immediately reimbursed by the Borrowers.

 

- 4 -

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

 

(ii) In furtherance of the provisions of the preceding paragraph (a) the Issuer
shall notify the Agent promptly upon receipt of notice of an intended draw under
a Letter of Credit. The Agent shall give written, telecopied or telegraphic
notice to each of the other Lenders of its pro rata share of such draw and the
scheduled date thereof. After receipt of such notice, and whether or not an
Event of Default or Default then exists, each Lender shall make available to the
Agent such Lender’s share of such draw in immediately available funds (in
Dollars) to the Agent no later than noon, on the date specified in the Agent’s
notice. The failure of the Issuer or the Agent to give timely notice pursuant to
this Subsection 1.4(f) shall not affect the right of the Issuer to reimbursement
from the Lenders. Any amount paid by Agent and Lenders pursuant to a draw made
under a Letter of Credit shall constitute a Revolving Credit Loan and shall be
repaid pursuant to the provisions respecting Revolving Credit Loans, provided
that if an Event of Default or Default exists at the time of a draw, the
Borrowers shall immediately reimburse the amount of such draw to the Agent for
the benefit of the Lenders.
(g) Standard of Conduct. The Issuer shall be entitled to administer each Letter
of Credit in the ordinary course of business and in accordance with its usual
practices, modified from time to time as it deems appropriate under the
circumstances, and shall be entitled to use its discretion in taking or
refraining from taking any action in connection herewith as if it were the sole
party involved. Any action taken or omitted to be taken by the Issuer under or
in connection with any Letter of Credit shall not create for the Issuer any
resulting liability to any other Lender. The Issuer shall be entitled to rely,
and shall be fully protected in relying upon, any Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and believed by it to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel, independent accountants and other experts selected
by the Issuer and the Agent.
Section 1.5 Swing Line Loans.
(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 1.5, to make loans in Dollars (each such loan, a
“Swing Line Loan”) to the Borrowers from time to time on any Business Day in an
aggregate amount not to exceed at any time outstanding the amount of the Swing
Line Sublimit; provided, however, that after giving effect to any Swing Line
Loan, (i) the Revolving Credit Outstandings shall not exceed the Revolving
Credit Facility at such time, and (ii) the aggregate outstanding amount of the
Revolving Credit Loans of any Lender at such time, plus such Lender’s Percentage
of the outstanding amount of all Letter of Credit Liabilities at such time, plus
such Lender’s Percentage of the outstanding amount of all Swing Line Loans at
such time shall not exceed such Lender’s Commitment, and provided further that
the Borrowers shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan. Within the foregoing limits, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this
Section 1.5, prepay under Section 2.2, and reborrow under this Section 1.5. Each
Swing Line Loan shall be a Base Rate Loan which shall mature on the earlier of
(A) the fifteenth day after such Loan was made and (B) the Revolving Credit
Termination Date. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Percentage times the amount
of such Swing Line Loan.

 

- 5 -

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

 

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon a
Borrower’s irrevocable notice to the Swing Line Lender and the Agent, which may
be given by telephone. Each such notice must be received by the Swing Line
Lender and the Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and (ii) the requested borrowing date, which shall be a Business Day.
Each such telephonic notice must be confirmed promptly by delivery to the Swing
Line Lender and the Agent of a written Swing Line Loan Notice, appropriately
completed and signed by an officer of a Borrower. Promptly after receipt by the
Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Agent (by telephone or in writing) that the Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Agent (including at the request of any Lender) prior to 2:00 p.m. on
the date of the proposed Swing Line Borrowing (A) directing the Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set forth
in the first proviso to the first sentence of Section 1.5(a), or (B) that one or
more of the applicable conditions specified in Article 5 is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the requesting
Borrower at its office by crediting the account of the requesting Borrower on
the books of the Swing Line Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the requesting Borrower (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each Lender
make a Base Rate Loan in an amount equal to such Lender’s Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Request for Advance for
purposes hereof) and in accordance with the requirements of Section 1.2, without
regard to the minimum and multiples specified therein for the principal amount
of Base Rate Loans, but subject to the unutilized portion of the Revolving
Credit Facility and the conditions set forth in Section 5.3. The Swing Line
Lender shall furnish the requesting Borrower with a copy of the applicable
Request for Advance promptly after delivering such notice to the Agent. Each
Lender shall make an amount equal to its Percentage of the amount specified in
such Request for Advance available to the Agent in immediately available funds
for the account of the Swing Line Lender at the Agent’s Office not later than
1:00 p.m. on the day specified in such Request for Advance, whereupon, subject
to Section 1.5(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the requesting Borrower in such amount. The
Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Credit Loan in accordance with Section 1.5(c)(i), the request for Base
Rate Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Agent for the account of the Swing Line Lender pursuant to
Section 1.5(c)(i) shall be deemed payment in respect of such participation.

 

- 6 -

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

 

(iii) If any Lender fails to make available to the Agent for the account of the
Swing Line Lender any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 1.5(c) by the time specified in
Section 1.5(c)(i), the Swing Line Lender shall be entitled to recover from such
Lender (acting through the Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the Swing Line Lender at a rate per annum
equal to the greater of the Federal Funds Rate and a rate determined by the
Swing Line Lender in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Swing Line Lender in connection with the foregoing. If such
Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Lender’s Revolving Credit Loan included in the
relevant Revolving Credit Loan or funded participation in the relevant Swing
Line Loan, as the case may be. A certificate of the Swing Line Lender submitted
to any Lender (through the Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender’s obligation to make Revolving Credit Loans or to purchase and
fund risk participations in Swing Line Loans pursuant to this Section 1.5(c)
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, any
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Revolving Credit Loans pursuant to this
Section 1.5(c) is subject to the conditions set forth in Section 5.3. No such
funding of risk participations shall relieve or otherwise impair the obligation
of the Borrowers to repay Swing Line Loans, together with interest as provided
herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Percentage thereof in the same funds as those received by the Swing Line
Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender (including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), each Lender shall pay to the Swing Line Lender its
Percentage thereof on demand of the Agent, plus interest thereon from the date
of such demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate. The Agent will make such demand upon the request of the
Swing Line Lender. The obligations of the Lenders under this clause shall
survive the payment in full of the Obligations and the termination of this
Agreement.

 

- 7 -

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

 

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing a Borrower for interest on the Swing Line Loans. Until
each Lender funds its Base Rate Loan or risk participation pursuant to this
Section 1.5 to refinance such Lender’s Percentage of any Swing Line Loan,
interest in respect of such Percentage shall be solely for the account of the
Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrowers shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.
Section 1.6 Increase in Revolving Credit Facility.
(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Agent (which shall promptly notify the Lenders), the
Borrowers may from time to time, request an increase in the Revolving Credit
Facility by an amount (for all such requests) not exceeding $50,000,000;
provided that any such request for an increase shall be in a minimum amount of
(i) $5,000,000, or an integral multiple thereof, and (ii) the Parent Borrower
may make a maximum of three such requests. At the time of sending such notice,
the Parent Borrower (in consultation with the Agent) shall specify the time
period within which each Lender is requested to respond (which shall in no event
be less than ten (10) Business Days from the date of delivery of such notice to
the Lenders).
(b) Lenders Election to Increase. Each Lender shall notify the Agent within such
time period whether or not it agrees to increase its Commitment and, if so,
whether by an amount equal to, greater than, or less than its Percentage of such
requested increase. Any Lender not responding within such time period shall be
deemed to have declined to increase its Commitment.
(c) Notification by Agent; Additional Lenders. The Agent shall notify the Parent
Borrower and each Lender of the Lenders’ responses to each request made
hereunder. To achieve the full amount of a requested increase, and subject to
the approval of the Agent, the Issuer and the Swing Line Lender (which approvals
shall not be unreasonably withheld), the Parent Borrower may also invite
additional Eligible Assignees to become Lenders pursuant to a joinder agreement
in form and substance reasonably satisfactory to the Parent Borrower and the
Agent and its counsel.
(d) Effective Date and Allocations. If the Revolving Credit Facility is
increased in accordance with this Section, the Agent and the Parent Borrower
shall determine the effective date (the “Revolving Credit Increase Effective
Date”) and the final allocation of such increase. The Agent shall promptly
notify the Parent Borrower and the Lenders of the final allocation of such
increase and the Revolving Credit Increase Effective Date.

 

- 8 -

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

 

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Parent Borrower shall deliver to the Agent a certificate of each
Loan Party dated as of the Revolving Credit Increase Effective Date (in
sufficient copies for each Lender) signed by a responsible officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article 6 and the other Loan
Documents are true and correct on and as of the Revolving Credit Increase
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Section 1.6, the
representations and warranties contained in Section 6.13 shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 8.1, and (B) no Default exists. The Borrowers shall
prepay any Revolving Credit Loans outstanding on the Revolving Credit Increase
Effective Date (and pay any additional amounts required pursuant to Section 4.4)
to the extent necessary to keep the outstanding Revolving Credit Loans ratable
with any revised Applicable Revolving Credit Percentages arising from any
nonratable increase in the Commitments under this Section.
ARTICLE 2
PAYMENTS AND PREPAYMENTS
Section 2.1 Reductions In Commitment. The Borrowers may, at any time and from
time to time, upon one (1) Business Day’s prior irrevocable written notice to
the Agent, reduce (on a pro rata basis among the Lenders) or terminate the
Commitment without premium or penalty, provided, however, that each partial
reduction shall be in an amount equal to Five Million Dollars ($5,000,000) or an
integral multiple of One Million Dollars ($1,000,000) in excess thereof and
provided further, that the Commitment shall not be reduced or terminated at any
time that would require the prepayment of a LIBOR Loan on a day, other than the
last day of the relevant Interest Period, unless the reduction notice is
accompanied by the breakage payments referred to, in Section 4.4 below. Once so
reduced, the Commitment shall not be increased and once so terminated, the
Commitment shall not be reinstated.
Section 2.2 Optional Prepayments of Loans.
(a) Subject to the provisions of paragraph (c) below, the Borrowers may, at any
time and from time to time, without penalty, prepay any or all Base Rate Loans.
(b) Subject to the provisions of paragraph (c) below, the Borrowers may, at any
time and from time to time, prepay any or all LIBOR Loans upon giving three
(3) Business Days irrevocable notice to the Agent, but if any such payment shall
be made on a day other than the last day of the applicable Interest Period, such
payment shall be accompanied by the breakage payments referred to in Section 4.4
below.
(c) The foregoing prepayment rights are subject to the following: (i) any
prepayment of less than all the outstanding Loans shall be in an amount equal to
Fifty Thousand Dollars ($50,000) or an integral multiple of Ten Thousand Dollars
($10,000) in excess thereof; (ii) no prepayment may be made in an amount that
would cause the amount of any outstanding LIBOR Loan to be less than One Hundred
Thousand Dollars ($100,000); and (iii) any prepayment in full of all outstanding
Loans shall be accompanied by the payment of all Obligations accrued or payable
as of the date of such prepayment.

 

- 9 -

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

 

Section 2.3 Repayment of Loans In Connection with Reductions of Commitment. On
or before the effective date of any reduction in the Commitment (whether
scheduled, mandatory, voluntary or otherwise), the Borrowers shall Cash
Collateralize all Letter of Credit Liabilities, so as to reduce the Revolving
Credit Outstandings to the Commitment, giving effect to the amount of the
Commitment as so reduced, provided, however, any prepayment of a LIBOR Loan on a
day that is not the last day of the, relevant Interest Period shall be
accompanied by the amounts provided for in Section 4.4 below.
ARTICLE 3
INTEREST AND FEES
Section 3.1 Interest. Subject to the provisions of Sections 3.2 and 4.4 below
and to the conditions set forth in this Section, the Loans shall bear interest
at the Borrowers option, as follows:
(a) Base Rate Loans. The interest rate on each Base Rate Loan shall equal the
sum of the Base Rate plus the Applicable Margin for Base Rate Loans, as in
effect from time to time. Changes in the rate of interest resulting from changes
in the Base Rate shall take place immediately without notice or demand of any
kind. Interest on Base Rate Loans is payable in arrears on the first day of each
month and on the maturity of such Loans, whether by acceleration or otherwise.
(b) LIBOR Loans. During any period that a Loan is a LIBOR Loan, Borrowers shall
pay interest on such Loan at a rate equal to the LIBOR Rate for the applicable
Interest Period plus the Applicable Margin for LIBOR Loans, as in effect from
time to time. Interest on LIBOR Loans shall be payable in arrears on the last
day of the applicable Interest Period relating to such Loan, provided that if
the Interest Period is longer than 30 days, interest shall be payable 30 days
after the relevant Loan is made and on each 30 day anniversary thereof, if
applicable, and on the last day of the Interest Period. All payments are due on
or prior to the Revolving Credit Termination Date.
Section 3.2 Election of Interest Rate. Subject to the provisions of Section 4.4
below, the Borrowers may elect the interest rate applicable to each Revolving
Credit Loan as follows:
(a) Rate in Absence of Election. Unless otherwise elected by the Borrowers, each
Revolving Credit Loan shall bear interest at the Base Rate plus the Applicable
Margin.
(b) Election of LIBOR Loans. The Borrowers may elect to request an advance
hereunder as a LIBOR Loan by so specifying the amount and the desired Interest
Period on the Request for Advance delivered pursuant to Section 1.2 above.

 

- 10 -

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

 

(c) Conversion to Different Type of Loan. All or any part of the principal
amount of Revolving Credit Loans of any Type may, on any Business Day, be
converted into any other Type or Types of Revolving Credit Loans, except that
(i) a LIBOR Loan may be converted only on the last day of the applicable
Interest Period therefor and (ii) a Base Rate Loan may be converted into a LIBOR
Loan only on a Business Day for LIBOR Loans.
(d) Notice of Election to Convert. The Borrowers shall give the Agent notice
(which shall be irrevocable) of each conversion of a Base Rate Loan into a LIBOR
Loan and each conversion of a LIBOR Loan at the end of the relevant Interest
Period into another LIBOR Loan, no later than 11:00 a.m. three (3) Business Days
prior to the requested date of such conversion. Each notice of conversion shall
be (i) in writing in substantially the form of Exhibit C attached hereto or
(ii) by telephone specifying the information set forth in Exhibit C attached
hereto, followed immediately by delivery of such notice, provided, however, that
the Borrowers failure to confirm any telephonic notice in writing shall not
invalidate any telephonic notice if acted upon by the Agent.
(e) Presumption In Absence of Election to Convert. Base Rate Loans shall
continue as Base Rate Loans unless and until such Revolving Credit Loans are
converted into Revolving Credit Loans of another Type pursuant to the preceding
paragraph (d). LIBOR Loans of any Type shall continue as Revolving Credit Loans
of such Type until the end of the then current Interest Period therefor, at
which time they shall be automatically converted into Base Rate Loans unless the
Borrowers shall have given the Agent notice in accordance with the preceding
paragraph (d).
(f) Limitations on Election of LIBOR Loans. The Borrowers may not elect to
borrow, continue or convert a Revolving Credit Loan to a LIBOR Loan if such
election would (i) require the Agent to administer concurrently more than six
(6) Types of Revolving Credit Loans, or (ii) require the Borrowers to make any
scheduled or required payment of principal prior to the last day of the Interest
Period or Interest Periods selected as a result of a reduction of the Available
Commitment, a mandatory repayment or otherwise hereunder.
Section 3.3 Interest Upon Default. Anything in this Agreement to the contrary
notwithstanding, upon the occurrence of an Event of Default (whether or not the
Lenders have accelerated payment of the Notes), or after maturity or judgment
has been rendered on the Notes, the Borrowers, right to select interest rate
options shall cease and the unpaid principal of the Loans shall, at the option
of the Agent, bear interest at the Base Rate plus the Applicable Margin plus two
percent (2%) (the “Default Rate”). Such interest shall be payable on the earlier
of (i) demand or (ii) the next Payment Date. Interest at the Default Rate shall
continue to accrue (both before and after judgment) until the earlier of (i) the
waiver or cure of the applicable Event of Default or (ii) the payment in full of
the Obligations. Furthermore, at the election of Agent or Majority Lenders
during any period in which any Event of Default is continuing (x) as the
Interest Periods for LIBOR Loans then in effect expire, such Loans shall be
converted into Base Rate Loans and (y) the LIBOR election shall not be available
to Borrowers.

 

- 11 -

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

 

Section 3.4 Fees.
(a) Commitment Fee. The Borrowers shall pay to the Agent for the account of the
Lenders a commitment fee, such fee to be payable in arrears on every third
Payment Date (i.e. the last Business Day of each March, June, September and
December) and on the Revolving Credit Termination Date, and equal to the product
of the Commitment Fee Margin times the average daily unused portion of the
Commitment during the period commencing on the date following the preceding
commitment fee payment date (or, if none, on the date hereof) and ending on such
commitment fee payment date.
(b) Other Fees. The Borrowers shall pay the Agent, the Issuer and/or the Lenders
such other fees as the Borrowers have otherwise agreed to pay in writing,
whether in the Fee Letter or otherwise.
(c) Letter of Credit and Fronting Fees. The Borrowers shall pay to the Agent for
the account of the Issuer and/or the Lenders, as applicable, such the Letter of
Credit Fees and Fronting Fees as are described in Section 1.4.
Section 3.5 Computation of Interest and Related Fees. All interest and fees
under each Loan Document shall be calculated on the basis of a 360-day year for
the actual number of days elapsed (or 365 or 366 days, as the case may be, as to
interest on any Base Rate Loan). The date of funding of a Base Rate Loan and the
first day of an Interest Period with respect to a LIBOR Loan shall be included
in the calculation of interest. The date of payment of a Base Rate Loan and the
last day of an Interest Period with respect to a LIBOR Loan shall be excluded
from the calculation of interest. If a Loan is repaid on the same day that it is
made, one (1) day’s interest shall be charged.
Section 3.6 Determination of Dollar Equivalent.
(a) No later than 1:00 P.M. on each Calculation Date with respect to any
Alternative Currency Letter of Credit or Loan denominated in Alternative
Currencies, the Agent shall determine the Dollar Equivalent as of such
Calculation Date with respect to such Alternative Currency Letter of Credit and
Loans denominated in Alternative Currencies. The Dollar Equivalent so determined
shall become effective on the relevant Calculation Date (a “Reset Date”), shall
remain effective until the next succeeding Reset Date, except as otherwise
provided, and shall for all purposes of this Agreement be the Dollar Equivalent
employed in converting any amounts between Dollars and Alternative Currencies.
(b) The Agent shall promptly notify the Parent Borrower of each determination
pursuant to this Section 3.6.
(c) In additional to the determination set forth above, and in no way expanding
the Approved Currencies available to the Borrowers, any amount specified in this
Agreement or any of the other Loan Documents to be in Dollars shall also, as may
be required, include the equivalent of such amount in any currency other than
Dollars, such equivalent amount thereof in the applicable currency to be
determined by the Agent at such time on the basis of the Spot Rate (as defined
below) for the purchase of such currency with Dollars. For purposes of this
Section 3.6, the “Spot Rate” for a currency means the rate determined by the
Agent to be the rate quoted by the Person acting in such capacity as the spot
rate for the purchase by such Person of such currency with another currency
through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date of such
determination; provided that the Agent may obtain such spot rate from another
financial institution designated by the Agent if the Person acting in such
capacity does not have as of the date of determination a spot buying rate for
any such currency.

 

- 12 -

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

 

ARTICLE 4
GENERAL MATTERS CONCERNING LOANS SECTION
Section 4.1 Manner of Tendering Payments by Borrowers.
(a) Time of Payments. Each payment (including any prepayment) by the Borrowers
on account of the principal of, or interest on, the Loans, commitment fees and
any other amount owed to the Agent on behalf of the Lenders under any Loan
Document shall be made not later than 1:00 p.m. on the date specified for
payment under such Loan Document in lawful money of the United States of America
in immediately available funds. Any payment received after 1:00 p.m. shall be
deemed received on the next Business Day. If any payment hereunder becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
(b) Location of Payments. All payments shall be made by the Borrowers to the
Agent at such place as the Agent may from time to time specify in writing,
except that all payments with respect to Letters of Credit shall be made by the
Borrowers to such other place as the Agent and, respectively, the Issuer, may
from time to time specify in writing. Any such payment shall be made in related
Approved Currency in immediately available funds, without counterclaim or setoff
and free and clear of, and without any deduction or withholding for, any taxes
or other payments.
(c) No Set-Off. The Borrowers agree to pay principal, interest, fees, expenses,
indemnities, reimbursements and all other amounts due under any Loan Document,
without set-off or counterclaim or any deduction whatsoever.
(d) Presumptions. Except as expressly set forth to the contrary in this
Agreement, or by the Borrowers with respect to any payment, all payments shall
be applied first to the payment of all fees, expenses and other amounts due to
the Agent or the Lenders (excluding principal and interest), then to accrued
interest, and the balance on account of outstanding principal of Base Rate Loans
and then to principal of LIBOR Loans (and among such LIBOR Loans, first to those
with the earliest expiring Interest Periods); provided, however, that after an
Event of Default which is continuing, payments will be applied to the
Obligations of Borrowers as Agent determines in its sole discretion.
Section 4.2 The Notes. Upon the request of any Lender made through the Agent,
the Borrowers shall execute and deliver to such Lender (through the Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, amount and maturity of its Loans and payments with respect thereto. Each
Note shall be in the aggregate principal amount of the applicable Lender’s share
of the Commitment in substantially the form attached hereto as Exhibit A (with
appropriate completion of the name of the applicable Lender).

 

- 13 -

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

 

Section 4.3 Loan Account. The Agent may open and maintain on its books in the
name of the Borrowers, a loan account with respect to the Loans and interest
thereon. If the Agent opens such an account, it shall debit such loan account
for the principal amount of each Loan made by it and accrued interest thereon,
and, subject to Section 1.3 above; shall credit such loan account for each
payment on account of principal or interest. The records of the Agent with
respect to the loan account maintained by it shall be prima facie evidence of
the Loans and accrued interest thereon, but the failure of the Agent to make any
such notations or any error or mistake in such notations shall not affect the
Borrowers’ repayment obligations with respect to such Loans.
Section 4.4 Additional Provisions Concerning Certain Loans.
(a) Mandatory Suspension and Conversion of LIBOR Loans. The Lenders obligation
to make, continue or convert into LIBOR Loans of any Type shall be suspended and
all Lenders outstanding Loans of such Type shall be converted into Base Rate
Loans on the last day of their applicable Interest Periods (or, if earlier, in
the case of clause (iii) below, on the last day the Lenders may lawfully
continue to maintain Loans, of such Type or, in the case of clause (iv) below,
on the day determined by the Agent to be the last Business Day before the
effective date of the applicable restriction) into, and all pending requests for
the making or continuation of or conversion into Loans of such Type by the Agent
shall be deemed requests for Base Rate Loans, if:
(i) on or prior to the determination of an interest rate for a LIBOR Loan for
any Interest Period, the Agent reasonably determines that for any reason
appropriate information is not available to it for purposes of determining the
LIBOR Rate for such Interest Period;
(ii) on or prior to the first day of any Interest Period for a LIBOR Loan of
such Type any of the Lenders reasonably determines that the LIBOR Rate, as
determined by such Lender, for such Interest Period would not accurately reflect
the cost to such Lender of making, continuing or converting into a LIBOR Loan of
such Type for such Interest Period;
(iii) at any time any of the Lenders determines that any Regulatory Change makes
it unlawful or impracticable for such Lender or its applicable lending office to
make, continue or convert into a LIBOR Loan of such Type, or to comply with its
obligations hereunder in respect thereof; or
(iv) any of the Lenders determines, that, by reason of any Regulatory Change,
such Lender or its applicable lending office is restricted, directly or
indirectly, in the amount that it may hold of (A) a category of liabilities that
includes deposits by reference to which, or on the basis of which, the interest
rate applicable to LIBOR Loans of such Type is directly or indirectly determined
or (B) the category of assets that includes LIBOR Loans of such Type.

