Exhibit 10.8

 

EXECUTION COPY

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of March 27, 2006,
(amending and restating the Credit Agreement dated
as of March 15, 2004)

 

among

 

TRUE TEMPER CORPORATION,

 

TRUE TEMPER SPORTS, INC.,
as Borrower

 

THE LENDERS PARTY HERETO

 

and

 

CREDIT SUISSE,
as Administrative Agent

 

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

 

CREDIT SUISSE,
as Sole Bookrunner and Sole Lead Arranger

 

ANTARES CAPITAL CORPORATION,
as Syndication Agent

 

GOLDMAN SACHS CREDIT PARTNERS L.P.
and
MERRILL LYNCH CAPITAL,
a division of Merrill Lynch Business Financial Services Inc.,
as Co-Documentation Agents

 

 

 

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

 

TABLE OF CONTENTS

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS

1

SECTION 1.01.

Defined Terms

1

SECTION 1.02.

Terms Generally

31

SECTION 1.03.

Classification of Loans and Borrowings

32

SECTION 1.04.

Pro Forma Calculations

32

 

 

 

ARTICLE II

THE CREDITS

32

SECTION 2.01.

Commitments

32

SECTION 2.02.

Loans

33

SECTION 2.03.

Borrowing Procedure

34

SECTION 2.04.

Repayment of Loans; Evidence of Debt

35

SECTION 2.05.

Fees

36

SECTION 2.06.

Interest on Loans

37

SECTION 2.07.

Default Interest

37

SECTION 2.08.

Alternate Rate of Interest

37

SECTION 2.09.

Termination and Reduction of Commitments

38

SECTION 2.10.

Conversion and Continuation of Borrowings

38

SECTION 2.11.

Repayment of Term Borrowings

40

SECTION 2.12.

Prepayment

41

SECTION 2.13.

Mandatory Prepayments

41

SECTION 2.14.

Reserve Requirements; Change in Circumstances

43

SECTION 2.15.

Change in Legality

44

SECTION 2.16.

Indemnity

45

SECTION 2.17.

Pro Rata Treatment

45

SECTION 2.18.

Sharing of Setoffs

46

SECTION 2.19.

Payments

46

SECTION 2.20.

Taxes

47

SECTION 2.21.

Assignment of Commitments Under Certain Circumstances; Duty to Mitigate

49

SECTION 2.22.

Swingline Loans

50

SECTION 2.23.

Letters of Credit

51

SECTION 2.24.

Increase in Term Loan Commitments

55

 

 

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

57

SECTION 3.01.

Organization; Powers

57

SECTION 3.02.

Authorization; No Conflicts

58

SECTION 3.03.

Enforceability

58

SECTION 3.04.

Governmental Approvals

58

SECTION 3.05.

Financial Statements

58

SECTION 3.06.

No Material Adverse Change

59

SECTION 3.07.

Title to Properties; Possession Under Leases

59

SECTION 3.08.

Subsidiaries

59

SECTION 3.09.

Litigation; Compliance with Laws

60

SECTION 3.10.

Agreements

60

 

i

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

 

SECTION 3.11.

Federal Reserve Regulations

60

SECTION 3.12.

Investment Company Act

60

SECTION 3.13.

Use of Proceeds

60

SECTION 3.14.

Tax Returns

61

SECTION 3.15.

No Material Misstatements; Acquisition Documentation

61

SECTION 3.16.

Employee Benefit Plans

61

SECTION 3.17.

Environmental Matters

62

SECTION 3.18.

Insurance

63

SECTION 3.19.

Security Documents

63

SECTION 3.20.

Location of Real Property

64

SECTION 3.21.

Labor Matters

64

SECTION 3.22.

Intellectual Property

64

SECTION 3.23.

Solvency

64

SECTION 3.24.

Senior Debt

65

 

 

 

ARTICLE IV

CONDITIONS OF LENDING

65

SECTION 4.01.

All Credit Events

65

SECTION 4.02.

First Credit Event

66

SECTION 4.03.

Amendment Effective Date

69

SECTION 4.04.

Funding Date

70

 

 

 

ARTICLE V

AFFIRMATIVE COVENANTS

71

SECTION 5.01.

Existence; Businesses and Properties

71

SECTION 5.02.

Insurance

71

SECTION 5.03.

Obligations and Taxes

71

SECTION 5.04.

Financial Statements, Reports, etc

72

SECTION 5.05.

Litigation and Other Notices

73

SECTION 5.06.

Information Regarding Collateral

74

SECTION 5.07.

Maintaining Records; Access to Properties and Inspections

74

SECTION 5.08.

Use of Proceeds

75

SECTION 5.09.

Additional Collateral, etc

75

SECTION 5.10.

Further Assurances

77

SECTION 5.11.

Interest Rate Protection

77

 

 

 

ARTICLE VI

NEGATIVE COVENANTS

77

SECTION 6.01.

Indebtedness

78

SECTION 6.02.

Liens

79

SECTION 6.03.

Sale and Lease-Back Transactions

81

SECTION 6.04.

Investments, Loans and Advances

82

SECTION 6.05.

Mergers, Consolidations, Sales of Assets and Acquisitions

83

SECTION 6.06.

Restricted Payments; Restrictive Agreements

84

SECTION 6.07.

Transactions with Affiliates

86

SECTION 6.08.

Business of Holdings, the Borrower and Subsidiaries; Limitation on Hedging
Agreements

86

 

ii

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

 

SECTION 6.09.

Other Indebtedness and Agreements; Amendments to Acquisition Documentation

86

SECTION 6.10.

Capital Expenditures

87

SECTION 6.11.

Interest Coverage Ratio

87

SECTION 6.12.

Leverage Ratio

88

SECTION 6.13.

Fixed Charge Coverage Ratio

88

SECTION 6.14.

Fiscal Year

88

 

 

 

ARTICLE VII

EVENTS OF DEFAULT

88

ARTICLE VIII

THE AGENTS AND THE ARRANGER

92

ARTICLE IX

MISCELLANEOUS

94

SECTION 9.01.

Notices

94

SECTION 9.02.

Survival of Agreement

95

SECTION 9.03.

Binding Effect

95

SECTION 9.04.

Successors and Assigns

95

SECTION 9.05.

Expenses; Indemnity

99

SECTION 9.06.

Right of Setoff

100

SECTION 9.07.

Applicable Law

100

SECTION 9.08.

Waivers; Amendment

101

SECTION 9.09.

Interest Rate Limitation

102

SECTION 9.10.

Entire Agreement

102

SECTION 9.11.

WAIVER OF JURY TRIAL

102

SECTION 9.12.

Severability

102

SECTION 9.13.

Counterparts

103

SECTION 9.14.

Headings

103

SECTION 9.15.

Jurisdiction; Consent to Service of Process

103

SECTION 9.16.

Confidentiality

104

SECTION 9.17.

Delivery of Lender Addenda

104

SECTION 9.18.

Effect of Amendment and Restatement of the Existing Credit Agreement

104

 

 

 

 

 

 

Exhibits and Schedules

 

 

 

 

 

Exhibit A

Form of Administrative Questionnaire

 

Exhibit B

Form of Affiliate Subordination Agreement

 

Exhibit C

Form of Assignment and Acceptance

 

Exhibit D

Form of Borrowing Request

 

Exhibit E

Form of Guarantee and Collateral Agreement

 

Exhibit F

Form of Lender Addendum

 

Exhibit G

Form of Mortgage (Owned Real Property)

 

Exhibit H

Form of Perfection Certificate

 

Exhibit I

Form of Revolving Note

 

Exhibit J

Form of Term Note

 

 

iii

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

 

Exhibit K

Form of Exemption Certificate

 

Exhibit L

Form of Supplement

 

 

 

Schedule 1.01(b)

Mortgaged Properties

 

Schedule 1.01(c)

Subsidiary Guarantors

 

Schedule 2.01

Commitments

 

Schedule 3.08

Subsidiaries

 

Schedule 3.18

Insurance

 

Schedule 3.19(a)

UCC Filing Offices

 

Schedule 3.19(c)

Mortgage Filing Offices

 

Schedule 3.20

Owned and Leased Real Property

 

Schedule 6.01

Existing Indebtedness

 

Schedule 6.02

Existing Liens

 

Schedule 6.04

Existing Investments

 

 

iv

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

 

AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 27, 2006, amending and
restating the Credit Agreement dated as of March 15, 2004, among TRUE TEMPER
CORPORATION, a Delaware corporation ( “Holdings”), TRUE TEMPER SPORTS, INC., a
Delaware corporation (the “Borrower”), the LENDERS from time to time party
hereto, CREDIT SUISSE (formerly known as Credit Suisse First Boston), as
administrative agent (in such capacity, the “Administrative Agent”) and as
collateral agent (in such capacity, the “Collateral Agent”), CREDIT SUISSE
(formerly known as Credit Suisse First Boston), as sole bookrunner and sole lead
arranger (in such capacity, the “Arranger”), ANTARES CAPITAL CORPORATION, as
syndication agent (in such capacity, the “Syndication Agent”), and GOLDMAN SACHS
CREDIT PARTNERS L.P. and MERRILL LYNCH CAPITAL, a division of Merrill Lynch
Business Financial Services Inc., as co-documentation agents (each, in such
capacity, a “Documentation Agent”).

 

The parties hereto agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Acquisition” shall mean the acquisition by TTS Holdings pursuant to the
Purchase Agreement of all the Equity Interests in Holdings from the Sellers for
an aggregate amount of $342,000,000 in cash (the “Acquisition Consideration”).

 

“Acquisition Consideration” shall have the meaning assigned to such term in the
definition of “Acquisition”.

 

“Acquisition Documentation” shall mean shall mean, collectively, the Purchase
Agreement and all schedules, exhibits, annexes and amendments thereto and all
side letters and agreements affecting the terms thereof.

 

“Acquisition Transactions” shall mean, collectively, (a) the Acquisition,
including the payment of the Acquisition Consideration, (b) the Equity
Contribution, (c) the obtaining by the Borrower of the Facility provided for by
this Agreement, (d) the issuance by the Borrower of the Subordinated Notes,
(e) the repayment by the Borrower of all amounts outstanding under the Existing
Credit Facility, (f) the redemption by the Borrower of all of its 10.875% Senior
Subordinated Notes due 2008 and (g) the payment of fees and expenses incurred in
connection with the foregoing, including a fee payable to the Sponsor.

 

“Additional Term Loan Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Additional Term Loans hereunder as
set forth on Schedule 2.01, as the same may be reduced or increased from time to
time pursuant to

 

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

 

assignment by or to such Lender pursuant to Section 9.04. The aggregate amount
of the Additional Term Loan Commitments is $18,000,000.

 

“Additional Term Loan Commitment Termination Date” shall have the meaning set
forth in Section 2.09(a).

 

“Additional Term Loans” shall mean the Term Loans made by the Lenders to the
Borrower on the Funding Date.

 

“Adjusted LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum equal to the product of (a) the
LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble.

 

“Administrative Agent Fees” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit A, or such other form as may be supplied from time to time by
the Administrative Agent.

 

“Affiliate” shall mean, when used with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified;
provided, however, that, for purposes of Section 6.07, the term “Affiliate”
shall also include any person that directly or indirectly owns 10% or more of
any class of Equity Interests of the person specified or that is an officer or
director of the person specified.

 

“Affiliate Subordination Agreement” shall mean an Affiliate Subordination
Agreement in the form of Exhibit B pursuant to which intercompany obligations
and advances owed by any Loan Party are subordinated to the Obligations.

 

“Affirmation and Consent” means the Affirmation and Consent, dated as of the
Amendment Effective Date, executed and delivered by Holdings and each Subsidiary
Guarantor in form and substance satisfactory to the Administrative Agent.

 

“Agents” shall have the meaning assigned to such term in Article VIII.

 

“Aggregate Revolving Credit Exposure” shall mean the aggregate amount of the
Lenders’ Revolving Credit Exposures.

 

“Agreement” shall mean, on any date, the Existing Credit Agreement, as amended
and restated on the Amendment Effective Date and as the same may thereafter from
time to time be further amended, supplemented, amended and restated or otherwise
modified and in effect on such date.

 

2

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

 

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective date of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“Amendment Agreement” shall mean the Amendment Agreement dated as of March 27,
2006, among Holdings, the Borrower and the Lenders party thereto.

 

“Amendment Effective Date” means the date this Amended and Restated Credit
Agreement becomes effective pursuant to the Amendment Agreement.

 

“Amendment Fee Letter” shall mean the Fee Letter dated as of March 20, 2006,
among the Borrower, Credit Suisse (formerly known as Credit Suisse First Boston)
and Credit Suisse Securities (USA) LLC.

 

“Applicable Margin” shall mean, for any day, for each Type of Loan, the rate per
annum set forth under the relevant column heading below based upon the Leverage
Ratio as of the relevant date of determination:

 

Leverage Ratio

 

Eurodollar
Term Loans

 

ABR Term
Loans

 

Eurodollar Revolving Loans and Swingline Loans

 

ABR Revolving Loans and
Swingline Loans

 

Category 1
Greater than 5.75 to 1.00

 

2.50

%

1.50

%

2.50

%

1.50

%

Category 2
Greater than 4.75 to 1.00
but less than or equal to
5.75 to 1.00

 

2.50

%

1.50

%

2.25

%

1.25

%

Category 3
Greater than 3.75 to 1.00
but less than or equal to
4.75 to 1.00

 

2.50

%

1.50

%

2.00

%

1.00

%

Category 4
Less than or equal to 3.75
to 1.00

 

2.50

%

1.50

%

1.75

%

0.75

%

 

; provided, that, notwithstanding the foregoing, each Applicable Margin set
forth above with respect to the Term Loans shall be increased by an additional
0.50% per annum at all times during the period from and including the Amendment
Effective Date through and including the date of delivery to the Administrative
Agent of the financial statements required by Section 5.04(b), with respect to
the fiscal quarter ending October 1, 2006. Each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective, with respect
to all Loans, Commitments and Letters of Credit outstanding, upon delivery to
the Administrative Agent of the financial statements and certificates required
by Section 5.04(a) or (b) and

 

3

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

 

Section 5.04(c), respectively, indicating such change until the date immediately
preceding the next date of delivery of such financial statements and
certificates indicating another such change. In addition, at any time during
which the Borrower has failed to deliver the financial statements and
certificates required by Section 5.04(a) or (b) and Section 5.04(c),
respectively, the Leverage Ratio shall be deemed to be in Category 1 for
purposes of determining the Applicable Margin for so long as such failure to
deliver such applicable financial statements and certificates shall continue.

 

“Arranger” shall have the meaning assigned to such term in the preamble.

 

“Asset Sale” shall mean the sale, lease, sale and leaseback, assignment (other
than for security purposes), conveyance, transfer, issuance or other disposition
(by way of merger, casualty, condemnation or otherwise) (any of the foregoing, a
“Disposition”) by Holdings, the Borrower or any of the Subsidiaries to any
person other than the Borrower or any Subsidiary Guarantor of (a) any Equity
Interests of any of the Subsidiaries (other than directors’ qualifying shares)
or (b) any other assets of Holdings, the Borrower or any of the Subsidiaries,
including Equity Interests of any person that is not a Subsidiary (other than
(i) inventory, obsolete or worn out assets, assets that are no longer useful,
scrap and Permitted Investments, in each case Disposed of in the ordinary course
of business, (ii) the sale or discount by the Borrower or any Subsidiary, in
each case without recourse and in the ordinary course of business, of overdue
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale or financing transaction),
(iii) the Disposition by any Subsidiary that is not a Loan Party of its assets
that do not constitute Collateral in connection with a foreclosure by the
applicable lenders with respect to any Indebtedness of such Subsidiary to the
extent that such assets are collateral security for such Indebtedness, (iv) the
licensing of intellectual property in the ordinary course of business, (v) the
settlement, release or surrender of tort or other litigation claims,
(vi) Dispositions between Subsidiaries that are not Subsidiary Guarantors,
(vii) Permitted Acquisitions or other Investments by the Borrower or any
Subsidiary that are expressly permitted by Section 6.04 and that do not involve
a Disposition of any assets of Holdings, the Borrower or any of the Subsidiaries
to any person other than the Borrower or any Subsidiary Guarantor and
(viii) Permitted Asset Swaps); provided that any Disposition or series of
related Dispositions described in clause (b) above (but not excluded in
clauses (i) through (viii) above) having a value not in excess of $250,000 shall
be deemed not to be an “Asset Sale” for purposes of this Agreement.

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any person whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the
form of Exhibit C or such other form as shall be approved by the Administrative
Agent.

 

“Benefit Plan” shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Tax Code or Section 307 of ERISA, and in respect of which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

 

4

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

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States of America.

 

“Borrower” shall have the meaning assigned to such term in the preamble.

 

“Borrowing” shall mean (a) Loans of the same Class and Type made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

 

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and substantially in the form of Exhibit D, or such other
form as shall be approved by the Administrative Agent.

 

“Breakage Event” shall have the meaning assigned to such term in Section 2.16.

 

“Business Day” shall mean any day other than a Saturday, Sunday or day on which
commercial banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan
(including with respect to all notices and determinations in connection
therewith and any payments of principal, interest or other amounts thereon), the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.

 

“Capital Expenditures” shall mean, for any period, with respect to any person,
(a) the additions to property, plant and equipment and other capital
expenditures of such person and its consolidated subsidiaries that are (or
should be) set forth in a consolidated statement of cash flows of such person
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by such person and its consolidated subsidiaries during
such period, but excluding in each case any such expenditure made (i) in
accordance with the terms of this Agreement to restore, replace or rebuild
property to the condition of such property immediately prior to any damage,
loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or
condemnation, (ii) with the proceeds from the sale or other disposition or
trade-in or exchange of assets to the extent utilized to purchase functionally
equivalent assets, (iii) with the proceeds of a substantially contemporaneous
equity contribution from Holdings (other than any Cure Securities) and
(iv) consisting of the Proposed Domestic Acquisition.

 

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

 

“Change in Control” shall mean (a) if at any time prior to a Qualified IPO, the
Permitted Holders shall fail to own directly or indirectly, beneficially and of
record, Equity Interests representing more than 50% of the aggregate ordinary
voting power and aggregate equity value represented by the issued and
outstanding Equity Interests in Holdings; (b) if after a Qualified

 

5

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

 

IPO, any “person” or “group” (within the meaning of Rule 13d-5 of the Securities
Exchange Act of 1934 as in effect on the date hereof) other than the Permitted
Holders shall own directly or indirectly, beneficially or of record, Equity
Interests representing either (i) more than 30% of either the aggregate ordinary
voting power or the aggregate equity value represented by the issued and
outstanding Equity Interests in Holdings or (ii) a greater percentage of either
the aggregate ordinary voting power or the aggregate equity value represented by
the issued and outstanding Equity Interests in Holdings then held, directly or
indirectly, beneficially and of record, by the Permitted Holders; (c) if a
majority of the seats (other than vacant seats) on the board of directors of
Holdings shall at any time be occupied by persons who are not Continuing
Directors; (d) if Holdings shall at any time fail to own directly or indirectly,
beneficially and of record, 100% of each class of issued and outstanding Equity
Interests in the Borrower free and clear of all Liens (other than Liens
expressly permitted by clauses (b) and (d) of Section 6.02); or (e) if any
change of control (or similar event, however denominated) shall occur under the
Subordinated Note Documents.

 

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.14, by any lending office of such Lender or by such
Lender’s or Issuing Bank’s holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the Closing Date.

 

“Charges” shall have the meaning assigned to such term in Section 9.09.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or
Swingline Loans and, when used in reference to any Commitment, refers to whether
such Commitment is a Revolving Credit Commitment, Term Loan Commitment or
Swingline Commitment.

 

“Closing Date” shall mean March 15, 2004.

 

“Collateral” shall mean all property and assets of the Loan Parties, now owned
or hereafter acquired, upon which a Lien is purported to be created by any
Security Document.

 

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

 

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

 

“Commitment Fee” shall have the meaning assigned to such term in
Section 2.05(a).

 

“Commitment Fee Rate” shall mean a rate per annum equal to ½ of 1%.

 

“Commitment Letter” shall mean the Commitment Letter dated as of January 30,
2004, among TTS Holdings and Credit Suisse (formerly known as Credit Suisse
First Boston).

 

6

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

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) Consolidated Interest
Expense for such period, (ii) consolidated income tax expense for such period,
(iii) all amounts attributable to depreciation and amortization for such period,
including any increased expense or depreciation or amortization resulting from
purchase accounting adjustments or the write-up of inventory in connection with
acquisitions and amortization or write-off of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness, (iv) any noncash charges (other than the write-down of accounts
receivable or inventory held for sale (other than in connection with the
Acquisition or other Permitted Acquisitions consummated after the Closing Date))
for such period, (v) any restructuring costs for such period that are incurred
in connection with the Acquisition or other Permitted Acquisitions consummated
after the Closing Date, (vi) any non-recurring or extraordinary fees, charges or
other expenses for such period, (vii) bonus and retention payments, including
earn-outs, stock appreciation rights, non-compete payments, phantom stock plans
and similar payments, made or incurred in connection with the Acquisition or
other Permitted Acquisitions consummated after the Closing Date and the
financing thereof, (viii) management fees paid during such period, (ix) start-up
and related costs associated with the Chinese operations not to exceed the
lesser of $1,000,000 and the actual amount of such start-up and related costs in
the fiscal years ending December 31, 2004 and December 31, 2005 (provided that
to the extent that all or any portion of the income of any person is excluded
from Consolidated Net Income pursuant to the definition thereof for all or any
portion of such period any amounts set forth in the preceding
clauses (i) through (ix) that are attributable to such person shall not be
included for purposes of this definition for such period or portion thereof),
(x) if and when incurred, the amount of integration costs (not to exceed
$3,000,000 in the aggregate) associated with the Proposed Domestic Acquisition
incurred 12 months prior to or after the closing of that acquisition, (xi) for
fiscal years 2006, 2007 and 2008, the amount of start-up and transition costs
(not to exceed $1,500,000 in any single fiscal year or $3,000,000 in the
aggregate for all such fiscal years) associated with the Borrower’s
establishment and expansion of its foreign operations with respect to the
Foreign Target, (xii) for fiscal years 2006, 2007 and 2008, the amount of
transition and shut-down costs (including closure (in whole or in part) of
facilities, relocation of assets, severance costs and related amounts)
associated with the Borrower’s establishment and expansion of its foreign
operations with respect to the Foreign Target, not to exceed $1,500,000 in any
single fiscal year or $3,000,000 in the aggregate for all such fiscal years and
(xiii) for purposes of determining compliance with the financial covenants in
Sections 6.11, 6.12 and 6.13, the Cure Amount received by the Borrower for such
period and permitted to be included in Consolidated EBITDA pursuant to (and
subject to the provisions in) Section 7.01, and minus (b) without duplication,
to the extent included in the statement of such Consolidated Net Income for such
period, (i) all cash payments made during such period on account of reserves,
restructuring charges and other non-cash charges added to Consolidated Net
Income pursuant to clause (a)(iv) above in a previous period and (ii) all
non-cash items of income for such period, all determined on a consolidated basis
in accordance with GAAP; provided that for purposes of calculating Consolidated
EBITDA (other than for purposes of the determination of Excess Cash Flow) for
any period (A) the Consolidated EBITDA of any Acquired Entity acquired by the
Borrower or any Subsidiary pursuant to a Permitted Acquisition during such
period shall be included on a pro forma basis for such period (assuming the
consummation of such acquisition and the incurrence or assumption

 

7

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

 

of any Indebtedness in connection therewith occurred as of the first day of such
period) and (B) the Consolidated EBITDA of any person or line of business
Disposed of by the Borrower or any Subsidiary during such period for shall be
excluded for such period (assuming the consummation of such sale or other
disposition and the repayment of any Indebtedness in connection therewith
occurred as of the first day of such period).

 

“Consolidated Fixed Charges” shall mean, for any period, without duplication,
the sum of (a) Consolidated Interest Expense for such period, plus (b) the
aggregate amount of scheduled principal payments (whether or not made) during
such period in respect of long term Indebtedness (including Capital Lease
Obligations and Synthetic Lease Obligations) of the Borrower and the
Subsidiaries (other than (i) payments made by the Borrower or any Subsidiary to
the Borrower or a Subsidiary and (ii) amounts payable in respect of repayment or
prepayment of principal of Indebtedness (not to exceed $5,000,000) incurred by
the Foreign Target from a lender that is organized or doing business in the
jurisdiction in which the Foreign Target is located or a province thereof), plus
(c) Capital Expenditures for such period (other than Foreign Target Capital
Expenditures and Capital Expenditures in connection with restructuring and
start-up costs relating to the Proposed Domestic Acquisition, the Proposed
Foreign Acquisition and other Permitted Acquisitions consummated after the
Closing Date), plus (d) the aggregate amount of income taxes paid in cash by the
Borrower and the Subsidiaries during such period.

 

“Consolidated Interest Expense” shall mean, for any period, the cash interest
expense (including imputed interest expense in respect of Capital Lease
Obligations and Synthetic Lease Obligations) of the Borrower and the
Subsidiaries for such period (including all commissions, discounts and other
fees and charges owed by the Borrower and the Subsidiaries with respect to
letters of credit and bankers’ acceptance financing), net of interest income, in
each case determined on a consolidated basis in accordance with GAAP. For
purposes of the foregoing, interest expense shall be determined after giving
effect to any net payments made or received by the Borrower or any Subsidiary
with respect to interest rate Hedging Agreements (excluding (i) cash costs paid
to unwind a Hedging Agreement existing on the Closing Date and (ii) interest
expense attributable to up to $5,000,000 of outstanding Indebtedness incurred by
the Foreign Target from a lender that is organized or doing business in a
jurisdiction in which the Foreign Target is located or a province thereof).

 

“Consolidated Net Income” shall mean, for any period, the net income or loss of
the Borrower and the Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions (including a distribution in respect of
intercompany Indebtedness) by such Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, statute, rule or governmental regulation applicable to such
Subsidiary, (b) the income or loss of any person accrued prior to the date it
becomes a Subsidiary or is merged into or consolidated with the Borrower or any
Subsidiary or the date that such person’s assets are acquired by the Borrower or
any Subsidiary, (c) the income of any person (other than a Subsidiary) in which
any other person (other than the Borrower or a Subsidiary or any director
holding qualifying shares in accordance with applicable law) has an interest,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or a Subsidiary by such person during such period, and
(d) any extraordinary gains or losses.

 

8

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

 

“Continuing Directors” shall mean, at any time of determination, any member of
the board of directors of Holdings who (a) was a member of such board of
directors on the Amendment Effective Date, (b) was nominated for election or
elected to such board of directors with the approval of a majority of the
Continuing Directors who were members of such board of directors at the time of
such nomination or election, (c) prior to the consummation of a Qualified IPO,
was nominated by the Sponsors pursuant to the Stockholders Agreement or
(d) following the consummation of a Qualified IPO, was nominated for election or
elected to such board of directors by the Sponsors at such time when the
Permitted Holders are the beneficial owners, directly or indirectly, of Equity
Interests representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in Holdings.

 

“Control” shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “Controlling” and “Controlled” shall have meanings correlative thereto.

 

“Credit Event” shall have the meaning assigned to such term in Section 4.01.

 

“Cure Amount” shall have the meaning assigned to such term in Section 7.01.

 

“Cure Right” shall have the meaning assigned to such term in Section 7.01.

 

“Cure Securities” shall mean equity securities of Holdings (the net proceeds of
which are contributed to the common equity of the Borrower) having no mandatory
redemption, repurchase, repayment or similar requirements prior to the date
which occurs six months after the later of the Revolving Credit Maturity Date,
the Term Loan Maturity Date or the Incremental Term Loan Maturity Date, and upon
which all dividends or distributions shall be payable in additional shares of
such security only, and which are not convertible or exchangeable into any other
instrument (other than common equity of Holdings) and are not guaranteed or
secured.

 

“Current Assets” shall mean, at any time, the consolidated current assets (other
than cash and Permitted Investments) of the Borrower and the Subsidiaries.

 

“Current Liabilities” shall mean, at any time, the consolidated current
liabilities of the Borrower and the Subsidiaries at such time, but excluding,
without duplication, (a) the current portion of any long-term Indebtedness and
(b) outstanding Revolving Loans and Swingline Loans.

 

“Default” shall mean any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would constitute an Event of
Default.

 

“Defaulting Lender” shall mean any Revolving Lender that has either
(a) defaulted in its obligation to make a Revolving Loan or to fund its
participation in a Letter of Credit or Swingline Loan required to be made or
funded by it hereunder, (b) notified the Administrative Agent or the Borrower in
writing that it does not intend to satisfy any such obligation described in
clause (a) or (c) become insolvent or been taken over by any regulatory
authority or agency.

 

9

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

 

“Disposition” shall have the meaning assigned to such term in the definition of
“Asset Sale” and the term “Dispose” shall have a correlative meaning.

 

“Documentation Agent” shall have the meaning assigned to such term in the
preamble.

 

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

 

“Domestic Subsidiaries” shall mean all Subsidiaries incorporated, formed or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.

 

“Environmental Laws” shall mean all former, current and future Federal, state,
local and foreign laws (including common law), treaties, regulations, rules,
ordinances, codes, decrees, judgments, directives, orders (including consent
orders), and agreements in each case, relating to protection of the environment,
natural resources, human health and safety or the presence, Release of,
threatened Release, or exposure to, Hazardous Materials, or the generation,
manufacture, processing, distribution, use, treatment, storage, transport,
recycling or handling of, or the arrangement for such activities with respect
to, Hazardous Materials.

 

“Environmental Liability” shall mean all liabilities, obligations, damages,
losses, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs (including administrative oversight costs, natural resource
damages and remediation costs), whether contingent or otherwise, arising out of
or relating to (a) compliance or non-compliance with any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.

 

“Environmental Permit” shall mean any Permit under Environmental Law.

 

“Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity interests in any person, or any obligations convertible
into or exchangeable for, or giving any person a right, option or warrant to
acquire, such equity interests or such convertible or exchangeable obligations.

 

“Equity Issuance” shall mean any issuance or sale by Holdings or the Borrower of
any Equity Interests of Holdings or the Borrower, as applicable, or the receipt
by Holdings or the Borrower of any capital contribution, as applicable, except
in each case for (a) in the case of the Borrower, any issuance or sale to, or
any receipt of any capital contribution from, Holdings, (b) any issuance of
directors’ qualifying shares, (c) sales or issuances of common stock of Holdings
to management or employees of Holdings, the Borrower or any Subsidiary under any
employee stock option or stock purchase plan or employee benefit plan in
existence from time to time in the ordinary course of business, (d) any issuance
or sale by, or capital contribution in, Holdings or the Borrower in a
transaction not constituting a public offering so long as the Net Cash Proceeds
thereof are (i) on or before the date of receipt thereof, designated by Holdings
or the Borrower, as the case may be, pursuant to a notice to the Administrative
Agent (specifying the amount and designated use thereof) for use to fund a
Permitted Acquisition in accordance

 

10

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

 

with the terms hereof and (ii) within 30 days of the receipt thereof, applied to
fund such Permitted Acquisition in accordance with the terms hereof; provided
that in the case of any failure to satisfy the requirement in clause (ii) such
Net Cash Proceeds shall be deemed to have been received for purposes of
Section 2.13 when the 30-day period referred to therein expires and (e) Cure
Securities.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Tax Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Tax Code, is treated as a single employer under
Section 414 of the Tax Code.

 

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Benefit Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Benefit Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Tax Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Tax Code
or Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Benefit Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Benefit Plan or the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Benefit Plan
or Multiemployer Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Benefit Plan or Plans or to appoint a trustee to
administer any Benefit Plan; (f) the adoption of any amendment to a Benefit Plan
that would require the provision of security pursuant to Section 401(a)(29) of
the Tax Code or Section 307 of ERISA; (g) the receipt by the Borrower or any of
its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan
from the Borrower or any of its ERISA Affiliates of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA; (h) the occurrence of a “prohibited transaction” with respect
to which the Borrower or any of the Subsidiaries is a “disqualified person”
(within the meaning of Section 4975 of the Tax Code) or with respect to which
the Borrower or any such Subsidiary could otherwise be liable; or (i) any other
event or condition with respect to a Benefit Plan or Multiemployer Plan that
could result in liability of the Borrower or any Subsidiary.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” shall have the meaning assigned to such term in Article VII.

 

“Excess Cash Flow” shall mean, for any fiscal year of the Borrower, the excess
of (a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal
year (calculated without giving effect to the last proviso set forth in the
definition of Consolidated EBITDA) and (ii) the

 

11

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

 

decrease, if any, in Current Assets minus Current Liabilities (other than for
the Foreign Target) from the beginning to the end of such fiscal year over
(b) the sum, without duplication, of (i) the amount of any Taxes payable in cash
by Holdings and the Subsidiaries with respect to such fiscal year,
(ii) Consolidated Interest Expense (including for Indebtedness incurred in
connection with the Proposed Domestic Acquisition and the Proposed Foreign
Acquisition) for such fiscal year payable in cash, (iii) the aggregate amount
paid in cash in respect of Capital Expenditures (including in connection with
the Proposed Domestic Acquisition and for the Proposed Foreign Acquisition) and
Permitted Acquisitions in accordance with Sections 6.10 and 6.04, respectively,
during such fiscal year (and including in such fiscal year, in the case of
Capital Expenditures with respect to which the obligation to make payment has
accrued in the last fiscal quarter of such fiscal year but such obligation is
not payable in cash until the immediately following fiscal quarter, the amount
to be paid in cash in such following fiscal quarter; provided that such amount,
when paid in such following fiscal quarter, shall not be included in this
clause (iii)), in each case, except to the extent financed with the proceeds of
Indebtedness, equity issuances, casualty proceeds, condemnation proceeds or
other proceeds that would not be included in Consolidated EBITDA, (iv) permanent
repayments of Indebtedness (other than mandatory prepayments of Loans under
Section 2.13) made by the Borrower and the Subsidiaries during such fiscal year,
but only to the extent that such prepayments by their terms cannot be reborrowed
or redrawn and do not occur in connection with a refinancing of all or any
portion of such Indebtedness, (v) the amount paid in cash by Holdings, the
Borrower and the Subsidiaries during such fiscal year as a purchase price
adjustment in connection with the Acquisition pursuant to the terms of the
Purchase Agreement (as existing on the Closing Date), (vi) the amount paid in
cash by Holdings and the Subsidiaries during such fiscal year as a purchase
price adjustment pursuant to the Purchase Agreement, (vii) the increase, if any,
in Current Assets minus Current Liabilities (in each case, other than for the
Foreign Target) from the beginning to the end of such fiscal year and (viii) the
aggregate amount of Investments made by the Borrower and Subsidiaries in the
Foreign Target.

 

“Excluded Foreign Subsidiaries” shall mean, at any time, any Foreign Subsidiary
that is (or is treated as) for United States federal income tax purposes either
(a) a corporation or (b) a pass-through entity owned directly or indirectly by
another Foreign Subsidiary that is (or is treated as) a corporation.

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income as a result of a present or
former connection between such recipient and the jurisdiction imposing such tax
(or any political subdivision thereof), other than any such connection arising
solely from such recipient having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document and (b) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.21(a)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with Section 2.20(d), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.20(a).

 

12

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

 

“Exempted Assets Sales” means a Disposition of assets (whether real or personal,
and whether tangible or intangible), within nine months (unless otherwise
extended for no more than three months by the Administrative Agent in its sole
discretion) following their acquisition by the Borrower or a Subsidiary in the
Proposed Domestic Acquisition or the acquisition of the assets of, or Equity
Interests of (resulting in a Subsidiary), a person in connection with the
Proposed Foreign Acquisition (but in each case only as to assets actually
acquired in the Proposed Domestic Acquisition or such an acquisition in
connection with the Proposed Foreign Acquisition).

 

“Existing Credit Agreement” means the Credit Agreement, dated as of March 15,
2004, among Holdings, the Borrower, the Lenders, the Administrative Agent, the
Collateral Agent, the Arranger, the Syndication Agent and the Documentation
Agent as amended or modified and in effect immediately prior to the Amendment
Effective Date.

 

“Facility” shall mean each of (a) the Term Loan Commitments and the Term Loans
made thereunder (the “Term Loan Facility”), and (b) the Revolving Credit
Commitments and the extensions of credit made thereunder (the “Revolving Credit
Facility”).

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Letters” shall mean, collectively, the Initial Fee Letter and the Amendment
Fee Letter.

 

“Fee Trigger Date” shall mean the day that is 61 days following the Amendment
Effective Date

 

“Fees” shall mean the Commitment Fees, the Administrative Agent Fees, the L/C
Participation Fees and the Issuing Bank Fees.

 

“Financial Officer” of any person shall mean the chief financial officer,
principal accounting officer, treasurer or controller of such person.

 

“Fixed Charge Coverage Ratio” shall mean, on the last day of any fiscal quarter,
the ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal
quarters most recently ended on and prior to such date, taken as one accounting
period, to (b) Consolidated Fixed Charges for the period of four consecutive
fiscal quarters most recently ended on and prior to such date, taken as one
accounting period.

 

“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

13

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

 

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

 

“Foreign Target” means, collectively, any direct or indirect Subsidiaries of the
Borrower that are organized or existing under the laws of a foreign jurisdiction
previously identified in writing to the Administrative Agent or a province
thereof or a majority of the value (as determined in good faith by the Borrower)
of whose properties or assets are located in such jurisdiction or a province
thereof.

 

“Foreign Target Capital Expenditures” shall mean, for any period,
(a) expenditures made with respect to the Foreign Target outside of the ordinary
course of business (including the acquisition of the Equity Interests (resulting
in a Subsidiary) of, all or substantially all of the assets of, a line of
business of, or a business unit or division of, any person in connection with
the Proposed Foreign Acquisition, and the acquisition of any other fixed or
capital assets acquired outside of the ordinary course of business from any
person in connection with the Proposed Foreign Acquisition) and (b) expenditures
made in the ordinary course of business to restore, replace or rebuild property
of the Foreign Target to the condition of such property immediately prior to any
damage, loss, destruction or condemnation of such property.

 

“Funded Debt” shall mean as of the last day of any fiscal quarter, Total Debt at
such time less the amount of cash and Permitted Investments of the Borrower and
the Subsidiary Guarantors at such time in an aggregate amount not to exceed
$7,500,000.

 

“Funding Date” shall mean the date on which the Borrowing of Term Loans (other
than Incremental Term Loans) is made following the Amendment Effective Date.

 

“GAAP” shall mean generally accepted accounting principles in the United States.

 

“Governmental Authority” shall mean the government of the United States of
America or any other nation, any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

“Granting Lender” shall have the meaning assigned to such term in
Section 9.04(i).

 

“Guarantee” of or by any person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of (a) the guarantor or (b) another person (including
any bank under a letter of credit) to induce the creation of which the guarantor
has issued a reimbursement, counterindemnity or similar obligation, in either
case guaranteeing or having the economic effect of guaranteeing any Indebtedness
or other obligation of any other person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation, contingent or
otherwise, of the guarantor, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment of such Indebtedness or other obligation,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Indebtedness or other obligation of the payment of
such Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay

 

14

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

 

such Indebtedness or other obligation, (iv) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation or (v) to otherwise assure or hold harmless the owner of such
Indebtedness or other obligation against loss in respect thereof; provided,
however, that the term “Guarantee” shall not include endorsements for collection
or deposit in the ordinary course of business.

 

“Guarantee and Collateral Agreement” shall mean the Guarantee and Collateral
Agreement in the form of Exhibit E, to be executed and delivered by Holdings,
the Borrower and each Subsidiary Guarantor.

 

“Guarantors” shall mean Holdings and the Subsidiary Guarantors.

 

“Hazardous Materials” shall mean any petroleum (including crude oil or fraction
thereof) or petroleum products or byproducts, or any pollutant, contaminant,
chemical, compound, constituent, or hazardous, toxic or other substances,
materials or wastes defined, or regulated as such by, or pursuant to, any
Environmental Law, or requires removal, remediation or reporting under any
Environmental Law, including asbestos, or asbestos containing material, radon or
other radioactive material, polychlorinated biphenyls and urea formaldehyde
insulation.

 

“Hedging Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, fuel or other
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided,
however, that no phantom stock or similar plan providing for payments and on
account of services provided by current or former directors, officers, employees
or consultants of Holdings, the Borrower or any Subsidiary shall be a Hedging
Agreement.

 

“Holdings” shall have the meaning assigned to such term in the preamble.

 

“Indebtedness” of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person under conditional sale or other title retention
agreements relating to property or assets acquired by such person, (d) all
obligations of such person in respect of the deferred purchase price of property
or services (other than current trade accounts payable incurred in the ordinary
course of business), (e) all obligations of such person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity
Interests in such person, (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such person of Indebtedness of others, (h) all Capital
Lease Obligations or Synthetic Lease Obligations of such person, (i) all
obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such person in respect of bankers’ acceptances. The
Indebtedness of any person shall include the Indebtedness of any other person
(including any partnership in which such person is a general partner) to the
extent such person is liable therefor as a result of such person’s ownership
interest

 

15

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

 

in, or other relationship with, such other person, except to the extent the
terms of such Indebtedness provide (including by a non-recourse nature) that
such person is not liable therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes and Other Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

 

“Information” shall have the meaning assigned to such term in Section 9.16.

 

“Incremental Debt Amount” shall mean, at any time, the amount (if any) equal to
(a) $15,000,000 less (b) an amount equal to the aggregate amount of all
Incremental Term Loan Commitments established prior to such time pursuant to
Section 2.24.

 

“Incremental Term Lender” shall mean a Lender with an Incremental Term Loan
Commitment or an outstanding Incremental Term Loan.

 

“Incremental Term Loan” shall mean an incremental term loan made by an
Incremental Term Lender to the Borrower pursuant to clause (b) of Section 2.01.
Incremental Term Loans may be made in the form of additional Term Loans or, to
the extent provided for in the relevant Incremental Term Loan Assumption
Agreement and permitted by Section 2.24, Other Term Loans.

 

“Incremental Term Loan Assumption Agreement” shall mean an Incremental Term Loan
Assumption Agreement in form and substance reasonably satisfactory to the
Administrative Agent, among the Borrower, the Administrative Agent and one or
more Incremental Term Lenders.

 

“Incremental Term Loan Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Incremental Term Loans hereunder as
set forth on the Incremental Term Loan Assumption Agreement delivered by such
Lender or as set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender assumed its Incremental Term Loan Commitment, as
applicable, as the same may be (a) reduced from time to time pursuant to
Section 2.09 and (b) reduced or increased from time to time pursuant to
assignment by or to such Lender pursuant to Section 9.04.

 

“Incremental Term Loan Maturity Date” shall mean the final maturity date of any
Incremental Term Loan, as set forth in the applicable Incremental Term Loan
Assumption Agreement, subject to the limitations thereon set forth in
Section 2.24.

 

“Incremental Term Loan Repayment Dates” shall mean the dates scheduled for the
repayment of principal of any Incremental Term Loan, as set forth in the
applicable Incremental Term Loan Assumption Agreement.

 

“Initial Fee Letter” shall mean the Fee Letter dated as of January 30, 2004,
among TTS Holdings and Credit Suisse (formerly known as Credit Suisse First
Boston).

 

“Intellectual Property Collateral” shall have the meaning assigned to such term
in the Guarantee and Collateral Agreement.

 

16

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

 

“Intellectual Property Security Agreement” shall mean all Intellectual Property
Security Agreements to be executed and delivered by the Loan Parties, each
substantially in the applicable form required by the Guarantee and Collateral
Agreement.

 

“Interest Coverage Ratio” shall mean, on the last day of any fiscal quarter, the
ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal
quarters most recently ended on and prior to such date, taken as one accounting
period, to (b) Consolidated Interest Expense for the period of four consecutive
fiscal quarters ended on and prior to such date, taken as one accounting period.

 

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last
Business Day of each March, June, September and December and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
that would have been an Interest Payment Date had successive Interest Periods of
three months’ duration been applicable to such Borrowing.

 

“Interest Period” shall mean, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is 1, 2, 3 or 6 months thereafter
(or 9 or 12 months thereafter if, at the time of the relevant Borrowing, an
interest period of such duration is available to all Lenders participating
therein), as the Borrower may elect; provided, however, that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. Interest shall accrue from and including the
first day of an Interest Period to but excluding the last day of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the date
on which such Borrowing is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.