 

- 14 -

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

 

(b) Regulatory Changes. If, in the determination of any of the Lenders:
(i) any Regulatory Change shall directly or indirectly: (A) reduce the amount of
any sum received or, receivable by such Lender with respect to the Revolving
Credit Facility; (B) impose a cost on such Lender or any Affiliate of such
Lender that is attributable to the making available or maintaining of, or such
Lender’s commitment to make available, the Revolving Credit Facility; (C)
require such Lender or any Affiliate of such Lender to make any payment on, or
calculated by reference to, the gross amount of any amount received by such
Lender under any Loan Document; or (D) reduce, or have the effect of reducing,
the rate of return on any capital of such Lender or any Affiliate of such Lender
that such Lender or such Affiliate is required to maintain on account of the
Revolving Credit Facility, or such Lender’s Commitment; and
(ii) such reduction, increased cost or payment shall not be fully compensated
for by an adjustment in the applicable rates of interest payable under the Loan
Documents;
then the Borrowers shall pay to such Lender such additional amounts as such
Lender reasonably determines will, together with any adjustment in the
applicable rates of interest payable hereunder, fully compensate it for such
reduction, increased cost or payment. Such additional, amounts shall be payable,
in the case of those applicable to prior periods, within 15 Business Days after
request by such Lender for such payment and, in the case of those applicable to
future periods, on the date specified, or determined in accordance with a method
specified, by such Lender. Such Lender will promptly notify the Agent and the
Borrowers of any determination made by it referred to in clauses (i) and
(ii) above and provide to Agent and Borrowers a reasonably detailed calculation
of all amounts required to be paid by the Borrowers, but the failure to give
such notice shall not affect such Lender’s right to such compensation.
(c) Capital Requirements. If in the determination of any Lender such Lender or
any Affiliate of such Lender is required, as a result of a Regulatory Change, to
maintain capital on account of the Revolving Credit Facility or such Lender’s
Commitment, then, upon request by such Lender, the Borrowers shall from time to
time thereafter pay to such Lender such additional amounts as such Lender
reasonably determines will fully compensate it for any reduction in the rate of
return on the capital that such Lender or such Affiliate is so required to
maintain on account of the Revolving Credit Facility or Commitment suffered as a
result of such capital requirement. Such additional amounts shall be payable, in
the case of those applicable to prior periods, within 15 Business Days after
request by such Lender to the Borrowers, and, in the case of those relating to
future periods, on the date specified or determined in accordance with a method
specified by such Lender. Such Lender will promptly notify the Agent and the
Borrowers of any determination made by it referred to in this paragraph(c), but
the failure to give such notice shall not affect such Lender’s right to such
compensation.

 

- 15 -

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

 

(d) Funding Losses. The Borrowers shall pay to the Agent, on behalf of the
Lenders, from time to time, upon request, such amount as the Agent reasonably
determines is necessary to compensate the Lenders for any loss, cost or expense,
including, without limitation, loss of the Applicable Margin incurred by it as a
result of (a) any payment, prepayment or conversion of a LIBOR Loan on a date
other than the last day of an Interest Period for such LIBOR Loan or (b) a LIBOR
Loan for any reason not being made or converted, or any payment of principal
thereof or interest thereon not being made, on the date therefor determined in
accordance with the applicable provisions of this Agreement. At the election of
the Agent, and without limiting the generality of the foregoing, but without
duplication, such compensation on account of losses may include an amount equal
to the excess of (i) the interest that would have been received from the
Borrowers under this Agreement, including the Applicable Margin on any amounts
to be reemployed during an Interest Period or its remaining portion over
(ii) the interest component of the return that the Agent, determines the Lenders
could have obtained had they placed such amount on deposit in the London
Interbank Eurodollar Market selected by it for a period equal to such Interest
Period or remaining portion.
(e) Determinations. In making the determinations contemplated by this Section,
the Agent or the applicable Lender may make such estimates, assumptions,
allocations and the like that the Agent or such Lender in good faith determines
to be appropriate, and the Agent or specified Lender selection thereof in
accordance with this Section, and the determinations made by such Lender on the
basis thereof, shall be final, binding and conclusive upon the Borrowers.
Notwithstanding any other provision of this Section, such Lender shall not apply
the provisions of subsections (b) or (c) of this Section with respect to the
Borrowers if it shall not at the time be the general policy or practice of the
Agent or such Lender to apply provisions of subsections (b) or (c) of this
Section to other borrowers in substantially similar circumstances under
substantially comparable provisions of other credit agreements.
(f) Rate Quotations. The Borrowers may call the Agent on or before the date on
which a Request for Advance or notice of conversion is to be delivered to
receive an indication of the rates then in effect, but it is acknowledged that
such projection shall not be binding on the Agent nor affect the rate of
interest which thereafter is actually in effect when the election is made.
(g) Inability to Determine Rates. If the Majority Lenders determine that for any
reason in connection with any request for a LIBOR Loan or a conversion to or
continuation thereof that (i) Dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of such LIBOR Loan, (ii) adequate and reasonable means do not exist for
determining the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Loan, or (iii) the LIBOR Rate for any requested Interest Period
with respect to a proposed LIBOR Loan does not adequately and fairly reflect the
cost to such Lenders of funding such Loan, the Agent will promptly so notify the
Parent Borrower and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Loans shall be suspended until the Agent (upon the
instruction of the Majority Lenders) revokes such notice. Upon receipt of such
notice, the Borrowers may revoke any pending request for an advance of,
conversion to or continuation of LIBOR Loans or, failing that, will be deemed to
have converted such request into a request for a Base Rate Loan in the amount
specified therein.

 

- 16 -

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

 

Section 4.5 Taxes.
(a) Payments Free and Clear.
(i) Any and all payments by any Loan Party under any Loan Document shall be made
free and clear of and without deduction or withholding for any and all taxes (as
defined below), provided that that if any applicable law requires the deduction
or withholding of any tax from any payment, then the applicable Loan Party shall
(A) make such deductions, (B) timely pay the full amount deducted to the
relevant taxing authority or other authority in accordance with applicable law
and (C) deliver to the Agent evidence of such payment to the relevant taxing
authority or other authority in the manner provided in Section 4.5(d) and, if
such tax is a Tax (as defined below), then the sum payable by any applicable
Loan Party shall be increased as may be necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) each Lender or the
Agent (as the case may be) receives an amount equal to the amount such party
would have received had no such deductions or withholdings been made.
(ii) For purposes of this Agreement (A) “taxes” means any and all present or
future taxes, levies, imposts, deductions, charges or withholding (including
interest, penalties and additions to tax), and all liabilities with respect
thereto and (B) “Taxes” means any and all taxes excluding, in the case of each
Lender and the Agent, (x) income and franchise taxes imposed by the jurisdiction
under the laws of which such Lender or the Agent (as the case may be) is
organized or is or should be qualified to do business or any political
subdivision thereof, and (y) income and franchise taxes imposed by the
jurisdiction of each Lender’s lending office or any political subdivision
thereof, and (z) United States federal withholding taxes imposed by reason of
failure or the inability of a Lender to comply with Section 4.5(e) (unless such
compliance is precluded as a result of a change in any law, rule, regulation or
treaty, or in the administrative interpretation or application thereof, in each
case after the date hereof or, in the case of a Participant or Assignee, the
date on which such Participant or Assignee receives its interests in the Loans).
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any present or
future stamp, registration, recordation or documentary taxes and any other
similar fees or charges or excise or property taxes, levies of the United States
or of any state or political subdivision thereof or of any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the other Loan Documents or the perfection of any rights or security
interest in respect thereto (hereinafter referred to as “Other Taxes”).
(c) Indemnity. The Borrowers shall indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
and Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by such Lender or the Agent and any liability (including
penalties, interest, additions thereto and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be made within fifteen
(15) Business Days from the date such Lender or the Agent makes written demand
therefor.

 

- 17 -

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

 

(d) Evidence of Payment. Within fifteen (15) Business Days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the Agent, at
its address a referred to in Section 13.1, the original or a certified copy, of
a receipt evidencing payment thereof or other evidence of payment reasonably
satisfactory to the Agent.
(e) Non-U.S. Lender. On or prior to the date on which any Participant or
Assignee that is not a United States person as defined in Section 7701(a)(30) of
the Code (each a “Non-U.S. Lender”) receives its interest in the Loans, each
Non-U.S. Lender that is entitled at such time to an exemption from United States
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall provide the Agent and the Parent Borrower with two
duly completed copies of the appropriate United States Internal Revenue Service
Form W-8 or other applicable successor form prescribed by the Internal Revenue
Service of the United States, certifying that such Non-U.S. Lender is entitled
to receive payments under this Agreement without deduction or withholding of (or
at a reduced rate of deduction and withholding of) United States federal
withholding taxes. The Borrowers shall have no obligation to pay any additional
amounts with respect to Loans made to a Non-U.S. Lender pursuant to
Section 4.5(a) or indemnify any Non-U.S. Lender under Section 4.5(c) if such
Non-U.S. Lender is entitled at such time to an exemption from or reduction of
United States withholding tax but has failed to provide the forms required
pursuant to this Section 4.5(e). Notwithstanding any other provision of this
Section 4.5(e), no Non-U.S. Lender shall be required to deliver any form
pursuant to this Section 4.5(e) that such Non-U.S. Lender is not legally able or
obligated to deliver and, for purposes of this Section 4.5, such non-delivery of
a form shall not be decreed to be non-compliant with this Section 4.5(e).
(f) Survival. Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations contained in this Section
shall survive the payment in full of the Obligations and the termination of the
Commitment.
Section 4.6 Payment Generally; Agent’s Clawback.
(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrowers
hereunder shall be made to the Agent, for the account of the respective Lenders
to which such payment is owed, at the Agent’s Office in the applicable Approved
Currency in which the credit was extended and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Agent will promptly
distribute to each Lender its Percentage of such payment in like funds as
received by wire transfer to such Lender. All payments received by the Agent
after 2:00 p.m. shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be
made by the Borrowers shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected on computing interest or fees, as the case may be.

 

- 18 -

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

 

(b) Presumptions by Agent.
(i) Funding by Lenders. Unless the Agent shall have received notice from a
Lender prior to the proposed date of any LIBOR Loans (or, in the case of any
Base Rate Loans, prior to 12:00 noon on the proposed date of such Loan) that
such Lender will not make available to the Agent such Lender’s share of such
Loan, the Agent may assume that such Lender has made such share available on
such date in accordance with Section 1.1 and may, in reliance upon such
assumption, make available to the Borrowers a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Loan
available to the Agent, then the applicable Lender and the Borrowers severally
agree to pay to the Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Agent, at (A) in the case of a payment to
be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by the Agent in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Agent in connection with the foregoing, and (B) in the case of a
payment to be made by the Borrowers, the interest rate applicable to Base Rate
Loans. If the Borrowers and such Lender shall pay such interest to the Agent for
the same or an overlapping period, the Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Loan to the Agent, then the amount
so paid shall constitute such Lender’s Loan included in such Loan. Any payment
by the Borrowers shall be without prejudice to any claim the Borrowers may have
against a Lender that shall have failed to make such payment to the Agent.
(ii) Payments by Borrowers. Unless the Agent shall have received notice from the
Borrowers prior to the time at which any payment is due to the Agent for the
account of the Lenders or the Issuer hereunder that the Parent Borrower will not
make such payment, the Agent may assume that the Borrowers have made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the appropriate Lenders or the Issuer, as the case may
be, the amount due. In such event, if the Borrowers has not in fact made such
payment, then each of the appropriate Lenders or the Issuer, as the case may be,
severally agrees to repay to the Agent forthwith on demand the amount so
distributed to such Lender or the Issuer, in immediately available funds with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Agent, at the
greater of the Federal Funds Rate and a rate determined by the Agent in
accordance with banking industry rules on interbank compensation.
A notice of the Agent to any Lender or the Borrowers with respect to any amount
owing under this subsection (b) shall be conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Agreement, and such funds are not made available to
the Borrowers by the Agent because the conditions to the applicable Loan set
forth in Article 5 are not satisfied or waived in accordance with the terms
hereof, the Agent shall return such funds (in like funds as received from such
Lender) to such Lender, without interest.
(d) Obligations of Lenders’ Several. The obligations of the Lenders hereunder to
make Revolving Credit Loans, to fund participations in Letters of Credit and
Swing Line Loans and to make payments pursuant to Section 13.14 are several and
not joint. The failure of any Lender to make any Loan, to fund any such
participation or to make any payment under Section 13.14 on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 13.14.

 

- 19 -

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

 

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
(f) Insufficient Funds. If at any time insufficient funds are received by and
available to the Agent to pay fully all amounts of principal, Reimbursement
Obligations, interest and fees then due hereunder, such funds shall be applied
(i) first, toward payment of interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal and
Letter of Credit Liabilities then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and Letter of
Credit Liabilities then due to such parties.
Section 4.7 Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of setoff or counterclaim or otherwise, obtain payment in respect of
(a) Obligations in respect of any the Facilities due and payable to such Lender
hereunder and under the other Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
due and payable to such Lender at such time to (ii) the aggregate amount of the
Obligations in respect of the Facilities due and payable to all Lenders
hereunder and under the other Loan Documents at such time) of payments on
account of the Obligations in respect of the Facilities due and payable to all
Lenders hereunder and under the other Loan Documents at such time obtained by
all the Lenders at such time or (b) Obligations in respect of any of the
Facilities owing (but not due and payable) to such Lender hereunder and under
the other Loan Documents at such time in excess of its ratable share (according
to the proportion of (i) the amount of such Obligations owing (but not due and
payable) to such Lender at such time to (ii) the aggregate amount of the
Obligations in respect of the Facilities owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations in respect of the Facilities owing (but not due and
payable) to all Lenders hereunder and under the other Loan Documents at such
time obtained by all of the Lenders at such time then the Lender receiving such
greater proportion shall (a) notify the Agent of such fact, and (b) purchase
(for cash at face value) participations in the Loans and subparticipations in
L/C Obligations and Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of Obligations in respect of the Facilities then due and payable to the Lenders
or owing (but not due and payable) to the Lenders, as the case may be, provided
that:
(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

- 20 -

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

 

(ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or (B) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to any Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.
ARTICLE 5
CONDITIONS PRECEDENT
Section 5.1 Conditions Precedent to Initial Loan. The obligation of the Lenders
to make the initial Loan is subject to the condition that each of the Lenders,
or the Agent, as applicable, shall have received each of the following, in form
and substance satisfactory to it:
(a) a duly executed Revolving Loan Note for any requesting Lender;
(b) a duly executed Foreign Subsidiary Guaranty;
(c) (i) the Security Agreement, duly executed by each Borrower, together with
such Uniform Commercial Code financing statements as are necessary or, in the
opinion of the Agent, desirable to perfect the security interests created by
such Security Agreement, (ii) either (A) a current landlord waiver, or (B) if an
existing landlord waiver is in full force an effect, a landlord estoppel
certificate, with regard to each leased facility of any Borrower which is
located in the United States, and (iii) the certificates, if any, representing
the equity or other ownership interests of each Subsidiary Borrower (other than
34% of the voting securities or other voting equity of each Foreign Subsidiary
that is a CFC), together with duly executed, undated stock powers or similar
assignments respecting such equity or other ownership interests;
(d) A perfection certificate duly completed by Borrowers, such questionnaire to
be delivered to the Agent prior to the closing;
(e) insurance policies or, certificates designating the Agent as lender loss
payee or mortgagee as its interests may appear, as appropriate, as required by
Section 9.17 of this Agreement or as required by any other Loan Document;
(f) to the extent requested by the Agent, an IP Security Agreement executed by
each Borrower, as appropriate, as to any registered or pending patents,
trademarks and copyrights, in appropriate form to file of record;

 

- 21 -

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

 

(g) the results of tax, judgments, UCC, title and other lien searches in form
and substance satisfactory to the Agent, and from such jurisdictions as may be
satisfactory to the Agent, together with U.S. Patent and Trademark Office and
Copyright Office searches of a recent date, in each case, with respect to the
Parent Borrower and each Subsidiary Borrower, showing no Liens except Permitted
Liens;
(h) modifications of Mortgages on all real property owned by each Borrower and
polices of title insurance, in amounts reasonably satisfactory to Agent,
insuring the Lien of the Mortgages as modified, together with evidence, in such
form as the Agent may reasonably require, of the zoning of the real property
subject to the Mortgages and the Environmental Indemnity Agreement;
(i) audited financial statements of Parent Borrower and its Subsidiaries on a
Consolidated basis for the fiscal year ended December 31, 2007, together with
projections of financial statements respecting each fiscal year through the
fiscal year 2011, which projections shall be approved by the chief financial
officer of Parent Borrower and based on reasonable assumptions;
(j) The unaudited financial statements of Parent Borrower and its Subsidiaries
on a Consolidated basis for the fiscal quarter ended June 30, 2008;
(k) any required governmental consents or other required consents to the closing
of this Agreement or to the execution, delivery and performance of this
Agreement and the other Loan Documents, each of which shall be in form and
substance satisfactory to the Agent;
(l) a certificate of each Loan Party to which is attached each of the following
certified as such by a duly authorized officer of such Loan Party:
(i) a certificate of incumbency with respect to each Authorized Signatory
thereof that signs any Loan Documents;
(ii) a copy of the charter or other organizational documents of such Loan Party
certified by the Secretary of State or similar state official of the
jurisdiction of formation of such Loan Party, such Loan Party;
(iii) a copy of the bylaws or other constituent documents of such Loan Party;
(iv) a certificate of good standing or subsistence, as the case may be, for such
Loan Party issued as of a recent date by the Secretary of State or similar state
official in the jurisdiction of its organization and in each state in which such
Loan Party is qualified to do business as set forth on Schedule 6.1;
(v) a copy of the resolutions duly adopted by the Board of Directors or other
governing body of such Loan Party authorizing it to execute, deliver and perform
each Loan Document to which it is, or is to be, a party; and
(vi) a copy of any shareholders agreement or similar agreement respecting such
Loan Party, if any such agreements exist;

 

- 22 -

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

 

(m) a legal opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP; and
(n) a certificate of the chief financial officer or Treasurer of the Parent
Borrower with respect to the solvency and adequacy, of capital of Parent
Borrower and each Subsidiary Borrower after giving effect to the initial Loan
and the application of the proceeds thereof.
For purposes of determining compliance with the conditions specified in this
Section 5.1, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Agent shall have received notice from
such Lender prior to the date hereof specifying its objection thereto.
Section 5.2 Payment of Fees and Costs. In addition to the conditions specified
in Section 5.1 above, prior to making the initial Loan, the Agent shall receive
payment of all accrued costs and fees and (if then ascertainable) expenses
arising out of reasonable attorneys fees for the preparation of the Loan
Documents and related services.
Section 5.3 Conditions Precedent to Each Loan. The obligation of the Lenders to
make each Loan (including the initial Loan) and issue any Letter of Credit is
subject to the fulfillment of each of the following conditions:
(a) All of the representations and warranties of the Borrowers in this Agreement
and all representations and warranties of each Loan Party in each other Loan
Document shall be true and correct in all material respects at such time, both
before and after giving effect to the application of the proceeds of such Loan;
(b) No Default or Event of Default hereunder shall then exist or be caused
thereby;
(c) No Material Adverse Change shall have occurred and no event shall have
occurred which could reasonably be expected to result in a Material Adverse
Change; and
(d) The Agent shall have received a duly executed Request for Advance, or, as to
a Letter of Credit, a Notice of LC Credit Event.
Section 5.4 Method of Satisfying Certain Conditions. The request for, and
acceptance of, each Loan by the Borrowers shall be deemed a representation and
warranty by the Borrowers that the conditions specified in subparts (a), (b) and
(c) of Section 5.3 have been satisfied.

 

- 23 -

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

 

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWERS
In order to induce the Lenders to enter into this Agreement, the Borrowers
jointly and severally make the following representations, covenants and
warranties, for themselves and each of their Subsidiaries:
Section 6.1 Organization and Qualification. Each Borrower and each of its
Foreign Subsidiaries are corporations or other entities, duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization. Each Borrower and each of its Foreign Subsidiaries have the
lawful power to own or lease their respective properties and to engage in the
respective business they presently conduct or propose to conduct. Each Borrower
and each of its Foreign Subsidiaries are duly licensed or qualified and in good
standing in each jurisdiction where property is owned or leased by them, or the
nature of the business transacted by them, or both, makes such licensing or
qualification necessary, except where the failure to be so qualified could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. Schedule 6.1 hereto shows as of the date hereof each state or
jurisdiction in which each Borrower and each of its Foreign Subsidiaries are
qualified and their respective jurisdictions of incorporation or organization,
as applicable.
Section 6.2 Capitalization and Ownership of Subsidiary Borrowers. The name of
each Borrower and each of its Foreign Subsidiaries, their authorized equity or
other ownership interests, the number of issued and outstanding equity and other
ownership interests and the owners thereof as of the date hereof are set forth
on Schedule 6.2 attached hereto. All outstanding equity or other ownership
interests of the Loan Parties are duly authorized, validly issued, fully paid
and nonassessable and are owned free and clear by the Borrowers except as
pledged pursuant to the Loan Documents and except for Permitted Liens to the
extent arising by operation of law. As of the date hereof, there are no options,
warrants or other rights outstanding to purchase any such equity and other
ownership interests except as indicated on said Schedule 6.2. Each Borrower has
the unrestricted right to vote the issued and outstanding equity and other
ownership interests owned by it. Each Borrower’s ownership interest in a
Subsidiary represents a direct controlling interest of such Subsidiary for
purposes of directing or causing the direction of the management and policies of
such Subsidiary.
Section 6.3 Authorization and Execution. The execution, delivery and performance
of this Agreement, and each other Loan Document to which any Loan Party is, or
will be, a party are within such Loan Party’s power and authority and have been
duly authorized by all necessary corporate or other applicable action. This
Agreement has been, and each other Loan Document when delivered hereunder will
be, duly executed by each Loan Party which is a party hereto or thereto, as the
case may be.

 

- 24 -

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

 

Section 6.4 Enforceability; Consents. This Agreement is, and each of the other
Loan Documents when delivered hereunder will be a legal, valid and binding
obligation of each of the Loan Parties which is, or will then be, a party hereto
or thereto, as the case may be, enforceable against each such Loan Party in
accordance with its terms. No recording, filing, registration, notice, consent
(governmental or otherwise) or other similar action including, without
limitation, any action involving any federal, state, local or other applicable
regulatory body, is required in order to insure the legality, validity, binding
effect or enforceability of this Agreement or the other Loan Documents as
against all Persons, except the recording of modifications to the Mortgages as
contemplated by this Agreement.
Section 6.5 Security Interests in Collateral.
(a) As of the date hereof no further action, including without limitation, any
filing or recording of any document or the obtaining of any consent, is
necessary in order to establish, perfect and maintain the Agent’s first priority
security interests in the Collateral, for the benefit of the Secured Parties,
being encumbered pursuant to the Security Agreement, subject to Permitted Liens
to the extent taking priority by operation of law, except for the periodic
filing of continuation statements with respect to such UCC-1 financing
statements. As of the date hereof, the perfection questionnaire previously
delivered to the Agent by Borrowers is true and correct and there have been no
changes thereto since the date of delivery.
(b) The Mortgages create perfected Liens on the real property described in the
Mortgages subject to no Liens of equal or greater priority except for Permitted
Liens to the extent taking priority by operation of law, and no further action,
including, without limitation, the filing or recording of any document, is
necessary to maintain such perfected Liens.
Section 6.6 Real Property of Borrowers. As of the date hereof, Schedule 6.6
attached hereto is a complete and correct list of all real property owned or
leased by each Borrower, specifying, in each case, whether such property is
owned or leased and specifying the owner/lessee thereof.
Section 6.7 Absence of Conflict with other Agreements; Etc. The execution,
delivery and performance by each Borrower of this Agreement and the other Loan
Documents to which it is, or will be, a party do not and will not (a) require
any consent or approval, governmental or otherwise, not already obtained,
(b) violate any Applicable Law respecting such Borrower, (c) conflict with,
result in a breach of, or constitute a default under, the organizational and
governing documents of such Borrower or any of its Foreign Subsidiaries, or
under any material indenture, agreement, license or other instrument to; which
such Borrower or any of its Foreign Subsidiaries are party to or by which any of
them or their respective properties may be bound, or (d) result in, or require
the creation or imposition of, any Lien upon or with respect to any property now
owned or hereafter acquired by any Borrower or any of its Foreign Subsidiaries
other than as contemplated hereby.
Section 6.8 Business. Each Borrower, together with each of its Foreign
Subsidiaries, is currently engaged in the business of designing, manufacturing
and marketing power electronics, power motion, power protection, transportation
and specialized communication equipment that is used in a variety of medical,
aerospace, computer, datacom, industrial, telecom; transportation, and electric
power utility equipment applications.

 

- 25 -

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

 

Section 6.9 Condition of Assets. All of the material properties, equipment and
systems of each Borrower and each of its Foreign Subsidiaries are in good
repair, working order and condition for their intended use, ordinary wear and
tear excepted, and are and will be in material compliance with all standards or
rules, imposed by any governmental agency or authority (including, without
limitation, any federal or state or local governments or instrumentalities) or
otherwise under Applicable Law.
Section 6.10 Use of Proceeds. The proceeds of the Loans will be used for certain
Permitted Acquisitions, capital expenditures, general corporate purposes and
working capital purposes. No proceeds of any Loan shall be used for any illegal
purposes.
Section 6.11 Litigation. Except as described in Schedule 6.11, there is no
action, suit, proceeding or investigation pending against, or, to the best of
the Borrowers knowledge, threatened against or in any other manner relating to,
any Borrower or any of its Foreign Subsidiaries or any of their respective
properties, in any court or before any arbitrator of any kind or before or by
any governmental body, which individually or in the aggregate, could (if
adversely determined) reasonably be expected to result in a Material Adverse
Change, nor is any Borrower or any of its Foreign Subsidiaries in violation of
any order, writ, injunction or decree of any such governmental body which could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change.
Section 6.12 Indebtedness. Except as permitted under Section 9.1, there is no
outstanding Indebtedness of any Loan Party, and any commitments of any such
Person to incur additional Indebtedness (other than Indebtedness pursuant to
this Agreement).
Section 6.13 Financial Statements.
(a) The audited financial statements for Parent Borrower and its Subsidiaries on
a Consolidated basis for the fiscal year ended December 31, 2007, and the
unaudited consolidated financial statements of Parent Borrower and its
Subsidiaries on a Consolidated basis for the six months ended June 30, 2008,
together with any other financial statements furnished to the Lenders, are
complete and correct in all material respects and present fairly in accordance
with GAAP the financial position of Parent Borrower and its Subsidiaries on a
Consolidated basis on and as at such dates and the results of operations for the
periods then ended (subject, in the case of unaudited financial statements, to
normal year-end adjustments). Neither Parent Borrower nor any of its
Subsidiaries has any material liabilities, contingent or otherwise, other than
as disclosed in the financial statements referred to in the preceding sentence
and there are not now and not anticipated any material unrealized losses of
Parent Borrower or any of its Subsidiaries.
(b) The projections delivered to the Lenders pursuant to Section 5.1 above and
Section 8.1 below are made in good faith, based on reasonable assumptions by the
Parent Borrower.
Section 6.14 Fiscal Year. The fiscal year of each Borrower ends on December 31.

 

- 26 -

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

 

Section 6.15 Title to Assets. Borrowers have good, legal and marketable title
to, or a valid leasehold interest in, all of the assets included on the last
balance sheet previously delivered to the Lenders except for assets disposed of
in the ordinary course of business or as permitted hereby. Each of the Borrowers
and their Subsidiaries has good, legal and marketable title to, or a valid
leasehold interest in, all of its assets included on the last balance sheet
previously delivered to the Lenders except for assets disposed of in the
ordinary course of business. None of such properties or assets is subject to any
Liens, except for Permitted Liens. No financing statement under the Uniform
Commercial Code as in effect in any jurisdiction and no other filing which names
any Borrower or any of their Subsidiaries as debtor or which covers or purports
to cover any of the assets of any Borrower or any of their Subsidiaries is
currently effective and on file in any state or other jurisdiction; and neither
any Borrower nor any of their Subsidiaries have signed any such financing
statement or filing or any security agreement authorizing any secured party
thereunder to file any such financing statement or filing except with respect to
Permitted Liens.
Section 6.16 Patents, Trademarks, Licenses and Franchises. Each Borrower and
each of its Foreign Subsidiaries hold or have the right to use all patents,
trademarks, service marks, trade names, copyrights, franchises, licenses and
authorizations, governmental or otherwise, necessary for the conduct of their
business as now conducted, without any known material conflict with the rights
of others which could, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Change. As of the date hereof, Schedule 6.16
attached hereto correctly lists all patents, trademarks and copyrights
registered to the Loan Parties as well as all material governmental licenses,
authorizations and similar rights. Each license agreement necessary to any
Borrower’s or any of their Foreign Subsidiaries’ business, and under which any
Borrower or any of its Foreign Subsidiaries are the licensee is a valid and
binding license agreement, enforceable against the licensee and, to Borrowers
knowledge, the licensor.
Section 6.17 Compliance with Law. Each Borrower and each of its Foreign
Subsidiaries are in material compliance with all Applicable Law.
Section 6.18 Compliance with ERISA.
(a) None of the Borrowers, their Subsidiaries, or their ERISA Affiliate thereof
maintains or contributes to any Plan, Multiemployer Plan or other employee
benefit plan, except as disclosed on Schedule 6.18 attached hereto.
(b) Each Plan which is intended to be qualified within the meaning of Section
401(a) of the Code is the subject of a favorable determination by the Internal
Revenue Service with respect to all plan document qualification requirements for
which the remedial amendment period under Section 401(b) of the Code has closed,
any plan document amendments required by such determination letter were made as
and when required by such determination letter, and nothing has occurred,
whether by action or failure to act, since the date of such letter which would
prevent any, such plan from remaining so qualified. Each Borrower has furnished
to the Agent a copy of the most recent actuarial report for each Plan which is a
defined benefit plan as defined in Section 3(35) of ERISA and for any Plan that
is a funded employee welfare benefit plan, and each such report is accurate in
all material respects.

 

- 27 -

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

 

(c) Each Borrower, each of their Subsidiaries and their respective ERISA
Affiliates have operated each Plan in all material respects in compliance with
the requirements of the Code and ERISA and the terms of each Plan.
(d) Except as specifically disclosed on Schedule 6.18 attached hereto, (1) no
Plan has engaged in any transaction in connection with which any Borrower or any
of its Subsidiaries or ERISA Affiliates could be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax penalty imposed
pursuant to Section 4975 of the Code, (2) there is no Accumulated Funding
Deficiency with respect to any Plan, whether or not waived, or an unfulfilled
obligation to contribute to any Multiemployer Plan or withdrawal from any
Multiemployer Plan, (3) no Plan has been terminated under conditions which
resulted, or could result in any liability to the PBGC, (4) no liability to the
PBGC has been or is expected by any Borrower to be incurred with respect to any
Plan by any Borrower or any of their Subsidiaries or ERISA Affiliates except for
required premium payments to the PBGC, (5) there has been no Reportable Event
with respect to any Plan, and no event or condition exists which presents a risk
of termination of any Plan by the PBGC, (6) none of the Borrowers or any of
their Subsidiaries or any ERISA Affiliate have incurred or anticipate incurring
Withdrawal Liability with respect to any Multiemployer Plan, (7) no
Multiemployer Plan is in Reorganization, and neither any Borrower, any of their
Subsidiaries, or any ERISA Affiliate reasonably expects any Multiemployer Plan
to be in Reorganization, (8) each Borrower and each of their Subsidiaries and
ERISA Affiliates have complied in all respects with the requirements of COBRA
and HIPAA, and no liability, and no circumstances exist pursuant to which any
such liability could reasonably be imposed on any Borrower, any of their
Subsidiaries or any ERISA Affiliate under Sections 4980B, 4980D or 5000 of the
Code or Sections 409 and 502(1) of ERISA, (9) there are no unfunded benefit
liabilities “(as defined in Section 4001(a)(18) of ERISA) in respect of any
Plan, (10) there is no violation of the Code or ERISA with respect to the filing
of applicable reports, documents and notices regarding any Plan with the
Secretary of Labor, the Secretary of the Treasury, the PBGC or any other
governmental entity or the furnishing of documents as required to participants
and/or beneficiaries, (11) there is no Plan providing for retiree health and/or
life insurance or other death benefits or any other “employee benefit welfare
plan” (as defined in Section 3(1) of ERISA) having unfunded liabilities; and
(12) neither any Borrower, any of their Subsidiaries nor any ERISA Affiliate are
subject to the Early Warning Program of the PBGC (as described in PBGC Technical
Update 00-3) or have been contacted by the PBGC in connection with the PBGC’s
Early Warning Program; except for any event described in the foregoing clauses
(1) through (12) which could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(e) No liability (whether or not such liability is being litigated) has been
asserted against any Borrower, any of their Subsidiaries or any ERISA Affiliate
in connection with any Plan or any Multiemployer Plan by the PBGC other than for
required premium payments to the PBGC, by a trustee appointed pursuant to
Section 4042(b) or (c) of ERISA, or by a sponsor or an agent of a sponsor of a
Multiemployer Plan, and no Lien has been attached and no Person has threatened
to attach a Lien on any property of any Borrower, any of their Subsidiaries or
ERISA Affiliates as a result of failure to comply with ERISA or as a result of
the termination of any Plan.

 

- 28 -

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

 

Section 6.19 Compliance with Regulations U and X. Neither any Borrower nor any
of their Foreign Subsidiaries are engaged principally or as one bf their
important activities in the business of using credit for the purpose of
purchasing or carrying, any “margin security” or “margin stock” as defined in
Regulations U and X of the Board of Governors of the Federal Reserve System.
Section 6.20 Investment Company Act. Neither any Borrower nor any of their
Foreign Subsidiaries are an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
Section 6.21 [Intentionally Omitted].
Section 6.22 Absence of Default. No event has occurred which constitutes a
Default or an Event of Default.
Section 6.23 Agreements with Affiliates. Except for the Management Agreement and
agreements or arrangements with Affiliates in which any Borrower or any of their
Foreign Subsidiaries provides services to such Affiliates or vice versa for fair
consideration and which are set forth on Schedule 6.23 attached hereto, neither
any Borrower nor any of their Foreign Subsidiaries have any contracts or written
agreements or binding arrangements of any kind with any Affiliate.
Section 6.24 No Burdensome Agreements; Material Agreements. Neither any Borrower
nor any of their Foreign Subsidiaries are parties to any agreement or instrument
or subject to any corporate or other restrictions which, assuming compliance by
such Persons with the terms of such agreements or instruments could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change. Schedule 6.24 hereto lists all material agreements as of the
date hereof (the “Material Agreements”) of each Borrower and each of their
Foreign Subsidiaries. Neither any Borrower nor any of their Foreign Subsidiaries
are in material default of any of the Material Agreements. Except where any
Borrower or any of their Foreign Subsidiaries have allowed a Material Agreement
to terminate because such termination was in the best interests, of such
Borrower or such Foreign Subsidiary, each of the Material Agreements remains in
full force and effect.
Section 6.25 Solvency. After giving effect to the transactions contemplated by
the Loan Documents: (a) the property of each Loan Party, at a fair valuation,
will exceed its debt; (b) the capital of each Loan Party will not be
unreasonably small to conduct its business; (c) each Loan Party will not have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature; and (d) the present fair salable value of the assets of
each Loan Party will be materially greater than the amount that will be required
to pay its probable liabilities (including debts) as they become absolute and
matured. The representations set forth in the preceding sentence are equally
true of the Loan Parties on a Consolidated basis and of each Subsidiary on a
Consolidating basis. For purposes of this Section, “debt” means any liability on
a claim, and “claim” means (i) the right to payment, whether or not such right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, undisputed, legal, equitable, secured or unsecured, or (ii) the right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.

 

- 29 -

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

 

Section 6.26 Taxes. All federal, state and other tax returns of each Borrower
and each of their Foreign Subsidiaries required by law to be filed have been
duly filed and all federal, state and other taxes, as applicable, including,
without limitation, withholding taxes, assessments and other governmental
charges or levies required to be paid by such Borrower or Foreign Subsidiary,
which are due and payable, have been paid, provided that there shall not be
deemed to be a violation of this representation if any such tax is being
diligently contested in good faith by appropriate proceedings promptly initiated
and diligently conducted and for which adequate reserves shall have been set
aside on the appropriate books, but only if no foreclosure, distraint, sale or
similar proceeding shall have been commenced. The charges, accruals and reserves
on the books of each Borrower and each of their Foreign Subsidiaries in respect
of taxes are adequate.
Section 6.27 Environmental Compliance. Except as could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Change or
as scheduled in Schedule 6.27:
(a) None of the real property currently owned or occupied by any Borrower or any
of their Foreign Subsidiaries, and, to the best of the knowledge of such Persons
after due inquiry (based solely on a review of their internal records), none of
the real property formerly owned or occupied by any Borrower or any of their
Foreign Subsidiaries, has ever been used by any Borrower or any of their Foreign
Subsidiaries during its or their ownership or occupancy, or, to the best of the
knowledge of such Persons after due inquiry (based solely on a review of their
internal records), by previous owners or occupiers to treat, produce, store,
handle, transfer, process, transport, dispose of or otherwise release any
Hazardous Substances in violation of any Environmental Law.
(b) There is no condition which exists on the real property owned or occupied by
any Borrower or any of their Foreign Subsidiaries which requires Remedial Action
and which was caused or exacerbated by any Borrower or any of their Foreign
Subsidiaries or, to the best of the knowledge of such Persons after due inquiry
(based solely on a review of their internal records), any other Person.
(c) Neither any Borrower nor any of their Foreign Subsidiaries have been
notified of, or have actual knowledge of any notification having been filed with
regard to, a Release or a threat of Release on or into any real property
currently or formerly owned or occupied by any Borrower or any of their Foreign
Subsidiaries.
(d) Neither any Borrower nor any of their Foreign Subsidiaries have received a
summons, citation, notice of violation, administrative order, directive, letter
or other communication, written or oral, from any governmental or quasi
governmental authority concerning any Release or threat of Release or need for
Remedial Action.
(e) There is no “friable asbestos material” (as that term is defined in
regulations under the Federal Clean Air Act) which has not been encapsulated as
required by Environmental Laws, in accordance with accepted guidelines
promulgated by the United States Environmental Protection Agency, existing in or
on any real property owned and/or in the portion of any other property occupied
by any Borrower or any of their Foreign Subsidiaries.

 

- 30 -

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

 

(f) No equipment, for which any Borrower or any of their Foreign Subsidiaries is
responsible, containing polychlorinated biphenyls, including electrical
transformers, is located on any real property owned or occupied by any Borrower
or any of their Foreign Subsidiaries in levels which exceed those permitted by
any governmental authorities with jurisdiction over such premises or which are
not properly labeled in accordance with Environmental Laws.
(g) There are no tanks on any real property owned or occupied by any Borrower or
any of their Foreign Subsidiaries that have been used for the storage of
petroleum products or any other substance or waste, nor, to the best of the
knowledge of such Persons after due inquiry (based solely on a review of their
internal records), have any such tanks been located on such property at any
time.
Section 6.28 Labor Disputes and Acts of God. Neither the business nor the
properties of any Borrower or any of their Foreign Subsidiaries are affected by
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy, or other
casualty (whether or not covered by insurance) which could, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Change.
ARTICLE 7
FINANCIAL COVENANTS
Section 7.1 Financial Covenants. Each Borrower shall, and shall cause each of
its, Subsidiaries to, maintain compliance with the following financial
covenants:
(a) Maximum Total Leverage Ratio. As of any fiscal quarter end, the Total
Leverage Ratio for the period of four (4) consecutive fiscal quarters ending on
or prior to such date shall not be greater than 3:25 to 1:00.
(b) Minimum Interest Coverage Ratio. As of any fiscal quarter end, the Interest
Coverage Ratio shall not be less than 2:50 to 1:00.
(c) Minimum Net Worth. As of any fiscal quarter end, the total amount of
stockholders equity of Parent Borrower and its Subsidiaries, on a consolidated
basis, shall be not less than the sum of:
(i) Fifty Million Dollars ($50,000,000); plus
(ii) an amount equal to 50% of the cumulative amount of Net Income (which shall
not be reduced by the amount of any net loss for any fiscal quarter) of Parent
Borrower and its Subsidiaries, on a consolidated basis, for the period
commencing on January 1, 2008, and ending on the date of determination; minus
(iii) the aggregate amount paid on or after the date hereof for stock
repurchases permitted under Section 9.4(a) hereof.
(d) Maximum Capital Expenditures. The aggregate amount of Capital Expenditures
made during any period of twelve (12) calendar months shall not exceed Seven
Million Dollars ($7,000,000), without cumulation or carryover, which amount
shall not include any amounts used for Permitted Acquisitions.

 

- 31 -

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

 

Section 7.2 Calculations. Calculations made pursuant to Section 7.1 shall give
effect, on a pro forma basis, to all Acquisitions and dispositions made during
the period to which the required compliance relates (the “Applicable Period”),
as if such Acquisition or disposition had been consummated on the first day of
the applicable period such that (a) the results of operations of the assets or
entities acquired or disposed of are included or excluded, as applicable, and
(b) any Indebtedness assumed or incurred of paid off in connection with such
Acquisition or disposition is included or excluded, as applicable, on a pro
forma basis from the first day of the Applicable Period.
ARTICLE 8
COVENANTS CONCERNING REPORTING REQUIREMENTS
Section 8.1 Financial Statements. So long as any of the Obligations is unpaid or
any Lender has any commitment to make Loans hereunder, the Parent Borrower
shall, from time to time, furnish (or cause to be furnished, as the case may be)
to the Lenders the following information:
(a) Annual Financial Statements. As soon as available and in any event within
one hundred and five (105) calendar days after the end of each of each fiscal
year of the Parent Borrower, but no later than the date upon which the Parent
Borrower’s annual report on Form 10-K is to be filed with the Securities and
Exchange Commission, the Parent Borrower shall deliver to the Lenders audited
Consolidated financial statements, together with any notes thereto of the Parent
Borrower and its Subsidiaries, consisting of a balance sheet as at the end of
such fiscal year and related statements of income, cash flows, and Changes in
retained earnings for the fiscal year then ended, all in reasonable detail and
setting forth in comparative form the respective consolidated financial
statements as at the end of and for the preceding fiscal year, prepared in
accordance with GAAP and Unqualifiedly Certified by independent certified public
accountants of nationally recognized standing satisfactory to the Majority
Lenders. The Parent Borrower shall also deliver a letter signed by such
accountants stating that, having conducted an ordinary and customary examination
of the affairs of the Parent Borrower in connection with the preparation of the
respective Consolidated financial statements, they are not aware of the
existence of any condition or event which constitutes a Default or an Event of
Default hereunder, and, promptly upon receipt, a copy of any management letter.
(b) Quarterly Financial Statements. As soon as available and in any event within
fifty (50) calendar days after the end of each of the first three fiscal
quarters in each fiscal year of the Parent Borrower, the Parent Borrower shall
deliver to the Lenders Consolidated financial statements of the Parent Borrower
and its Subsidiaries, consisting of a balance sheet as at the end of such fiscal
quarter and related statements of income, cash flows, and changes in retained
earnings for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and setting forth in comparative form the
respective Consolidated financial statements of the corresponding date and
period in the previous fiscal year and certified (subject to normal year-end
audit adjustments) by the President or chief financial officer of the Parent
Borrower as (i) having been prepared in accordance with GAAP and (ii) presenting
fairly the financial position of the Parent Borrower and its Subsidiaries as at
the end of each fiscal quarter.

 

- 32 -

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

 

(c) Subsidiary Financial Statements. At the same time as the financial
statements delivered under subsections (a) and (b) above, a balance sheet,
statement of income and statement of cash flows for each Subsidiary of the
Parent Borrower in form reasonably satisfactory to the Agent.
(d) Business Plan. As soon as available and in any event within ninety
(90) calendar days after the end of each fiscal year, the Parent Borrower shall
deliver to the Lenders the annual Business Plan for such year on a quarter by
quarter basis. Such Business Plan shall be accompanied by a certification of the
President or Chief Financial Officer of the Parent Borrower that such Business
Plan is reasonable, made in good faith, consistent with the Loan Documents, and
represents the Parent Borrower’s best judgment bas to such matters.
Section 8.2 Officer’s Compliance Certificates. As soon as available and in any
event within fifty (50) calendar days after the end of each of the first three
fiscal quarters, and within one hundred and five (105) calendar days after the
end of each fiscal year, but no later than the date upon which the Parent
Borrower’s annual report on Form 10-K is to be filed with the Securities and
Exchange Commission, the Parent Borrower shall deliver to the Lenders a
certificate of the President or Chief Financial Officer of the Parent Borrower,
in substantially the form of Exhibit D attached hereto, containing the following
information:
(a) a statement that no Default or Event of Default exists and is continuing on
the date of such certificate; and
(b) calculations in sufficient detail to demonstrate compliance as of the date
of the relevant financial statements with all of the financial covenants
contained in Article 7 (Financial Covenants) hereof.
Section 8.3 Auditors Reports. Promptly upon receipt, the Parent Borrower shall
deliver to the Lenders copies of all financial reports or written
recommendations, if any, submitted to the Parent Borrower or any of its
Subsidiaries by its auditors in connection with each annual or interim auditor
examination of its books by such auditors.
Section 8.4 Notice of Default. Promptly after any officer of any Borrower has
learned of the occurrence of a Default or an Event of Default, the Parent
Borrower shall deliver to the Agent, the Issuer and the Lenders a notice of such
Default or Event of Default. Each such notice pursuant to this Section shall set
forth details of the matter referred to therein and state what action the Parent
Borrower or the affected Subsidiary has taken, is taking and proposes to take,
with respect thereto, and shall be certified by the President or Chief Financial
Officer of the Parent Borrower as true and correct in all material respects.

 

- 33 -

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

 

Section 8.5 Notice Concerning Representations and Warranties. Each Borrower
shall give the Agent notice of any changes in facts or circumstances on which
the representations and warranties set forth in this Agreement are made which
makes such representations and warranties false or misleading in any material
respect. Such notice shall be given promptly, but in any event not later than
ten (10) days after any officer of any Borrower becomes aware of its occurrence.
Except as set forth in the proviso to Section 5.3, the delivery of such a notice
shall not imply any waive by the Lenders.
Section 8.6 Notice of Litigation. Promptly after the commencement thereof, but
in any event not later than ten (10) days after any officer or director of any
Borrower becomes aware thereof, the Parent Borrower shall deliver to the Agent
notice of any actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting any Borrower or any of their Subsidiaries in which the amount
involved is $250,000 or more or, which, if not solely for monetary damages,
could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
Section 8.7 SEC Disclosure. Promptly after the sending or filing thereof, the
Parent Borrower shall deliver to the Agent and the Lenders copies of all proxy
statements, financial statements, and reports which the Parent Borrower or any
Subsidiary sends to its shareholders, and copies of all regular, periodic, and
special reports, and all registration statements which the Parent Borrower or
any Subsidiary files with the Securities and Exchange Commission (or any
governmental authority which may be substituted therefor or with any national
securities exchange or regulatory body thereof.
Section 8.8 Conditions Affecting Collateral. Each Borrower shall give the Agent
at least thirty (30) days prior written notice of any of the following
conditions: (a) the opening or acquisition of a new facility or office; (b) a
change in the jurisdiction of incorporation of any Borrower or any Subsidiary of
a Borrower; (c) any creation or acquisition of a Subsidiary; (d) acquisition of
any material amount of property by such Borrower or any Subsidiary not subject
to a valid and perfected Lien pursuant to the then existing Loan Documents with
the priority required by the Loan Documents; or (e) or any change of domicile or
change of name or any change of address of the chief executive office of any
Loan Party.
Section 8.9 ERISA Notices. (a) Promptly after the filing or receiving thereof,
each Borrower shall deliver to the Agent copies of all reports and notices,
including annual reports and audited financial statements, which any Borrower or
any Subsidiary or any ERISA Affiliate files with or receives from PBGC, the U.S.
Department of Labor under ERISA, or the Internal Revenue Service, (b) as soon as
possible and in any event within ten (10) business days after any Borrower or
any Subsidiary or any ERISA Affiliate knows or has reason to know that (i) any
Reportable Event has occurred or is reasonably expected to occur with respect to
any Plan, (ii) that the PBGC or any Borrower or any Subsidiary, or any ERISA
Affiliate has instituted or will institute proceedings under Title IV of ERISA
to terminate any Plan, (iii) that any Withdrawal Liability from a Multiemployer
Plan has been or will be incurred by any Borrower or any of its Subsidiaries or
any ERISA Affiliate, (iv) that any Multiemployer Plan is or will be in
Reorganization terminated, partitioned or declared insolvent, (v) an Accumulated
Funding Deficiency has

 

- 34 -

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

 

been incurred or an application has been made to the Secretary of the Treasury
for a waiver or modification of the minimum funding standard or an extension of
any amortization period under Section 412 of the Code with respect to a Plan,
(vi) an action has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Multiemployer Plan, (vii) any event, transaction,
or condition has, occurred or will occur that could reasonably be expected to
result in the imposition of a lien under Part 3 of Subtitle B of Title I of
ERISA or Title IV of ERISA, (viii) any Prohibited Transaction or other
transaction, event or condition has occurred or will occur with respect to a
Plan that could reasonably be expected to result in any Borrower, any of its
Subsidiaries or any ERISA Affiliate incurring a material liability or becoming
subject to a material penalty or excise tax, or (ix) the PBGC has contacted any
Borrower, any of its Subsidiaries or any ERISA Affiliate with respect to the
PBGC’s Early Warning Program, each Borrower shall deliver to the Agent a
certificate of the chief financial officer of such Borrower setting forth,
details as to such event, transaction or condition and the action such Borrower
has taken, is taking or proposes to take with respect thereto, in either case,
which respects an event, transaction or condition which could, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Change.
Section 8.10 Environmental Matters. Promptly upon receipt, but no later than
five (5) Business Days following receipt thereof, the Borrowers shall provide
written notice to the Agent of (a) receipt of any written notice or demand from
the State of New Jersey, the United States or other Governmental Authority,
which asserts against any Borrower liability or the potential for liability for
damages to any natural resource under the New Jersey Spill Compensation and
Control Act, as amended, N.J.S.A. 58:10-23.11 et seq., the federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., or other Environmental Law, which, in any case,
are, or could reasonably be expected to be, for amounts equal to or greater than
One Million Dollars ($1,000,000), or (b) any settlement of or accrual for any
environmental liability or liabilities in an amount equal to or greater than One
Million Dollars ($1,000,000).
Section 8.11 Miscellaneous. With reasonable promptness, each Borrower shall give
to the Agent and the Lenders such other information respecting the business
operations and financial condition of such Borrower or any of its Subsidiaries
as the Agent may, from time to time, request, including, without limitation, any
change in management and any application or other filing made with regard to any
intellectual property.
Section 8.12 Authorization of Third Parties to Deliver Information. Each
Borrower hereby agrees that any opinion, report or other information delivered
to the Agent or the Lenders pursuant to the Loan Documents is hereby deemed to
have been authorized and directed by the Borrowers to be delivered for the
benefit, and reliance thereupon, of the Agent and the Lenders.