 

“Investments” shall have the meaning assigned to such term in Section 6.04.

 

“Issuing Bank” shall mean, as the context may require, (a) Credit Suisse
(formerly known as Credit Suisse First Boston), in its capacity as the issuer of
Letters of Credit hereunder, and (b) any other Lender that may become an Issuing
Bank pursuant to Section 2.23(i) or 2.23(k), with respect to Letters of Credit
issued by such Lender. The Issuing Bank may, in its discretion, arrange for one
or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.

 

“Issuing Bank Fees” shall have the meaning assigned to such term in
Section 2.05(c).

 

“Jineng” shall mean Jineng Composite Materials and Products (Guangzhou) Company
Ltd., a Subsidiary organized under the laws of China.

 

17

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

 

“L/C Commitment” shall mean the commitment of the Issuing Bank to issue Letters
of Credit pursuant to Section 2.23.

 

“L/C Disbursement” shall mean a payment or disbursement made by the Issuing Bank
pursuant to a Letter of Credit.

 

“L/C Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all Letters of Credit at such time and (b) the aggregate amount of all
L/C Disbursements that have not been reimbursed at such time. The L/C Exposure
of any Revolving Credit Lender at any time shall equal its Pro Rata Percentage
of the aggregate L/C Exposure at such time.

 

“L/C Fee Payment Date” shall have the meaning assigned to such term in
Section 2.05(c).

 

“L/C Participation Fee” shall have the meaning assigned to such term in
Section 2.05(c).

 

“Lender Addendum” shall mean, with respect to any initial Lender, a Lender
Addendum in the form of Exhibit F, or such other form as may be supplied by the
Administrative Agent, to be executed and delivered by such Lender on the Closing
Date.

 

“Lenders” shall mean (a) the persons that deliver a Lender Addendum (other than
any such person that has ceased to be a party hereto pursuant to an Assignment
and Acceptance), (b) any person that has become a party hereto pursuant to an
Assignment and Acceptance and (c) any person that has become a party hereto
pursuant to an Incremental Term Loan Assumption Agreement. Unless the context
otherwise requires, the term “Lenders” shall include the Swingline Lender.

 

“Letter of Credit” shall mean any letter of credit issued pursuant to
Section 2.23.

 

“Leverage Ratio” shall mean, on the last day of any fiscal quarter, the ratio of
(a) Funded Debt on such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on and prior to such date, taken
as one accounting period.

 

“LIBO Rate” shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the date that is two Business Days
prior to the commencement of such Interest Period by reference to the British
Bankers’ Association Interest Settlement Rates for deposits in dollars (as set
forth by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent which has been nominated by the
British Bankers’ Association as an authorized information vendor for the purpose
of displaying such rates) for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the interest
rate per annum determined by the Administrative Agent to be the average of the
rates per annum at which deposits in dollars are offered for such relevant
Interest Period to major banks in the London interbank market in London, England
by the Administrative Agent at approximately 11:00 a.m. (London time) on the
date that is two Business Days prior to the beginning of such Interest Period.

 

18

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

 

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien (statutory or otherwise), pledge, hypothecation, encumbrance, collateral
assignment, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.

 

“Loan Documents” shall mean this Agreement, the Supplement and the Security
Documents.

 

“Loan Parties” shall mean Holdings, the Borrower and each Subsidiary (other than
a Foreign Subsidiary) that is or becomes a party to a Loan Document.

 

“Loans” shall mean the Revolving Loans, the Term Loans and the Swingline Loans.

 

“Majority Facility Lenders” shall mean, with respect to any Facility, the
holders (other than Defaulting Lenders) of a majority of the aggregate unpaid
principal amount of the Term Loans or the Aggregate Revolving Credit Exposure,
as the case may be, outstanding under such Facility (or, in the case of the
Revolving Credit Facility, prior to the termination of the Revolving Credit
Commitments, the holders of a majority of the Total Revolving Credit
Commitment).

 

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

 

“Material Adverse Effect” shall mean a material adverse condition or material
adverse change in or materially affecting (a) the business, assets, liabilities,
operations or condition (financial or otherwise) of Holdings, the Borrower and
the Subsidiaries, taken as a whole, or (b) the validity or enforceability of any
of the Loan Documents or the material rights and remedies of the Arranger, the
Administrative Agent, the Collateral Agent or the Secured Parties thereunder.

 

“Material Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $5,000,000. For purposes of determining
Material Indebtedness, the “principal amount” of the obligations of Holdings,
the Borrower or any Subsidiary in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that Holdings, the Borrower for such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgaged Properties” shall mean, initially, each parcel of real property and
the improvements thereto owned or leased by a Loan Party and specified on
Schedule 1.01(b), and shall include each other parcel of real property and
improvements thereto with respect to which a Mortgage is granted pursuant to
Section 5.09 or 5.10.

 

19

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

 

“Mortgages” shall mean the fee or leasehold mortgages or deeds of trust,
assignments of leases and rents and other security documents granting a Lien on
any Mortgaged Property to secure the Obligations, if such Mortgaged Property is
owned, in the form of Exhibit G or, if such Mortgaged Property is leased, in
form reasonably satisfactory to the Collateral Agent, as the case may be, with
such changes as shall be advisable under the law of the jurisdiction in which
such Mortgage is to be recorded and as are reasonably satisfactory to the
Collateral Agent, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.

 

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate
may have any liability.

 

“Net Cash Proceeds” shall mean (a) with respect to any Asset Sale or Recovery
Event, the proceeds thereof in the form of cash and Permitted Investments
(including any such proceeds subsequently received (as and when received) in
respect of noncash consideration initially received), net of (i) selling
expenses (including reasonable and customary broker’s or investment banker’s
fees or commissions, legal fees, transfer and similar taxes incurred by the
Borrower and the Subsidiaries in connection therewith and the Borrower’s good
faith estimate of income taxes paid or payable in connection with such sale,
after taking into account any available tax credits or deductions and any tax
sharing arrangements), (ii) amounts provided as a reserve, in accordance with
GAAP, against any liabilities under any indemnification obligations or purchase
price adjustment associated with such Asset Sale (provided that, to the extent
and at the time any such amounts are released from such reserve, such amounts
shall constitute Net Cash Proceeds) and (iii) the principal amount, premium or
penalty, if any, interest and other amounts on any Indebtedness for borrowed
money which is secured by the asset sold in such Asset Sale and which is
required to be repaid with such proceeds (other than any such Indebtedness
assumed by the purchaser of such asset); provided, however, that, if (x) the
Borrower shall deliver a certificate of a Financial Officer of the Borrower to
the Administrative Agent within three Business Days of the time of receipt
thereof setting forth the Borrower’s intent to reinvest such proceeds in assets
of a kind then used or usable in the business of the Borrower and the
Subsidiaries within 365 days of receipt of such proceeds and (y) no Event of
Default shall have occurred and be continuing at the time of such certificate,
such proceeds shall not constitute Net Cash Proceeds except to the extent not so
used at the end of such 365-day period, at which time such proceeds shall be
deemed to be Net Cash Proceeds; provided further, however, that, if (A) such
proceeds shall result from an Asset Sale or Recovery Event to the extent
involving assets, rights or other property of a Subsidiary that is not a Loan
Party, (B) the terms of any Indebtedness of such Subsidiary require that such
proceeds be applied to repay such Indebtedness, (C) the Borrower shall deliver a
certificate of a Financial Officer to the Administrative Agent within three
Business Days of the time of receipt thereof setting forth the Borrower’s intent
to use such proceeds to repay such Indebtedness of such Subsidiary to the extent
required thereby and, if such Indebtedness is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto, within 365 days of
receipt of such proceeds and (D) no Event of Default shall have occurred and be
continuing at the time of such certificate, such proceeds shall not constitute
Net Cash Proceeds except to the extent not so used at the end of such 365-day
period, at which time such proceeds shall be deemed to be Net Cash Proceeds; and
(b) with respect to any issuance or disposition of Indebtedness or any Equity
Issuance, the cash proceeds thereof, net of all taxes and reasonable and
customary fees (including

 

20

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

 

legal fees), commissions, underwriting discounts, costs and other expenses
incurred by the Borrower and the Subsidiaries in connection therewith.

 

“Obligations” shall mean all obligations defined as “Obligations” in the
Guarantee and Collateral Agreement and the other Security Documents.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
(including interest, fines, penalties and additions to tax) arising from any
payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

 

“Other Term Loans” shall have the meaning assigned to such term in
Section 2.24(a).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

 

“Perfection Certificate” shall mean the Pre-Closing UCC Diligence Certificate
substantially in the form of Exhibit H or any other form approved by the
Collateral Agent.

 

“Permits” shall mean any and all material franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, rights of way, Liens and other rights,
privileges and approvals required under any Requirement of Law.

 

“Permitted Acquisition” shall mean (a) the Proposed Domestic Acquisition and the
acquisition of the assets of, or Equity Interests of (resulting in a
Subsidiary), a person in connection with the Proposed Foreign Acquisition and
(b) any other acquisition by the Borrower or any Subsidiary of all or
substantially all the assets of a person or line of business of such person, or
all of the Equity Interests of a person (referred to herein as the “Acquired
Entity”); provided that (i) the Acquired Entity shall be a going concern and
shall be in a Permitted Business; (ii) at the time of such transaction (A) both
before and after giving effect thereto, no Event of Default or Default shall
have occurred and be continuing; (B) the Borrower would be in compliance with
the covenants set forth in Sections 6.11 and 6.13 and if the aggregate
consideration paid in connection with such acquisition and any related
acquisition (including any Indebtedness of the Acquired Entity that is assumed
by the Borrower or any Subsidiary following such acquisition) is (x) $5,000,000
or more, then the Leverage Ratio would be at least 0.25 to 1.0 less than the
maximum Leverage Ratio permitted under Section 6.12 at such time or (y) less
than $5,000,000, then the Borrower would be in compliance with the covenant set
forth in Section 6.12, in each case described in this clause (B) as of the most
recently completed period ending prior to such transaction for which the
financial statements and certificates required by Section 5.04(a) or
5.04(b) were required to be delivered or for which comparable financial
statements have been filed with or furnished to the Securities and Exchange
Commission, after giving pro forma effect to such transaction and to any other
event occurring after such period as to which pro forma recalculation is
appropriate (including any other transaction described in this definition
occurring after such period) as if such transaction (and the occurrence or
assumption of any Indebtedness in connection therewith) had occurred as of the
first day of such period; and (C) in the case of other than the Proposed Foreign
Acquisition, after

 

21

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

 

giving effect to such acquisition, there must be at least $5,000,000 of unused
and available Revolving Credit Commitments; and (iii) the Borrower shall comply,
and shall cause the Acquired Entity to comply, with the applicable provisions of
Sections 5.09 and 5.10 and the Security Documents.

 

“Permitted Asset Swap” shall mean any transfer of properties or assets by the
Borrower or any of the Subsidiaries in which at least 90% of the consideration
received by the transferor consists of properties or assets (other than cash or
Permitted Investments) useful in the business of the Borrower or the
Subsidiaries; provided that (a) the aggregate fair market value (as determined
in good faith by the board of directors of the Borrower) of the property or
assets being transferred by the Borrower or such Subsidiary is not greater than
the aggregate fair market value (as determined in good faith by the board of
directors of the Borrower) of the property or assets received by the Borrower or
such Subsidiary in such transfer and (b) the aggregate fair market value (as
determined in good faith by the board of directors of the Borrower) of all
property or assets transferred by the Borrower or any of the Subsidiaries in
such transfer, together with the aggregate fair market value of all other
property or assets transferred in prior Permitted Asset Swaps in such fiscal
year, shall not exceed $2,000,000 in any fiscal year.

 

“Permitted Business” shall mean any business conducted or proposed to be
conducted by the Borrower and the Subsidiaries on the date of this Agreement or
any business that is similar, reasonably related, incidental or ancillary
thereto or to the manufacture of sports equipment or metal or graphite products.

 

“Permitted Holders” shall mean the Sponsor and the Sponsor Related Parties.

 

“Permitted Holdings Indebtedness” shall mean Indebtedness of Holdings which
(a) does not require the payment of cash interest, does not mature, and is not
subject to mandatory repurchase, redemption or amortization (other than pursuant
to customary asset sale or change of control provisions requiring redemption or
repurchase only if and to the extent permitted by this Agreement), in each case,
prior to the date that is six months after the Term Loan Maturity Date, (b) is
not secured by any assets of Holdings, the Borrower or any Subsidiary, (c) is
not Guaranteed by the Borrower or any Subsidiary, (d) is not exchangeable or
convertible into Indebtedness of Holdings (except other Permitted Holdings
Indebtedness), the Borrower or any Subsidiary or any preferred stock or other
Equity Interest (other than common equity of Holdings, provided that any such
exchange or conversion, if effected, would not result in a Change in Control)
and (e) is subordinated to the Obligations to the same degree (or to a greater
degree) as those obligations that are subject to the Affiliate Subordination
Agreement.

 

“Permitted Investments” shall mean:

 

(a)                                  direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;

 

22

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

 

(b)                                 investments in commercial paper maturing
within 270 days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody’s;

 

(c)                                  investments in certificates of deposit,
banker’s acceptances and time deposits maturing within 270 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, the Administrative Agent or any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus and
undivided profits of not less than $500,000,000;

 

(d)                                 fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause
(a) above and entered into with a financial institution satisfying the criteria
of clause (c) above;

 

(e)                                  investments in “money market funds” within
the meaning of Rule 2a-7 of the Investment Company Act of 1940, as amended,
substantially all of whose assets are invested in investments of the type
described in clauses (a) through (d) above; and

 

(f)                                    other short-term investments utilized by
Foreign Subsidiaries in accordance with normal investment practices for cash
management in investments of a type analogous to the foregoing.

 

“Permitted Refinancing Indebtedness” shall mean Indebtedness issued or incurred
(including by means of the extension or renewal of existing Indebtedness) to
refinance, refund, extend, renew or replace existing Indebtedness (“Refinanced
Indebtedness”); provided that (a) the principal amount of such refinancing,
refunding, extending, renewing or replacing Indebtedness is not greater than the
principal amount of such Refinanced Indebtedness plus the amount of any premiums
or penalties and accrued and unpaid interest paid thereon and reasonable fees
and expenses, in each case associated with such refinancing, refunding,
extension, renewal or replacement, (b) such refinancing, refunding, extending,
renewing or replacing Indebtedness has a final maturity that is no sooner than,
and a weighted average life to maturity that is no shorter than, such Refinanced
Indebtedness, (c) if such Refinanced Indebtedness or any Guarantees thereof are
subordinated to the Obligations, such refinancing, refunding, extending,
renewing or replacing Indebtedness and any Guarantees thereof remain so
subordinated on terms no less favorable to the Lenders, (d) the obligors in
respect of such Refinanced Indebtedness immediately prior to such refinancing,
refunding, extending, renewing or replacing are the only obligors on such
refinancing, refunding extending, renewing or replacing Indebtedness and
(e) unless such refinancing, refunding, extending, renewing or replacing shall
occur within 30 days of the final maturity of such Refinanced Indebtedness, such
refinancing, refunding, extending, renewing or replacing Indebtedness contains
covenants and events of default and is benefited by Guarantees, if any, which,
taken as a whole, are determined in good faith by a Financial Officer of the
Borrower to be no less favorable to the Borrower or the applicable Subsidiary
and the Lenders in any material respect than the covenants and events of default
or Guarantees, if any, in respect of such Refinanced Indebtedness; provided
further, however, that any Indebtedness issued or incurred to refinance, refund,
extend, renew or replace

 

23

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

 

the Indebtedness of Jineng that is set forth in Schedule 6.01 or the Foreign
Target shall not be subject to clause (b) or clause (e) above.

 

“person” shall mean any natural person, corporation, trust, business trust,
joint venture, joint stock company, association, company, limited liability
company, partnership, Governmental Authority or other entity.

 

“Pledged Collateral” shall have the meaning assigned to such term in the
Guarantee and Collateral Agreement.

 

“Prime Rate” shall mean the rate of interest per annum announced from time to
time by Credit Suisse as its prime rate in effect at its principal office in New
York City; each change in the Prime Rate shall be effective as of the opening of
business on the date such change is announced as being effective. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually available.

 

“Pro Forma EBITDA” shall have the meaning assigned to such term in
Section 4.02(k).

 

“Proposed Domestic Acquisition” means the acquisition made pursuant to an asset
purchase agreement, dated as of the Funding Date, between the Borrower, as the
purchaser, and a company previously disclosed to the Administrative Agent, as
the seller.

 

“Proposed Foreign Acquisition” means the Borrower’s establishment or expansion
of a Permitted Business in a foreign jurisdiction previously identified in
writing to the Administrative Agent or any province thereof, including by way of
the acquisition of the assets of, or of the Equity Interests of (resulting in a
Subsidiary), a Person located in such jurisdiction or a province thereof, or the
making of Capital Expenditures therein.

 

“Pro Rata Percentage” of any Revolving Credit Lender, at any time, shall mean
the percentage of the Total Revolving Credit Commitment represented by such
Lender’s Revolving Credit Commitment. In the event the Revolving Credit
Commitments shall have expired or been terminated, the Pro Rata Percentages of
any Revolving Credit Lender shall be determined on the basis of the Revolving
Credit Commitments most recently in effect prior thereto.

 

“Purchase Agreement” shall mean the stock purchase agreement dated as of
January 30, 2004, by and among TTS Holdings, the Sellers and Holdings.

 

“Qualified IPO” shall mean an underwritten initial public offering of common
stock of (and by) Holdings pursuant to an effective registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, which initial public offering results in gross cash
proceeds to Holdings of $50,000,000 or more.

 

“Real Property” shall mean all Mortgaged Property and all other real property
owned or leased from time to time by Holdings, the Borrower and the
Subsidiaries.

 

“Receivables Subsidiary” shall mean a Subsidiary which engages in no activities
other than in connection with the financing of accounts receivable or related
assets (including contract rights) and which is designated by the board of
directors of the Borrower (as provided below) as

 

24

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

 

a Receivables Subsidiary (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (i) is guaranteed by Holdings,
the Borrower or any of the other Subsidiaries (but excluding customary
representations, warranties, covenants and indemnities entered into in
connection with a Securitization Transaction), (ii) is recourse to or obligates
Holdings, the Borrower or any of the other Subsidiaries in any way other than
pursuant to customary representations, warranties, covenants and indemnities
entered into in connection with a Securitization Transaction or (iii) subjects
any property or asset (including contract rights) of Holdings, the Borrower or
any of the other Subsidiaries (other than accounts receivable and related assets
provided in the definition of “Securitization Transaction”), directly or
indirectly, contingently or otherwise, to the satisfaction thereof, other than
pursuant to customary representations, warranties, covenants and indemnities
entered into in connection with a Securitization Transaction, (b) with which
none of Holdings, the Borrower or any of the other Subsidiaries has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to Holdings, the Borrower or such other Subsidiary than those that
might be obtained at the time from persons who are not Affiliates of Holdings,
other than customary fees payable in connection with servicing accounts
receivable and (c) with which none of Holdings, the Borrower or any of the other
Subsidiaries has any obligation to maintain or preserve such Subsidiary’s
financial condition or cause such Subsidiary to achieve certain levels of
operating results. Any such designation by the board of directors of the
Borrower shall be evidenced to the Administrative Agent by delivery to the
Administrative Agent of a certified copy of the resolution of the board of
directors of the Borrower giving effect to such designation and a certificate of
a Financial Officer of the Borrower certifying that such designation complied
with the foregoing requirements.

 

“Recovery Event” shall mean any settlement of or payment in respect of any
property or casualty insurance claim or any taking under power of eminent domain
or by condemnation or similar proceeding of or relating to any property or asset
of Holdings, the Borrower or any Subsidiary.

 

“Register” shall have the meaning assigned to such term in Section 9.04(d).

 

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

 

“Related Fund” shall mean, with respect to any Lender, any other fund that
invests in bank loans and is advised or managed by the same investment advisor
or manager as such Lender or by an Affiliate of such investment advisor or
manager.

 

“Related Parties” shall mean, with respect to any specified person, such
person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such person and such person’s Affiliates.

 

25

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

 

“Release” shall mean any release, spill, seepage, emission, leaking, pumping,
injection, pouring, emptying, deposit, disposal, discharge, dispersal, dumping,
escaping, leaching, or migration into, onto or through the environment or within
or upon any building, structure, facility or fixture.

 

“Repayment Date” shall have the meaning given such term in Section 2.11.

 

“Required Lenders” shall mean, at any time, Lenders (other than Defaulting
Lenders) having Loans (excluding Swingline Loans), L/C Exposure, Swingline
Exposure and unused Revolving Credit Commitments and Term Loan Commitments
representing at least a majority of the sum of all Loans outstanding (excluding
Swingline Loans), L/C Exposure, Swingline Exposure and unused Revolving Credit
Commitments and Term Loan Commitments at such time.

 

“Required Prepayment Percentage” shall mean (a) in the case of any Asset Sale or
Recovery Event, 100%; (b) in the case of any Equity Issuance, if on the date of
the applicable prepayment, to the extent that the Leverage Ratio, after giving
effect to any repayment of Loans with the applicable Net Cash Proceeds, is
greater than or equal to 4.00 to 1.00, 50%, and to the extent that the Leverage
Ratio, after giving effect to any repayment of Loans with the applicable Net
Cash Proceeds, is less than 4.00 to 1.00, 25%; (c) in the case of any issuance
or other incurrence of Indebtedness, 100%; and (d) in the case of any Excess
Cash Flow, if on the last day of the applicable fiscal year, to the extent that
the Leverage Ratio, after giving effect to any repayment of Loans with the
applicable Net Cash Proceeds, is (i) greater than or equal to 4.00 to 1.00, 75%,
(ii) less than 4.00 to 1.00 but greater than 3.00 to 1.00, 50%, (iii) less than
or equal to 3.00 to 1.00 but greater than 2.00 to 1.00, 25% and (iv) less than
or equal to 2.00 to 1.00, 0%.

 

“Requirement of Law” shall mean as to any person, the governing documents of
such person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such person or any of its Real Property or personal property
or to which such person or any of its property of any nature is subject.

 

“Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.

 

“Restricted Indebtedness” shall mean Indebtedness of Holdings, the Borrower or
any Subsidiary, the payment, prepayment, repurchase or defeasance of which is
restricted under Section 6.09(b).

 

“Restricted Payment” shall mean any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in
Holdings, the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, defeasance, retirement, acquisition,
cancellation or termination of any Equity Interests in Holdings, the Borrower or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Holdings, the Borrower or any Subsidiary.

 

26

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

 

“Revolving Credit Borrowing” shall mean a Borrowing comprised of Revolving
Loans.

 

“Revolving Credit Commitment” shall mean, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans (and to acquire
participations in Letters of Credit and Swingline Loans) hereunder as set forth
on the Lender Addendum delivered by such Lender or as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be
(a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04.

 

“Revolving Credit Exposure” shall mean, with respect to any Lenders, at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender’s
L/C Exposure, plus the aggregate amount at such time of such Lender’s Swingline
Exposure.

 

“Revolving Credit Lender” shall mean a Lender with a Revolving Credit Commitment
or an outstanding Revolving Loan.

 

“Revolving Credit Maturity Date” shall mean March 15, 2009.

 

“Revolving Loans” shall mean the revolving loans made by the Lenders to the
Borrower pursuant to clause (b) of Section 2.01.

 

“S&P” shall mean Standard & Poor’s Ratings Group, Inc.

 

“Secured Parties” shall have the meaning assigned to such term in the Guarantee
and Collateral Agreement.

 

“Securitization Transactions” shall mean, with respect to any person, any
transfer by such person of accounts receivable or interests therein (a) to a
trust, partnership, corporation or other entity that is a Receivables
Subsidiary, which transfer is funded in whole or in part, directly or
indirectly, by the incurrence or issuance by the transferee or any successor
transferee of Indebtedness or securities that are to receive payments from, or
that represent interests in, the cash flow derived from such accounts receivable
or interests, or (b) directly to one or more investors or other purchasers. The
amount of any Securitization Transaction shall be deemed at any time to be the
aggregate principal or stated amount of the Indebtedness or securities referred
to in the preceding sentence or, if there shall be no such principal or stated
amount, the uncollected amount of the accounts receivable transferred pursuant
to such Securitization Transaction net of any accounts receivable that have been
written off as uncollectible.

 

“Security Documents” shall mean the Guarantee and Collateral Agreement, the
Mortgages, the Intellectual Property Security Agreements and each of the other
security agreements, pledges, mortgages, consents and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.09 or 5.10.

 

“Sellers” shall mean True Temper Sports, LLC, and certain members of management
of Holdings party to the Purchase Agreement.

 

27

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

 

 “Senior Secured Debt” shall mean, at any time, the principal amount of all the
Obligations and all other Indebtedness included in Total Debt at such time,
except the Subordinated Notes and any other unsecured Indebtedness.

 

“SPC” shall have the meaning assigned to such term in Section 9.04(i).

 

“Sponsor” shall mean, collectively, Gilbert Global Equity Partners, L.P.,
Gilbert Global Equity Partners (Bermuda), L.P. and GGEP/SK Equity Partners, LLC.

 

“Sponsor Related Parties” shall mean (a) any (i) controlling stockholder,
partner or member, (ii) majority-owned (or more) subsidiary or (iii) spouse or
immediate family member (in the case of an individual), in each case, of the
Sponsor or (b) any trust, corporation, partnership, limited liability company or
other entity, the beneficiaries, stockholders, partners, members, owners or
persons beneficially holding (directly or through on or more subsidiaries) a
greater than 50% controlling interest of which consist of the Sponsor and/or
such persons referred to in the immediately preceding clause (a).

 

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board and any other banking authority, domestic or foreign,
to which the Administrative Agent or any Lender (including any branch, Affiliate
or other fronting office making or holding a Loan) is subject for eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Board). Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

 

“Stockholders Agreement” shall mean the Stockholders Agreement dated as of the
Closing Date among Holdings and its stockholders party thereto.

 

“Subordinated Note Documents” shall mean the indenture under which the
Subordinated Notes are issued and all other instruments, agreements and other
documents evidencing or governing the Subordinated Notes or providing for any
Guarantee or other right in respect thereof.

 

“Subordinated Notes” shall mean the Borrower’s 8-3/8% Senior Subordinated Notes
due 2011, in an aggregate principal amount of $125,000,000, including any notes
issued by the Borrower in full exchange for, and as contemplated by, the
Subordinated Notes with substantially identical terms as the Subordinated Notes.

 

“subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, limited liability company, association
or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, owned, controlled or held, or (b) that is, at the
time

 

28

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

 

any determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.

 

“Subsidiary” shall mean any subsidiary of the Borrower.

 

“Subsidiary Guarantor” shall mean, initially, each Subsidiary specified on
Schedule 1.01(c) and, at any time thereafter, shall include each other
Subsidiary that is not an Excluded Foreign Subsidiary or a Receivables
Subsidiary.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
loans pursuant to Section 2.22, as the same may be reduced from time to time
pursuant to Section 2.09.

 

“Swingline Exposure” shall mean, at any time, the aggregate principal amount at
such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.

 

“Swingline Lender” shall mean Credit Suisse (formerly known as Credit Suisse
First Boston), in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to
Section 2.22.

 

“Syndication Agent” shall have the meaning assigned to such term in the
preamble.

 

“Synthetic Lease Obligations” shall mean all monetary obligations of a person
under (a) a so-called synthetic, off-balance sheet or tax retention lease (which
is not a true operating lease) or (b) an agreement for the use or possession of
any property (whether real, personal or mixed) creating obligations which do not
appear on the balance sheet of such person, but which, upon the insolvency or
bankruptcy of such person, would be characterized as Indebtedness of such person
(without regard to accounting treatment).

 

“Synthetic Purchase Agreement” shall mean any swap, derivative or other
agreement or combination of agreements pursuant to which Holdings, the Borrower
or any Subsidiary is or may become obligated to make (a) any payment in
connection with a purchase by any third party from a person other than Holdings,
the Borrower or any Subsidiary of any Equity Interest or Restricted Indebtedness
or (b) any payment (other than on account of a permitted purchase by it of any
Equity Interest or Restricted Indebtedness) the amount of which is determined by
reference to the price or value at any time of any Equity Interest or Restricted
Indebtedness; provided that no phantom stock or similar plan providing for
payments only to current or former directors, officers or employees of Holdings,
the Borrower or the Subsidiaries (or to their heirs or estates) shall be deemed
to be a Synthetic Purchase Agreement.

 

“Tax Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

 

29

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

 

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges, liabilities or withholdings imposed by any Governmental
Authority.

 

“Tax Sharing Agreement” shall mean the tax sharing agreement dated as of the
Closing Date among Holdings, the Borrower and the Subsidiaries party thereto.

 

“Term Borrowing” shall mean a Borrowing comprised of Term Loans.

 

“Term Lender” shall mean a Lender with a Term Loan Commitment or an outstanding
Term Loan.

 

“Term Loan Commitment” shall mean, with respect to each Lender, the commitment,
if any, of such Lender to make Term Loans hereunder as set forth on the Lender
Addendum delivered by such Lender or as set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender assumed its Term Loan
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial
aggregate amount of the Term Loan Commitments is $110,000,000. The aggregate
amount of the Term Loan Commitments following the Amendment Effective Date is
$128,000,000. Unless the context shall otherwise require, (i) after the
Amendment Effective Date, the term “Term Loan Commitment” shall include any
Additional Term Loan Commitment and (ii) after the effectiveness of any
Incremental Term Loan Commitment, the term “Term Loan Commitment” shall include
such Incremental Term Loan Commitment.

 

“Term Loan Maturity Date” shall mean March 15, 2011.

 

“Term Loans” shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01 and, if applicable, Section 2.24. Unless the context
shall otherwise require, the term “Term Loan” shall include any Additional Term
Loans, Incremental Term Loans and any Other Term Loans.

 

“Total Debt” shall mean, as of the last day of any fiscal quarter, the aggregate
amount of Indebtedness of the Borrower and the Subsidiaries outstanding at such
time, in the amount that would be reflected on a balance sheet prepared at such
time on a consolidated basis in accordance with GAAP.

 

“Total Revolving Credit Commitment” shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time. The Total
Revolving Credit Commitment on the Closing Date is $20,000,000.

 

“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Loan Parties of the Loan Documents and the Subordinated Note
Documents to which they are a party, (b) the borrowings hereunder, the issuance
of the Subordinated Notes, the issuance of Letters of Credit and the use of
proceeds of each of the foregoing, (c) the granting of Liens pursuant to the
Security Documents, (d) the Acquisition and the other Acquisition Transactions
and (e) any other transactions related to or entered into in connection with any
of the foregoing.

 

30

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

 

“TTS Holdings” shall mean TTS Holdings LLC, a Delaware limited liability company
controlled by the Sponsor and its Affiliates, which was merged with and into
Holdings on the Closing Date, with Holdings being the surviving person.

 

“Type”, when used in respect of any Loan or Borrowing, shall refer to the Rate
by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term “Rate” shall include the
Adjusted LIBO Rate and the Alternate Base Rate.

 

“UCC” shall mean the Uniform Commercial Code.

 

“Uniform Customs” shall have the meaning assigned to such term in Section 9.07.

 

“wholly owned subsidiary” of any person shall mean a subsidiary of such person
of which securities (except for directors’ qualifying shares) or other ownership
interests representing 100% of the Equity Interests are, at the time any
determination is being made, owned, controlled or held by such person or one or
more wholly owned subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person; a “wholly owned Subsidiary” shall mean
any wholly owned subsidiary of the Borrower.

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including”, and
words of similar import, shall not be limiting and shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. The words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision of
this Agreement unless the context shall otherwise require. All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (a) any definition of, or reference to, any Loan Document, including
this Agreement, or any other agreement, instrument or document in this Agreement
shall mean such Loan Document or other agreement, instrument or document as
amended, restated, supplemented or otherwise modified from time to time (subject
to any restrictions on such amendments, restatements, supplements or
modifications set forth herein) and (b) all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that if the Borrower notifies the Administrative Agent
that the Borrower wishes to amend any covenant in Article VI or any related
definition to eliminate the effect of any change in GAAP occurring after the
date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI or any related definition for such purpose), then the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend (subject to the approval of the Required Lenders) such covenant

 

31

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

 

to preserve the original intent thereof in light of such change; provided that
until so amended the Borrower’s compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to the Borrower and the Required Lenders.

 

SECTION 1.03. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

 

SECTION 1.04. Pro Forma Calculations. All pro forma calculations permitted or
required to be made by the Borrower or any Subsidiary pursuant to this Agreement
shall include only those adjustments that would be permitted or required by
Regulation S-X under the Securities Act of 1933, as amended, together with those
adjustments that (a) have been certified by a Financial Officer of the Borrower
as having been prepared in good faith based upon reasonable assumptions and
(b) are based on reasonably detailed written assumptions reasonably acceptable
to the Administrative Agent.

 

ARTICLE II

 

The Credits

 

SECTION 2.01. Commitments. Subject to the terms and conditions hereof and
relying upon the representations and warranties set forth herein, (a) each Term
Lender having a Term Loan Commitment on the Closing Date has made a Term Loan to
the Borrower on the Closing Date in a principal amount not exceeding its Term
Loan Commitment on such date, (b) each Term Lender having a Term Loan Commitment
on the Amendment Effective Date agrees, severally and not jointly, to make a
Term Loan to the Borrower on a single date specified by the Borrower that is
prior to the Additional Term Loan Commitment Termination Date in a principal
amount not to exceed its Term Loan Commitment, (c) each Incremental Term Lender
which shall provide an Incremental Term Loan Commitment pursuant to Section 2.24
agrees, severally and not jointly, to make an Incremental Term Loan to the
Borrower in a principal amount not to exceed its Incremental Term Loan
Commitment and (d) each Revolving Credit Lender agrees, severally and not
jointly, to make Revolving Loans to the Borrower, at any time and from time to
time on or after the Closing Date and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Revolving Credit Lender in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that will not result in such Revolving
Credit Lender’s Revolving Credit Exposure exceeding such Revolving Credit
Lender’s Revolving Credit Commitment. Within the limits set forth in
clause (d) of the preceding sentence and subject to the terms, conditions and
limitations set forth herein, the Borrower may borrow, pay or prepay and
reborrow Revolving Loans. Amounts paid or prepaid in respect of Term Loans
may not be reborrowed.

 

32

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

 

 

SECTION 2.02. Loans. (a)  Each Loan (other than Swingline Loans) shall be made
as part of a Borrowing consisting of Loans of the same Class and Type made by
the Lenders ratably in accordance with their respective Commitments of the
applicable Class; provided, however, that the failure of any Lender to make any
Loan required to be made by it shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan
required to be made by such other Lender). Except for Loans deemed made pursuant
to Section 2.02(f) and subject to Section 2.22 relating to Swingline Loans, the
Loans comprising any Borrowing shall be in an aggregate principal amount that is
(i) an integral multiple of $500,000 and not less than $2,000,000 or (ii) equal
to the remaining available balance of the applicable Commitments.

 

(b)                                 Subject to Sections 2.08 and 2.15, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request pursuant to Section 2.03. Each Lender may at its option
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement. Borrowings of more than one Type may be
outstanding at the same time; provided, however, that the Borrower shall not be
entitled to request any Borrowing that, if made, would result in more than ten
Eurodollar Borrowings outstanding hereunder at any time. For purposes of the
foregoing, Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Borrowings.

 

(c)                                  Except with respect to Loans made pursuant
to Section 2.02(f) and subject to Section 2.22 relating to Swingline Loans, each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall promptly credit the
amounts so received to an account designated by the Borrower in the applicable
Borrowing Request or, if a Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the amounts
so received to the respective Lenders.

 

(d)                                 Unless the Administrative Agent shall have
received notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender’s portion
of such Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of such Borrowing
in accordance with paragraph (c) of this Section and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If the Administrative Agent shall have so made
funds available then, to the extent that such Lender shall not have made such
portion available to the Administrative Agent, such Lender and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower to but excluding the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans comprising such Borrowing
or (ii) in the case of such Lender, a rate determined by the Administrative
Agent to represent its cost of overnight or short-term funds (which
determination shall be conclusive absent manifest error). If such Lender shall
repay to

 

33

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

 

the Administrative Agent such corresponding amount, such amount shall constitute
such Lender’s Loan as part of such Borrowing for purposes of this Agreement.

 

(e)                                  Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Revolving Credit
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Credit Maturity Date.

 

(f)                                    If the Issuing Bank shall not have
received from the Borrower the payment required to be made by
Section 2.23(e) with respect to a Letter of Credit within the time specified in
such Section, the Issuing Bank will promptly notify the Administrative Agent of
the L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 10:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender’s Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent will promptly pay to the Issuing
Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from the Borrower pursuant to Section 2.23(e) prior to the time that any
Revolving Credit Lender makes any payment pursuant to this paragraph; any such
amounts received by the Administrative Agent thereafter will be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that shall
have made such payments and to the Issuing Bank, as their interests may appear.
If any Revolving Credit Lender shall not have made its Pro Rata Percentage of
such L/C Disbursement available to the Administrative Agent as provided above,
such Lender and the Borrower severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid, to
the Administrative Agent for the account of the Issuing Bank at (i) in the case
of the Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.

 

SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other than a
Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to which
this Section 2.03 shall not apply), the Borrower shall notify the Administrative
Agent by telephone (promptly confirmed by fax) or shall hand deliver or fax to
the Administrative Agent a duly completed Borrowing Request (a) in the case of a
Eurodollar Borrowing, not later than 12:00 p.m. (noon), New York City time,
three Business Days before a proposed Borrowing and (b) in the case of an ABR
Borrowing, not later than 12:00 p.m. (noon), New York City time, one Business
Day before a proposed Borrowing. Each Borrowing Request shall be irrevocable,
shall be signed by or on behalf of the Borrower and shall specify the following
information:  (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day); (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the

 

34

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

 

requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the initial Interest Period with
respect thereto; provided, however, that, notwithstanding any contrary
specification in any Borrowing Request, each requested Borrowing shall comply
with the requirements set forth in Section 2.02. If no election as to the Type
of Borrowing is specified in any such notice, then the requested Borrowing shall
be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. The Administrative
Agent shall promptly advise the applicable Lenders of any notice given in
accordance with this Section 2.03 (and the contents thereof), and of each
Lender’s portion of the requested Borrowing.

 

SECTION 2.04. Repayment of Loans; Evidence of Debt. (a)  The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the principal amount of each Term Loan of such Lender made to
the Borrower as provided in Section 2.11 and (ii) the then unpaid principal
amount of each Revolving Loan of such Lender made to the Borrower on the
Revolving Credit Maturity Date. The Borrower hereby unconditionally promises to
pay to the Swingline Lender the then unpaid principal amount of each Swingline
Loan made to the Borrower on the Revolving Credit Maturity Date.

 

(b)                                 Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender to the
Borrower from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.

 

(c)                                  The Administrative Agent shall maintain
accounts in which it will record (i) the amount of each Loan made hereunder, the
Type thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of the sum received by
the Administrative Agent hereunder from the Borrower or any Guarantor and each
Lender’s share thereof.

 

(d)                                 The entries made in the accounts maintained
pursuant to paragraphs (b) and (c) of this Section shall be prima facie evidence
of the existence and amounts of the obligations therein recorded; provided,
however, that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans made to the Borrower in
accordance with the terms of this Agreement.

 

(e)                                  Any Lender may request that Loans made by
it hereunder be evidenced by a promissory note. In such event, the Borrower
shall execute and deliver to such Lender a promissory note payable to such
Lender and, if requested by such Lender, its registered assigns, in the form of
Exhibit I, if such promissory note relates to Revolving Credit Borrowings, or in
the form of Exhibit J, if such promissory note relates to Term Borrowings, or
any other form reasonably acceptable to the Administrative Agent.
Notwithstanding any other provision of this Agreement, in the event any Lender
shall request and receive such a promissory note, the interests represented by
such note shall at all times (including after any assignment of all or part

 

35

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

 

of such interests pursuant to Section 9.04) be represented by one or more
promissory notes payable to the payee named therein or its registered assigns.

 

SECTION 2.05. Fees. (a)  The Borrower agrees to pay to each Lender, through the
Administrative Agent, on the last Business Day of March, June, September and
December in each year and on each date on which any Commitment of such Lender
shall expire or be terminated as provided herein, a commitment fee (a
“Commitment Fee”) equal to the Commitment Fee Rate on the average daily unused
amount of the Commitments of such Lender (other than the Swingline Commitment)
during the preceding quarter (or other period commencing with the Closing Date
or ending with the Revolving Credit Maturity Date or the date on which the
Commitments of such Lender shall expire or be terminated). All Commitment Fees
shall be computed on the basis of the actual number of days elapsed in a year of
360 days. The Commitment Fee due to each Lender shall commence to accrue on the
Closing Date and shall cease to accrue on the date on which the Commitment of
such Lender shall expire or be terminated as provided herein. For purposes of
calculating Commitment Fees with respect to Revolving Credit Commitments only,
no portion of the Revolving Credit Commitments shall be deemed utilized under
Section 2.22 as a result of outstanding Swingline Loans.

 

(b)                                 The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees in the amounts and at the
times from time to time agreed to in writing by the Borrower (or any Affiliate)
and the Administrative Agent, including pursuant to the applicable Fee Letter
(the “Administrative Agent Fees”).

 

(c)                                  The Borrower agrees to pay (i) to each
Revolving Credit Lender, through the Administrative Agent, on the last Business
Day of March, June, September and December of each year and on the date on which
the Revolving Credit Commitment of such Lender shall be terminated as provided
herein (each, an “L/C Fee Payment Date”) a fee (an “L/C Participation Fee”)
calculated on such Lender’s Pro Rata Percentage of the daily aggregate L/C
Exposure (excluding the portion thereof attributable to unreimbursed L/C
Disbursements which are earning interim interest pursuant to Section 2.23(h))
during the preceding quarter (or shorter period commencing with the Closing Date
or ending with the Revolving Credit Maturity Date or the date on which all
Letters of Credit have been canceled or have expired and the Revolving Credit
Commitments of all Lenders shall have been terminated) at a rate per annum equal
to the Applicable Margin used to determine the interest rate on Revolving Credit
Borrowings comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to
the Issuing Bank with respect to each outstanding Letter of Credit issued for
the account of (or at the request of) the Borrower a fronting fee, which shall
accrue at the rate of ¼ of 1% per annum or such other rate as shall be
separately agreed upon between the Borrower and the Issuing Bank, on the
drawable amount of such Letter of Credit, payable quarterly in arrears on each
L/C Fee Payment Date after the issuance date of such Letter of Credit, as well
as the Issuing Bank’s standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit issued for the account of (or at
the request of) the Borrower or processing of drawings thereunder (the fees in
this clause (ii), collectively, the “Issuing Bank Fees”). All L/C Participation
Fees and Issuing Bank Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days.

 

(d)                                 The Borrower agrees to pay to the
Administrative Agent for the account of the applicable Term Lenders, a fee in an
amount equal to 0.50% per annum on the aggregate amount

 

36

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

 

of the Additional Term Loan Commitments (payable to such applicable Term Lenders
on a pro rata basis with respect to their Additional Term Loan Commitments),
accruing for the period from the Fee Trigger Date through and including the
Additional Term Loan Commitment Termination Date if (i) the borrowing of the
Additional Term Loans does not occur within 60 days following the Amendment
Effective Date or (ii) the Borrower terminates the Additional Term Loans
Commitments on or following the Fee Trigger Date.

 

(e)                                  All Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders, except that the Issuing Bank Fees shall
be paid directly to the Issuing Bank. Once paid, none of the Fees shall be
refundable under any circumstances.

 

SECTION 2.06. Interest on Loans. (a)  Subject to the provisions of Section 2.07,
the Loans comprising each ABR Borrowing, including each Swingline Loan, shall
bear interest (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at all
other times, in each case calculated from and including the date of such ABR
Borrowing to but excluding the date of repayment) at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin in effect from time to time.

 

(b)                                 Subject to the provisions of Section 2.07,
the Loans comprising each Eurodollar Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin in effect from time to time.