 

- 35 -

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

 

ARTICLE 9
BUSINESS COVENANTS
So long as any of the Obligations is unpaid or any of the Lenders has any
commitment to make Loans hereunder, the Borrowers shall, and shall cause each of
their Subsidiaries to, comply with the following covenants.
Section 9.1 Indebtedness.
(a) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, directly or indirectly, create, assume, incur, on otherwise
become or remain obligated in respect of, or permit to be outstanding, any
Indebtedness, except:
(i) Indebtedness consisting of Obligations;
(ii) obligations in an aggregate principal amount not to exceed at any time Two
Million Five Hundred Thousand Dollars ($2,500,000) in respect of Capital Lease
Obligations and purchase money Indebtedness in respect of equipment;
(iii) Indebtedness among Borrowers;
(iv) Indebtedness outstanding on the date hereof as set forth on Schedule 9.1
and refinancings thereof;
(v) obligations (contingent or otherwise) existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with fluctuations in interest rates or foreign exchange rates
and (ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party; and
(vi) Other Indebtedness not described in clauses (i)-(v) above in an amount not
to exceed Two Million Five Hundred Thousand Dollars ($2,500,000).
(b) In addition to the limitations on the incurrence or existence of
Indebtedness referred to above, no Indebtedness may be incurred by any Borrower
or any of its Foreign Subsidiaries unless immediately before and after giving
effect to the incurrence of such Indebtedness, no Default or Event of Default
shall have occurred and be continuing.
(c) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, directly or indirectly, (i) pay, make or set aside any amount
for payment of the Indebtedness set forth in clauses (i)-(v) of Section 9.1(a)
above (collectively, “Permitted Indebtedness”), except for regularly scheduled
payments required by the provisions of any agreements governing Permitted
Indebtedness, or (ii) amend or otherwise modify the terms of any agreements
governing Permitted Indebtedness.
Section 9.2 Liens.
(a) Each Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, assume, incur or permit to exist, any Lien on
any of its properties or assets, whether now owned or hereafter acquired, except
the following (collectively, the “Permitted Liens”):
(i) Liens in favor of the Agent, for the benefit of the Secured Parties, arising
out of the Collateral Documents;

 

- 36 -

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

 

(ii) Liens for taxes, assessments or other governmental charges the payment of
which is not at the time required to be paid pursuant to Section 9.14, not yet
subject to penalty or which are being contested in good faith and by appropriate
proceedings, if adequate reserves with respect thereto are maintained or the
books of the Borrowers in accordance with GAAP;
(iii) statutory Liens of bankers, carriers, landlords, warehousemen, mechanics,
laborers and materialmen incurred in the ordinary course of business for sums
not yet due, or which are being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto are maintained on the
books of the Borrowers in accordance with GAAP;
(iv) Capital Leases and purchase money security interests incurred in compliance
with clause (a)(ii) of Section 9.1 above, provided, that no such Liens shall
extend to or cover any property other than the leased property or equipment
purchased by proceeds of such permitted purchase money Indebtedness;
(v) zoning restrictions, easements, rights-of-way, minor restrictions and other
similar encumbrances on real property, in each case incidental to, and not
interfering with, the ordinary conduct of the business of such Person;
(vi) Liens incurred or deposits made in the ordinary course of business to
secure the obligations of each Borrower and each Foreign Subsidiary under
workers compensation, unemployment insurance and other types of social security
legislation or otherwise to secure statutory or regulatory obligations or for
the payment of rent of each Borrower or any of their Foreign Subsidiaries in the
ordinary course of business consistent with past practice, including to secure
the performance of tenders, surety and appeal bonds, performance bonds,
performance of bids, leases, trade contracts, governmental contracts, operating
leases, performance and return-of-money bonds and other similar obligations
(exclusive in each case of obligations for the payment of borrowed money);
provided, that the obligations in connection with which such Liens were incurred
or deposits made shall have been incurred in the ordinary course of business and
shall otherwise be permitted by this Agreement;
(vii) Judgment Liens not giving rise to an Event of Default so long as any such
Lien is adequately bonded and any appropriate legal proceedings which may have
been duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired;
(viii) Liens securing Indebtedness, or Liens on shares of capital stock, of a
Person existing at the time such Person becomes a Subsidiary or is merged with
or into any Borrower or any of its Foreign Subsidiaries pursuant to a Permitted
Acquisition or any Lien securing Indebtedness incurred in connection with a
Permitted Acquisition, provided that (A) such Liens were in existence prior to
the date of such Permitted Acquisition, were not incurred in anticipation
thereof, and do not extend to any other assets; and (B) do not exceed One
Million Dollars ($1,000,000) in the aggregate;
(ix) licenses, leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the business
of any Borrower or any of their Foreign Subsidiaries or materially detracting
from the value of the assets of any Borrower or any of their Foreign
Subsidiaries; and

 

- 37 -

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

 

(x) Liens disclosed on the title reports delivered to Agent on the date hereof
or listed on Schedule 9.2, provided that such Liens do not extend to assets or
secure liabilities in addition to those existing on the date hereof.
(b) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, agree with any Person to restrict or place limitations on the
right of any Borrower or any of its Foreign Subsidiaries to create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any Borrower or any of its Foreign Subsidiaries, other than the lessor as to
a Capital Lease or the secured party as to a purchase money security interest,
as long as the restriction applies only to the specific equipment involved.
(c) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, license or sublicense any of their owned or licensed
Intellectual Property or general intangibles except to any Subsidiary and in the
ordinary course of business consistent with past practice as described on
Schedule 9.2.
Section 9.3 Investments and Acquisitions. Each Borrower shall not, and shall not
permit any Foreign Subsidiary to, directly or indirectly, make or permit to
exist any Investment or make any Acquisition, except that so long as no Default
or Event of Default then exists or would be caused thereby, any Borrower and any
of its Foreign Subsidiaries may:
(a) maintain existing Investments in direct or indirect wholly-owned
Subsidiaries;
(b) create new direct or indirect wholly-owned Subsidiaries, subject to the
provisions of Section 9.27;
(c) make Investments in Cash Equivalents;
(d) make Investments in securities of trade creditors, customers or any debtor
of any Borrower or any of its Subsidiaries received in compromise of obligations
incurred in the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors, customers or debtors and any Investments received in
satisfaction of judgments;
(e) make loans or advances to employees, directors, officers or consultants of
any Borrower or any of its Subsidiaries of the types consistent with past
practice in an aggregate amount at any time outstanding not to exceed Five
Hundred Thousand Dollars ($500,000);
(f) make payroll, travel and similar advances to cover matters that are expected
at the time of the advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business and consistent
with past practice;

 

- 38 -

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

 

(g) make Investments in any Person to the extent such Investments consist of
prepaid expenses, negotiable instruments held for collection and lease, utility
and workers compensation, performance and other similar deposits made in the
ordinary course of business and consistent with past practice;
(h) make Permitted Acquisitions and Investments in Foreign Subsidiaries, so long
as the aggregate consideration (including the assumption of any Indebtedness in
connection therewith if the incurrence of such Indebtedness has been approved by
the Required Lenders) to be paid for any such Permitted Acquisitions, together
with any such Investments in Foreign Subsidiaries and any Restricted Payments
made in accordance with Section 9.4(a) below (i) shall not exceed Twenty Million
Dollars ($20,000,000) for the period of four consecutive fiscal quarters ending
on or immediately prior to the date of any such Acquisition, Investment or
Restricted Payment, or (ii) when taken together with the total consideration
paid for all other of such Acquisitions, Investments and Restricted Payments
effected at any time after the date hereof, does not exceed Forty-Five Million
Dollars ($45,000,000); and
(i) Investments by the Borrowers in Swap Contracts permitted under
Section 9.1(a)(iv).
Section 9.4 Restricted Payments. Each Borrower shall not, and shall not permit
any of its Foreign Subsidiaries to, directly or indirectly, declare, order, pay,
make or set apart any sum or property for any Restricted Payment or agree with
any Person to restrict or place limitations on the right of each Borrower or any
of its Foreign Subsidiaries to declare, order, pay, make or set apart any sum or
property for any Restricted Payment, except that:
(a) the Parent Borrower may, subject to compliance with 9.3(h), purchase its
registered capital stock then issued and outstanding;
(b) Subsidiaries may make Restricted Payments to the Borrowers or another
Subsidiary of the Borrowers which is not a Foreign Subsidiary;
(c) so long as no Default or Event of Default shall have occurred and be
continuing, the payment of cash dividends to Parent Borrower to the extent
applied by Parent Borrower to repurchase, redeem or otherwise retire or acquire
equity or other ownership interests of Parent Borrower from its employees or
directors (or their heirs or estates) or employees or directors (or their heirs
or estates) of Parent Borrower or its Subsidiaries, in each case, pursuant to
the terms of any stockholders agreement, employment agreement, severance
agreement, employee stock option agreement or similar agreement in accordance
with the provisions of any such arrangement as in effect on the date hereof, in
an Aggregate amount pursuant to this paragraph (b) to all such employees or
directors (or their heirs or estates) not to exceed $500,000 per fiscal year;

 

- 39 -

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

 

(d) the payment of cash dividends to Parent Borrower (i) to the extent applied
by Parent Borrower to pay reasonable and customary directors fees payable to,
and indemnity provided on behalf of, the Board of Directors of Parent Borrower,
indemnity provided on behalf of officers and employees of Parent Borrower and
customary reimbursement of travel and similar expenses incurred in the ordinary
course of business (without giving effect to any amendment or supplement thereto
or modification thereof), (ii) in an aggregate not to exceed $250,000 per fiscal
year, to the extent applied by Parent Borrower to pay its general administrative
expenses, including, without limitation, in respect of director fees and
expenses, administrative, legal and accounting services, or (iii) solely to
enable Parent Borrower to make payments in cash to holders of its capital stock
in lieu of the issuance of fractional shares of its capital stock in an
aggregate amount not to exceed $200,000; and
(e) Payments may be made pursuant to the Management Agreement.
Section 9.5 Affiliate Transactions.
(a) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, directly or indirectly, engage in any transaction with an
Affiliate, or make an assignment or other transfer of any of its properties or
assets: to any Affiliate on terms that are less favorable to such Borrower or
such Foreign Subsidiary than those which might be obtained at the time from
unaffiliated third parties; provided, however, the foregoing restrictions shall
not apply to transactions exclusively among the Borrowers.
(b) Each Borrower shall not, and shall not permit any of its Foreign
Subsidiaries to, (i) enter into any management agreement with any Person (other
than the Management Agreement as in effect on the date hereof) that gives such
Person the right to manage its business except for usual and customary
employment agreements and consulting agreements consistent with past practice,
(ii) directly or indirectly pay or accrue to any Person any sum or property for
fees for management or similar services rendered in connection with the
operation of a business except as set forth in clause (i) above, except for
payment under and pursuant to the Management Agreement of not more than $475,000
in annual management fees, (iii) amend the Management Agreement without the
Agent’s prior written consent, except to permit (A) an annual bonus of up to
$250,000, if approved in advance by the Board of Directors and the Compensation
Committee of Parent Borrower or (B) reductions in compensation, or (iv) make any
payments under the Management Agreement unless Steel maintains material
involvement in the management of Parent Borrower.
Section 9.6 Disposition of Assets. Each Borrower shall not, and shall not permit
any of its Foreign Subsidiaries to, directly or indirectly, sell, assign, lease,
abandon, or otherwise transfer or dispose of any of their assets (including,
without limitation, shares of stock and indebtedness of Subsidiaries,
receivables, and leasehold interests), except:
(a) inventory disposed of in the ordinary course of its business as presently
conducted;
(b) the sale or other disposition of assets no longer used or useful in the
conduct of its business;
(c) that any Foreign Subsidiary may assign or otherwise transfer its assets to
any Borrower; or
(d) property subject to a governmental condemnation.

 

- 40 -

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

 

Section 9.7 Liquidation or Merger. Each Borrower shall not, and shall not permit
any of its Foreign Subsidiaries to, liquidate or dissolve itself (or suffer any
liquidation or dissolution) or otherwise wind up, or enter into any merger or
consolidation or division or similar transaction, other than:
(a) a merger or consolidation between any two or more Borrowers;
(b) a merger or consolidation between or among two or more Foreign Subsidiaries;
(c) a merger or consolidation in connection with a Permitted Acquisition, so
long as the surviving Person, upon completion of such merger or consolidation,
is a Borrower; or
(d) the liquidation and dissolution of a non-operating Subsidiary or a
Subsidiary having book assets not in excess of $100,000.00.
Section 9.8 Change in Organizational Documents. Each Borrower shall not, and
shall not permit any Foreign Subsidiary to, amend or otherwise modify, the
respective articles or certificate of incorporation, bylaws or other
organizational documents of such Person, except in connection with a merger
permitted by Section 9.7 above.
Section 9.9 Issuance of Equity. Each Borrower shall not, and shall not permit
any of its Foreign Subsidiaries to, issue, authorize the issuance of, or
obligate itself to issue any shares of its capital stock or other equity
(including, without limitation, any options, warrants or other rights in respect
thereof) to any Person that (a) would contravene any other provision of this
Agreement (including any provision respecting Change of Control) or (b) would
result in there being equity of any Subsidiary of any Borrower (other than
directors’ qualifying shares) that is not pledged pursuant to the Security
Agreement (to the extent required to be pledged thereunder).
Section 9.10 Environmental Violations. Each Borrower shall not, and shall not
permit any of its Foreign Subsidiaries to, or permit any Person to, use,
generate, treat, store, dispose of or otherwise introduce, any Hazardous
Materials into or on any real property owned or leased by any of them and shall
not permit such actions to occur, except in an environmentally safe manner
through methods which have been approved by and meet all of the standards of the
federal Environmental Protection Agency and any other federal, state or local
agency with authority to enforce Environmental Laws except where the failure to
comply with the foregoing sentence could, not, individually or in the aggregate,
reasonably be expected to result in either (a) a Material Adverse Change or
(b) liabilities to the Borrowers in excess of Ten Million Dollars ($10,000,000).
Without limiting the generality of any other indemnities provided under this
Agreement, each Borrower hereby agrees to indemnify, reimburse, defend and hold
harmless any Indemnified Person for, from and against all, demands, liabilities,
damages, costs, claims, suits, actions, legal or administrative proceedings,
interest, losses, expenses and reasonable attorney’s fees (including any such
fees and expenses incurred in enforcing this indemnity) asserted against,
imposed on or incurred by any of the Indemnified Persons, directly or
indirectly, pursuant to, or in connection with, the application of any
Environmental Law to acts or omissions occurring at any time on or in connection
with any real estate owned or leased by any Borrower or any of its Foreign
Subsidiaries or any business conducted thereon except those which result from
the gross negligence or willful misconduct of any Indemnified Person.

 

- 41 -

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

 

Section 9.11 Preservation of Existence, Etc. Except as permitted by Section 9.7,
each Borrower shall at all times preserve and keep in full force and effect
(a) its corporate, company, partnership or other existence and (b) the
corporate, company, partnership or other existence of each Foreign Subsidiary
and (c) the good standing of such Persons in all states or jurisdictions in
which they are formed or required to qualify to do business, except, as to
qualification only, where the failure to keep in full force and effect any such
good standing could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change.
Section 9.12 Permitted Businesses. Each Borrower shall, and shall cause each of
its Foreign Subsidiaries to engage in the businesses permitted under Section 6.8
and no other business.
Section 9.13 Compliance with Law. Each Borrower shall, and shall cause each of
its Foreign Subsidiaries to, comply with the requirements of all Applicable Law
and will obtain or maintain all franchises, permits, licenses and other
governmental authorizations and approvals necessary to the ownership,
acquisition or disposition of their respective properties or to the conduct of
their respective businesses, except where failure to comply with, obtain or
maintain any of the foregoing could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change.
Section 9.14 Payment of Taxes and Claims. Each Borrower shall, and shall cause
each of its Foreign Subsidiaries to, timely file all tax and information returns
required by federal, state, local and foreign tax authorities. Each Borrower
shall, and shall cause each of its Foreign Subsidiaries to, pay all taxes
(including, without limitation, withholding taxes), assessments and governmental
charges or levies required to be paid by it or imposed on it or on its income or
profits or upon any of its properties or assets, prior to the date on which
penalties (or additions to tax) attach thereto or interest accrues and all
claims for (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and payable and which, if unpaid,
might become a Lien upon its properties or assets; provided that it shall not be
deemed to be a violation of this covenant if any such charge or claim not paid
is being diligently contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and for which adequate reserves shall have
been set aside on the appropriate books, but only so long as no foreclosure,
distraint, sale or similar proceeding shall have been commenced.
Section 9.15 Tax Consolidation. Each Borrower shall not file or consent to or
permit the filing of any consolidated income tax return on behalf of it or any
Subsidiary with any Person (other than a consolidated return for the group of
which Parent Borrower is the common parent). Each Borrower shall not, and shall
not permit any Subsidiary to, enter into any agreement with any Person which
would cause such Borrower or such Subsidiary to bear more than the amount of
taxes to which it would have been subject had it separately filed (or filed as
part of a consolidated return among the Parent Borrower’s Subsidiaries).

 

- 42 -

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

 

Section 9.16 Maintenance of Properties. Each Borrower shall, and shall cause
each of its Foreign Subsidiaries to, maintain or, cause to be maintained in good
repair, working order and condition (ordinary wear and tear excepted) all
properties used or useful in its business (whether owned or leased), such
maintenance to include, without limitation, repair, renewal, replacement or
improvement thereto; and keep, and cause each Subsidiary to, keep, all systems
and equipment which may now or in the future be subject to compliance with any
standard or rules imposed by any Governmental Authority in compliance in all
material respects with such standards or rules. Each Borrower shall, and shall
cause each of its Foreign Subsidiaries to maintain, preserve and protect, and,
when necessary, renew, all franchises, licenses, patents, copyrights, permits,
service marks, trademarks and trade names and other general intangibles held by
any of them and all agreements to which any of them are parties which are
necessary to conduct such Borrower’s or any applicable Subsidiary’s business.
Section 9.17 Insurance.
(a) Each Borrower shall, and shall cause each of its Foreign Subsidiaries to,
maintain or cause to be maintained with financially sound and reputable
insurers, insurance with respect to the properties and business of such Borrower
or any such Foreign Subsidiary against loss or damage of the kinds and in the
amounts reasonably prudent for the operation of its business and including such
risks as are customarily insured against by entities of established reputation
having similar properties similarly situated or engaged in the same or similar
type of businesses. Each Borrower and each of its Foreign Subsidiaries shall
cause each insurance policy issued in connection herewith to provide, and the
insurer issuing such policy to certify to the Agent that (i) the Agent will be
named as additional insured and lender loss payee or mortgagee, as appropriate,
under each such insurance policy; (ii) if such insurance be proposed to be
cancelled or materially changed for any reason whatsoever, such insurer will
promptly notify the Agent and such cancellation or change shall not be effective
as to the Agent for at least thirty (30) days after receipt by the Agent of such
notice, unless the effect of such change is to extend or increase coverage under
the policy; and (iii) the Agent will have the right (but no obligation) at its
election to remedy any default in the payment of premiums within thirty
(30) days of notice from the insurer of such default.
(b) If no Default or Event of Default exists, loss payments will be applied by
each Borrower or the relevant Subsidiary to the repair and/or replacement of
property with respect to which the loss was incurred to the extent reasonably
feasible, and any loss payments or the balance thereof remaining, to the extent
not so applied or used to purchase other assets useful in the business of each
such Borrower and each such Subsidiary within 360 days of receipt thereof and
subject to the Liens of the Agent hereunder, shall be payable to the Agent on
behalf of the Lenders and applied to the Obligations. If an Event of Default or
Default shall then exist then such proceeds shall, at the option of the Agent,
be applied to reduce the Obligations, and at the Agent’s election the Commitment
shall be permanently reduced, or be reinvested in the business of such Borrower
or applicable Subsidiary. Notwithstanding the foregoing, payments received by
the Agent in excess of all Obligations shall be paid over by the Agent to the
Borrowers. Copies of such policies or the related certificates, in each case,
naming the Agent as additional insured and lender loss payee or mortgagee, as
appropriate, shall be delivered to the Agent annually at the time of the
delivery of the financial statements referred to in Section 8.1(a) above and at
the time any new policy of insurance is issued. If no Default or Event of
Default exists, no claim may be adjusted without the consent of the Borrowers.
(c) Each Borrower shall maintain or cause to be maintained all insurance
available through the PBGC and/or insurers acceptable to the Agent against their
obligations and the obligations of any of its Foreign Subsidiaries to the PBGC.

 

- 43 -

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

 

Section 9.18 Compliance with ERISA.
(a) Each Borrower shall, and shall cause each of its Subsidiaries and any ERISA
Affiliates to comply in all material respects with the requirements of the Code
and ERISA with respect to the operation of all Plans and Multiemployer Plans.
(b) Each Borrower shall, and shall cause each of its Subsidiaries and any ERISA
Affiliates to, comply in all material respects with the requirements of COBRA,
HIPAA and Section 1862(b) of the Social Security Act with respect to any Plans
subject to the requirements thereof.
(c) Each Borrower shall not take, and shall prevent each of its Subsidiaries and
any ERISA Affiliate from taking, any of the following actions and shall not
permit any of the following events to occur if such action or event together
with all other such actions or events, would subject any Borrower, any of its
Subsidiaries or any of its ERISA Affiliates to any tax, penalty, or other
liabilities which could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change:
(i) engage in or knowingly consent to any “party in interest” or any
“disqualified person,” as such terms are defined in Section 3(14) of ERISA and
Section 4975(e)(2) of the Code respectively, engaging in any Prohibited
Transaction in connection with which any Borrower, any of its Subsidiaries or
any ERISA Affiliate could be subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;
(ii) terminate any Plan in a manner, or take any other action, which could
result in any liability of any Borrower, any of its Subsidiaries or any ERISA
Affiliate to the PBGC;
(iii) fail to make full payment when due of all amounts which, under the
provisions of any Plan or any Multiemployer Plan, any Borrower, any of its
Subsidiaries or any ERISA Affiliate is required to pay as contributions thereto,
or permit to exist any Accumulated Funding Deficiency, whether or not waived;
with respect to any Plan or fail to pay PBGC premiums when due;
(iv) permit the current value of all accrued benefits under all Plans which are
subject to Title IV of ERISA to exceed the current value of the assets of such
Plans allocable to such vested accrued benefits, except as may be permitted
under actuarial funding standards adopted in accordance with Section 412 of the
Code;
(v) withdraw from any Multiemployer Plan, if such withdrawal would result in the
imposition of Withdrawal Liability; or
(vi) adopt a Plan amendment which results in significant underfunding (as
defined in Section 307 of ERISA) which requires any Borrower or any of its
Subsidiaries or ERISA Affiliates to provide security.
(d) The Borrowers shall comply with the ERISA reporting requirements set forth
in Section 8.9.
As used in this Section 9.18, the term “accrued benefit” has the meaning
specified in Section 3(23) of ERISA and the term “current value” has the meaning
specified in Section 4001(a)(18)(B) of ERISA.