 

(c)                                  Interest on each Loan shall be payable on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for
each Interest Period or day within an Interest Period, as the case may be, shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

 

SECTION 2.07. Default Interest. If the Borrower shall default in the payment of
the principal of or interest on any Loan or any other amount becoming due
hereunder or under any other Loan Document, by acceleration or otherwise, the
Borrower shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) (a) in the case of overdue principal, at the
rate otherwise applicable to such Loan pursuant to Section 2.06 plus 2.00% per
annum and (b) in all other cases, at a rate per annum (computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be, when determined by reference to the Prime Rate and over a year of 360
days at all other times) equal to the rate that would be applicable to an ABR
Revolving Loan plus 2.00%.

 

SECTION 2.08. Alternate Rate of Interest. In the event, and on each occasion,
that prior to the commencement of any Interest Period for a Eurodollar Borrowing
(a) the Administrative Agent shall have determined that adequate and reasonable
means do not exist for determining the Adjusted LIBO Rate for such Interest
Period or (b) the Administrative Agent is advised by the Majority Facility
Lenders in respect of the relevant Facility that the Adjusted LIBO Rate for such

 

37

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

 

Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining their Loans included in such Borrowing for such
Interest Period, the Administrative Agent shall, as soon as practicable
thereafter, give written or fax notice of such determination to the Borrower and
the Lenders. In the event of any such determination, until the Administrative
Agent shall have advised the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, (i) any request by the Borrower for
a Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a
request for an ABR Borrowing and (ii) any Interest Period election that requests
the conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective. Each determination by the
Administrative Agent under this Section 2.08 shall be conclusive absent manifest
error.

 

SECTION 2.09. Termination and Reduction of Commitments. (a)  Unless previously
terminated in accordance with the terms hereof, (i) the Term Loan Commitments
made under the Existing Credit Agreement automatically terminated at 5:00 p.m.,
New York City time, on the Closing Date, (ii) the Revolving Credit Commitments,
the Swingline Commitment and the L/C Commitment shall automatically terminate on
the Revolving Credit Maturity Date and (iii) the Additional Term Loan
Commitments made under this Agreement shall automatically terminate on the
earlier of (such date, the “Additional Term Loan Commitment Termination Date”)
(A) 5:00 p.m., New York City time, on the date that the Borrower delivers
written notice to the Administrative Agent notifying the Administrative Agent
that the Borrower will not borrow the Additional Term Loans, (B) the Borrowing
thereunder on the Funding Date and (C) 5:00 p.m., New York City time, on the
date that is 150 days after the Amendment Effective Date if a Borrowing of
Additional Term Loans shall not have occurred by such time.

 

(b)                                 Upon at least three Business Days’ prior
irrevocable written or fax notice to the Administrative Agent, the Borrower
may at any time in whole permanently terminate, or from time to time in
part permanently reduce, the Additional Term Loan Commitments, the Incremental
Term Loan Commitments, the Revolving Credit Commitments or the Swingline
Commitment; provided, however, that (i) each partial reduction of the Additional
Term Loan Commitments, the Incremental Term Loan Commitments, the Revolving
Credit Commitments or the Swingline Commitment shall be in an integral multiple
of $500,000 and in a minimum amount of $2,000,000 and (ii) the Total Revolving
Credit Commitment shall not be reduced to an amount that is less than the
Aggregate Revolving Credit Exposure then in effect.

 

(c)                                  Each reduction in the Additional Term Loan
Commitments, the Incremental Term Loan Commitments, the Revolving Credit
Commitments or Swingline Commitment hereunder shall be made ratably among the
applicable Lenders in accordance with their Pro Rata Percentages. The Borrower
shall pay to the Administrative Agent for the account of the applicable Lenders,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.

 

SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower shall have
the right at any time upon prior irrevocable notice to the Administrative Agent
(a) not later than 12:00 p.m. (noon), New York City time, one Business Day prior
to conversion, to convert any Eurodollar Borrowing of the Borrower into an ABR
Borrowing, (b) not later than 12:00 p.m. (noon), New York City time, three
Business Days prior to conversion or continuation, to convert

 

38

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

 

any ABR Borrowing of the Borrower into a Eurodollar Borrowing or to continue any
Eurodollar Borrowing of the Borrower as a Eurodollar Borrowing for an additional
Interest Period and (c) not later than 12:00 p.m. (noon), New York City time,
three Business Days prior to conversion, to convert the Interest Period with
respect to any Eurodollar Borrowing of the Borrower to another permissible
Interest Period, subject in each case to the following:

 

(i)                                     each conversion or continuation shall be
made pro rata among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued Borrowing;

 

(ii)                                  if less than all the outstanding principal
amount of any Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a) and
2.02(b) regarding the principal amount and maximum number of Borrowings of the
relevant Type;

 

(iii)                               each conversion shall be effected by each
Lender and the Administrative Agent by recording for the account of such Lender
the new Loan of such Lender resulting from such conversion and reducing the Loan
(or portion thereof) of such Lender being converted by an equivalent principal
amount; accrued interest on any Eurodollar Loan (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion;

 

(iv)                              if any Eurodollar Borrowing is converted at a
time other than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to Section 2.16;

 

(v)                                 any portion of a Borrowing maturing or
required to be repaid in less than one month may not be converted into or
continued as a Eurodollar Borrowing;

 

(vi)                              any portion of a Eurodollar Borrowing that
cannot be converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;

 

(vii)                           no Interest Period may be selected for any
Eurodollar Term Borrowing that would end later than a Repayment Date occurring
on or after the first day of such Interest Period if, after giving effect to
such selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings with Interest Periods ending on or prior to such Repayment Date and
(B) the ABR Term Borrowings would not be at least equal to the principal amount
of Term Borrowings to be paid on such Repayment Date; and

 

(viii)                        upon notice to the Borrower from the
Administrative Agent given at the request of the Required Lenders, after the
occurrence and during the continuance of a Default or Event of Default, no
outstanding Loan may be converted into, or continued as, a Eurodollar Loan.

 

39

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

 

Each notice pursuant to this Section 2.10 shall be irrevocable and shall refer
to this Agreement and specify (i) the identity and amount of the Borrowing that
the Borrower requests be converted or continued, (ii) whether such Borrowing is
to be converted to or continued as a Eurodollar Borrowing or an ABR Borrowing,
(iii) if such notice requests a conversion, the date of such conversion (which
shall be a Business Day) and (iv) if such Borrowing is to be converted to or
continued as a Eurodollar Borrowing, the Interest Period with respect thereto.
If no Interest Period is specified in any such notice with respect to any
conversion to or continuation as a Eurodollar Borrowing, the Borrower shall be
deemed to have selected an Interest Period of one month’s duration. The
Administrative Agent shall advise the Lenders of any notice given pursuant to
this Section 2.10 and of each Lender’s portion of any converted or continued
Borrowing. If the Borrower shall not have given notice in accordance with this
Section 2.10 to continue any Borrowing into a subsequent Interest Period (and
shall not otherwise have given notice in accordance with this Section 2.10 to
convert such Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof), automatically
be converted or continued into an ABR Borrowing.

 

SECTION 2.11. Repayment of Term Borrowings.

 

(a)                                  (i)  On the dates set forth below, or if
any such date is not a Business Day, on the next preceding Business Day (each
such date being called a “Repayment Date”), the Borrower shall pay to the
Administrative Agent, for the account of the Term Lenders, a principal amount of
the Term Loans (as adjusted from time to time pursuant to Sections 2.12,
2.13(f) and 2.24(d)) equal to the amount set forth below for such date, together
in each case with accrued and unpaid interest and Fees on the amount to be paid
to but excluding the date of such payment:

 

Repayment Date

 

Amount

 

March 31, 2006

 

$

320,000

 

June 30, 2006

 

$

320,000

 

September 30, 2006

 

$

320,000

 

December 31, 2006

 

$

320,000

 

March 31, 2007

 

$

320,000

 

June 30, 2007

 

$

320,000

 

September 30, 2007

 

$

320,000

 

December 31, 2007

 

$

320,000

 

March 31, 2008

 

$

320,000

 

June 30, 2008

 

$

320,000

 

September 30, 2008

 

$

320,000

 

December 31, 2008

 

$

320,000

 

March 31, 2009

 

$

320,000

 

June 30, 2009

 

$

320,000

 

September 30, 2009

 

$

320,000

 

December 31, 2009

 

$

320,000

 

March 31, 2010

 

$

320,000

 

June 30, 2010

 

$

30,640,000

 

September 30, 2010

 

$

30,640,000

 

December 31, 2010

 

$

30,640,000

 

Term Loan Maturity Date

 

Remainder

 

 

40

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

 

(ii)  The Borrower shall pay to the Administrative Agent, for the account of the
applicable Lenders, on each Incremental Term Loan Repayment Date, a principal
amount of Other Term Loans (as adjusted from time to time pursuant to Sections
2.12 and 2.13(f)) equal to the amount set forth for such date in the applicable
Incremental Term Loan Assumption Agreement, together in each case with accrued
and unpaid interest and Fees on the amount to be paid to but excluding the date
of such payment.

 

(b)                                 To the extent not previously paid, all Term
Loans and (if applicable) Other Term Loans shall be due and payable on the Term
Loan Maturity Date or the applicable Incremental Term Loan Maturity Date, as the
case may be, together with accrued and unpaid interest on the principal amount
to be paid to but excluding the date of payment.

 

(c)                                  All repayments pursuant to this
Section 2.11 shall be subject to Section 2.16, but shall otherwise be without
premium or penalty.

 

SECTION 2.12. Prepayment. (a)  The Borrower shall have the right at any time and
from time to time to prepay any Borrowing, in whole or in part, upon at least
three Business Days’ prior written or fax notice (or telephone notice promptly
confirmed by written or fax notice) in the case of Eurodollar Loans, or written
or fax notice (or telephone notice promptly confirmed by written or fax notice)
at least one Business Day prior to the date of prepayment in the case of ABR
Loans, to the Administrative Agent before 12:00 p.m. (noon), New York City time;
provided, however, that each partial prepayment shall be in an amount that is an
integral multiple of $500,000 and not less than $500,000.

 

(b)                                 Optional prepayments of Term Loans shall be
applied, first, pro rata to the scheduled installments of principal due in
respect of the Term Loans in accordance with Section 2.11 within twelve months
of such prepayment and, second, pro rata against the remaining scheduled
installments of principal due in respect of the Term Loans.

 

(c)                                  Each notice of prepayment shall specify the
prepayment date and the principal amount of each Borrowing (or portion thereof)
to be prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing by the amount stated therein on the date stated therein. All
prepayments under this Section 2.12 shall be subject to Section 2.16, but
otherwise without premium or penalty. All prepayments under this Section 2.12
shall be accompanied by accrued and unpaid interest on the principal amount to
be prepaid to but excluding the date of payment.

 

SECTION 2.13. Mandatory Prepayments. (a)  In the event of any termination of all
the Revolving Credit Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Credit Borrowings and
all its outstanding Swingline Loans and replace all its outstanding Letters of
Credit and/or deposit an amount equal to the L/C Exposure in cash in a cash
collateral account established with the Collateral Agent for the benefit of the
Secured Parties, unless, in each case, if such termination arises as a result of
the actions by the Administrative Agent described in clause (i) of the last
paragraph of Article VII, the Majority Facility Lenders with respect to the
Revolving Credit Facility shall otherwise agree. If as a result

 

41

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

 

of any partial reduction of the Revolving Credit Commitments the Aggregate
Revolving Credit Exposure would exceed the Total Revolving Credit Commitment
after giving effect thereto, then the Borrower shall, on the date of such
reduction, repay or prepay Revolving Credit Borrowings or Swingline Loans (or a
combination thereof) and/or cash collateralize Letters of Credit in an amount
sufficient to eliminate such excess.

 

(b)                                 Unless the Majority Facility Lenders with
respect to the Term Loan Facility shall otherwise agree, not later than the
third Business Day following the completion of any Asset Sale or the occurrence
of any Recovery Event (subject in each case to all applicable reinvestment and
repayment rights to the extent set forth in the definition of “Net Cash
Proceeds”), the Borrower shall apply the Required Prepayment Percentage of the
Net Cash Proceeds received with respect thereto to prepay outstanding Term Loans
in accordance with Section 2.13(f).

 

(c)                                  Unless the Majority Facility Lenders with
respect to the Term Loan Facility shall otherwise agree, in the event and on
each occasion that an Equity Issuance occurs, the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day next
following) the occurrence of such Equity Issuance, apply the Required Prepayment
Percentage of the Net Cash Proceeds therefrom to prepay outstanding Term Loans
in accordance with Section 2.13(f).

 

(d)                                 Unless the Majority Facility Lenders with
respect to the Term Loan Facility shall otherwise agree, in the event that any
Loan Party or any subsidiary of a Loan Party shall receive Net Cash Proceeds
from the issuance or other incurrence of Indebtedness of any Loan Party or any
subsidiary of a Loan Party (other than Indebtedness permitted pursuant to
Section 6.01 (other than pursuant to clause (A) of the proviso in
Section 6.01(h) or Section 6.01(k))), the Borrower shall, substantially
simultaneously with (and in any event not later than the third Business Day next
following) the receipt of such Net Cash Proceeds by such Loan Party or such
subsidiary, apply an amount equal to the Required Prepayment Percentage of such
Net Cash Proceeds to prepay outstanding Term Loans in accordance with
Section 2.13(f).

 

(e)                                  Unless the Majority Facility Lenders with
respect to the Term Loan Facility shall otherwise agree, no later than (i) in
the case of the fiscal year of the Borrower ending on December 31, 2005, on
June 30, 2006 and (ii) in the case of each subsequent fiscal year of the
Borrower, the earlier of (x) 90 days after the end of such fiscal year and (y)
the date on which the financial statements with respect to such period are
delivered pursuant to Section 5.04(a), the Borrower shall prepay outstanding
Term Loans in accordance with Section 2.13(f), in an aggregate principal amount
equal to the Required Prepayment Percentage of Excess Cash Flow for the fiscal
year then ended.

 

(f)                                    Mandatory prepayments of outstanding Term
Loans under this Agreement shall be applied pro rata against the applicable
remaining scheduled installments due in respect of the Term Loans under
Section 2.11.

 

(g)                                 The Borrower shall deliver to the
Administrative Agent, at the time of each prepayment required under this
Section 2.13, (i) a certificate signed by a Financial Officer of the Borrower
setting forth in reasonable detail the calculation of the amount and date of
such prepayment and (ii) to the extent practicable, at least three days prior
written notice of such

 

42

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

 

prepayment. Each notice of prepayment shall specify the prepayment date, the
Type of each Loan being prepaid and the principal amount of each Loan (or
portion thereof) to be prepaid. All prepayments of Borrowings pursuant to this
Section 2.13 shall be subject to Section 2.16, but shall otherwise be without
premium or penalty.

 

SECTION 2.14. Reserve Requirements; Change in Circumstances. (a) 
Notwithstanding any other provision of this Agreement, if any Change in Law
shall:

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender, the Administrative
Agent or the Issuing Bank (except any such reserve requirement which is
reflected in the Adjusted LIBO Rate) or

 

(ii)                                  impose on any Lender, the Administrative
Agent or the Issuing Bank or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any Letter
of Credit or participation therein,

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or the Issuing Bank of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to any
Lender, the Administrative Agent or the Issuing Bank of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender, the Administrative Agent or the Issuing Bank to be
material, then the Borrower will pay to such Lender, the Administrative Agent or
the Issuing Bank, as the case may be, upon demand such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.

 

(b)                                 If any Lender, the Administrative Agent or
the Issuing Bank shall have determined that any Change in Law regarding capital
adequacy has or would have the effect of reducing the rate of return on such
Lender’s, the Administrative Agent’s or the Issuing Bank’s capital or on the
capital of such Lender’s, the Administrative Agent’s or the Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made
by, or participations in Letters of Credit purchased by, such Lender or the
Letters of Credit issued by the Issuing Bank to a level below that which such
Lender, the Administrative Agent or the Issuing Bank or such Lender’s, the
Administrative Agent’s or the Issuing Bank’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s, the
Administrative Agent’s or the Issuing Bank’s policies and the policies of such
Lender’s, the Administrative Agent’s or the Issuing Bank’s holding company with
respect to capital adequacy) by an amount deemed by such Lender, the
Administrative Agent or the Issuing Bank to be material, then from time to time
the Borrower shall pay to such Lender, the Administrative Agent or the Issuing
Bank, as the case may be, such additional amount or amounts as will compensate
such Lender, the Administrative Agent or the Issuing Bank or such Lender’s, the
Administrative Agent’s or the Issuing Bank’s holding company for any such
reduction suffered.

 

43

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

 

(c)                                  A certificate of a Lender, the
Administrative Agent or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender, the Administrative Agent or the Issuing
Bank or its holding company, as applicable, as specified in paragraph (a) or
(b) of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender, the Administrative
Agent or the Issuing Bank, as the case may be, the amount or amounts shown as
due on any such certificate delivered by it within 10 days after its receipt of
the same.

 

(d)                                 Failure or delay on the part of any Lender,
the Administrative Agent or the Issuing Bank to demand compensation pursuant to
this Section shall not constitute a waiver of such Lender’s, the Administrative
Agent’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be under any obligation to compensate any Lender, the
Administrative Agent or the Issuing Bank under paragraph (a) or (b) above for
increased costs or reductions with respect to any period prior to the date that
is 270 days prior to such request if such Lender, the Administrative Agent or
the Issuing Bank knew or could reasonably have been expected to know of the
circumstances giving rise to such increased costs or reductions and of the fact
that such circumstances would result in a claim for increased compensation by
reason of such increased costs or reductions; provided further that the
foregoing limitation shall not apply to any increased costs or reductions
arising out of the retroactive application of any Change in Law within such
270-day period. The protection of this Section shall be available to each
Lender, the Administrative Agent and the Issuing Bank regardless of any possible
contention of the invalidity or inapplicability of the Change in Law that shall
have occurred or been imposed.

 

SECTION 2.15. Change in Legality. (a)  Notwithstanding any other provision of
this Agreement, if any Change in Law shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:

 

(i)                                     such Lender may declare that Eurodollar
Loans will not thereafter (for the duration of such unlawfulness) be made by
such Lender hereunder (or be continued for additional Interest Periods and ABR
Loans will not thereafter (for such duration) be converted into Eurodollar
Loans), whereupon any request for a Eurodollar Borrowing (or to convert an ABR
Borrowing to a Eurodollar Borrowing or to continue a Eurodollar Borrowing for an
additional Interest Period) shall, as to such Lender only, be deemed a request
for an ABR Loan (or a request to continue an ABR Loan as such for an additional
Interest Period or to convert a Eurodollar Loan into an ABR Loan, as the case
may be), unless such declaration shall be subsequently withdrawn; and

 

(ii)                                  such Lender may require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in which
event all such Eurodollar Loans shall be automatically converted to ABR Loans as
of the effective date of such notice as provided in paragraph (b) below.

 

In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans

 

44

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

 

that would have been made by such Lender or the converted Eurodollar Loans of
such Lender shall instead be applied to repay the ABR Loans made by such Lender
in lieu of, or resulting from the conversion of, such Eurodollar Loans. Any such
conversion of a Eurodollar Loan under (i) above shall be subject to
Section 2.16.

 

(b)                                 For purposes of this Section 2.15, a notice
to the Borrower by any Lender shall be effective as to each Eurodollar Loan made
by such Lender, if lawful, on the last day of the Interest Period then
applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt by the Borrower.

 

SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against any
loss (other than (x) any loss of margin over funding cost or (y) anticipated
profit) or expense that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a “Breakage Event”) or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender setting forth any amount or amounts which
such Lender is entitled to receive pursuant to this Section 2.16 shall be
delivered to the Borrower and shall be conclusive absent manifest error.

 

SECTION 2.17. Pro Rata Treatment. Except as provided below in this Section 2.17
with respect to Swingline Loans and as required under Section 2.15, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving Credit
Commitments. Each Lender agrees that in computing such Lender’s portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender’s percentage of such Borrowing to the next higher or lower
whole dollar amount.

 

45

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

 

SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall, through
the exercise of a right of banker’s lien, setoff or counterclaim against the
Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Loans and participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Loans and
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans and L/C Exposure of such other Lender, so that the aggregate unpaid
principal amount of the Loans and L/C Exposure and participations in Loans and
L/C Exposure held by each Lender shall be in the same proportion to the
aggregate unpaid principal amount of all Loans and L/C Exposure then outstanding
as the principal amount of its Loans and L/C Exposure prior to such exercise of
banker’s lien, setoff or counterclaim or other event was to the principal amount
of all Loans and L/C Exposure outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan or L/C Disbursement deemed to have been
so purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.

 

SECTION 2.19. Payments. (a)  The Borrower shall make each payment (including
principal of or interest on any Borrowing or any L/C Disbursement or any Fees or
other amounts) hereunder and under any other Loan Document not later than 12:00
(noon), New York City time, on the date when due in immediately available
dollars, without setoff, defense or counterclaim. Each such payment (other than
(i) Issuing Bank Fees, which shall be paid directly to the Issuing Bank, and
(ii) principal of and interest on Swingline Loans, which shall be paid directly
to the Swingline Lender except as otherwise provided in Section 2.22(e)) shall
be made to the Administrative Agent at its offices at Eleven Madison Avenue, New
York, NY 10010. All payments hereunder and under each other Loan Document shall
be made in dollars. The Administrative Agent shall distribute such payments to
the Lenders promptly upon receipt in like funds as received.

 

(b)                                 Except as otherwise expressly provided
herein, whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.

 

46

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

 

SECTION 2.20. Taxes. (a)  Any and all payments by or on account of any
obligation of the Borrower or any other Loan Party hereunder or under any other
Loan Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes or
Other Taxes are required to be withheld or deducted from such payments, then
(i) the sum payable by the Borrower shall be increased as necessary so that
after all required deductions or withholding (including deductions or
withholdings applicable to additional sums payable under this Section) the
Administrative Agent or such Lender (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made,
(ii) the Borrower or such other Loan Party shall make (or cause to be made) such
deductions and (iii) the Borrower or such other Loan Party shall pay (or cause
to be paid) the full amount deducted to the relevant Governmental Authority in
accordance with applicable law. In addition, the Borrower or any other Loan
Party hereunder shall pay (or cause to be paid) any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

 

(b)                                 The Borrower shall jointly and severally
indemnify the Administrative Agent and each Lender, within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, or any of
their respective Affiliates, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and expenses arising therefrom or with respect thereto, whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority; provided that if the Borrower
determines in good faith that a reasonable basis exists for contesting any
Indemnified Taxes or Other Taxes for which an increase in the amount of such
payment is made or for which indemnification has been demanded pursuant to this
Section 2.20, such Lender or the Administrative Agent, as applicable, shall
reasonably cooperate with the Borrower in challenging such Indemnified Taxes or
Other Taxes at the Borrower’s expense if so requested by the Borrower in writing
to the extent that such cooperation is not, in the Lender’s or the
Administrative Agent’s reasonable discretion, unduly burdensome or
disadvantageous. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender, or by the Administrative Agent on its
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(c)                                  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes pursuant to Section 2.20(a), and in any event
within 30 days of any such payment being due, the Borrower shall deliver (or
cause to be delivered) to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

(d)                                 Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent) such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the Borrower as will

 

47

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

 

permit such payments to be made without withholding or at a reduced rate;
provided that such Lender is legally entitled to complete, execute and deliver
such documentation and in such Lender’s judgment such completion, execution or
delivery would not materially prejudice the legal position of such Lender. In
addition, each Foreign Lender shall (i) furnish on or before it becomes a party
to the Agreement either (a) two accurate and complete originally executed U.S.
Internal Revenue Service Form W-8BEN (or successor form) or (b) an accurate and
complete U.S. Internal Revenue Service Form W-8ECI (or successor form),
certifying, in either case, to such Foreign Lender’s legal entitlement to an
exemption or reduction from U.S. federal withholding tax with respect to all
interest payments hereunder, and (ii) provide a new Form W8BEN (or successor
form) or Form W-8ECI (or successor form) upon the expiration or obsolescence of
any previously delivered form to reconfirm any complete exemption from, or any
entitlement to a reduction in, U.S. federal withholding tax with respect to any
interest payment hereunder; provided that any Foreign Lender that is not a
“bank” within the meaning of Section 881(c)(3)(A) of the Code and is relying on
the so-called “portfolio interest exemption” shall also furnish a “Non-Bank
Certificate” in the form of Exhibit K together with a Form W8BEN.
Notwithstanding any other provision of this paragraph, a Foreign Lender shall
not be required to deliver any form pursuant to this paragraph that such Foreign
Lender is not legally able to deliver.

 

(e)                                  Any Lender that is a United States person,
as defined in Section 7701(a)(30) of the Internal Revenue Code, and is not an
exempt recipient within the meaning of Treasury Regulations
Section 1.6049-4(c) shall deliver to the Borrower (with a copy to the
Administrative Agent) two accurate and complete original signed copies of
Internal Revenue Service Form W-9, or any successor form that such person is
entitled to provide at such time in order to comply with United States back-up
withholding requirements.

 

(f)                                    Without prejudice to the survival of any
other agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.20 shall survive the payment in full of all
amounts due hereunder.

 

(g)                                 In the event that any Lender or the
Administrative Agent receives a refund in respect of Indemnified Taxes or Other
Taxes as to which it has been paid additional amounts by the Borrower pursuant
to clause (a) of this Section or indemnified by the Borrower pursuant to
clause (b) of this Section and such Lender or the Administrative Agent, as
applicable, reasonably determines that such refund is attributable to such
additional amounts or indemnification, then such Lender or the Administrative
Agent, as applicable, shall promptly notify the Administrative Agent and the
Borrower and shall within 30 Business Days after the refund is actually received
remit to the Borrower an amount as such Lender or the Administrative Agent, as
applicable, determines to be the proportion of the refunded amount as will leave
such Lender or the Administrative Agent, as applicable, after such remittance,
in no better or worse position than it would have been if the Indemnified Taxes
or Other Taxes had not been imposed and the corresponding additional amounts or
indemnification payment not been made. Nothing in this Section 2.20(g) shall
oblige any Lender or the Administrative Agent to disclose to the Borrower or any
other person any information regarding its tax affairs or tax computations or
interfere with the right of any Lender or the Administrative Agent to arrange
its tax affairs in whatever manner it thinks fit and, in particular, no Lender
or the Administrative Agent shall be under any obligation to claim relief from
its corporate profits or similar tax liability in credits or deductions

 

48

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

 

available to it and, if it does claim, the extent, order and manner in which it
does so shall be at its absolute discretion.

 

SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty to
Mitigate. (a)  In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) any Lender does not consent to a proposed amendment,
modification or waiver of this Agreement requested by the Borrower which
requires the consent of all of the Lenders or all of the Lenders under any
Facility to become effective (and which is approved by at least the Required
Lenders), the Borrower may, at its sole expense and effort (including with
respect to the processing and recordation fee referred to in Section 9.04(b)),
upon notice to such Lender or the Issuing Bank and the Administrative Agent,
require such Lender or the Issuing Bank to transfer and assign, without recourse
(in accordance with and subject to the restrictions contained in Section 9.04),
all of its interests, rights and obligations under this Agreement to an assignee
that shall assume such assigned obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (x) such assignment
shall not conflict with any law, rule or regulation or order of any court or
other Governmental Authority having jurisdiction, (y) solely with respect to
replacements of Lenders pursuant to clauses (i), (ii) or (iii) of this Section,
the Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Credit Commitment is being assigned, of the Issuing
Bank and the Swingline Lender), which consent shall not unreasonably be withheld
or delayed, and (z) the Borrower or such assignee shall have paid to the
affected Lender or the Issuing Bank in immediately available funds an amount
equal to the sum of the principal of and interest accrued to the date of such
payment on the outstanding Loans or L/C Disbursements of such Lender or the
Issuing Bank, respectively, plus all Fees and other amounts accrued for the
account of such Lender or the Issuing Bank hereunder (including any amounts
under Section 2.14 and Section 2.16); provided further that, if prior to any
such transfer and assignment the circumstances or event that resulted in such
Lender’s or the Issuing Bank’s claim for compensation under Section 2.14 or
notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as the
case may be, cease to cause such Lender or the Issuing Bank to suffer increased
costs or reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.15, or cease
to result in amounts being payable under Section 2.20, as the case may be
(including as a result of any action taken by such Lender or the Issuing Bank
pursuant to paragraph (b) below), or if such Lender or the Issuing Bank shall
waive its right to claim further compensation under Section 2.14 in respect of
such circumstances or event or shall withdraw its notice under Section 2.15 or
shall waive its right to further payments under Section 2.20 in respect of such
circumstances or event, as the case may be, then such Lender or the Issuing Bank
shall not thereafter be required to make any such transfer and assignment
hereunder. In connection with any such replacement, if the replaced Lender does
not execute and deliver to the Administrative Agent a duly completed Assignment
and Acceptance reflecting such replacement within five Business Days of the date
on which the replacement Lender executes and delivers such Assignment and
Acceptance to the replaced Lender, then such replaced Lender shall be deemed to
have executed and delivered such Assignment and Acceptance.

 

49

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

 

(b)                                 If (i) any Lender or the Issuing Bank shall
request compensation under Section 2.14, (ii) any Lender or the Issuing Bank
delivers a notice described in Section 2.15 or (iii) the Borrower is required to
pay any additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to
Section 2.20, then such Lender or the Issuing Bank shall use reasonable efforts
(which shall not require such Lender or the Issuing Bank to incur an
unreimbursed loss or unreimbursed cost or expense or otherwise take any action
inconsistent with its internal policies or legal or regulatory restrictions or
suffer any disadvantage or burden deemed by it to be significant) (x) to file
any certificate or document reasonably requested in writing by the Borrower or
(y) to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or the
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.

 

SECTION 2.22. Swingline Loans. (a)  Swingline Commitment. Subject to the terms
and conditions hereof and relying upon the representations and warranties, set
forth herein, the Swingline Lender agrees to make loans to the Borrower, at any
time and from time to time after the Closing Date, and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $5,000,000 in the aggregate or
(ii) the Aggregate Revolving Credit Exposure, after giving effect to any
Swingline Loan, exceeding the Total Revolving Credit Commitment. Each Swingline
Loan shall be in a principal amount that is an integral multiple of $250,000.
The Swingline Commitment may be terminated or reduced from time to time as
provided herein. Within the foregoing limits, the Borrower may borrow, pay or
prepay and reborrow Swingline Loans hereunder, subject to the terms, conditions
and limitations set forth herein.

 

(b)                                 Swingline Loans. The Borrower shall notify
the Administrative Agent by fax, or by telephone (confirmed by fax), not later
than 12:00 p.m. (noon), New York City time, on the day of a proposed Swingline
Loan to be made to it. Such notice shall be delivered on a Business Day, shall
be irrevocable and shall refer to this Agreement and shall specify the requested
date (which shall be a Business Day) and amount of such Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any notice
received from the Borrower pursuant to this paragraph (b). The Swingline Lender
shall make each Swingline Loan available to the Borrower by means of a credit to
the account of the Borrower identified in such notice promptly on the date such
Swingline Loan is so requested.

 

(c)                                  Prepayment. The Borrower shall have the
right at any time and from time to time to prepay any Swingline Loan, in whole
or in part, in a principal amount that is an integral multiple of $250,000 (or,
if all outstanding Swingline Loans are being prepaid, the aggregate principal
amount of all such outstanding Swingline Loans), upon giving written or fax
notice (or telephone notice promptly confirmed by written or fax notice) to the
Swingline Lender and to the Administrative Agent before 12:00 (noon), New York
City time, on the date of prepayment at the Swingline Lender’s address for
notices specified in the Lender Addendum delivered by the

 

50

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

 

Swingline Lender. All principal payments of Swingline Loans shall be accompanied
by accrued interest on the principal amount being repaid to the date of payment.

 

(d)                                 Interest. Each Swingline Loan shall be an
ABR Loan and, subject to the provisions of Section 2.07, shall bear interest as
provided in Section 2.06(a).

 

(e)                                  Participations. The Swingline Lender may by
written notice given to the Administrative Agent not later than 10:00 a.m., New
York City time, on any Business Day require the Revolving Credit Lenders to
acquire participations on such Business Day in all or a portion of the Swingline
Loans outstanding. Such notice shall specify the aggregate amount of Swingline
Loans in which Revolving Credit Lenders will participate. The Administrative
Agent will, promptly upon receipt of such notice, give notice to each Revolving
Credit Lender, specifying in such notice such Lender’s Pro Rata Percentage of
such Swingline Loan or Loans. In furtherance of the foregoing, each Revolving
Credit Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the Swingline Lender, such Revolving Credit Lender’s Pro Rata Percentage of such
Swingline Loan or Loans. Each Revolving Credit Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in
Section 2.02(c) with respect to Loans made by such Lender (and
Section 2.02(c) shall apply, mutatis mutandis, to the payment obligations of the
Lenders under this Section) and the Administrative Agent shall promptly pay to
the Swingline Lender the amounts so received by it from the Lenders. The
Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Borrower (or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to the Swingline Lender, as their interests
may appear. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Borrower (or other party liable for obligations
of the Borrower) of any default in the payment thereof.

 

SECTION 2.23. Letters of Credit. (a)  General. Subject to the terms and
conditions hereof, the Borrower may request the issuance of a Letter of Credit
at any time and from time to time prior to the date that is 30 days prior to the
termination of the Revolving Credit Commitments for its own account or for the
account of any of the Subsidiary Guarantors (in which case the Borrower and such
Subsidiary Guarantor shall be co-applicants with respect to such Letter of
Credit), in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank. This Section shall not be construed to impose an obligation upon
the Issuing Bank to issue any Letter of Credit that is inconsistent with the
terms and conditions of this Agreement.

 

51

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

 

(b)                                 Notice of Issuance, Amendment, Renewal,
Extension; Certain Conditions. In order to request the issuance of a Letter of
Credit (or to amend, renew or extend an existing Letter of Credit), the Borrower
shall hand deliver or fax to the Issuing Bank and the Administrative Agent (no
less than five Business Days (or such shorter period of time acceptable to the
Issuing Bank) in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (i) the L/C Exposure shall not exceed
$10,000,000 and (ii) the Aggregate Revolving Credit Exposure shall not exceed
the Total Revolving Credit Commitment. The contingent reimbursement obligations
of Antares Capital Corporation owing to the issuing bank of the Existing Letters
of Credit in respect of the Existing Letters of Credit shall be entitled to all
of the rights, benefits and privileges afforded to Letters of Credit under this
Agreement.

 

(c)                                  Expiration Date. Each Letter of Credit
shall expire at the close of business on the earlier of (i) the date one year
after the date of the issuance of such Letter of Credit and (ii) the date that
is five Business Days prior to the Revolving Credit Maturity Date, unless such
Letter of Credit expires by its terms on an earlier date; provided, however,
that a Letter of Credit may, upon the request of the Borrower, include a
provision whereby such Letter of Credit shall be renewed automatically for
additional consecutive periods of 12 months or less (but not beyond the date
that is five Business Days prior to the Revolving Credit Maturity Date) unless
the Issuing Bank notifies the beneficiary thereof at least 30 days prior to the
then-applicable expiration date that such Letter of Credit will not be renewed.

 

(d)                                 Participations. By the issuance of a Letter
of Credit and without any further action on the part of the Issuing Bank or the
Lenders, the Issuing Bank hereby grants to each Revolving Credit Lender, and
each such Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Pro Rata Percentage of the aggregate
amount available to be drawn under such Letter of Credit, effective upon the
issuance of such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Credit Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Pro Rata Percentage of each L/C Disbursement made by the Issuing
Bank and not reimbursed by the Borrower (or, if applicable, another party
pursuant to its obligations under any other Loan Document) forthwith on the date
due as provided in Section 2.02(f). Each Revolving Credit Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or an Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.

 

(e)                                  Reimbursement. If the Issuing Bank shall
make any L/C Disbursement in respect of a Letter of Credit, the Borrower shall
pay to the Administrative Agent an amount equal to

 

52

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

 

such L/C Disbursement not later than two hours after the Borrower shall have
received notice from the Issuing Bank that payment of such draft will be made,
or, if the Borrower shall have received such notice later than 10:00 a.m., New
York City time, on any Business Day, not later than 10:00 a.m., New York City
time, on the immediately following Business Day.

 

(f)                                    Obligations Absolute. The Borrower’s
obligations to reimburse L/C Disbursements as provided in paragraph (e) above
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, and irrespective of:

 

(i)                                     any lack of validity or enforceability
of any Letter of Credit or any Loan Document, or any term or provision therein;

 

(ii)                                  any amendment or waiver of, or any consent
to departure from, all or any of the provisions of any Letter of Credit or any
Loan Document;

 

(iii)                               the existence of any claim, setoff, defense
or other right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any Letter of
Credit, the Issuing Bank, the Administrative Agent or any Lender or any other
person, whether in connection with this Agreement, any other Loan Document or
any other related or unrelated agreement or transaction;

 

(iv)                              any draft or other document presented under a
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;

 

(v)                                 payment by the Issuing Bank under a Letter
of Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit; and

 

(vi)                              any other act or omission to act or delay of
any kind of the Issuing Bank, any Lender, the Administrative Agent or any other
person or any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower’s obligations
hereunder.

 

Without limiting the generality of the foregoing, it is expressly understood and
agreed that the absolute and unconditional obligation of the Borrower hereunder
to reimburse L/C Disbursements will not be excused by the gross negligence or
willful misconduct of the Issuing Bank. However, the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
gross negligence or willful misconduct in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof; it
is understood that the Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further

 

53

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

 

investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank’s exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuing Bank.

 

(g)                                 Disbursement Procedures. The Issuing Bank
shall, promptly following its receipt thereof, examine all documents purporting
to represent a demand for payment under a Letter of Credit. The Issuing Bank
shall as promptly as possible give telephonic notification, confirmed by fax, to
the Administrative Agent and the Borrower of such demand for payment and whether
the Issuing Bank has made or will make an L/C Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the applicable
Lenders with respect to any such L/C Disbursement. The Administrative Agent
shall promptly give each Revolving Credit Lender notice thereof.

 

(h)                                 Interim Interest. If the Issuing Bank shall
make any L/C Disbursement in respect of a Letter of Credit, then, unless the
Borrower shall reimburse such L/C Disbursement in full on such date, the unpaid
amount thereof shall bear interest for the account of the Issuing Bank, for each
day from and including the date of such L/C Disbursement to but excluding the
earlier of the date of payment by the Borrower or the date on which interest
shall commence to accrue thereon as provided in Section 2.02(f), at the rate per
annum that would apply to such amount if such amount were an ABR Revolving Loan.

 

(i)                                     Resignation or Removal of the Issuing
Bank. The Issuing Bank may resign at any time by giving 30 days’ prior written
notice to the Administrative Agent, the Lenders and the Borrower. Subject to the
next succeeding paragraph, upon the acceptance of any appointment as the Issuing
Bank hereunder by a Lender that shall agree to serve as successor Issuing Bank,
such successor shall succeed to and become vested with all the interests, rights
and obligations of the retiring Issuing Bank and the retiring Issuing Bank shall
be discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective, the
Borrower shall pay all accrued and unpaid fees pursuant to Section 2.05(c)(ii).
The acceptance of any appointment as the Issuing Bank hereunder by a successor
Lender shall be evidenced by an agreement entered into by such successor, in a
form satisfactory to the Borrower and the Administrative Agent, and, from and
after the effective date of such agreement, (i) such successor Lender shall have
all the rights and obligations of the previous Issuing Bank under this Agreement
and the other Loan Documents and (ii) references herein and in the other Loan
Documents to the term “Issuing Bank” shall be deemed to refer to such successor
or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the resignation or removal of the
Issuing Bank

 

54

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

 

hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.

 

(j)                                     Cash Collateralization. If any Event of
Default shall occur and be continuing, the Borrower shall, (i) on the Business
Day it receives notice, if such notice is received by 11a.m. (New York City
time) on such Business Day, and (ii) within one Business Day following the
Business Day it receives notice, if such notice is received after 11a.m. (New
York City time) on such Business Day, in each case from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Revolving Credit Lenders representing greater than 50% of the total L/C
Exposure) thereof and of the amount to be deposited, deposit in an account with
the Collateral Agent, for the ratable benefit of the Revolving Credit Lenders,
an amount in cash equal to the L/C Exposure as of such date. Such deposit shall
be held by the Collateral Agent as collateral for the payment and performance of
the obligations of the Borrower under this Agreement. The Collateral Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment
of such deposits in Permitted Investments, which investments shall be made at
the option and sole discretion of the Collateral Agent, such deposits shall not
bear interest. Interest or profits, if any, on such investments shall accumulate
in such account. Moneys in such account shall (i) automatically be applied by
the Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Credit Lenders representing greater than 50% of the total
L/C Exposure), be applied to satisfy the Obligations. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

 

(k)                                  Additional Issuing Banks. The Borrower may,
at any time and from time to time with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld) and such Lender, designate
one or more additional Lenders to act as an issuing bank under the terms of the
Agreement. Any Lender designated as an issuing bank pursuant to this paragraph
shall be deemed to be an “Issuing Bank” (in addition to being a Lender) in
respect of Letters of Credit issued or to be issued by such Lender, and, with
respect to such Letters of Credit, such term shall thereafter apply to the other
Issuing Bank and such Lender.

 

SECTION 2.24. Increase in Term Loan Commitments. (a)  The Borrower may, by
written notice to the Administrative Agent from time to time, request
Incremental Term Loan Commitments in an aggregate amount not to exceed the
Incremental Debt Amount from one or more Incremental Term Lenders, which
may include any existing Lender; provided that each Incremental Term Lender, if
not already a Lender hereunder, shall be subject to the approval of the
Administrative Agent (which approval shall not be unreasonably withheld). Such
notice shall set forth (i) the amount of the Incremental Term Loan Commitments
being requested (which shall be in a minimum amount of $5,000,000 and in
increments of $1,000,000 in excess thereof (or such lesser amount as shall be
approved by the Administrative Agent)), (ii) the date

 

55

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

 

on which such Incremental Term Loan Commitments are requested to become
effective (which date shall be prior to March 15, 2010 and shall not be less
than 10 Business Days nor more than 60 days after the date of such notice) and
(iii) whether such Incremental Term Loan Commitments are to be Term Loan
Commitments or commitments to make term loans with certain terms different from
the Term Loans (“Other Term Loans”), subject to the provisions herein.

 

(b)                                 The Borrower and each Incremental Term
Lender shall execute and deliver to the Administrative Agent an Incremental Term
Loan Assumption Agreement and such other documentation as the Administrative
Agent shall reasonably specify to evidence the Incremental Term Loan Commitment
of such Incremental Term Lender. Each Incremental Term Loan Assumption Agreement
shall specify the terms of the Incremental Term Loans to be made thereunder;
provided that, without the prior written consent of the Required Lenders,
(i) the final maturity date of any Other Term Loans shall be no earlier than the
Term Loan Maturity Date, (ii) the average life to maturity of any Other Term
Loans shall be no shorter than the average life to maturity of the Term Loans,
(iii) any Other Term Loans shall rank pari passu in right of payment and of
security with the Term Loans, (iv) any Other Term Loans shall have such pricing
as may be agreed by the Borrower and the Persons providing such Other Term Loans
(provided that, to the extent that any yield (taking into account, among other
things, the interest rate spreads in respect of such Other Term Loans, any
upfront fees paid to the Persons providing such Other Term Loans and any
prepayment fees or penalties payable in respect of prepayments of such Other
Term Loans) with respect to such Other Term Loans shall be greater than the
yield with respect to the Term Loans at the time the applicable Incremental Term
Loan Assumption Agreement is executed and delivered plus 0.25% per annum, the
yield of the Term Loans shall be automatically increased (and/or fees shall be
paid to the Lenders, as applicable) so as to eliminated such difference) and
(v) any Other Term Loans shall otherwise be treated hereunder substantially the
same as (and in any event no more favorably than) the Term Loans. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Incremental Term Loan Assumption Agreement. Each of the parties hereto
hereby agrees that, upon the effectiveness of any Incremental Term Loan
Assumption Agreement, this Agreement shall be deemed amended to the extent (but
only to the extent) necessary to reflect the existence and the terms of the
Incremental Term Loan Commitment evidenced thereby; provided that any
Incremental Term Loan Assumption Agreement may, without the consent of any
Lender, effect such amendments to this Agreement and the other Loan Documents as
may be necessary or appropriate, in the opinion of the Administrative Agent, to
effect the provisions of this Section 2.24. Any such deemed amendment may be
memorialized in writing by the Administrative Agent with the Borrower’s consent
(not to be unreasonably withheld) and furnished to the other parties hereto.