 

- 44 -

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

 

Section 9.19 Maintenance of Records; Fiscal Year. Each Borrower shall, and shall
cause each of its Foreign Subsidiaries to, keep at all times books of record and
account in which entries will be made of all dealings or transactions in
relation to its business and affairs as required by GAAP. Each Borrower shall
keep, and shall cause each of its Foreign Subsidiaries to keep, its books of
account and financial statements in accordance with GAAP and report on the basis
of a fiscal year ending December 31.
Section 9.20 Inspections and Field Examinations. Upon reasonable notice (and for
this purpose no more than two Business Days notice shall be required under any
circumstances) if no Event of Default or Default shall exist, or at any time
with or without notice after the occurrence of an Event of Default or Default,
each Borrower shall, and shall cause each of its Foreign Subsidiaries to, allow
any representative of the Agent or any Lender to visit and inspect any of the
properties of such Borrower and any of its Foreign Subsidiaries, to examine the
books of account and other records and files of such Borrower and any of its
Foreign Subsidiaries (including, without limitation, the financial statements
(audited and unaudited, to the extent prepared) of each Subsidiary and
information with respect to each business operated by such Borrower and any of
its Foreign Subsidiaries), to make copies thereof and to discuss the affairs,
business, finances and accounts of such Borrower and its Foreign Subsidiaries
with its personnel and accountants. The Agent or any Lender shall also be
permitted to conduct field examinations at Borrowers expense, not more than once
a year if no Event of Default shall have occurred and be continuing and without
limitation if any Event of Default shall have occurred and be continuing. The
Agent and the Lenders inspections are solely for the protection of the Agent and
the Lenders and no action or inaction of the Agent or the Lenders shall
constitute any representation by the Agent or the Lenders that the Borrowers are
in compliance with the terms of any Loan Documents or that the Agent or the
Lenders approve of the Borrowers affairs, business, finances or accounts.
Section 9.21 Exchange of Notes. Upon receipt of a written notice of loss, theft,
destruction or mutilation of a Note and of a letter of indemnity from the
affected Lender or its successors or assigns, and upon surrendering for
cancellation such Note if mutilated (in which event no indemnity shall be
required), each Borrower shall execute and deliver a new Note of like tenor in
lieu of such lost, stolen, destroyed or mutilated Note, as the case may be.
Section 9.22 Compliance with Federal Reserve Regulations. The Loans shall not be
used, in whole or in part, for the purpose of purchasing or carrying any margin
stock, secured directly or indirectly by margin stock, within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System. Following
application of the proceeds of each Loan, not more than 25 percent of the value
of the assets of any Borrower or the Borrowers and their Subsidiaries on a
Consolidated basis, which are subject to the provisions of Section 9.2(a) or
Section 9.6 or subject to any restriction contained in any agreement or
instrument between any Borrower and any Lender or any Affiliate of any Lender,
is represented by margin stock. If requested by the Agent or any Lender, each
Borrower shall complete and sign Part I of a copy of the Federal Reserve Form
U-1 referred to in Regulation U of the Board of Governors of the Federal Reserve
System and deliver such copy to the Agent or such Lender. Neither any Borrower
nor any of its Foreign Subsidiaries, nor any bank acting on any of their behalf,
have taken or will take any action which might cause this Agreement or the Notes
to violate Regulation U or X or any other regulation of the Board of Governors
of the Federal Reserve System, as now or hereafter in effect.

 

- 45 -

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

 

Section 9.23 Limitations on Certain Restrictive Provisions. Each Borrower shall
not, and shall not permit any of its Foreign Subsidiaries to (a), permit or
place any restriction, directly or indirectly, on (i) the payment of dividends
or distributions by any Subsidiary or (ii) the making of advances or other cash
payments by any such Subsidiary or (iii) the transfer by any Subsidiary of any
of its properties or assets, in each case to any Borrower or its Subsidiaries,
or (b) agree with any Person other than Agent and the Lenders that the Borrowers
and/or their Subsidiaries shall not amend the Loan Documents.
Section 9.24 Corporate Separateness. Each Borrower and each of its Foreign
Subsidiaries, on the one hand, shall conduct their business and operations
separate from that of each other and their Affiliates, on the other hand.
Without limiting the generality of the foregoing, each Borrower shall not, and
shall not permit any of its Foreign Subsidiaries, to commingle funds with any
Person that is not a Borrower or a Subsidiary of a Borrower.
Section 9.25 Deposit and Securities Accounts. Each Borrower and its Foreign
Subsidiaries shall at all times maintain their primary demand, time and other
deposit accounts with the Agent or a Lender approved by the Agent in order to
facilitate the making of the Loans and to provide security for repayment of the
Obligations, other than accounts with aggregate deposits of less than $5,000 per
Borrower or payroll accounts (subject to the limitations set forth in clause
(b) of the next sentence). Deposits and investments in securities accounts with
financial institutions, other than as provided above, shall at no time exceed an
aggregate of $200,000, provided that, (a) one account may be maintained in
England, six accounts in China, and six accounts in Mexico, with aggregate
deposits in all such accounts to be limited to $300,000, and (b) amounts in
excess of the aggregate limits stated above may be deposited in employee payroll
accounts (whether domestic or foreign) on any particular day if such excess is
paid as compensation to employees within one day.
Section 9.26 Collateral; Lockbox.
(a) Without limiting the generality of the provisions of Section 9.28 below, at
any time that any Borrower or any of its Foreign Subsidiaries shall (i) acquire
any property which would constitute Collateral, whether real, personal or other
and whether tangible or intangible, (ii) change the location of any property
which would constitute Collateral, (iii) transfer or otherwise issues shares of
capital stock, (iv) change its name, or (v) take any action that would cause the
Agent to fail to have a valid, perfected first priority security interest in all
the property of the Borrowers and the Foreign Subsidiaries and in all the equity
or other ownership interests of the Borrowers and the Foreign Subsidiaries,
subject only to the exceptions explicitly permitted under the terms of this
Agreement and the Security Agreement, or at any time any condition shall exist
which results in such failure of the Agent to be so secured, then each Borrower
shall, and shall cause its Subsidiaries to, take such action as is necessary to
provide such security to the Agent, all at the expense of the Borrowers.

 

- 46 -

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

 

(b) If any Borrower or any of its Foreign Subsidiaries elect at any time to
maintain a lockbox or any other mechanism for the direct deposit or collection
of accounts receivable or from which collected accounts receivable will be swept
into another deposit account, such lockbox or mechanism shall be maintained with
Agent or with a Lender approved by the Agent, and no other Person, and it shall
be maintained pursuant to documentation reasonably satisfactory to Agent.
Section 9.27 Joinder of Subsidiaries. Without limiting the generality of the
provisions of Section 9.28, at any time that any Borrower or any of its Foreign
Subsidiaries forms or acquires any new Subsidiary (a “New Subsidiary”), which
formation or acquisition shall be effected only if no Default or Event of
Default has occurred and is continuing, or would be caused thereby, then the
Borrowers shall, at the time of such formation or acquisition, deliver to the
Agent:
(a) a duly executed joinder in the form of Exhibit F, joining such party to the
applicable Loan Documents (either as a Borrower or a Guarantor);
(b) a perfection questionnaire duly completed by such New Subsidiary;
(c) the results of tax, judgments and other lien searches in form and substance
satisfactory to the Agent, and from such jurisdictions as may be satisfactory to
the Agent, together with U.S. Patent and Trademark Office and Copyright Office
searches of a recent date, in each case, with respect to such New Subsidiary,
showing no Liens except Permitted Liens;
(d) Mortgages on all real property located in the United States owned by such
New Subsidiary, and environmental indemnity agreements with respect thereto;
(e) for each property subject to a Mortgage, (i) title insurance insuring the
priority of the Mortgage, (ii) zoning certification, (iii) a flood
certification, and (iv) a survey, in each case satisfactory to the Agent;
(f) any required governmental consents or other required consents to the
execution, delivery and performance of the Loan Documents, each of which shall
be in form and substance satisfactory to the Agent;
(g) a certificate of such New Subsidiary to which is attached each of the
following certified as such by a duly authorized officer of such New Subsidiary:
(i) a certificate of incumbency with respect to each Authorized Signatory
thereof that signs any Loan Documents;
(ii) a copy of the charter or other organizational documents of such New
Subsidiary, certified by the Secretary of State or similar state official of the
jurisdiction of formation of such New Subsidiary;

 

- 47 -

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

 

(iii) a copy of the bylaws or other constituent documents of such New
Subsidiary;
(iv) a certificate of good standing or subsistence, as the case may be, for such
New Subsidiary, issued as of a recent date by the Secretary of State or similar
state official in the jurisdiction of its organization and in each state in
which such New Subsidiary is qualified to transact business;
(v) a copy of the resolutions, duly adopted by the Board of Directors or other
governing body of such New Subsidiary, authorizing it to execute, deliver and
perform each Loan Document to which it is, or is to be, a party; and
(vi) a copy of any shareholders agreement or similar agreement respecting such
New Subsidiary, if any such agreement exists;
(h) at the request of the Agent, a legal opinion of counsel and special local
counsel in such states as may be reasonably requested by the Agent speaking to
such matters as the Agent may reasonably request; and
(i) such stock certificates and other documentation as shall be necessary or
advisable to perfect the pledge of the equity of the New Subsidiary in favor of
the Agent;
provided that, if such New Subsidiary is a Foreign Subsidiary (A) the foregoing
agreements delivered by the New Subsidiary shall be modified to the extent
necessary that income is not recognized by one or more of the Borrowers due to
the operation of Code Section 956(d), (B) the Agent may waive delivery of one or
more of the required items to the extent that in its discretion such items are
not material, and (C) the Foreign Subsidiary shall execute and deliver a joinder
to the Foreign Subsidiary Guaranty (rather than to this Agreement).
Section 9.28 Further Assurances. Each Borrower; at its own expense, will
promptly execute and deliver or cause to be executed and delivered to the Agent
all such other and further documents, agreements and instruments, and shall
provide, or cause to be provided, to the Agent such additional information, and
shall do or cause to be done such further acts, as may be necessary or proper in
the reasonable opinion of the Agent or any Lender to carry out more effectively
the provisions and purposes of this Agreement ands the other Loan Documents.

 

- 48 -

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

 

ARTICLE 10
DEFAULT
Section 10.1 Events of Default. Each of the following shall constitute an Event
of Default, whatever the reason for such event and whether it shall be voluntary
or involuntary or be effected by operation of law or otherwise:
(a) Any Borrower shall fail to make any payment of principal on the Loans on the
dates when the same shall become due and payable, whether at stated maturity or
at a date fixed for any installment or prepayment thereof or otherwise;
(b) Any Borrower shall fail to make any payment of interest on the Loans or
shall fail to pay the commitment fees or any other amounts owing hereunder
(other than principal of the Loans) or under the other Loan Documents on the
dates when such interest, commitment fees or other amounts shall become due and
payable and such failure continues for more than three (3) Business Days;
(c) Any representation or warranty made in any Loan Document shall prove to have
been incorrect or misleading in any material respect when made or deemed to have
been made;
(d) Any Borrower shall fail (i) to perform or observe any agreement or covenant
contained in Article 7 or Article 9 (other than those sections referred to in
subsection (d)(iii) below) hereof, (ii) to provide any financial statement or
report under Article 8 hereof, and, with respect to this clause (ii) only, such
failure shall not be cured within a period of ten (10) days from the occurrence
thereof, or (iii) to perform or observe any agreement or covenant contained in
Section 9.5, 9.10, 9.13, 9.16, 9.19, 9.21, 9.26 or 9.27 and, with respect to
this clause (iii) only, such failure shall not be cured within a period of ten
(10) days from the occurrence thereof;
(e) Any Borrower or any Subsidiary shall fail to perform or observe any other
agreement or covenant contained in this Agreement or any other Loan Document
other than those referred to in subsections (a), (b), (c) or (d) above, and, if
such failure is capable of being remedied, such failure shall not be cured
within a period of thirty (30) days from the occurrence thereof;
(f) (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness

 

- 49 -

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

 

or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is an Affected Party (as so defined) and, in either event, the Swap
Termination Value owed by such Loan Party or such Subsidiary as a result thereof
is greater than the Threshold Amount;
(g) Any Collateral Document shall at any time after its execution and delivery
for any reason cease to create a valid and perfected first priority security
interest in and to the property purported to be subject to such Collateral
Document;
(h) Judgments, assessments or orders for the payment of money which aggregate at
any time in excess of the Threshold Amount shall be entered against any Borrower
and/or any of its Subsidiaries by a court or other tribunal of competent
jurisdiction, which judgments, assessments or orders are not discharged,
vacated, bonded or stayed pending appeal within a period of thirty (30) days
from the date of entry;
(i) Any Borrower or any of its Subsidiaries shall suspend or discontinue its
business, shall make an assignment for the benefit of creditors or a composition
with creditors, shall generally not be paying their debts as they mature, shall
admit their inability to pay their debts as they mature, shall file a petition
in bankruptcy, shall become insolvent (howsoever such insolvency may be
evidenced), shall be adjudicated insolvent or bankrupt, shall petition or apply
to any tribunal for the appointment of any receiver, custodian, liquidator or
trustee of or for them or any substantial part of their property or assets,
shall commence any proceeding relating to them under any bankruptcy,
reorganization, arrangement, readjustment of debt, receivership, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or if there shall be commenced against any Borrower or any of its
Subsidiaries, any such proceeding and the same shall not be dismissed within
sixty (60) days after an order, judgment or decree approving the petition in any
such proceeding shall be entered against any Borrower or any of its
Subsidiaries; or if any Borrower or any of its Subsidiaries shall by any act or
failure to act indicate their consent to, approval of or acquiescence in; any
such proceeding or any appointment of any receiver, custodian, liquidator or
trustee of or for it or for any substantial part of its property or assets; or
if any court of competent jurisdiction shall assume jurisdiction with respect to
any such proceeding and the same shall not be dismissed within sixty (60) days;
or if a receiver or a trustee or other officer or representative of a court,
governmental office or agency, shall, under color of legal authority, take and
hold possession of any substantial part of the property or assets of any
Borrower or any of its Subsidiaries, and shall not have relinquished possession
within sixty (60) days; or if any Borrower or any of its Subsidiaries shall have
concealed, removed, or permitted to be concealed or removed, any part of its
property, with intent to hinder, delay or defraud its creditors, or any of them,
or shall have made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law;

 

- 50 -

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

 

(j) There shall be any Accumulated Funding Deficiency, whether or not waived,
with respect to any Plan maintained by any Borrower or any of its Subsidiaries
or any ERISA Affiliate, or to which any Borrower or any of its Subsidiaries or
any ERISA Affiliate has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
such Plan; or PBGC shall institute proceedings to terminate any such Plan; or
any Borrower or any of its Subsidiaries or any ERISA Affiliate shall incur any
liability to PBGC in connection with the termination of any such Plan or their
withdrawal from any such Plan with respect to which they are substantial
employer within the meaning of Section 4063(b) of ERISA; or any Plan or trust
created under any Plan of any Borrower or any of its Subsidiaries or any ERISA
Affiliate shall engage in a Prohibited Transaction which would subject any such
Plan, any trustee created thereunder, any trustee or administrator thereof, or
any party dealing with any such Plan or trust to the tax or penalty on
Prohibited Transactions imposed by Section 502 of ERISA or Section 4975 of the
Code; or any Borrower or any Subsidiary or ERISA Affiliate fails to make a
quarterly installment to a Plan as required under Section 412(m) of the Code if
such failure results in a lien in favor of the Plan under Section 412(n) of the
Code; or any Borrower or any Subsidiary or ERISA Affiliate incurs any Withdrawal
Liability which, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Change (or liability in excess of the Threshold
Amount);
(k) If there shall occur a Material Adverse Change that, in the reasonable
judgment of the Agent, could be expected to result in any Borrower’s failure to
pay the Obligations when due;
(l) Any Loan Document shall cease to be a legal, valid and binding agreement,
enforceable against each Loan Party signatory thereto, in accordance with its
terms or shall in any way be declared ineffective or inoperative or shall in any
way be challenged or contested by any Loan Party;
(m) Any attachment or garnishment proceeding or similar type of action shall be
commenced against or involving the property of any Borrower or any of its
Subsidiaries, which proceeding or action could affect or involve any deposits
held by any Borrower or any of its Subsidiaries with any Lender; or
(n) A Change of Control shall occur.
Section 10.2 Remedies.
(a) Termination of Obligation to Make Loans. Without limiting the generality of
Section 5.3, at any time after an Event of Default, the Lenders shall have no
obligation to make any Loans or otherwise extend credit hereunder.
(b) Acceleration. At any time an Event of Default specified in Section 10.1,
above (other than an Event of Default under subsection (i) thereof) shall have
occurred and shall be continuing, the Agent may, by providing written notice to
the Parent Borrower, declare the principal, interest and other amounts due
hereunder and under the Notes and all other Obligations to be forthwith due and
payable, without presentment, demand, protest or notice of protest, notice of
dishonor or other notice of any kind, all of which are hereby expressly waived,
anything in any Loan Document to the contrary notwithstanding.

 

- 51 -

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

 

(c) Automatic Acceleration in Connection with Bankruptcy or Insolvency
Proceeding. Upon the occurrence of an Event of Default specified in subsection
(i) of Section 10.1 above, all principal, interest and other amounts due
hereunder and under the Notes, and all other Obligations, shall be immediately
due and payable, all without any action by the Agent or the Lenders and without
presentment, demand, protest or other notice of protest or other notice of
dishonor of any kind, all of which are expressly waived, anything in the Loan
Documents to the contrary notwithstanding.
(d) Appointment of Receiver. Upon acceleration of the Notes as provided in
paragraphs (b) or (c) above, the Agent shall have the right to the appointment
of a receiver for the properties and assets of any Borrower and its
Subsidiaries. Each Borrower, for itself and on behalf of its Subsidiaries,
hereby consents to such right and such appointment and hereby waives any
objection it or any Subsidiary may have thereto or the right to have a bond or
other security posted by, or on behalf of, the Agent, in connection therewith.
(e) Additional Remedies. In addition to the remedies set forth above, the Agent
and the Lenders shall have all of the post-default rights granted to it under
any of the Loan Documents and under Applicable Law.
Section 10.3 Cash Collateral. If (a) any Event of Default specified in Section
10.1(i) shall occur, (b) the Obligations shall have otherwise been accelerated
pursuant to Section 10.2, or (c) the Commitment shall have been terminated
pursuant to Section 10.2, then, without any request or the taking of any other
action by Agent, Borrowers shall immediately comply with the provisions of
Section 1.4(e) with respect to the deposit of Cash Collateral to secure the
existing Letter of Credit Liabilities and future payment of related fees.
Section 10.4 Application of Funds. After the exercise of remedies provided for
in Section 10.2 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the Section 10.3), any amounts received on
account of the Obligations shall be applied by the Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Agent and amounts payable under Article 4)
payable to the Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the Issuer (including fees, charges and
disbursements of counsel to the respective Lenders and the Issuer (including
fees and time charges for attorneys who may be employees of any Lender or the
Issuer) arising under the Loan Documents and amounts payable under Article 4,
ratably among them in proportion to the respective amounts described in this
clause Second payable to them;

 

- 52 -

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

 

Third, to payment of that portion of the Obligations constituting accrued and
unpaid Letter of Credit Fees and interest on the Loans, Reimbursement
Obligations and other Obligations arising under the Loan Documents, ratably
among the Lenders and the Issuer in proportion to the respective amounts
described in this clause Third payable to them;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, Reimbursement Obligations and amounts owing under
Secured Hedge Agreements and Secured Cash Management Agreements, ratably among
the Lenders, the Issuer, the Hedge Banks and the Cash Management Banks, in
proportion to the respective amounts described in this clause Fourth held by
them;
Fifth, to the Agent for the account of the Issuer, to Cash Collateralize any
portion of Reimbursement Obligations comprised of the aggregate undrawn amount
of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrowers or as otherwise required by law.
Subject to Section 1.4(e), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE 11
DEFINITIONS
Section 11.1 Defined Terms. For the purposes of this Agreement, the following
terms shall have the meanings specified in this Article 11 unless the context
otherwise requires:
“Acquisition” means (whether by purchase, lease, exchange, issuance of equity or
debt securities, merger, reorganization or any other method) (a) any acquisition
by any Borrower or any of its Subsidiaries of an interest in any other Person
which shall then become Consolidated with any Borrower or any such Subsidiary in
accordance with GAAP, or (b) any acquisition by any Borrower or any of its
Subsidiaries of all or any substantial part of the assets of any other Person.
“Accumulated Funding Deficiency” means any accumulated funding deficiency as
defined in Section 302(a) of ERISA.
“Administrative Questionnaire” means an Administrative Questionnaire in such
form as approved by the Agent.

 

- 53 -

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

 

“Affiliate” means, with respect to a Person, a spouse of such Person, any
relative (by blood, adoption or marriage) of such Person within the third
degree, any director, officer or employee of such Person, any other Person of
which such first Person is a partner, member, director, officer or employee, and
any other Person directly or indirectly controlling or controlled by or under
common control with such first Person. For purposes of this definition “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person, means the possession,
direct or indirect, of the power to direct, or cause the direction of, the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise. Without limiting the generality of the
foregoing, (a) Steel shall be deemed to be an “Affiliate” of the Borrowers, and
(b) any Person who has the direct or indirect beneficial ownership of more than
thirty percent (30%) of the voting securities or voting equity of another Person
shall be deemed an Affiliate of such other Person.
“Agreement” means this Amended and Restated Revolving Credit Agreement, as the
same may be amended, modified or supplemented, from time to time.
“Alternative Currency” means any Approved Currency other than Dollars.
“Alternative Currency Letter of Credit” means a Letter of Credit denominated in
an Alternative Currency.
“Applicable Law” means, with respect to any Person, all provisions of
constitutions, laws, statutes, ordinances, rules, treaties, regulations,
permits, licenses, approvals, interpretations and orders of court or
Governmental Authorities and all orders of arbitrators with appropriate
jurisdiction (by contract or otherwise), and decrees of all courts and
arbitrators in proceedings or actions to which the Person is a party or by which
it (or any of its property) is bound.
“Applicable Margin” means the interest rate margin applicable to the Loans as
follows:

                              Revolving Credit Loans Then the          
Applicable Margin is   Tier   If the Total Leverage Ratio is:   LIBOR Rate+    
Base Rate+   1  
Less than or equal to 1.50 to 1.00
    1.75 %     0 % 2  
Greater than 1.50 to 1.00, but less than or equal to 2.50 to 1.00
    2.25 %     0.50 % 3  
Greater than 2.50 to 1.00, but less than or equal to 3.00 to 1.00
    2.75 %     0.75 % 4  
Greater than 3.00 to 1.00
    3.25 %     1.00 %

On the date hereof the Applicable Margin shall be set at Tier 1 above, and
thereafter shall be determined and adjusted quarterly on the date (each a
“Adjustment Date”) ten (10) Business Days after the date by which the Parent
Borrower is required to provide a Compliance Certificate pursuant to Section 8.2
for the most recently ended fiscal quarter of the Parent Borrower; provided,
however, that if the Parent Borrower fails to provide the Compliance Certificate
as required by Section 8.2 for the most recently ended fiscal quarter of the
Parent Borrower preceding the applicable Adjustment Date, the Applicable Margin
from such Adjustment Date shall be based on Tier 4 until such time as an
appropriate Compliance Certificate is provided, at which time the Tier shall be
determined by reference to the Total Leverage Ratio as of the last day of the
most recently ended fiscal quarter of the Parent Borrower preceding such
Adjustment Date. The Applicable Margin shall be effective from one Adjustment
Date until the next Adjustment Date. Any adjustment in the Applicable Margin
shall be applicable to all Loans then existing or subsequently made or issued.

 

- 54 -

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

 

“Approved Currencies” means Dollars and Euros (each, an “Approved Currency”),
and such other currencies as shall be requested by the Borrowers to be an
Approved Currency hereunder subject to the approval of all Lenders, in their
sole and absolute discretion, in each case constituting freely transferable
lawful money of the country of issuance and in the case of each such currency
(other than Dollars) is readily transferable and convertible into Dollars in the
international interbank market.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
“Assignee” has the meaning set forth in Section 13.6(b).
“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another and/ or two or more Approved Funds managed by the same investment
advisor.
“Assignment and Acceptance Agreement” means an Assignment and Acceptance
Agreement in substantially the form of Exhibit E attached hereto.
“Authorized Signatory” means, with respect to any documents, agreements or
instruments, such officer(s) of a Person as may be duly authorized by its Board
of Directors, its bylaws or similar authority to execute the relevant documents,
agreements or instruments on behalf of such Person.
“Available Commitment” means that portion of the Commitment which, at any date
of determination, the Borrowers are eligible to borrow under the terms of this
Agreement.
“Base Rate” means for any day a fluctuating rate per annum equal to the higher
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate.” The “prime rate” is a rate set by Bank of America based
upon various factors including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
“Base Rate Loan” means any Loan that bears interest based on the Base Rate.
“Borrower” means each Borrower referred to in the preamble hereto, together with
such successors and assigns thereof as are permitted pursuant to the terms of
Section 13.6 below, or joined pursuant to Section 9.27 above.