 

(c)                                  Notwithstanding the foregoing, no
Incremental Term Loan Commitment shall become effective under this Section 2.24
unless (i) on the date of such effectiveness, the conditions set forth in
paragraphs (b) and (c) of Section 4.01 shall be satisfied and the Administrative
Agent shall have received a certificate to that effect dated such date and
executed by a Financial Officer of the Borrower, (ii) the Administrative Agent
shall have received legal opinions, board resolutions and other closing
certificates and documentation consistent with those delivered on the Closing
Date under paragraphs (a) and (b) of Section 4.02, as well as any other
applicable documents reasonably required by the Administrative Agent in
connection with

 

56

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

 

any such transaction, (iii) on such date, and after giving effect to the
Borrowing of Incremental Term Loans contemplated thereby and the use of the
proceeds therefrom as if made and applied on such date, the Borrower shall be in
pro forma compliance with each of the covenants contained in Sections 6.11, 6.12
and 6.13 as of the most recently ended fiscal quarter, and (iv) no Default or
Event of Default shall exist on such date before or after giving effect to such
Incremental Term Loan Commitments and the Borrowing of Incremental Term Loans
contemplated thereby and the use of the proceeds therefrom as if made and
applied on such date.

 

(d)                                 Each of the parties hereto hereby agrees
that the Administrative Agent may take any and all actions as may be reasonably
necessary to ensure that all Incremental Term Loans (other than Other Term
Loans), when originally made, are included in each Borrowing of outstanding Term
Loans on a pro rata basis. This may be accomplished at the discretion of the
Administrative Agent by requiring each outstanding Eurodollar Term Borrowing to
be converted into an ABR Term Borrowing on the date of each outstanding
Eurodollar Term Borrowing on a pro rata basis, even though as a result thereof
such Incremental Term Loan may effectively have a shorter Interest Period than
the Term Loans included in the Borrowing of which they are a part (and
notwithstanding any other provision of this Agreement that would prohibit such
an initial Interest Period). Any conversion of Eurodollar Term Loans to ABR Term
Loans made pursuant to the immediately preceding sentence shall be subject to
Section 2.16. If any Incremental Term Loan is to be allocated to an existing
Interest Period for a Eurodollar Term Borrowing, then, subject to Section 2.07,
the interest rate applicable to such Incremental Term Loan for the remainder of
such Interest Period shall equal the Adjusted LIBO Rate for a period
approximately equal to the remainder of such Interest Period (as determined by
the Administrative Agent two Business Days before the date such Incremental Term
Loan is made) plus the Applicable Margin. In addition, to the extent any
Incremental Term Loans are not Other Term Loans, the scheduled amortization
payments under Section 2.11(a) required to be made after the making of any
Incremental Term Loans shall be ratably increased by the aggregate principal
amount of such Incremental Term Loans.

 

ARTICLE III

 

Representations and Warranties

 

Each of Holdings and the Borrower jointly and severally represents and warrants
to the Arranger, the Administrative Agent, the Collateral Agent, the Issuing
Bank and each of the Lenders that:

 

SECTION 3.01. Organization; Powers. Holdings, the Borrower and each of the
Subsidiaries (a) is duly organized or formed, validly existing and (if
applicable) in good standing under the laws of the jurisdiction of its
organization or formation, (b) has all requisite power and authority to own and
operate its property and assets, to lease the property it operates as lessee and
to carry on its business as now conducted and as proposed to be conducted,
(c) is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where the failure so
to qualify, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect and (d) has the power and authority to
execute, deliver and perform its obligations under this Agreement, each of the
other Loan Documents to which it is or will be a party, the Acquisition
Documentation to which it is or will be a party and

 

57

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

 

each other agreement or instrument contemplated hereby or thereby to which it is
or will be a party, including, in the case of the Borrower, to borrow hereunder,
in the case of each Loan Party, to grant the Liens contemplated to be granted by
it under the Security Documents and, in the case of each Subsidiary Guarantor,
to Guarantee the Obligations as contemplated by the Guarantee and Collateral
Agreement.

 

SECTION 3.02. Authorization; No Conflicts. The Transactions (a) have been duly
authorized by all requisite corporate, partnership or limited liability company
and, if required, stockholder, partner or member action and (b) will not
(i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of Holdings, the Borrower or any Subsidiary, (B) any order of any
Governmental Authority or arbitrator or (C) any provision of any indenture,
material agreement or other material instrument to which Holdings, the Borrower
or any Subsidiary is a party or by which any of them or any of their property is
or may be bound, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise to
any right to accelerate or to require the prepayment, repurchase or redemption
of any obligation under any such indenture, agreement or other instrument or
(iii) result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by Holdings, the Borrower
or any Subsidiary (other than Liens created under the Security Documents).

 

SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by each of Holdings and the Borrower and constitutes, and each other
Loan Document when executed and delivered by each Loan Party party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.04. Governmental Approvals. No action, consent or approval of,
registration or filing with, Permit from, notice to, or any other action by, any
Governmental Authority is or will be required in connection with the
Transactions, except for (a) the filing of UCC financing statements and filings
with the United States Patent and Trademark Office and the United States
Copyright Office, (b) recordation of the Mortgages, (c) such as have been made
or obtained and are in full force and effect and (d) such the failure of which
to make or obtain, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

SECTION 3.05. Financial Statements. (a)  The Borrower has heretofore furnished
to the Lenders its consolidated balance sheets and statements of income,
stockholder’s equity and cash flows as of and for the fiscal years ended
December 31, 2004 audited by and accompanied by the opinion of KPMG LLP,
independent public accountants. Such financial statements present fairly in all
material respects the financial condition and results of operations and cash
flows of the Borrower and its consolidated Subsidiaries as of such dates and for
such periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.

 

58

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

 

(b)                                 [RESERVED]

 

SECTION 3.06. No Material Adverse Change. No event, change or condition has
occurred since December 31, 2003 that has caused, or could reasonably be
expected to cause, a Material Adverse Effect.

 

SECTION 3.07. Title to Properties; Possession Under Leases. (a)  Each of
Holdings, the Borrower and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets (including
material Real Property), except for (i) defects in title that, in the aggregate,
are not substantial in amount and do not materially detract from the value of
the property subject thereto or materially interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets for
their intended purposes, (ii) Liens expressly permitted by Section 6.02 and
(iii) leasehold interests that terminate in the ordinary course of business in
accordance with their terms and not on account of a tenant default. Each
material parcel of Real Property is free from material structural defects and
all building systems contained therein are in good working order and condition,
ordinary wear and tear excepted, suitable for the purposes for which they are
currently being used.

 

(b)                                 Each of Holdings, the Borrower and the
Subsidiaries, and, to the knowledge of the Borrower, each other party thereto,
has complied with all obligations under all leases to which it is a party and
all such leases are legal, valid, binding and in full force and effect and are
enforceable in accordance with their terms, except, in each case, for such
noncompliance or such failures to be in full force and effect that could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Each of Holdings, the Borrower and the Subsidiaries
enjoys peaceful and undisturbed possession under all such material leases. The
Borrower has delivered to the Administrative Agent true, complete and correct
copies of all leases (whether as landlord or tenant) of Real Property existing
as of the Closing Date the Borrower has promptly after execution delivered to
the Administrative Agent true, complete and correct copies of all leases
(whether as landlord or tenant) of Mortgaged Properties executed at any time
after the Closing Date.

 

(c)                                  The Borrower has obtained all material
Permits, licenses, variances and certificates (including certificates of
occupancy) required by applicable law to be obtained and necessary to the use
and operation of each parcel of Real Property, except where the failure to have
such Permit, license, certificate or variance could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

 

SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing Date a
list of all Subsidiaries, after giving effect to the Acquisition, including each
Subsidiary’s exact legal name (as reflected in such Subsidiary’s certificate or
articles of incorporation or other constitutive documents) and jurisdiction of
incorporation or formation and the percentage ownership interest of Holdings or
the Borrower (direct or indirect) therein, and identifies each Subsidiary that
is Loan Party. The shares of capital stock or other Equity Interests so
indicated on Schedule 3.08 are (where applicable) fully paid and non-assessable
and are owned by Holdings or the Borrower, directly or indirectly, free and
clear of all Liens (other than Liens expressly permitted by clauses (b) or
(d) of Section 6.02).

 

59

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

 

SECTION 3.09. Litigation; Compliance with Laws. (a) There are no actions, suits
or proceedings at law or in equity or by or before any arbitrator or
Governmental Authority now pending or, to the knowledge of Holdings or the
Borrower, threatened against or affecting Holdings, the Borrower or any
Subsidiary or any business, property or rights of any such person (i) that
involve any Loan Document or the Transactions or (ii) except as set forth on
Schedule 3.09, as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

 

(b)                                 Since the date of this Agreement, there has
been no change in the status of the matters disclosed on Schedule 3.09 that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

 

(c)                                  None of Holdings, the Borrower or any of
the Subsidiaries or any of their respective material properties or assets is in
violation of, nor will the continued operation of their material properties and
assets as currently conducted violate, any law, rule or regulation (including
any zoning, building, Environmental Law, ordinance, code or approval or any
building permits) or any restrictions of record or agreements affecting the
Mortgaged Property, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where, in each case
in this paragraph (c), such violation or default, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the
Subsidiaries is in default in any manner under any provision of any agreement or
instrument, or subject to any corporate restriction, that, individually or in
the aggregate, has resulted or could reasonably be expected to result in a
Material Adverse Effect.

 

SECTION 3.11. Federal Reserve Regulations. (a)  None of Holdings, the Borrower
or any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.

 

(b)                                 None of the transactions contemplated by
this Agreement (including the making of the Loans and the use of the proceeds
thereof, including any refinancing or retirement of Indebtedness with the
proceeds thereof) will violate or result in the violation of any of the
provisions of the Regulations of the Board, including Regulation T, U or X. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.

 

SECTION 3.12. Investment Company Act. None of Holdings, the Borrower or any of
the Subsidiaries is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended.

 

SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of (a) the
Term Loans funded on the Amendment Effective Date to pay the consideration for
the Proposed Domestic Acquisition and fees and expenses related thereto and
(b) any other Loans solely for

 

60

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

 

general corporate purposes, including the Proposed Domestic Acquisition, the
Proposed Foreign Acquisition and other Permitted Acquisitions. The Borrower will
request the issuance of Letters of Credit solely to support payment obligations
incurred in the ordinary course of business by the Borrower and the Subsidiary
Guarantors.

 

SECTION 3.14. Tax Returns. Each of Holdings, the Borrower and each of the
Subsidiaries has timely filed or timely caused to be filed all Federal, state,
material local and foreign tax returns or materials required to have been filed
by it and all such tax returns are correct and complete in all material
respects. Each of Holdings, the Borrower and each of the Subsidiaries has timely
paid or timely caused to be paid all Taxes due and payable by it and all
assessments received by it, except Taxes that are being contested in good faith
by appropriate proceedings and for which Holdings, the Borrower or such
Subsidiary, as applicable, shall have set aside on its books adequate reserves
in accordance with GAAP. Each of Holdings, the Borrower and each of the
Subsidiaries has made adequate provision in accordance with GAAP for all Taxes
not yet due and payable. None of the Holdings, the Borrower or any of the
Subsidiaries intends to treat the Loans or any of the transactions contemplated
by any Loan Document as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4).

 

SECTION 3.15. No Material Misstatements; Acquisition Documentation. Each of
Holdings and the Borrower has disclosed to the Arranger, the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which Holdings, the Borrower or any of the Subsidiaries is
subject, and all other matters known to any of them, that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect. None of any factual information, report, financial statement, exhibit or
schedule furnished by or on behalf of Holdings, the Borrower or any Subsidiary
to the Arranger, the Administrative Agent or any Lender for use in connection
with the transactions contemplated by the Loan Documents or in connection with
the negotiation of any Loan Document or included therein or delivered pursuant
thereto, when taken as a whole, contained, contains or will contain (in each
case as of the date of its delivery to the Arranger, the Administrative Agent or
any Lender) any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading;
provided that to the extent any such information, report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or projection, each
of Holdings and the Borrower represents only that it acted in good faith and
utilized assumptions believed by management of Holdings and the Borrower to be
reasonable at the time made in the preparation of such information, report,
financial statement, exhibit or schedule (it being understood by the Lenders and
the Agents that such financial information as it relates to future events is not
to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set
forth therein).

 

SECTION 3.16. Employee Benefit Plans. Each of the Borrower and each of its ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Tax Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in a Material Adverse Effect. The present
value

 

61

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

 

of all benefit liabilities under each Benefit Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of December 31, 2003, exceed by more than $3,000,000 the fair market
value of the assets of such Benefit Plan, and the present value of all benefit
liabilities of all underfunded Benefit Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
December 31, 2003, exceed by more than $3,000,000 the fair market value of the
assets of all such underfunded Benefit Plans.

 

SECTION 3.17. Environmental Matters. Except with respect to matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, none of Holdings, the Borrower or any of the
Subsidiaries:

 

(a)                                  has failed to comply with any Environmental
Law or to take, in a timely manner, all actions necessary to obtain, maintain,
renew and comply with any Environmental Permit, and all such Environmental
Permits are in full force and effect and not subject to any administrative or
judicial appeal;

 

(b)                                 has become a party to any governmental,
administrative or judicial proceeding or possesses knowledge of any such
proceeding that has been threatened under Environmental Law;

 

(c)                                  has received written notice of, become
subject to, or is aware of any facts or circumstances that could form the basis
for, any Environmental Liability other than those which have been fully and
finally resolved and for which no obligations remain outstanding;

 

(d)                                 possesses knowledge that any Mortgaged
Property (A) is subject to any Lien, restriction on ownership, occupancy, use or
transferability imposed pursuant to Environmental Law or (B) contains or
previously contained Hazardous Materials of a form or type or in a quantity or
location that could reasonably be expected to result in any Environmental
Liability;

 

(e)                                  possess knowledge that there has been a
Release or threat of Release of Hazardous Materials at or from the Mortgaged
Properties (or from any facilities or other properties formerly owned, leased or
operated by Holdings, the Borrower or any of the Subsidiaries) in violation of,
or in amounts or in a manner that could give rise to liability under, any
Environmental Law;

 

(f)                                    has generated, treated, stored,
transported, or Released Hazardous Materials from the Mortgaged Properties (or
from any facilities or other properties formerly owned, leased or operated by
Holdings, the Borrower or any of the Subsidiaries) in violation of, or in a
manner or to a location that could give rise to liability under, any
Environmental Law;

 

(g)                                 is aware of any facts, circumstances,
conditions or occurrences in respect of any of the facilities and properties
owned, leased or operated that could (A) form the basis of any action, suit,
claim or other judicial or administrative proceeding relating to liability under
or noncompliance with Environmental Law on the part of Holdings, the

 

62

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

 

Borrower or any of the Subsidiaries or (B) interfere with or prevent continued
compliance with Environmental Laws by Holdings, the Borrower or the
Subsidiaries; or

 

(h)                                 has pursuant to any order, decree, judgment
or agreement by which it is bound or has assumed the Environmental Liability for
any Person.

 

SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and correct
description of all insurance maintained by or on behalf of Holdings, the
Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date,
such insurance is in full force and effect and all premiums have been duly paid.
Holdings, the Borrower and the Subsidiaries are insured by financially sound and
reputable insurers and such insurance is in such amounts and covering such risks
and liabilities (and with such deductibles, retentions and exclusions) as are in
the Borrower’s reasonable judgment in accordance with normal and prudent
industry practice. None of Holdings, the Borrower or any of the Subsidiaries
(a) has received notice from any insurer (or any agent thereof) that substantial
capital improvements or other substantial expenditures will have to be made in
order to continue such insurance, the cost of which improvements or expenditures
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect or (b) has any reason to believe that it will not be
able to renew its existing coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.19. Security Documents. (a)  The Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid, binding and enforceable security interest
in the Collateral described therein in which a security interest can be created
under Article 8 or 9 of the UCC and proceeds thereof and (i) in the case of the
Pledged Collateral, upon the earlier of (A) when such Pledged Collateral is
delivered to the Collateral Agent and (B) when financing statements in
appropriate form are filed in the offices specified on Schedule 3.19(a) and
(ii) in the case of all other Collateral described therein in which a security
interest can be created under Article 8 or 9 of the UCC (other than Intellectual
Property Collateral), when financing statements in appropriate form are filed in
the offices specified on Schedule 3.19(a), the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Secured Parties in such Collateral in which
a security interest can be created under Article 8 or 9 of the UCC and proceeds
thereof, as security for the Obligations, in each case prior and superior to the
rights of any other person (except, in the case of all Collateral other than
Pledged Collateral, with respect to Liens expressly permitted by Section 6.02
and, in the case of Pledged Collateral, with respect to any Liens expressly
permitted by clauses (b) or (d) of Section 6.02).

 

(b)                                 Each Intellectual Property Security
Agreement is effective to create in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid, binding and enforceable
security interest in the Intellectual Property Collateral described therein and
proceeds thereof. When each Intellectual Property Security Agreement is filed in
the United States Patent and Trademark Office and the United States Copyright
Office, respectively, together with financing statements in appropriate
form filed in the offices specified in Schedule 3.19(a), such Intellectual
Property Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in the Intellectual

 

63

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

 

Property Collateral in which a security interest may be perfected by filing in
the United States and proceeds thereof, as security for the Obligations, in each
case prior and superior in right to any other person (except with respect to
Liens expressly permitted by Section 6.02) (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a lien on registered
trademarks, trademark applications and copyrights acquired by the grantors after
the Closing Date).

 

(c)                                  Each of the Mortgages is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid, binding and enforceable Lien on, and security interest
in, all of the Loan Parties’ right, title and interest in and to the Mortgaged
Property thereunder and proceeds thereof, and when the Mortgages are filed in
the offices specified on Schedule 3.19(c), each such Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the grantors thereof in such Mortgaged Property and proceeds thereof, as
security for the Obligations, in each case prior and superior in right to any
other person (except with respect to Liens expressly permitted by Section 6.02).

 

SECTION 3.20. Location of Real Property. Schedule 3.20 lists completely and
correctly as of the Closing Date all Real Property and the addresses thereof,
indicating for each parcel whether it is owned or leased, including in the case
of leased Real Property, the landlord name, lease date and lease expiration
date.

 

SECTION 3.21. Labor Matters. As of the Closing Date, there are no strikes,
lockouts or slowdowns against Holdings, the Borrower or any Subsidiary pending
or, to the knowledge of Holdings or the Borrower, threatened. The hours worked
by and payments made to employees of Holdings, the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters,
except for such violations that could not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect. All payments due
from Holdings, the Borrower or any Subsidiary, or for which any claim may be
made against Holdings, the Borrower or any Subsidiary, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary, except for such failures that could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.

 

SECTION 3.22. Intellectual Property. Each of Holdings, the Borrower and each of
the Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by Holdings, the Borrower and the Subsidiaries does not
infringe upon the rights of any other person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 3.23. Solvency. Immediately after the consummation of the Transactions
to occur on the Closing Date and immediately following the making of each Loan
(or other extension of credit hereunder) and after giving effect to the
application of the proceeds of each Loan (or other extension of credit
hereunder), subject, in the case of any guarantee of any Guarantor, to the terms
of Section 2 of the Guarantee and Collateral Agreement, (a) the fair value of
the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities,

 

64

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

 

subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) no Loan Party will have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.

 

SECTION 3.24. Senior Debt. The Obligations constitute “Senior Debt” under and as
defined in the Subordinated Note Documents.

 

ARTICLE IV

 

Conditions of Lending

 

The obligations of the Lenders to make Loans and the obligations of the Issuing
Bank to issue Letters of Credit are subject to the satisfaction of the following
conditions:

 

SECTION 4.01. All Credit Events. On the date of each Borrowing, including each
Borrowing of a Swingline Loan but excluding the conversion of a Eurodollar
Borrowing to an ABR Borrowing (or vice versa) or the continuation or conversion
of the Interest Period of a Eurodollar Borrowing into another permitted Interest
Period, and on the date of each issuance, amendment, extension or renewal of a
Letter of Credit (each such event being called a “Credit Event”):

 

(a)                                  The Administrative Agent shall have
received a notice of such Borrowing as required by Section 2.03 (or such notice
shall have been deemed given in accordance with Section 2.03) or, in the case of
the issuance, amendment, extension or renewal of a Letter of Credit, the Issuing
Bank and the Administrative Agent shall have received a notice requesting the
issuance, amendment, extension or renewal of such Letter of Credit as required
by Section 2.23(b) or, in the case of the Borrowing of a Swingline Loan, the
Swingline Lender and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.22(b).

 

(b)                                 The representations and warranties set forth
in each Loan Document shall be true and correct in all material respects on and
as of the date of such Credit Event with the same effect as though made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on and as
of such earlier date.

 

(c)                                  At the time of and immediately after such
Credit Event, no Event of Default or Default shall have occurred and be
continuing.

 

Each Credit Event shall be deemed to constitute a joint and several
representation and warranty by each of Holdings and the Borrower on the date of
such Credit Event as to the matters specified in paragraphs (b) and (c) of this
Section 4.01.

 

65

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

 

SECTION 4.02. First Credit Event. On the Closing Date:

 

(a)                                  The Administrative Agent shall have
received a favorable written opinion dated as of the Closing Date of (i) Mayer,
Brown, Rowe & Maw LLP, special counsel for the Loan Parties, in form and
substance reasonably satisfactory to the Administrative Agent and (ii) Baker
Donelson Bearman Caldwell & Berkowitz, Mississippi real estate counsel for
Holdings, the Borrower and the Subsidiaries, in form and substance reasonably
satisfactory to the Administrative Agent, and Holdings, the Borrower and the
Subsidiaries hereby request such counsel to deliver such opinions.