 

- 55 -

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

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, the state in which the Agent’s office is located, and, if such day
relates to any LIBOR Loan, means any such day on which dealings in Dollar
deposits are conducted by and between banks in the London interbank eurodollar
market.
“Business Plan” means, for any fiscal year of the Parent Borrower, a detailed
budget by each operating Subsidiary setting forth the amounts budgeted on a
quarterly basis for revenues and operating expenses by category for each
Subsidiary as well as the amount of Capital Expenditures, along with a
comparison of the actual amounts (and, if applicable, the budgeted amounts) of
such items for the preceding year.
“Calculation Date” with respect to each Alternative Currency, means the last day
of each calendar month (or, if such day is not a Business Day, the next
succeeding Business Day) and during the occurrence and continuation of an Event
of Default, such other days from time to time as the Agent shall designate as a
“Calculation Date”, provided that each of the following shall also be a
“Calculation Date”: (i) the Business Day preceding each date on which a
participation in an Alternative Currency Letter of Credit or Loan denominated in
an Alternative Currency is calculated pursuant to Section 1.4(f) or a
reimbursement obligation with respect to an Alternative Currency Letter of
Credit or Loan denominated in an Alternative Currency is calculated pursuant to
Section 3.6; (ii) the Business Day preceding the Business Day on which any fee
payable pursuant to Section 3.4 is payable in respect of an Alternative Currency
Letter of Credit or a Loan denominated in an Alternative Currency; and (iii) the
date of issuance or amendment of a Letter of Credit in an Alternative Currency
or the making of a Loan denominated in an Alternative Currency.
“Capital Expenditures” means expenditures for the purchase of assets of
long-term use which are or should be capitalized in accordance with GAAP.
“Capital Lease” means, with respect to any Person, any lease which has been, or
should be, in accordance with GAAP, accounted for as a capital lease in respect
of which such Person is liable as lessee.
“Capital Lease Obligation” means that portion of any obligation of a Person as
lessee under a Capital Lease which at the time appears, or in accordance with
GAAP should appear, on the balance sheet of such Person or in a note to such
balance sheet.
“Capital Securities” means, with respect to any Person, any and all shares,
interests (including partnership interests or limited liability company
interests), participations or other equivalents (however designated, whether
voting or non-voting) of such Person’s capital, whether now outstanding or
issued after the date hereof.
“Cash Collateralize” means to pledge and deposit with or deliver to the Agent,
for the benefit of the Issuer and the Lenders, as collateral for the Letter of
Credit Liabilities, cash or deposit account balances pursuant to documentation
in form and substance satisfactory to the Agent and the Issuer (which documents
are hereby consented to by the Lenders). Derivatives of such term have
corresponding meanings.

 

- 56 -

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

 

“Cash Equivalent” means:
(a) securities issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided, that the
full faith and credit of the United States of America is pledged in support
thereof);
(b) securities issued or directly and fully guaranteed or insured by any state
of the United States of America or any agency or instrumentality thereof and
that are rated within one of the two highest ratings for such securities by
Standard & Poor’s Corporation or Moody’s Investors Service, Inc.;
(c) demand and time deposits, certificates of deposit, bankers acceptances and
commercial paper issued by the parent corporation of any domestic commercial
bank of recognized standing having capital and surplus in excess of
$500 million;
(d) commercial paper issued by Persons rated at least A-2 or the equivalent
thereof by Standard & Poor’s Corporation or at least P-2 or the equivalent
thereof by Moody’s Investors Service, Inc.;
(e) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in (a) through (d) above entered
into with any financial institution meeting the qualifications specified in
(d) above; and
(f) money market funds, substantially all of the assets of which constitute Cash
Equivalents of the kinds described in (a) through (e) of this definition, and in
the case of each of (b), (c), (d) and (e) maturing within one year after the
date of acquisition.
“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.
“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.
“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.
“CFC” means a controlled foreign corporation as defined in Section 956 of the
Code.
“Change of Control” means any of:
(a) any “person” or “group” (each as used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), other than any person or group which was on April 14, 2008,
the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly
or indirectly, of outstanding shares of common stock of Parent Borrower (or
securities convertible into or exchangeable for such stock) representing twenty
percent (20%) or more of the outstanding common stock of the Parent Borrower as
set forth in the Parent Borrower’s Proxy Statement dated April 14, 2008, for the
Parent Borrower’s 2008 Annual Meeting of Shareholders, either (A) becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of voting Stock of the Parent Borrower (or securities convertible
into or exchangeable for such voting Stock) representing thirty percent (30%) or
more of the combined voting power of all voting Stock of the Parent Borrower (on
a fully diluted basis) or (B) otherwise has the ability, directly or indirectly,
to elect a majority of the board of directors of the Parent Borrower;

 

- 57 -

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

 

(b) During any period of two consecutive years, individuals who at the beginning
of such period constituted the board of directors (together with any new
directors whose election by such board of directors or whose nomination for
election by the shareholders of the Parent Borrower was approved by a vote of 66
2/3% of the directors of the Parent Borrower at the time of such approval who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) of Parent Borrower cease for
any reason to constitute a majority of the board of directors then in office;
(c) Parent Borrower shall cease to own 100% of the outstanding equity or other
ownership interests of the Subsidiary Borrowers, except as permitted under
Section 9.9;
(d) The Agent shall fail to have a valid, first priority Lien in all issued and
outstanding shares of capital stock of each Borrower (other than Parent
Borrower) and its Subsidiaries (except to the extent provided in Section 9.9);
(e) Any Borrower or any Subsidiary adopts a plan of liquidation, except as
permitted under Section 9.7;
(f) any merger or consolidation of Parent Borrower with or into another Person
or the merger of another Person with or into Parent Borrower, unless in the case
of a merger or consolidation transaction, holders of securities that represented
100% of the aggregate voting power of Parent Borrower’s voting stock immediately
prior to such transaction (together with holders of nonvoting securities that
were convertible into Borrower’s voting stock immediately prior to such
transaction) own directly or indirectly at least a majority of the aggregate
voting power of the voting stock of the surviving Person in such merger or
consolidation transaction immediately after such transaction or have the right
or ability by voting power, contract or otherwise to elect or designate for a
election a majority of Parent Borrower’s Board of Directors;
(g) the sale of all or substantially all of Parent Borrower’s assets (determined
on a consolidated basis) to another Person; or
(h) There exists any “change of control” or “change in control” as defined under
any agreement to which any Borrower or any Subsidiary is party or is subject.
For purposes of this definition, “voting stock” means capital stock or other
ownership interests of any class or classes of a corporation or another entity
the holders of which are entitled to elect a majority of the corporate directors
or Persons performing similar functions.
“COBRA” means group health plan continuation coverage requirements of
Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.

 

- 58 -

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

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any regulations, revenue rulings or technical information releases issued
thereunder.
“Collateral” means all property which is, or is to be, subject to the Lien
granted by the Collateral Documents.
“Collateral Documents” means the Security Agreement, the Mortgages, the IP
Security Agreement, the Uniform Commercial Code financing statements, and all
other Loan Documents which purport to grant or perfect a Lien in favor of the
Agent, on behalf of the Lenders, securing the Obligations.
“Commitment” means the obligation of the Lenders pursuant to the terms hereof to
make Revolving Credit Loans to the Borrowers in an initial aggregate principal
amount outstanding at any time not to exceed Sixty Million Dollars
($60,000,000), from time to time until the Termination Date. The amount of the
Commitment may be reduced pursuant to the terms hereof.
“Commitment Fee Margin” means the corresponding percentages set forth below:

                      Then the Commitment Fee   Tier   If the Total Leverage
Ratio is:   Margin is   1  
Less than or equal to 1.50 to 1.00
    0.35 % 2  
Greater than 1.50 to 1.00, but less than or equal to 2.50 to 1.00
    0.45 % 3  
Greater than 2.50 to 1.00, but less than or equal to 3.00 to 1.00
    0.60 % 4  
Greater than 3.00 to 1.00
    0.75 %

On the date hereof the Commitment Fee Margin shall be set at Tier 1 above, and
thereafter shall be determined and adjusted quarterly on each Adjustment Date;
provided, however, that if the Parent Borrower, fails to provide the Compliance
Certificate as required by Section 8.2 for the most recently ended fiscal
quarter of the Parent Borrower preceding the applicable Adjustment Date, the
Commitment Fee Margin from such Adjustment Date shall be based on Tier 4 until
such time as an appropriate Compliance Certificate is provided, at which time
the Tier shall be determined by reference to the Total Leverage Ratio as of the
last day of the most recently ended fiscal quarter of the Borrowers preceding
such Adjustment Date. The Commitment Fee Margin shall be effective from one
Adjustment Date until the next Adjustment Date. Any adjustment in the Applicable
Margins shall be applicable to all Loans then existing or subsequently made or
issued.
“Consideration” means an amount equal to the sum of (a) the aggregate fair
market value of any securities and any other non-cash consideration, (including,
without limitation, any joint venture interest delivered to, or retained by, the
applicable selling entity), issued or delivered or to be issued or delivered and
any cash or deferred consideration paid or payable in connection with an
Acquisition, and (b) the amount of all indebtedness and preferred stock of the
selling entity which is assumed or acquired by the applicable Borrower or
retired or deceased in connection with an Acquisition. The fair market value of
any securities issued and any other non-cash consideration delivered or retained
in connection with an Acquisition shall be the value stated in the agreements
governing such Acquisition.

 

- 59 -

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

 

“Consolidated” means, with respect to any Person and any specified Subsidiaries,
the consolidation of financial statements of such Person and, such Subsidiaries
in accordance with GAAP.
“Default” means any event which, with the giving of notice or passage of time,
or both, would constitute an Event of Default.
“Default Rate” is defined in Section 3.3.
“Disqualified Stock” means, with respect to any Person, any Capital Security
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) (a) matures or is mandatorily redeemable for
any reason, (b) is convertible or exchangeable for Indebtedness or Disqualified
Stock, or (c) is redeemable at the option of the holder thereof, in whole or in
part, in each case on or prior to the first anniversary of the stated maturity
of the Notes.
“Dollar Equivalent” means, with respect to any Alternative Currency, on the date
of determination thereof, the amount of Dollars which could be purchased with
the amount of such Alternative Currency involved in such computation at the spot
rate at which such Alternative Currency may be exchanged into Dollars as set
forth on such date on (i) the applicable Reuters pages, or (ii), if such rate is
not set forth on such Reuters pages, on the applicable Telerate Service pages,
or (iii) if such rate does not appear on such Reuters or Telerate Service pages,
at the spot exchange rate therefor as determined by the Agent, in each case as
of 11:00 A.M. (London time, as applicable, or such other local time as the Agent
shall deem appropriate) on such date of determination thereof.
“Dollars” and “$” means dollars in lawful currency of the United States.
“EBIT” means, for any Person for any period, the Net Income of such Person for
such period (before deducting fees either paid in cash or deferred during the
applicable period under the Management Agreement referenced in Section 9.5) plus
the sum of the following (to the extent deducted in the computation of such Net
Income):
(a) Interest Expense; and
(b) income taxes including (with respect to each Subsidiary Borrower) any
amounts payable or paid to Parent Borrower for such taxes (but, if there is a
net tax benefit, that should be deducted from Net Income in calculating EBIT).

 

- 60 -

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

 

“EBITDA” means, for any Person for any period:
(a) the Net Income of such Person for such period (before deducting fees either
paid in cash or deferred during the applicable period under the Management
Agreement); plus
(b) the sum of the following (to the extent deducted in the computation of such
Net Income):
(i) depreciation expense;
(ii) amortization expense (including amortization expense associated with
purchase accounting write-up of tangible and intangible assets) and deferred
financing costs;
(iii) Interest Expense;
(iv) income taxes, including (with respect to each Subsidiary Borrower) any
amounts payable or paid to Parent Borrower for such taxes (but, if there is a
net tax benefit, that should be deducted from Net Income in calculating EBITDA);
(v) restructuring charges (as determined in accordance with GAAP) relating to
the consolidation of operations or reduction in head-count which have been
approved, in writing, by the Majority Lenders;
(vi) all other non-cash charges reducing Net Income for such period
(A) including, but not limited to, (1) non-cash charges attributable to the
grant, exercise or repurchase of options for or shares of capital stock to or
from employees of such Person and its Consolidated Subsidiaries determined in
accordance with GAAP, (2) unrealized losses resulting solely from the marking to
market of derivative securities or securities held in deferred compensation
plans, (3) non-cash charges associated with the amortization or write-off of
deferred financing costs and debt issuance costs of such Person and its
Consolidated Subsidiaries during such period, and (4) non-cash charges
associated with the purchase accounting write-up of inventory, but (B) excluding
non-cash charges that require an accrual of or a reserve for cash charges for
any future periods and normally occurring accruals such as reserves for accounts
receivable; and
(vii) any premium or penalty paid in connection with redeeming or retiring
Indebtedness of such Person and its Consolidated Subsidiaries prior to the
stated maturity thereof pursuant to the agreements governing such Indebtedness;
less
(c) the sum of the following:
(i) all non-cash items increasing Consolidated Net Income for such period
(including unrealized gains resulting solely from the marking to market of
derivative securities or securities held in deferred compensation plans); and
(ii) the amount of all cash payments made by such Person or any of the
Subsidiaries during such period to the extent such payments relate to non-cash
charges that were added back in determining EBITDA for such period or any prior
period.

 

- 61 -

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

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 13.6(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 13.6(b)(iii)).
“Eligible Institution” means any federally chartered or state chartered bank or
any financial institution whose deposits are insured by the Federal Deposit
Insurance Corporation.
“Environmental Indemnity Agreement” means that certain Environmental Indemnity
Agreement from the Borrowers, dated the date hereof, together with any other
environmental indemnity agreement executed and delivered pursuant to the terms
of this Agreement, as such environmental indemnity agreements may be amended,
restated, modified or supplemented from time to time.
“Environmental Laws” means all Applicable Laws relating to the pollution or
protection of the environment and human health and safety, including, without
limitation, Applicable Laws relating to the discharge, emission, spill,
leaching, disposal, release, or threatened release of Hazardous Substances to
air, water or land, or to the withdrawal or use of ground water, or to the use,
handling, disposal, treatment, storage or management of Hazardous Substances,
including, without limitation, CERCLA and the Resource Conservation and Recovery
Act of 1976, as amended.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rules and regulations issued thereunder.
“ERISA Affiliate” means (a) any corporation included with any Borrower in a
controlled group of corporations within the meaning of Section 414(b) of the
Code, (b) any trade or business (whether or not incorporated) which is under
common control with the Borrowers within the meaning of Section 414(c) of the
Code, (c) any member of an affiliated service group of which any Borrower is a
member within the meaning of Section 414(m) of the Code, and (d) any other
entity required to be aggregated with any Borrower pursuant to Section 414(o) of
the Code.
“Event of Default” means any of the events specified in Section 10.1, provided
that any requirement for notice or lapse of time has been satisfied.
“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; 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, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Agent.

 

- 62 -

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

 

“Fee Letter” means the letter agreement, dated August 1, 2008, among the Parent
Borrower, Banc of America Securities LLC and the Agent.
“Foreign Subsidiary” means any Subsidiary of any Borrower which (a) is not
organized under the laws of the United States, any state thereof or the District
of Columbia and (b) conducts substantially all of its business operations
outside the United States of America.
“Foreign Subsidiary Guaranty” means that certain Amended and Restated Guaranty,
dated the date hereof, providing for a Guarantee of the Obligations from each
Foreign Subsidiary in favor of the Agent, as may be amended, restated, modified
or supplemented from time to time.
“Fronting Fee” has the meaning specified in Subsection 1.4(b).
“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
“GAAP” means generally accepted accounting principles in the United States,
which, as to any Borrower and its Subsidiaries, shall be consistently applied
with those applied in the preparation of the financial statements referred to in
Section 5.1.4(a), with such changes as may be agreed pursuant to Section 11.2.
“Governmental Authority” means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, including, without limitation, any central bank or comparable agency
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
“Guarantee” or “Guaranteed,” as applied to any Person (the “guarantor”) means
and includes any direct or indirect liability, contingent or otherwise, of such
guarantor with respect to any indebtedness, lease, dividend or other financial
or performance obligation, of another Person (“primary obligor”), including, but
not limited to (a) any direct or indirect guaranty, endorsement (other than for
collection or deposit in the ordinary course of business), discount or sale with
recourse by such guarantor of the obligations of the primary obligor and (b) any
agreement (contingent or otherwise) to (i) purchase, repurchase or otherwise
acquire an obligation of the primary obligor or any security therefor,
(ii) provide funds for the payment or discharge of such obligation (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), (iii) maintain the solvency or financial condition of the primary
obligor, or (iv) make payment for any products, materials, supplies or services
tendered or rendered to the primary obligor, in any case if the purpose or
intent of such agreement or arrangement is to provide assurance that the primary
obligor’s obligation will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation will be
protected against loss in respect thereof. In addition to the other restrictions
on Guaranties set forth in this Agreement, no Guarantee shall be permitted by
this Agreement unless the maximum dollar amount of the obligation being
guaranteed is readily ascertainable by the terms of such obligation or the
agreement or instrument evidencing such Guarantee specifically limits the dollar
amount of the maximum exposure of the guarantor thereunder. For purposes of
making computations under this Agreement, the amount of any Guarantee made
during any period shall be the aggregate amount of the obligation guaranteed (or
such lesser amount as to which the maximum exposure of the guarantor shall have
been specifically limited), less any amount by which the guarantor may have been
discharged with respect thereto (including any discharge by way of a reduction
in the amount of the obligation guaranteed).

 

- 63 -

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

 

“Guarantor” means each Foreign Subsidiary party to the Foreign Subsidiary
Guaranty (other than, as of any date, any Foreign Subsidiary as to which the
Foreign Subsidiary Guaranty is not, pursuant to Section 15 thereof, effective).
“Hazardous Substances” means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required, or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or filtration of
which may be restricted, prohibited or penalized by any Environmental Law
(including, without limitation, petroleum products, asbestos, urea formaldehyde
foam insulation and polychlorinated biphenyls and any substance defined as a
“hazardous substance” under CERCLA).
“Hedge Bank” means any Person that, at the time it enters into a Secured Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Secured Hedge Agreement.
“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended from time to time.
“Indebtedness” means, with respect to any Person (without duplication):
(a) all indebtedness for borrowed money of such Person;
(b) all obligations of such Person for the deferred purchase price of capital
assets or other property or services (other than accounts payable incurred in
the ordinary course of business) to the extent such liabilities and obligations
would appear as a liability upon the Consolidated balance sheet of such
specified Person in accordance with GAAP;
(c) all obligations of such Person evidenced by notes, bonds, debentures or
other instruments;
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property) and
all other obligations secured by a Lien on the property or assets of such
Person;
(e) all Capital Lease Obligations of such Person;

 

- 64 -

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

 

(f) all obligations, contingent or otherwise, of such Person under acceptances,
letters of credit or similar facilities;
(g) all obligations of such Person in respect of Disqualified Stock or other
obligations of such Person to purchase, redeem, retire or otherwise acquire for
value any capital stock of such Person or any warrants, rights or options to
acquire such capital stock, which obligations shall be valued, in the case of
redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends and, in the case of
other such obligations, at the amount that, in light of all the facts and
circumstances existing at the time of determination, is reasonably expected to
be payable;
(h) interest accrued but not paid on the scheduled date;
(i) all Guarantees of such Person;
(j) all Indebtedness referred to in clauses (a) through (i) above secured by (or
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness;
(k) all fixed (but not variable) payments required by such Person under
non-compete agreements;
(l) net obligations of such Person under any Swap Contract; and
(m) all obligations of such Person that are the functional equivalent of the
Indebtedness referred to in clauses (a) through (l) above.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.
“Indemnified Person” means the Agent, the Issuer, the other Lenders and their
officers, agents, employees, attorneys, consultants and Affiliates and any
successors, assigns and participants thereof.
“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, (a) all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, registrations and recordings
thereof, and all applications in connection therewith, including, without
limitation, all registrations, recordings and applications in the United States
Copyright Office, (b) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof and
all goodwill associated therewith, and all applications for letters patent of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, (c) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, (d) all rights to obtain any reissues or extensions of
the foregoing and (e) all licenses for any of the foregoing.

 

- 65 -

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

 

“Interest Coverage Ratio” means, as of any date, the ratio of (a) EBIT, for the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date, to (b) Interest Expense (whether or not paid), payable during the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date.
“Interest Expense” means, with respect to any Person for any period, all cash
interest expense (including imputed interest with respect to Capitalized Lease
Obligations and accreted interest on zero coupon bonds and similar obligations)
paid, accrued or accreted, or to be paid, accrued or accreted, with respect to
any Indebtedness of such Person during such period pursuant to the terms of the
agreement respecting such Indebtedness, together with all fees (including,
without limitation, commitment or unused fees) payable in respect thereof, all
as calculated in accordance with GAAP, excluding amortization or write-off or
deferred financing cost and debt issuance cost of such Person for such period.
“Interest Period” means a period commencing, in the case of the first Interest
Period applicable to a LIBOR Loan, on the day of the making of, or conversion
into, such Loan, and, in the case of each subsequent, successive Interest Period
applicable thereto, on the last day of the immediately preceding Interest
Period, and ending on the same day in the first, second, third or sixth calendar
month thereafter, except that:
(a) any Interest Period that would otherwise 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
(b) any 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 in which such Interest Period ends) shall end on the last Business Day of
the calendar month in which such Interest Period ends.
“Inventory” means “inventory” (as defined in Article 9 of the UCC) of Borrowers
and their Subsidiaries.
“Investment” means, as applied to any Person, any direct or indirect purchase or
other acquisition by such Person of stock or other securities of another Person,
or any direct or indirect loan, advance or capital contribution by such Person
to any other Person, including all Indebtedness and accounts receivable from
such other Person which are not current assets or did not arise from sales to
such other Person in the ordinary course of business.

 

- 66 -

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

 

“IP Security Agreement” means that certain Amended and Restated IP Security
Agreement from certain Loan Parties, dated the date hereof, together with any
other IP security agreement executed and delivered pursuant to the terms of the
Security Agreement, as such security agreements may be amended, restated,
modified or supplemented from time to time.
“Issuer” means Bank so long as it is a Lender, or if Bank is no longer a Lender,
then a Lender designated by the Parent Borrower as Issuer and acceptable to the
Agent.
“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the Issuer and any Borrower (or any Subsidiary) or in favor of the
Issuer and relating to such Letter of Credit.
“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lender.
“Lender Required Payment” has the meaning set forth in Section 4.7.
“Letter of Credit” means a standby letter of credit issued for the account of
Borrowers or any of their Subsidiaries by Issuer which expires by its terms
within one year after the date of issuance and in any event at least thirty
(30) days prior to the Revolving Credit Termination Date. Notwithstanding the
foregoing, a Letter of Credit may provide for automatic extensions of its expiry
date for one or more successive one (1) year periods provided that the Issuer
has the right to terminate such Letter of Credit on each such annual expiration
date and no renewal term may extend the term of the Letter of Credit to a date
that is later than the thirtieth (30th) day prior to the Revolving Credit
Termination Date.
“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the Issuer.
“Letter of Credit Facility” means the facility extended pursuant to Section 1.4
for the Borrowers to request Letters of Credit from Issuer.
“Letter of Credit Fees” has the meaning set forth in Section 1.4(b).
“Letter of Credit Liabilities” means, at any time of calculation, the Dollar
Equivalent of the sum of (i) the amount then available for drawing under all
outstanding Letters of Credit (without regard to whether any conditions to
drawing thereunder can then be met), plus (ii) the aggregate unpaid amount of
all reimbursement obligations in respect of previous drawings made under such
Letters of Credit.
“Letter of Credit Sublimit” means an amount equal to $10,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Revolving Credit
Facility.
“LIBOR Loan” means any Loan bearing interest at a rate based on the LIBOR Rate.

 

- 67 -

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

 

“LIBOR Rate” means, for any Interest Period with respect to a Eurodollar Rate
Loan, the rate per annum equal to the British Bankers Association LIBOR Rate
(“BBA LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Agent from time to time)
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
“LIBOR Rate” for such Interest Period shall be the rate per annum determined by
the Agent to be the rate at which deposits in Dollars for delivery on the first
day of such Interest Period in same day funds in the approximate amount of the
LIBOR Rate Loan being made, continued or converted by Bank of America and with a
term equivalent to such Interest Period would be offered by Bank of America’s
London Branch to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
“Lien” means any mortgage, lien, pledge, adverse claim, assignment, charge,
security interest, title retention agreement, separate beneficial interest,
levy, execution, seizure, attachment, garnishment or other encumbrance in
respect of any property, whether created by statute, contract, common law or
otherwise, and whether or not choate, vested or perfected.
“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Foreign Subsidiary Guarantee, (d) the Collateral Documents, (e) the Fee Letter,
(f) each Issuer Document, (g) each Secured Hedge Agreement, (h) each Secured
Cash Management Agreement, (i) the Environmental Indemnity Agreement, and
(j) all other documents and agreements executed or delivered in connection with
or contemplated by this Agreement, in each case as amended, modified or
supplemented, from time to time; provided that for purposes of the definition of
“Material Adverse Change” and Articles 6 through 10, “Loan Documents” shall not
include Secured Hedge Agreements or Secured Cash Management Agreements.
“Loan Party” means any Borrower, any of their Foreign Subsidiaries, and any
other obligor under any of the Loan Documents.
“Loans” means the Revolving Credit Loans and the Swing Line Loans.
“Management Agreement” means that certain Management Agreement dated as of
January 23, 2002 between the Parent Borrower and Steel, as may be amended,
restated, modified, supplemented or replaced from time to time.
“Majority Lenders” means at any time, Lenders having greater than fifty percent
(50%) of the Commitment (whether borrowed or not).
“Material Adverse Change” means (a) any material adverse change in the business,
condition (financial or otherwise), assets, liabilities, results of operations,
properties, or business prospects of the Borrowers and the Foreign Subsidiaries
on a Consolidated basis, or (b) any material adverse change with respect to the
binding nature, validity, or enforceability of this Agreement or any other Loan
Document, or with respect to the ability of any Loan Party to perform its
obligations under this Agreement or deed(s) of trust, as applicable, whether
resulting from any single act, omission, situation or event or taken together
with other such acts, omissions, situations or events.

 

- 68 -

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

 

“Material Agreements” has the meaning set forth in Section 6.24.
“Maturity Date” means October 1, 2011.
“Mortgage” means one or more real estate mortgages or deeds of trust, as
applicable, executed or to be executed and delivered pursuant to the terms of
this Agreement, as such instruments may be amended, modified or supplemented,
from time to time.
“Multiemployer Plan” means a multiemployer pension plan as defined in
Section 3(37) of ERISA to which any Borrower, any of its Subsidiaries or any
ERISA Affiliate is, or was, required to contribute.
“Net Income” means, for any Person and for any period, the net income (or net
loss) of such Person for such period determined in accordance with GAAP provided
that such amount shall be adjusted to exclude (to the extent otherwise included
therein and without duplication) the following:
(a) any write-up or write-down of any asset;
(b) any net gain from the collection of the proceeds of life insurance policies;
(c) any gain (or loss) arising from the acquisition or sale of any securities or
Indebtedness of such Person and any gain or loss arising from the exercise of
any warrant of such Person;
(d) any aggregate net gain (or loss) during such period arising from the sale,
exchange or other disposition of capital assets (such term to include all fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets and all securities) other than any sale,
exchange or other disposition in the ordinary course of business;
(e) all other extraordinary items; and
(f) any net income that is attributable to or derived from an entity or other
issuer that is not a Subsidiary of such Person.
“New Subsidiary” has the meaning set forth in Section 9.27.
“Non-U.S. Lender” has the meaning set forth in Section 4.5(e).
“Notes” means any promissory notes issued by the Borrowers to the Lenders in
substantially the form of Exhibit A attached hereto, and any other promissory
note or notes issued by the Borrowers to evidence the Loans and Reimbursement
Obligations pursuant to this Agreement and any replacement or restatement of,
and any supplement to, such note.

 

- 69 -

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

 

“Notices” has the meaning set forth in Section 13.1.
“Notice of LC Credit Event” means a written notice from an Authorized Signatory
of Parent Borrower to the Issuer with respect to any issuance, increase or
extension of a Letter of Credit specifying: (a) the date of issuance or increase
of a Letter of Credit; (b) the expiry date of such Letter of Credit; (c) the
proposed terms of such Letter of Credit, including the face amount; and (d) the
transactions or additional transaction or transactions that are to be supported
or financed with such Letter of Credit or increase thereof.
“Obligations” means (a) all payment and performance obligations of every kind,
nature and description of the Borrowers and any other Loan Party to the Agent or
any Lender under this Agreement and the other Loan Documents (including, without
limitation, any interest, fees and other charges on the Loans or otherwise under
the Loan Documents that would accrue but for the filing of a bankruptcy action,
whether or not such claim is allowed in such bankruptcy action), whether such
obligations are direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing or hereafter arising, and (b) (to the extent not
included in the preceding clause (a)) the obligation of the Borrowers or any
obligor to pay an amount equal to the amount of any and all damage which the
Agent or any Lender may suffer by reason of a breach by such Person of any
obligation, covenant or undertaking with respect to this Agreement or any other
Loan Document.
“Other Taxes” has the meaning set forth in Section 4.5(b).
“Participant” has the meaning set forth in Section 13.6(d).
“Payment Date” means (a) the last Business Day of each calendar month and
(b) the Revolving Credit Termination Date.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all its functions under ERISA.
“Percentage” means, with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Revolving Credit Facility
represented by such Lender’s Commitment at such time. If the commitment of each
Lender to make Revolving Credit Loans and the obligation of the Issuer to issue
Letters of Credit have been terminated, or if the Commitments have expired, then
the Percentage of each Lender in respect of the Revolving Credit Facility shall
be determined based on the Percentage of such Lender in respect of the Revolving
Credit Facility most recently in effect, giving effect to any subsequent
assignments. The initial Percentage of each Lender in respect of the Revolving
Credit Facility is set forth opposite the name of such Lender on Schedule A or
in the Assignment and Acceptance Agreement pursuant to which such Lender becomes
a party hereto, as applicable.

 

- 70 -

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

 

“Permitted Acquisition” means an acquisition (whether pursuant to an acquisition
of all (but not less than all) of the Capital Securities of a Person, assets
(only in the event of an acquisition of all or substantially all of the assets
of another Person, or of a division or line of business of another Person) or
otherwise) by a Borrower from any Person, in which the following conditions are
satisfied:
(a) immediately before and immediately after giving affect to such acquisition
no Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(b) such acquisition was not preceded by an unsolicited tender offer for such
business;
(c) all transactions related thereto are consummated in accordance with
applicable law;
(d) in the case of any acquisition of Capital Securities in a Person, 100% of
the Capital Securities in such Person, and any other Subsidiary resulting from
such acquisition, shall be owned directly or indirectly by a Borrower and all
actions required to be taken with respect to each Subsidiary resulting from such
acquisition under Section 9.27;
(e) the Borrowers shall have delivered to the Agent a Compliance Certificate for
the four quarters immediately preceding such acquisition (prepared in good faith
and in a manner and using such methodology which is consistent with the most
recent financial statements delivered pursuant to Section 8.1) giving pro forma
effect to the consummation of such acquisition and all borrowings of Loans in
connection therewith and evidencing compliance with the covenants set forth in
Article 7 at all times prior to the Maturity Date; and
(f) the Borrowers shall have delivered to Agent at least ten (10) Business Days
notice of such proposed Permitted Acquisition and delivered to Agent such
documentation and due diligence materials with respect to such proposed
Permitted Acquisition as Agent shall reasonably request.
“Permitted Indebtedness” has the meaning set forth in Section 9.1.
“Permitted Liens” has the meaning set forth in Section 9.2.
“Person” means an individual, corporation, limited liability company,
association, partnership, business, joint venture, trust, estate, unincorporated
organization, government or any agency or political subdivision thereof, or any
other entity.
“Plan” means an “Employee Pension Benefit Plan” (as defined in Section 3(2) of
ERISA) and/or an “Employee Welfare Benefit Plan” (as defined in Section 3(1) of
ERISA) which is or has been established or maintained, or to which contributions
are, or are required to be, or were, or were required to be, made by any
Borrower, any of its Subsidiaries or any ERISA Affiliate (or any predecessor
thereof), except a Multiemployer Plan.
“Prohibited Transaction” has the meaning given to such terrain Section 406 of
ERISA, Section 4975(c) of the Code, or any successor sections, and any Treasury
regulations issued thereunder.

 

- 71 -

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

 

“Regulatory Change” means any Applicable Law including, without limitation, any
interpretation, directive, request or guideline (whether or not having the force
of law) or any change therein or in the administration or enforcement thereof,
that becomes effective or is implemented or first required or expected to be
complied with after the date of this Agreement (including any Applicable Law
that shall have become such as the result of any act or omission of any Borrower
or any of its Affiliates, without regard to when such Applicable Law shall have
been enacted or implemented), whether the same is (a) the result of an enactment
by a government or any agency or political subdivision thereof, a determination
of a court or regulatory authority or otherwise; or (b) enacted, adopted, issued
or proposed before or after the date of this Agreement, including any such that
imposes, increases or modifies any tax, reserve requirement, insurance charge,
special deposit requirement, assessment or capital adequacy requirement.
“Reimbursement Obligations” means, at any date, the obligations of Borrowers
then outstanding to reimburse the Issuer for payments made by the Issuer under a
Letter of Credit.
“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.
“Release” means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous
Substance into the indoor or outdoor environment or into or out of any property,
including the movement of Hazardous Substances through or in air, soil, surface
water or groundwater on any property.
“Remedial Action” means any action necessary to comply with any Environmental
Law with respect to: (a) any response to, or clean up, removal, treatment or
handling of Hazardous Substances in the indoor or outdoor environment;
(b) prevention of Releases or threats of Releases or minimization of further
Releases so they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment; (c) performance, of
pre-remedial studies and investigations and post-remedial monitoring and care;
or (d) the assessment or payment of natural resource damages.
“Reorganization” means reorganization as defined in Section 4241(a) of ERISA.
“Reportable Event”, means an event described in Section 4043(c) of ERISA.
“Request for Advance” means a certificate designated as a “Request for Advance”,
signed by an Authorized Signatory of the Parent Borrower requesting an Advance
hereunder, which shall be substantially in the form of Exhibit B attached
hereto.
“Reserve Percentage” means, with respect to any LIBOR Loan, the maximum rate at
which reserves (including any marginal, supplemental or emergency reserves) are
required to be maintained during the relevant Interest Period under Regulation D
(and/or other similar regulation) of the Board of Governors of the Federal
Reserve System against “Eurocurrency Liabilities” (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by reason
of any regulatory change against (a) any category of liabilities which includes
deposits by reference to which LIBOR Rate is to be determined as provided in the
definition of “LIBOR Rate” or (b) any category of extensions of credit or other
assets which include loans the interest rate of which is based on LIBOR Rate.

 

- 72 -

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

 

“Restricted Payment” means:
(a) any direct or indirect distribution, dividend or other payment (other than
stock dividends and stock splits) to any Person on account of (i) any general or
limited partnership interest in, or shares of capital stock or other securities
of, any Borrower or any of its Subsidiaries or (ii) any warrants or other rights
or options to acquire shares of capital stock of, or other interest in, any
Borrower or any of its Subsidiaries;
(b) any redemption, retirement, purchase or other acquisition or any other
payment on account of any interests or securities listed above, except to the
extent that the consideration therefor consists solely of shares of stock of any
Borrower or its Subsidiary, as the case may be;
(c) any sinking fund, other prepayment or installment payment on account of the
foregoing;
(d) any other payment, loan or advance to a shareholder, partner or equity owner
of any Borrower or any of its Subsidiaries (whether or not in its capacity as
shareholder, partner or equity owner) other than salaries or compensation which
are (i) not otherwise restricted under the Loan Documents, (ii) in reasonable
amounts and (iii) paid in the ordinary course of business; and
(e) any forgiveness or release without adequate consideration by any Borrower or
any of its Subsidiaries of any Indebtedness or, other obligation of a
shareholder, partner or equity owner.
“Revolving Credit Facility” means the Revolving Credit Facility of Sixty Million
Dollars ($60,000,000) extended hereunder, consisting of the Revolving Loan
Facility and the Letter of Credit Facility.
“Revolving Credit Loans” means the loans made by the Lenders to the Borrowers
pursuant to Section 1.1 below.
“Revolving Credit Outstandings” means at any time of calculation the Dollar
Equivalent of the sum of the then existing (a) aggregate outstanding principal
amount of Loans and (b) Letter of Credit Liabilities.
“Revolving Credit Termination Date” means the Maturity Date, or such earlier
date on which the Commitment shall be completely terminated hereunder.
“Revolving Loan Facility” means the facility extended pursuant to Article 1 for
the Borrowers to make Revolving Loans from Lender.
“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between a Borrower and any Cash Management Bank.
“Secured Hedge Agreement” means any interest rate Swap Contract permitted under
Section 9.1(a)(v) that is entered into by and between a Borrower and any Hedge
Bank.

 

- 73 -

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

 

“Secured Parties” means, collectively, the Agent, the Lenders, the Issuer, the
Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed by
the Agent from time to time pursuant to Section 9.05, and the other Persons the
Obligations owing to which are or are purported to be secured by the Collateral
under the terms of the Collateral Documents.
“Security Agreement” means that certain Amended and Restated Security Agreement
from the Borrowers, dated the date hereof, together with any other security
agreement executed and delivered pursuant to the terms of this Agreement, as
such security agreements may be amended, restated, modified or supplemented from
time to time.
“Steel” means Steel Partners II, L.P., a Delaware limited partnership.
“Subsidiary” means, as applied to any Person, (a) any corporation of which more
than fifty percent (50%) of the outstanding stock (other than directors
qualifying shares) having ordinary voting power to elect a majority of the board
“of directors of such corporation (regardless of whether the holders of any
class or classes of securities shall or might have such voting power upon the
occurrence of any contingency) is directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries, or by one
or more of such Person’s other Subsidiaries, (b) any partnership, joint venture
or other association which is owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries, or by one or more of such Person’s
other Subsidiaries, or (c) any other entity which is directly or indirectly
controlled or capable of being controlled by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

- 74 -

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

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 1.5.
“Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 1.5(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 1.5(b).
“Swing Line Sublimit” means an amount equal to the lesser of (a) $10,000,000 and
(b) the Commitment. The Swing Line Sublimit is part of, and not in addition to,
the Revolving Credit Facility.
“Taxes” has the meaning set forth in Section 4.5(a)(ii).
“Threshold Amount” means One Million Dollars ($1,000,000).
“Total Funded Indebtedness” means all Indebtedness other than that described in
subsections (h), (i), (j) and (k) of the definition thereof.
“Transferee” has the meaning set forth in Section 9.11.
“Total Leverage Ratio” means the ratio of (a) Total Funded Indebtedness as of
such date to (b) EBITDA.
“Type” with respect to any Loan, means its designation as a Base Rate Loan or
LIBOR Loan of a specified Interest Period. Loans with Interest Periods ending on
different days or of differing durations shall be deemed to be different Types
of Loans.
“UCC” shall have the meaning set forth in the Security Agreement.
“Unqualifiedly Certified” when used in connection with audited financial
statements delivered pursuant to Section 8.1 hereby by the Parent Borrower’s
independent auditors or accountants, means the absence of any qualification,
limitation, exception or explanatory paragraph that would (a) call into question
or express substantial doubt about the ability of the Parent Borrower or any
Subsidiary to continue as a going concern, as discussed in the American
Institute of Certified Public Accountants Statement of Auditing Standard Number
59, (b) relate to the limited scope of examination of matters relevant to such
financial statements or (c) relate to the treatment or classification of any
item in such financial statements and, which as a condition of its removal would
require an adjustment to such item the effect of which would be to cause the
occurrence of a Default or an Event of Default.
“Withdrawal Liability” means any withdrawal liability as defined in Section 4201
of ERISA.

 

- 75 -

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

 

Section 11.2 Accounting Terms. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all accounting determinations hereunder
(including without limitation determinations made pursuant to the exhibits
hereto) shall be made, and all financial statements required to be delivered
hereunder shall be prepared on a consolidated basis in accordance with GAAP
applied on a basis consistent with the audited consolidated financial statements
of Parent Borrower and its Consolidated Subsidiaries for the year ended
December 31, 2007, delivered to the Lenders; provided, that if (a) Parent
Borrower shall object to determining compliance with the provisions of this
Agreement on such basis by written notice delivered to the Lenders at the time
of delivery of required financial statements due to any change in GAAP or the
rules promulgated with respect thereto or (b) the Majority Lenders shall so
object in writing by written notice delivered to Parent Borrower within sixty
(60) days after delivery of such financial statements, then compliance with this
Agreement shall be determined on a basis consistent with the above-referenced
financial statements, but the parties hereto shall promptly enter into
negotiations in order to amend the financial covenants and other terms of this
Agreement and so as to equitably reflect such changes in GAAP with the desired
result that the criteria for evaluating the financial condition of Parent
Borrower and its Consolidated Subsidiaries and such other terms shall be the
same in all material respects after such changes as if such changes had not been
made. All amounts used for purposes of financial calculations required to be
made herein shall be without duplication.
Section 11.3 Other Definitional Provisions. References in this Agreement to
“Articles”, “Sections”, “Annexes” or “Exhibits” shall be to Articles, Sections,
Annexes or Exhibits of or to this Agreement unless otherwise specifically
provided. Any term defined herein may be used in the singular or plural.
“Include”, “includes” and “including” shall be deemed to be followed by “without
limitation”. Except as otherwise specified herein, references to any Person
include the successors and assigns of such Person. References “from” or
“through” any date mean, unless otherwise specified, “from and including” or
“through and including”, respectively. References to any statute or act shall
include all related current regulations and all amendments and any successor
statutes, acts and regulations. Unless the context otherwise requires, any terms
used in the masculine form shall also include the feminine and neuter forms and
vice versa and any terms used in the plural shall include the singular and vice
versa. Unless otherwise stated, any references to a time of day shall be to the
time of day in Philadelphia, Pennsylvania.
ARTICLE 12
AGENT
Section 12.1 Authority.
(a) Each of the Lenders and the Issuer hereby irrevocably appoints Bank of
America to act on its behalf as the Agent hereunder and under the other Loan
Documents and authorizes the Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the Agent,
the Lenders and the L/C Issuer, and neither any Borrower nor any other Loan
Party shall have rights as a third party beneficiary of any of such provisions.

 

- 76 -

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

 

(b) The Agent shall also act as the “Collateral Agent” under the Loan Documents,
and each of the Lenders (in its capacities as a Lender, Swing Line Lender (if
applicable), potential Hedge Bank and potential Cash Management Bank) and the
Issuer hereby irrevocably appoints and authorizes the Agent to act as the agent
of such Lender and the L/C Issuer 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, together with such powers and discretion as are
reasonably incidental thereto. In this connection, the Agent, as “Collateral
Agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the
Agent for purposes of holding or enforcing any Lien on the Collateral (or any
portion thereof) granted under the Collateral Documents, or for exercising any
rights and remedies thereunder at the direction of the Agent), shall be entitled
to the benefits of all provisions of this Agreement in favor of the Agent as if
set forth in full herein with respect thereto.
Section 12.2 Expenses. In default of reimbursement or indemnification by the
Borrowers, the Lenders will, in proportion to their respective portions of the
Commitment, reimburse the Agent for and against all expense, liability, penalty
and damage of any nature whatsoever (including but not limited to reasonable
attorneys fees) which may be incurred or sustained by the Agent in any way in
connection with the Loan Documents or its duties under the Loan Documents;
provided that no Lender shall be liable for any portion of the foregoing items
resulting from the gross negligence or willful misconduct of the Agent. Without
limiting the generality of any other provision excusing the Agent form taking
any actions, the Agent shall not have any obligation to take any action in
connection with the, performance of its duties as Agent under the Loan Documents
which, in its opinion, requires the payment of expenses or the incurrence of
liability, if there is any ground for belief that reimbursement of such expenses
or liability is not reasonably assured to it.
Section 12.3 Action by Agent. The Agent is authorized to take any action
specified in this Agreement and all actions reasonably related thereto. However,
except for actions expressly required to be taken by the Agent in this Agreement
(which actions the Agent will take as required subject to all of the exculpatory
provisions herein), the Agent is not required to take actions that it may be
authorized to take.
Section 12.4 Exculpatory Provisions.
(a) General Standard. Neither the Agent nor any of its officers, directors,
employees or agents, shall be liable for any action taken or omitted under the
Loan Documents or in connection with the Loan Documents unless caused by its or
their gross negligence or willful misconduct. Neither the Agent nor any of its
officers, directors, employees or agents, shall be liable for any action taken
or omitted by it at the direction of the Majority Lenders. The Agent shall not
be responsible for any recitals, warranties or representations in the Loan
Documents or for the validity, enforceability, collectability or due execution
of this Agreement or any of the other Loan Documents.

 

- 77 -

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

 

(b) Agents and Employees. The Agent may execute any of its duties by or through
agents or employees, all of whom shall be entitled to the benefits of any
exculpatory provision herein.
(c) Advice of Professionals. Agent shall be entitled to advice of counsel,
accountants or other professionals of its selection concerning all matters
pertaining to the Loan Documents and its duties under the Loan Documents. Agent
is entitled to rely on the advice of its professionals whether or not the advice
is correct.
(d) Reliance on Information Believed to Be Genuine. The Agent shall be entitled
to rely upon any writing or other document, telegram or telephone conversation
believed by it to have been signed, sent or made by the proper person or
persons.
Section 12.5 Investigation by Lenders. Each Lender expressly acknowledges that
the Agent has not made any representation or warranty to it and that no act
taken by the Agent shall be deemed to constitute a representation or warranty by
the Agent to the Lenders. Each Lender further acknowledges that it has taken and
will continue to take such action and to make such investigation as it deems
necessary to inform itself of the affairs of the Loan Parties. Each Lender
further acknowledges that it has made and will continue to make its own
independent investigation of the creditworthiness and the business and
operations of the Loan Parties. In entering into this Agreement, and in making
an advance under this Agreement, each Lender represents that it has not relied
and shall not rely upon any information or representations furnished or given by
the Agent or by any other Lender. The Agent shall be under no duty or
responsibility to the Lenders to ascertain or to inquire into the performance or
observance by the Loan Parties of any of the provisions of this Agreement or any
document or instrument now or hereafter executed in connection with this
Agreement.
Section 12.6 Notice of Events of Default. Without limiting the generality of the
provisions of the preceding Section 12.5, it is expressly understood and agreed
that the Agent shall not be deemed to have knowledge of the existence,
occurrence or continuance of an Event of Default or Default, unless the Agent
shall have been notified in writing of such Event of Default by any Lender or
the Borrowers pursuant to a writing designated as a “Notice of Event of
Default”. For the avoidance of doubt, the provisions of this Section 12.6 are
expressly not for the benefit of the Borrowers.
Section 12.7 Resignation; Termination. The Agent may resign at any time by
giving prior written notice to the Parent Borrower and the Lenders and the Agent
may be removed at any time with or without cause by the Majority Lenders. Such
resignation or removal shall take effect at the end of the sixty (60) day period
after such notice of resignation or removal has been given or upon the earlier
appointment of a successor agent. The Lenders shall (with the consent of the
Parent Borrower so long as no Event of Default has occurred and is then
continuing), upon receipt of such notice, appoint a successor agent from among,
the Lenders. The Lenders and the Borrowers shall execute such documents as shall
be necessary to effect such appointment. During any period that there shall not
be a duly appointed and acting Agent, the Borrowers agree to make each payment
due under this Agreement and under the Notes directly to each Lender entitled
thereto and to provide copies of each certificate or other document required
under this Agreement directly to each Lender.

 

- 78 -

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

 

Section 12.8 Sharing. If any Lender shall at any time receive payment of
principal on account of all or a part of any Note held by it, whether by set-off
or otherwise, in a greater proportion than the principal payments made on the
Notes held by the other Lenders, such Lender shall simultaneously purchase,
without recourse, for crash, ratably from each of the other Lenders, such
portion of the Notes held by such other Lenders so that, after such purchase,
each Lender will hold an unpaid principal amount of Notes in the same proportion
that the outstanding principal balance due to such Lender immediately prior to
such payment bore to the aggregate outstanding principal balance due to all
Lenders immediately prior to such payment. In the event that, at any time, any
Lender shall be required to refund any amount which has been paid to or received
by it on account of any Note held by it, and which has been applied to the
purchase of a portion of the Notes held by other Lenders pursuant to this
Section, then, upon notice from such Lender, each of the other Lenders shall
simultaneously purchase, without recourse, its portion for cash, to the extent
of its ratable share thereof, of the Notes held by the Lender required to make
such refund.
Section 12.9 Other Relationships. It is acknowledged that the Agent, the Lenders
and/or any of their Affiliates may now or hereafter have lending or other
relationships with the Borrowers and Affiliates of the Borrowers. It is agreed
that the Agent and the Lenders are free to act with respect thereto without
consulting with one another and without regard to the effect of any such action
or relationship upon the Loans or other Obligations. With respect to the portion
of the Loans made by it and Notes issued to it, the Agent shall have the same
rights and powers under the Loan Documents as any other Lender or holder of a
Note and may exercise the same as though it were not the Agent, and the term
“Lenders” or “Holders of Notes” or any similar term shall, unless the context
otherwise indicates, include the Agent in its capacity as a Lender.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Notices. All notices, requests, demands, directions and other
communications (collectively, “Notices”) given to or made upon any party hereto
under the provisions of this Agreement shall be by telephone or in writing
(including telex or facsimile communication) unless otherwise expressly provided
hereunder and, if in writing, shall be delivered or sent by telex or facsimile
to the respective parties at the addresses and numbers set forth under their
respective names on the signature pages hereof or in accordance with any
subsequent unrevoked written direction from any party to the others. All Notices
shall, except as otherwise expressly herein provided, be effective (a) in the
case of facsimile, when received, (b) in the case of over-night courier or other
hand-delivered notice, when hand-delivered, (c) in the case of telephone or
e-mail, when telephoned or e-mailed; provided, however, that in order to be
effective, telephonic Notices or e-mail must be confirmed in writing by another
medium provided for in this Section 13.1, received no later than the next day,
(d) if given by mail, four (4) days after such communication is deposited in the
mails with first class postage prepaid, return receipt requested, and (e) if
given by any other means (including by air courier), when delivered. In the
event of a discrepancy between any telephonic or written notice, the written
notice shall control. Any Lender giving any Notice to the Borrowers shall
simultaneously send a copy of such Notice to the Agent.

 

- 79 -

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

 

Section 13.2 Duration; Survival. All representations and warranties of the
Borrowers contained in the Loan Documents shall survive the making of the Loans
and shall not be waived by the execution and delivery of any Loan Document or
any investigation by the Agent or the Lenders, or payment in full of the Loans.
All such representations and warranties as well as all other covenants and
agreements of the Borrowers contained in the Loan Documents shall continue in
full force and effect from and after the date hereof so long as the Borrowers
may borrow hereunder and until termination of the Commitment and payment in full
of the Obligations.
Section 13.3 Borrower Representative. Each Subsidiary Borrower does hereby
irrevocably make, constitute and appoint the Parent Borrower as its agent and
attorney-in-fact for all purposes in connection with the Loan Documents,
including, without limitation, with respect to any and all payments, borrowings,
disbursements and notices described hereunder. All actions taken by the Agent or
the Lenders for the benefit of the Parent Borrower with respect to the matters
described above shall be deemed to have been taken for the benefit of each
Borrower. The power of attorney granted in this Section 13.3 is coupled with an
interest. All actions taken by the Parent Borrower with respect to the matters
described above shall be deemed to have been taken on behalf of each Borrower.
The Agent and the Lender shall be entitled to rely conclusively upon the status
of the Parent Borrower as agent and attorney-in-fact of each Subsidiary
Borrower.
Section 13.4 No Implied Waiver; Rights Cumulative. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Loan Document and no course of dealing between the
Borrowers and the Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and not exclusive of any other rights
or remedies which the Agent or any Lender would otherwise have. No notice to or
demand on the Borrowers in any case shall entitle the Borrowers to any other or
further notice or demand in similar or other circumstances, or shall constitute
a waiver of the right of the Agent or any Lender to take any other or further
action in any circumstances without notice or demand.
Section 13.5 Amendments, etc.
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrowers or any other Loan
Party therefrom, shall be effective unless in writing signed by the Majority
Lenders and the Borrowers or the applicable Loan Party, as the case may be, and
acknowledged by the Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 5.3, or, in the case of the initial
Loans, Section 5.1, without the written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 10.2) without the written consent of such Lender;

 

- 80 -

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

 

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (excluding mandatory prepayments) of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under such other Loan
Document without the written consent of each Lender entitled to such payment;
(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or Reimbursement Obligations, or (subject to clause (iv) of the second
proviso to this Section 13.5) any fees or other amounts payable hereunder or
under any other Loan Document without the written consent of each Lender
entitled to such amount; provided, however, that only the consent of the
Majority Lenders shall be necessary (i) to amend the definition of “Default
Rate” or to waive any obligation of the Borrowers to pay interest or Letter of
Credit Fees at the Default Rate or (ii) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan or Reimbursement
Obligation or to reduce any fee payable hereunder;
(e) change Section 1.6 or Section 10.4 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;
or
(f) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender;
and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuer in addition to the Lenders required above,
affect the rights or duties of the Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above, affect the rights or duties of the Agent under this
Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or
rights or privileges thereunder waived, in a writing executed only by the
parties thereto. Notwithstanding anything to the contrary herein, no Defaulting
Lender shall have any right to approve or disapprove any amendment, waiver or
consent hereunder, except that the Commitment of such Lender may not be
increased or extended without the consent of such Lender.
If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender and that has been approved by the Required Lenders, the Borrowers may
replace such non-consenting Lender in accordance with Section 13.6; provided
that such amendment, waiver, consent or release can be effected as a result of
the assignment contemplated by such Section (together with all other such
assignments required by the Borrowers to be made pursuant to this paragraph).

 

- 81 -

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

 

Section 13.6 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither a Borrower nor any
other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 13.6(b), (ii) by way of participation in accordance with
the provisions of Section 13.6(d), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 13.6(f) (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 subsection
(d) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Agent, the Issuer and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees (each an “Assignee”) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment(s) and the
Loans (including for purposes of this Section 13.6(b), participations in Letter
of Credit Liabilities) at the time owing to it); provided that any such
assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment under any Facility and the Loans at the time owing to it
under such Facility or in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund, no minimum amount need be assigned; and
(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Acceptance
Agreement with respect to such assignment is delivered to the Agent or, if
“Trade Date” is specified in the Assignment and Acceptance Agreement, as of the
Trade Date, shall not be less than $5,000,000, unless each of the Agent and, so
long as no Event of Default has occurred and is continuing, the Parent Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met;
(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights and obligations among any separate
facilities on a non-pro rata basis;

 

- 82 -

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

 

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A) the consent of the Parent Borrower (such consent not to be unreasonably
withheld or delayed; provided that the Parent Borrower shall not be required to
consent to any assignment to a Fund which is not an Approved Fund) shall be
required unless (1) an Event of Default has occurred and is continuing at the
time of such assignment or (2) such assignment is to a Lender, an Affiliate of a
Lender or an Approved Fund;
(B) the consent of the Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments if such assignment is to a Person
that is not a Lender, an Affiliate of such Lender or an Approved Fund with
respect to such Lender; and
(C) the consent of the Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding).
(iv) Assignment and Acceptance Agreement. The parties to each assignment shall
execute and deliver to the Agent an Assignment and Acceptance Agreement,
together with a processing and recordation fee in the amount of $3,500;
provided, however, that the Agent may, in its sole discretion, elect to waive
such processing and recordation fee in the case of any assignment. The assignee,
if it is not a Lender, shall deliver to the Agent an Administrative
Questionnaire.
(v) No Assignment to Borrowers. No such assignment shall be made to a Borrower
or any of a Borrower’s Affiliates or Subsidiaries.
(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.
Subject to acceptance and recording thereof by the Agent pursuant to subsection
(c) of this Section, from and after the effective date specified in each
Assignment and Acceptance Agreement, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance Agreement, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance Agreement, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Sections 4.4, and 4.5 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrowers (at its expense) shall execute and
deliver a Note to the assignee Lender. 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 13.6(d).
(c) Register. The Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at the Agent’s office a copy of each Assignment and
Acceptance Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and Letter of Credit Liabilities owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, the Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

- 83 -

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

 

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Agent, sell participations to any Person (other
than a natural person or the Borrowers or any of the Borrowers’ Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender’s participations in
Letter of Credit Liabilities) owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Agent, the Lenders and the Issuer
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. 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; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in Section 13.5 that affects such
Participant. Subject to subsection (e) of this Section, the Borrowers agrees
that each Participant shall be entitled to the benefits of Sections 4.4 and 4.5
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 13.6(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 13.12 as though it
were a Lender, provided such Participant agrees to be subject to Section 12.8 as
though it were a Lender.
(e) Limitation Upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 4.4 or 4.5 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrowers’ prior written consent. A Participant that would be a
Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of
Section 4.5 unless the Borrowers are notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 4.5(e) as though it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; 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.

 

- 84 -

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

 

(g) Resignation as Issuer after Assignment. Notwithstanding anything to the
contrary contained herein, if at any time Bank of America assigns all of its
Revolving Credit Commitment and Revolving Credit Loans pursuant to
Section 13.6(b), Bank of America may, upon 30 days’ notice to the Borrowers and
the Lenders, resign as Issuer. In the event of any such resignation as Issuer,
the Borrowers shall be entitled to appoint from among the Lenders a successor
Issuer hereunder; provided, however, that no failure by the Borrowers to appoint
any such successor shall affect the resignation of Bank of America as Issuer. If
Bank of America resigns as Issuer, it shall retain all the rights, powers,
privileges and duties of the Issuer hereunder with respect to all Letters of
Credit outstanding as of the effective date of its resignation as Issuer and all
Letter of Credit Liabilities with respect thereto (including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
unreimbursed amounts pursuant to Section 1.4(f)). Upon the appointment of a
successor Issuer, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring Issuer and (b) the
successor Issuer shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to Bank of America to effectively assume the
obligations of Bank of America with respect to such Letters of Credit.
Section 13.7 Descriptive Headings. The descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
Section 13.8 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the laws
of the Commonwealth of Pennsylvania without reference to the laws applicable to
conflicts or choice of law.
Section 13.9 Payments Due on Non-Business Days. If any payment under the Loan
Documents becomes due on a day which is not a Business Day, the due date of such
payment shall be extended to the next succeeding Business Day, and such
extension of time shall be included in computing interest and fees in connection
with such payment.
Section 13.10 Counterparts. This Agreement and the other Loan Documents may be
executed in one or more counterparts, each of which shall constitute an
original, but all of which together shall constitute one and the same
instrument. Delivery of a photocopy or telecopy of an executed counterpart of a
signature page to any Loan Document shall be as effective as delivery of a
manually executed counterpart of such Loan Document.

 

- 85 -

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

 

Section 13.11 Maximum Lawful Interest Rate.
(a) All agreements between any Borrowers and Guarantors and the Lenders are
hereby expressly limited so that in no contingency or event, whatsoever, whether
by reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to the Lenders for the use
or the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term “Applicable Law”
shall mean the law in effect as of the date hereof; provided, however, that in
the event there is a change in the law, which results in a higher permissible
rate of interest, then this Agreement shall be governed by such new law as of
its effective date. In this regard, it is expressly agreed that it is the intent
of Borrowers and the Lenders in the execution, delivery and acceptance of this
Agreement to contract in strict compliance with the laws of the Commonwealth of
Pennsylvania from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Loan Documents
at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by Applicable Law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from circumstances whatsoever the Lenders should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between any
Borrowers, Guarantors and the Lenders.
(b) If, at any time, the rate of interest, together with all amounts which
constitute interest and which are reserved, charged or taken by the Lenders as
compensation for fees, services or expenses incidental to the making,
negotiating or collection of the loan evidenced hereby, shall be deemed by any
competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest permitted to be charged by the Lenders to Borrowers under
applicable law, then, during such time as such rate of interest would be deemed
excessive, that portion of each sum paid attributable to that portion of such
interest rate that exceeds the maximum rate of interest so permitted shall be
deemed a voluntary prepayment of principal.
Section 13.12 Set-off of Bank Accounts. The Borrowers hereby grant to Agent for
the pro rata benefit of the Lenders and their successors and assigns a
continuing lien, security interest and right of set-off as security for all
Obligations, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property now or hereafter in the possession,
custody, safekeeping or control of any Lender or any entity under common control
with any Lender or in transit to any of them. At any time following an Event of
Default which is continuing without demand or notice (any such notice being
expressly waived by the Borrowers), the Agent and/or such Lender may set-off the
same or any part thereof and apply the same to the Obligations of the Borrowers
or any Guarantor even though unmatured and regardless of the adequacy of the
other Collateral. ALL RIGHTS TO REQUIRE THE AGENT OR ANY LENDER TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS,
PRIOR TO EXERCISING ITS RIGHT TO SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWERS, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.
Section 13.13 Severability. Every provision of the Loan Documents is intended to
be severable, and if any term or provision hereof or thereof shall be invalid,
illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not be
affected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.

 

- 86 -

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

 

Section 13.14 Payment and Reimbursement of Costs and Expenses; Indemnification.
(a) Whether or not any Loans are made, the Borrowers shall, unconditionally upon
demand, pay or reimburse the Agent for, and indemnify and save the Agent
harmless against, any and all liabilities, losses (including judgments,
penalties and fines), costs, expenses, claims, and/or charges (including without
limitation reasonable fees and disbursements of legal counsel, accountants,
investigators, the reasonable allocated costs , of in-house legal counsel,
accounting, consulting, brokerage or other similar professional fees and
expenses, and any fees and expenses associated with travel or other costs
relating to any appraisals or examinations conduction with the Loans or any
Collateral, and other experts, whether or not they are employees of the Agent)
(collectively, “Losses”) arising out of, relating to or connected with:
(i) the negotiation, preparation, default, collection, waiver or amendment of
any of the Loan Documents, whether or not executed, or any waiver, modification,
restatement, reaffirmation, amendment or consent thereunder or thereto;
(ii) the administration of the Loan Documents, including, without limitation,
performing audits or investigations or consulting with attorneys or other
advisors with respect to any matter in any way arising out of, related to, or
connected with, the Loan Documents; and
(b) Without limiting the generality of the foregoing paragraph (a), whether or
not any Loans are made, the Borrowers shall, unconditionally upon demand, pay or
reimburse each Indemnified Person for, and indemnify and save each Indemnified
Person harmless against, any and all Losses incurred by such Indemnified Person
in connection with, arising out of or in any way relating to:
(i) any claim (whether civil, criminal or administrative and whether sounding in
tort, contract or otherwise) arising out of, related to or connected with, the
Loan Documents (including, without limitation, related to property subject to
Mortgages or leasehold mortgages), whether such claim arises or is asserted
before or after the date hereof or before or after the Maturity Date (whether
such claim is asserted by such Indemnified Person or the Borrowers or any other
Person);
(ii) any investigation, governmental or otherwise, arising out of, related to,
or in any way connected with, the Loan Documents or the relationships
established thereunder, including the prosecution or defense or investigation
thereof and any litigation or proceeding with respect thereto (whether or not,
in the case of any such litigation or proceeding, such Indemnified Party is a
party thereto);
(iii) protecting, preserving, exercising or enforcing any of the rights of the
Agent and the Lenders in, under or related to the Loan Documents;
(iv) all transfer, documentary, stamp and similar taxes, and all recording and
filing fees and taxes payable in connection with, arising out of, or in any way
related to, the execution, delivery and performance of the Loan Documents or the
making of the Loans; and
(v) commissions or claims by or on behalf of brokers, finders or agents not
retained by the Lenders (and the Borrowers represent that they have not engaged
or used any such broker, finder or agent);

 

- 87 -

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

 

except to the extent any of the foregoing is held by a final, non-appealable
judgment of a court of competent jurisdiction to have resulted solely and
directly from the gross negligence or willful misconduct of such Indemnified
Person.
(c) The amount of all of such Losses shall, beginning ten (10) days following
notification of the Parent Borrower thereof until paid, bear interest at the
rate applicable to Base Rate Loans hereunder (including the Default Rate) and
all obligations of Borrowers in respect thereof shall be secured by the
Collateral.
Section 13.15 Consent to Jurisdiction. For the purpose of any action that may be
brought in connection with this Agreement or any Loan Document, the Borrowers
hereby consent to the jurisdiction and venue of the courts of the Commonwealth
of Pennsylvania or of any federal court located in such state and waives
personal service of any and all process upon it and consents that all such
service of process be made by certified or registered mail directed to such
Borrowers at the address provided for in Section 13.1 and service so made shall
be deemed to be completed on actual receipt. The Borrowers waive the right to
contest the jurisdiction and venue of the courts located in the Commonwealth of
Pennsylvania on the ground of inconvenience or otherwise and, further, waives
any right to bring any action or proceeding against the Lenders in any court
outside the City of Philadelphia in the Commonwealth of Pennsylvania. The
provisions of this Section shall not limit or otherwise affect the right of the
Agent or any Lender to institute and conduct an action in any other appropriate
manner, jurisdiction or court.
Section 13.16 Termination. This Agreement shall remain in full force and effect
until the later of (a) the time that all Obligations shall have been
indefeasibly paid in full and (b) the time that there shall be no Commitment;
provided, however, that the Borrowers expense and indemnification obligations
pursuant to Section 13.13 above as well as any liability in connection with any
untrue representation or warranty, shall survive such termination.
Section 13.17 Waiver of Right to Jury Trial. EACH PARTY MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWERS HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWERS CERTIFY THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR
LENDER TO ACCEPT THIS AGREEMENT AND MAKE THE LOAN.

 

- 88 -

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

 

Section 13.18 Confidentiality. The Agent and the Lenders agree to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent the Agent
and the Lenders from disclosing any such information (a) to any Transferee or
prospective Transferee that agrees to comply with the provisions of this Section
(or executes a confidentiality agreement with confidentiality terms that are
substantially similar to the terms of this Section), (b) to any of its
employees, directors, agents, attorneys, accountants and other professional
advisors), (c) upon the request or demand of any Governmental Authority or self
regulatory body having or claiming to have jurisdiction over it, (d) in response
to any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any requirement of law, (e) if requested or required to do
so in connection with any litigation or similar proceeding to which it is a
party (so long as the pertinent Loan Party is given a reasonable opportunity to
seek a protective order to safeguard such information), or (f) in connection
with the exercise of any remedy hereunder or under any other Loan Document.
Notwithstanding any other express or implied agreement, arrangement or
understanding to the contrary, each of the parties hereto hereby, agree that,
each party hereto (and each of its employees, representatives or agents) are
permitted to disclose to any and all persons, without limitation, the tax
treatment and tax aspects of the Loans and the other transactions contemplated
hereby, and all materials of any kind (including opinions or other tax analyses)
that are provided to the Loan Parties or the Agent and the Lenders, related to
such tax treatment and tax aspects. To the extent not inconsistent with the
immediately preceding sentence, this authorization does not extend to disclosure
of any other information or any other term or detail not related to the tax
treatment or tax aspects of the Loans or the other transactions contemplated
hereby.
Section 13.19 USA Patriot Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Borrowers that, pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies each Borrower, which information includes the name and address
of each Borrower and other information that will allow such Lender to identify
such Borrower in accordance with the Act.
Section 13.20 Conversion of Currencies.
(a) If, for the purpose of obtaining judgment in any court, it is necessary to
convert a sum owing hereunder in one currency into another currency, each party
hereto agrees, to the fullest extent that it may effectively do so, that the
rate of exchange used shall be that at which, in accordance with normal banking
procedures in the relevant jurisdiction, the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.

 

- 89 -

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

 

(b) The obligations of the Borrowers in respect of any sum due to any party
hereto or any holder of the obligations owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may, in
accordance with normal banking procedures in the relevant jurisdiction, purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, the Borrowers agree, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 13.20 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
Section 13.21 Amendment and Restatement. Notwithstanding that this Agreement is
amending and restating the Existing Credit Agreement, nothing contained herein
shall be deemed to cause a novation of any transfers, conveyances or
transactions which were effected under the Existing Agreement, or of any
Obligations, including, without limitation, the Indebtedness evidenced by the
Notes issued pursuant thereto and the security interests granted pursuant to the
Collateral Documents.

 

- 90 -

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

 

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated
Revolving Credit Agreement, or caused it to be executed by their duly authorized
officers, all as of the day and year first above written.

                  Parent Borrower:
 
                SL INDUSTRIES, INC.    
 
           
 
  By:   /s/ David R. Nuzzo    
 
           
 
      Name: David R. Nuzzo    
 
      Title: Vice President & Chief Financial Officer    
 
      Phone: (856) 222-5515    
 
      Fax: (856) 727-1683    
 
      E-Mail: david.nuzzo@slindustries.com    
 
                Subsidiary Borrowers:    
 
                SL DELAWARE, INC.         SL DELAWARE HOLDINGS, INC.         MTE
CORPORATION         RFL ELECTRONICS INC.         SL MONTEVIDEO TECHNOLOGY, INC.
        CEDAR CORPORATION         TEAL ELECTRONICS CORPORATION         MEX
HOLDINGS LLC         SL POWER ELECTRONICS CORPORATION         SLGC HOLDINGS,
INC.         SLW HOLDINGS, INC.         SL AUBURN, INC.         SL SURFACE
TECHNOLOGIES, INC.    
 
           
 
  By:   /s/ David R. Nuzzo    
 
           
 
      Name: David R. Nuzzo    
 
      Title: Authorized Officer    
 
                See contact information above    

 

- 91 -

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

 

                  BANK OF AMERICA, N.A., in its capacity as Agent
 
           
 
  By:   /s/ Anne Zeschke    
 
           
 
      Name: Anne Zeschke    
 
      Title: Vice President    
 
           
 
      For payments and requests for credit extensions:    
 
      Mail Stop: NC1-001-04-39    
 
      101 North Tryon Street    
 
      Charlotte, NC 28255    
 
      Attn: Brian Greuling    
 
      Phone: 704-386-3767    
 
      Fax: 704-683-9368    
 
      E-Mail: brian.t.greuling@bankofamerica.com    
 
           
 
      For all other notice purposes:    
 
      Mail Stop IL1-231-10-41    
 
      231 South LaSalle Street    
 
      Chicago, IL 60604    
 
      Attn: Laura Call    
 
      Phone: 312-828-3559    
 
      Fax: 877-207-2883    
 
      E-Mail: laura.call@bankofamerica.com    
 
                Wire Transfer Information:
 
           
 
      Bank of America, N.A.    
 
      Attention: Corporate Credit Services    
 
      Account Number: 136-621-225-0600    
 
      Reference: SL Industries    
 
      ABA Number: 026009593    

[signature page for Amended and Restated Revolving Credit Agreement]

 

- 92 -

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

 

                  BANK OF AMERICA, N.A., in its capacity as a Lender
 
           
 
  By:   /s/ Christian Barrow    
 
           
 
      Name: Christian Barrow    
 
      Title:    
 
           
 
      Bank of America, N.A.    
 
      1600 John F. Kennedy Boulevard    
 
      4 Penn Center, Suite 1100    
 
      Philadelphia, PA 19103    
 
      Attn: Christian Barrow    
 
      Phone: 267.675.0109    
 
      Fax: 212.548.8911    
 
      christian.d.barrow@bankofamerica.com    

[signature page for Amended and Restated Revolving Credit Agreement]

 

- 93 -

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

 

                  PNC BANK, NATIONAL ASSOCIATION
 
           
 
  By:   /s/ John Siegrist    
 
           
 
      Name: John Siegrist    
 
      Title: Senior Vice President    
 
           
 
      PNC Bank, National Association    
 
      1600 Market Street    
 
      Philadelphia, PA 19103    
 
      Attn: John Siegrist, Senior Vice President    
 
      Phone: 215-585-5355    
 
      Fax:    
 
      John.siegrist@pnc.com    

[signature page for Amended and Restated Revolving Credit Agreement]

 

- 94 -

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

 

                  KEYBANK, N.A.
 
           
 
  By:   /s/ Ronald W. Gale    
 
           
 
      Name: Ronald W. Gale    
 
      Title: Director    
 
           
 
      KeyBank Capital Markets Inc.    
 
      45 Rockefeller Plaza    
 
      33rd Floor    
 
      New York, NY 10111    
 
      Attn: Ronald W. Gale, Director    
 
      Phone: 212-424-1828    
 
      Fax:    
 
      rgale@keybanccm.com    

[signature page for Amended and Restated Revolving Credit Agreement]

 

- 95 -