 

(b)                                 The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation or other formation
documents, including all amendments thereto, of each Loan Party, certified as of
a recent date by the Secretary of State of the state of its organization, and a
certificate as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such Loan Party
as in effect on the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the Board of Directors of
such Loan Party authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party, in the case of the Borrower, the
borrowings hereunder, in the case of each Loan Party, the granting of the Liens
contemplated to be granted by it under the Security Documents and, in the case
of each Subsidiary Guarantor, the Guaranteeing of the Obligations as
contemplated by the Guarantee and Collateral Agreement, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation or other
formation documents of such Loan Party have not been amended since the date of
the last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above and (D) as to the incumbency and specimen signature
of each officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party; (iii) a certificate of another
officer as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing the certificate pursuant to (ii) above; and
(iv) such other documents as the Administrative Agent, the Arranger, the Issuing
Bank or the Lenders may reasonably request.

 

(c)                                  The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by a Financial Officer
of the Borrower, confirming compliance with the conditions precedent set forth
in paragraphs (b) and (c) of Section 4.01.

 

(d)                                 The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of each
of Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of each of Holdings and the
Borrower and each Subsidiary Guarantor, (iii) a Mortgage covering each of the
Mortgaged Properties (other than the Post Closing Mortgaged Property), executed
and delivered

 

66

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

 

by a duly authorized officer of each Loan Party thereto, (iv) the Intellectual
Property Security Agreements, executed and delivered by a duly authorized
officer of each Loan Party a party thereto, (v) if requested by any Lender
pursuant to Section 2.04, a promissory note or notes conforming to the
requirements of such Section and executed and delivered by a duly authorized
officer of the Borrower and (vi) a Lender Addendum executed and delivered by
each Lender and accepted by the Borrower.

 

(e)                                  The Collateral Agent, for the ratable
benefit of the Secured Parties, shall have been granted on the Closing Date
first priority perfected Liens on the Collateral (subject, in the case of all
Collateral other than Pledged Collateral, only to Liens expressly permitted by
Section 6.02 and, in the case of Pledged Collateral, only to Liens expressly
permitted by clauses (b) or (d) of Section 6.02) and customary Guarantees from
the Subsidiary Guarantors. The Pledged Collateral shall have been duly and
validly pledged under the Guarantee and Collateral Agreement to the Collateral
Agent, for the ratable benefit of the Secured Parties, and certificates
representing such Pledged Collateral, accompanied by instruments of transfer and
stock powers endorsed in blank, shall be in the actual possession of the
Collateral Agent. With respect to the Mortgaged Property, the Collateral Agent
shall have received such reports, documents and agreements (including title
insurance, flood insurance and surveys) as the Collateral Agent shall reasonably
request and that are customarily delivered in connection with security interests
in real property.

 

(f)                                    The Collateral Agent shall have received
a duly executed Perfection Certificate dated on or prior to the Closing Date.
The Collateral Agent shall have received the results of a recent Lien and
judgment search in each relevant jurisdiction with respect to Holdings, the
Borrower and those of the Subsidiaries that shall be Subsidiary Guarantors or
shall otherwise have assets that are included in the Collateral, and such search
shall reveal no Liens on any of the assets of Holdings, the Borrower or any of
such Subsidiaries except, in the case of Collateral other than Pledged
Collateral, for Liens expressly permitted by Section 6.02 and except for Liens
to be discharged on or prior to the Closing Date pursuant to documentation
reasonably satisfactory to the Collateral Agent.

 

(g)                                 The Acquisition and the Acquisition
Transactions shall be consummated simultaneously with the initial funding of the
Loans hereunder in accordance with applicable law; the Purchase Agreement and
all other related documentation shall be reasonably satisfactory to the
Administrative Agent; the Equity Contribution shall have been made on terms
reasonably acceptable to the Administrative Agent; the Administrative Agent
shall be satisfied with the capitalization, structure and equity ownership of
Holdings and the Borrower after giving effect to the Transactions; and the
Administrative Agent shall be reasonably satisfied with the arrangements to
retain the senior management team (it being agreed that the final execution copy
of the Purchase Agreement, dated as of the date of the Commitment Letter, is
acceptable).

 

(h)                                 The Borrower shall have received not less
than $125,000,000 in gross cash proceeds from the issuance of the Subordinated
Notes in a public offering or in a Rule 144A or other private placement. The
terms and conditions of the Subordinated Notes (including but not limited to
terms and conditions relating to the interest rate, fees,

 

67

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

 

amortization, maturity, subordination, covenants, events of default and
remedies) shall be reasonably satisfactory in all respects to the Administrative
Agent.

 

(i)                                     After giving effect to the Transactions
and the other transactions contemplated hereby, Holdings and its subsidiaries
shall have outstanding no Indebtedness or preferred stock other than (i) the
Loans and other extensions of credit hereunder, (ii) the Subordinated Notes and
(iii) other Indebtedness to be agreed upon by the Borrower and the
Administrative Agent. The Borrower (A) shall have redeemed, defeased or
otherwise acquired or retired all of its outstanding 10.875% Senior Subordinated
Notes due 2008 on terms reasonably satisfactory to the Administrative Agent and
(B) shall have repaid all amounts outstanding under the Existing Credit
Facility. The Administrative Agent shall have received satisfactory evidence
that (i) the Existing Credit Facility shall have been terminated, all amounts
then due and payable or to become due and payable (other than indemnification
obligations not yet having been requested) thereunder shall have been paid in
full and all commitments and reimbursement obligations thereunder shall have
been terminated and (ii) satisfactory arrangements shall have been made for the
termination of all Liens granted in connection therewith, in each case on terms
and conditions reasonably satisfactory to the Administrative Agent.

 

(j)                                     The Administrative Agent shall have
received (i) the financial statements described in Section 3.05 and (ii) U.S.
GAAP unaudited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of the Borrower for (A) each subsequent
fiscal quarter ended 30 days before the Closing Date and (B) each fiscal month
after the most recent 2004 fiscal quarter for which financial statements were
received by the Administrative Agent as described above and ended 30 days before
the Closing Date.

 

(k)                                  The Administrative Agent shall be satisfied
that the Borrower’s pro forma Consolidated EBITDA for the four-fiscal quarter
period most recently ended prior to the Closing Date (prepared in accordance
with Regulation S-X under the Securities Act of 1933, as amended, to give pro
forma effect to the Transactions as if they had occurred at the beginning of
such four-fiscal quarter period, together with such other adjustments as shall
be reasonably satisfactory to the Administrative Agent in an amount not to
exceed $2,100,000) (such pro forma Consolidated EBITDA, “Pro Forma EBITDA”)
shall not be less than $35,000,000.

 

(l)                                     The Administrative Agent shall be
satisfied (i) that the Borrower’s ratio of Senior Secured Debt on the Closing
Date to Pro Forma EBITDA shall be no more than 3.1 to 1.0 and (ii)that the
Borrower’s ratio of Funded Debt on the Closing Date to Pro Forma EBITDA shall be
no more than 6.50 to 1.0.

 

(m)                               The Administrative Agent shall have received
projections of Holdings and its subsidiaries for the years 2004 through 2010 and
for the quarters beginning with the first fiscal quarter of 2004 and through the
fourth fiscal quarter of 2004, in form and substance satisfactory to the
Administrative Agent.

 

68

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

 

(n)                                 The Administrative Agent shall have received
a certificate from the chief financial officer of Holdings certifying that
Holdings, the Borrower and each of the Subsidiary Guarantors, after giving
effect to the Transactions and the other transactions contemplated hereby, are
solvent.

 

(o)                                 All material governmental and third party
consents and approvals with respect to the Transactions and the other
transactions contemplated hereby to the extent required shall have been
obtained, all applicable appeal periods shall have expired and there shall be no
litigation, governmental, administrative or judicial action, actual or
threatened, that could reasonably be expected to restrain, prevent or impose
materially burdensome conditions on the Transactions or the other transactions
contemplated hereby.

 

(p)                                 The Administrative Agent shall have received
all documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including the U.S.A. Patriot Act.

 

SECTION 4.03. Amendment Effective Date. The obligations of the Lenders, the
Issuing Bank and the Administrative Agent under this Agreement shall become
effective upon the satisfaction of the following conditions:

 

(a)                                  The Administrative Agent shall have
received a favorable written opinion dated as of the Amendment Effective Date of
Mayer, Brown, Rowe & Maw LLP, special counsel for the Loan Parties, in form and
substance reasonably satisfactory to the Administrative Agent, and Holdings, the
Borrower and the Subsidiaries hereby request such counsel to deliver such
opinion.

 

(b)                                 The Administrative Agent shall have received
(i) a copy of the certificate or articles of incorporation or other formation
documents, including all amendments thereto, of each Loan Party, certified as of
a recent date by the Secretary of State of the state of its organization, and a
certificate as to the good standing of each Loan Party as of a recent date, from
such Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of each Loan Party dated the Amendment Effective Date and certifying
(A) that attached thereto is a true and complete copy of the by-laws of such
Loan Party as in effect on the Amendment Effective Date, (B) in the case of the
Borrower, that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the certificate
or articles of incorporation or other formation documents of the Borrower have
not been amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (i) above and (D) as
to the incumbency and specimen signature of each officer of the Borrower
executing any Loan Document or any other document delivered in connection
herewith on behalf of the Borrower; (iii) a certificate of another officer as to
the incumbency and specimen

 

69

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

 

signature of the Secretary or Assistant Secretary of the Borrower executing the
certificate pursuant to (ii) above.

 

(c)                                  The Administrative Agent shall have
received a certificate, dated the Amendment Effective Date and signed by a
Financial Officer of the Borrower, confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.01.

 

(d)                                 The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of each
of Holdings and the Borrower and (ii) an Affirmation and Consent to the
Guarantee and Collateral Agreement, executed and delivered by a duly authorized
officer of each of Holdings, the Borrower and each Subsidiary Guarantor.

 

SECTION 4.04. Funding Date. On the Funding Date:

 

(a)                                  The Proposed Domestic Acquisition shall be
consummated simultaneously with the funding of the Additional Term Loans in
accordance with applicable law; all documentation related to the Proposed
Domestic Acquisition shall be reasonably satisfactory to the Administrative
Agent; and the Administrative Agent shall be satisfied with the capitalization,
structure and equity ownership of Holdings and the Borrower after giving effect
to the Transactions.

 

(b)                                 The Administrative Agent shall have received
a pro forma consolidated balance sheet and related pro forma consolidated
statements of income and cash flows of the Borrower as of and for the
twelve-month period ending on the last day of the most recently completed
four-fiscal quarter period, prepared after giving effect to the Proposed
Domestic Acquisition as if such acquisition had occurred as of such date (in the
case of such balance sheet) or at the beginning of such period (in the case of
such other financial statements), which financial statements shall not be
materially inconsistent with the forecasts previously provided to the
Administrative Agent.

 

(c)                                  The Administrative Agent shall have
received a duly executed and delivered notarized modification to each existing
Mortgage in form and substance satisfactory to the Administrative Agent  and,
with respect to each such mortgage modification, endorsements to the title
insurance policy insuring the Mortgage being so modified in form and substance
reasonably acceptable to the Administrative Agent.

 

(d)                                 All material governmental and third party
consents and approvals with respect to the Proposed Domestic Acquisition and the
other transactions contemplated thereby to the extent required shall have been
obtained, all applicable appeal periods shall have expired and there shall be no
litigation, governmental, administrative or judicial action, actual or
threatened, that could reasonably be expected to restrain, prevent or impose
materially burdensome conditions on the Proposed Domestic Acquisition or the
other transactions contemplated thereby.

 

(e)                                  Credit Suisse shall have received all fees
required to be paid on or before the Funding Date pursuant to the Amendment Fee
Letter and the Administrative Agent

 

70

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

 

shall have been reimbursed by the Borrower for its reasonable out-of-pocket
expenses, as set forth in the Amendment Fee Letter, in connection with this
Agreement, including the reasonable fees and disbursements of counsel.

 

ARTICLE V

 

Affirmative Covenants

 

Each of Holdings and the Borrower covenants and agrees with each Lender that so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full and all Letters of Credit have been canceled or have expired and all
amounts drawn thereunder have been reimbursed in full, each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to:

 

SECTION 5.01. Existence; Businesses and Properties. (a)  Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence, except as otherwise expressly permitted under Section 6.05.

 

(b)                                 Do or cause to be done all things necessary
to obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business; maintain and operate
such business in substantially the manner in which it is presently conducted and
operated; comply in all material respects with all applicable laws, rules,
regulations and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times.

 

SECTION 5.02. Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other
insurance, to such extent and against such risks (and with such deductibles,
retentions and exclusions) as is customary with companies in the same or similar
businesses operating in the same or similar locations, including liability
insurance against claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use of any properties owned,
occupied or controlled by it; maintain such other insurance as may be required
by law; and maintain such other insurance as otherwise required by the Security
Documents.

 

SECTION 5.03. Obligations and Taxes. Pay its Material Indebtedness promptly and
in accordance with their terms and pay and discharge promptly when due all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits or in respect of its property, before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise that, if unpaid, could reasonably be
expected to give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to any such tax, assessment,

 

71

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

 

charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower or the
applicable Subsidiary shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien and, in the case of a Mortgaged Property, there is no
reasonable risk of forfeiture of such property.

 

SECTION 5.04. Financial Statements, Reports, etc. In the case of the Borrower,
furnish to the Administrative Agent for distribution to each Lender:

 

(a)                                  within 90 days after the end of each fiscal
year (beginning with the fiscal year ending on December 31, 2004), its
consolidated balance sheet and related statements of income, stockholders’
equity and cash flows showing the financial condition of the Borrower and its
consolidated Subsidiaries as of the close of such fiscal year and the results of
its operations and the operations of such Subsidiaries during such year,
together with comparative figures for the immediately preceding fiscal year, all
audited by KPMG LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which shall
not be qualified in any material respect) to the effect that such consolidated
financial statements fairly present the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;

 

(b)                                 within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, its consolidated balance sheet
and related statements of income, stockholders’ equity and cash flows showing
the financial condition of the Borrower and its consolidated Subsidiaries as of
the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, and comparative figures for the same periods in the
immediately preceding fiscal year, all certified by one of its Financial
Officers as fairly presenting the financial condition and results of operations
of the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

 

(c)                                  (i) concurrently with any delivery of
financial statements under paragraph (a) above, a letter from the accounting
firm opining on such statements (which letter may be limited to accounting
matters or other items that independent certified public accountants are
permitted to cover in such letters pursuant to their professional standards and
customs and may disclaim responsibility for legal interpretations) stating
whether, in connection with their audit examination, anything has come to their
attention which would cause them to believe that there has been a violation of
any of the provisions of Section 6.10, 6.11, 6.12 or 6.13 of this Agreement or,
if any such a violation has occurred, specifying the nature thereof; provided
that no such letter shall be required to the extent that (x) it is prohibited at
such time by the then current recommendations of the American Institute of
Certified Public Accountants or any other applicable accounting governing body
or (y) such accounting firm has at such time a firm-wide policy prohibiting the
delivery of such a letter and such firm does not at such time provide such
letters in connection with any other credit agreements, (ii) concurrently with
any delivery

 

72

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

 

of financial statements under paragraph (a) above, a certificate of a Financial
Officer of the Borrower identifying the assets transferred to the Foreign Target
during such fiscal year and setting forth the Borrower’s election pursuant to
paragraph (b)(i)(II)(b)(i) of Section 6.05 and (iii) concurrently with any
delivery of financial statements under paragraph (a) or (b) above, a certificate
of a Financial Officer of the Borrower (A) certifying that no Event of Default
or Default has occurred or, if such an Event of Default or Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto and (B) setting forth computations in
reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the covenants contained in Sections 6.11, 6.12 and 6.13 and, in
the case of a certificate delivered with the financial statements required by
paragraph (a) above with respect to the fiscal year ending December 31, 2005 and
each fiscal year thereafter, setting forth the Borrower’s calculation of Excess
Cash Flow;

 

(d)                                 at least 90 days after the end of each
fiscal year of the Borrower, a detailed consolidated budget for the following
fiscal year (including a projected consolidated balance sheet and related
statements of projected operations and cash flows as of the end of and for such
following fiscal year and setting forth the assumptions used for purposes of
preparing such budget) and, promptly when available, any significant revisions
of such budget;

 

(e)                                  promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and other
materials filed by Holdings, the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
of the functions of said Commission;

 

(f)                                    promptly after the receipt thereof by
Holdings, the Borrower or any of the Subsidiaries, a copy of any “management
letter” (in final form) received by any such person from its certified public
accountants and the management’s response thereto; and

 

(g)                                 promptly, from time to time, such other
information regarding the operations, business affairs and financial condition
of Holdings, the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender (acting through the
Administrative Agent) may reasonably request.

 

SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative Agent,
the Issuing Bank and each Lender written notice of the following promptly after
any Responsible Officer obtains knowledge thereof:

 

(a)                                  any Event of Default or Default, specifying
the nature and extent thereof and the corrective action (if any) taken or
proposed to be taken with respect thereto;

 

(b)                                 the filing or commencement of, or any threat
or notice of intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any arbitrator or
Governmental Authority, against Holdings, the Borrower or any Subsidiary that
involves, in the Borrower’s good faith judgment, a reasonable

 

73

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

 

possibility of an adverse determination and which, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect; and

 

(c)                                  the occurrence of any ERISA Event described
in clause (b) of the definition thereof or any other ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of Holdings, the Borrower and the Subsidiaries
in an aggregate amount of $5,000,000 or greater; and

 

(d)                                 any development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.

 

SECTION 5.06. Information Regarding Collateral. (a)  Furnish to each of the
Administrative Agent and the Collateral Agent (i) prompt written notice of any
change (A) in any Loan Party’s corporate name, (B) in any Loan Party’s corporate
structure or (C) in any Loan Party’s Federal Taxpayer Identification Number and
(ii) on the date of delivery of financial statements and certificates required
by Section 5.04(a), written notice of any change, if any, in the location of
Collateral with a fair market value (as determined by the Borrower) in excess of
$1,000,000. Each of Holdings and the Borrower agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
(or will have been made within 30 days of such change) under the UCC or
otherwise and all other actions have been taken (or will have been taken within
30 days of such change) that are required in order for the Collateral Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the Collateral. Each of Holdings and the Borrower also
agrees promptly to notify each of the Administrative Agent and the Collateral
Agent if any material portion of the Collateral is damaged or destroyed.

 

(b)                                 In the case of the Borrower, each year,
unless otherwise agreed by the Administrative Agent to extend such time, at the
time of delivery of the annual financial statements with respect to the
preceding fiscal year pursuant to Section 5.04(a), deliver to the Administrative
Agent a certificate of a Financial Officer setting forth the information
required pursuant to Section I of the Perfection Certificate.

 

SECTION 5.07. Maintaining Records; Access to Properties and Inspections. Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each of Holdings and
the Borrower will, and will cause each of its subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect (including with respect to environmental matters) the financial
records and the properties of Holdings or the Borrower, as the case may be, or
any of its subsidiaries at reasonable times (but, in the case of any Lenders,
not more than one time each year for all Lenders and at such Lenders’ expense,
unless an Event of Default is continuing) and to make extracts from and copies
of such financial records, and permit any representatives designated by the
Administrative Agent or any Lender (acting through the Administrative Agent) to
discuss the affairs, finances and condition of Holdings or the Borrower, as the
case may be, or any of its subsidiaries with the officers thereof and
independent accountants therefor; provided that the Borrower shall be given an
opportunity to have a designated representative present at any

 

74

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

 

discussions with such independent accountants if available at such time and
shall be given at least five Business Days’ notice of such discussions.

 

SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request the
issuance of Letters of Credit only for the purposes set forth in Section 3.13.

 

SECTION 5.09. Additional Collateral, etc. (a)  With respect to any Collateral
acquired after the Closing Date or, in the case of inventory or equipment, any
material Collateral moved after the Closing Date by the Borrower or any other
Loan Party (other than any Collateral described in paragraphs (b), (c) or (d) of
this Section) as to which the Collateral Agent, for the benefit of the Secured
Parties, does not as a result of such acquisition or move have a first priority
perfected security interest (subject to Liens expressly permitted by
Section 6.02), promptly (and, in any event, within 20 days following the date of
such acquisition) (i) execute and deliver to the Administrative Agent and the
Collateral Agent such amendments to the Guarantee and Collateral Agreement or
such other Security Documents as the Collateral Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the Secured
Parties, a security interest in such Collateral and (ii) promptly following the
Administrative Agent’s or the Collateral Agent’s request, take all actions
necessary or advisable to grant to, or continue on behalf of, the Collateral
Agent, for the benefit of the Secured Parties, a perfected first priority
security interest (subject to Liens expressly permitted by Section 6.02) in such
Collateral, including the filing of UCC financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent or the Collateral Agent.

 

(b)                                 With respect to any (x) fee interest in any
Collateral consisting of material Real Property (as determined by Administrative
Agent and (y) lease of Collateral consisting of Real Property with an annual
base rent in excess of $2,500,000 after the expiration of any rent abatement or
free rent period, acquired or leased after the Closing Date by the Borrower or
any other Loan Party and promptly (and, in any event, within 20 days following
the date of such acquisition, in the case of clause (x)) (i) execute and deliver
or, in the case of clause (y), use commercially reasonable efforts to execute
and deliver, a first priority (subject to Liens expressly permitted by
Section 6.02) Mortgage in favor of the Collateral Agent, for the benefit of the
Secured Parties, covering such Real Property and complying with the provisions
herein and in the Security Documents, (ii) provide or, in the case of clause
(y), use commercially reasonable efforts to provide, the Secured Parties with
title and extended coverage insurance in an amount at least equal to the
purchase price of such Real Property (or such other amount as the Administrative
Agent shall reasonably specify), surveys, and if applicable, flood insurance,
lease estoppel certificates or, in the event that the Administrative Agent has
determined that a recorded memorandum of lease or an amendment of lease is
necessary or appropriate in order to make any such leased Real Property
mortgageable, evidence of such recordation or a copy of such fully executed and
binding lease amendment, all as may be reasonably requested by the
Administrative Agent, (iii) if requested by the Administrative Agent, deliver to
the Administrative Agent and the Collateral Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent and the Collateral
Agent and (iv) deliver to the Administrative Agent a notice identifying, and
upon the Administrative Agent’s request and subject to any contractual
restrictions contained therein, provide a copy of, the consultant’s reports,

 

75

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

 

environmental site assessments or other documents relied upon by the Borrower or
any other Loan Party to determine that any such Real Property included in such
Collateral does not contain Hazardous Materials of a form or type or in a
quantity or location that could reasonably be expected to result in a material
Environmental Liability. Holdings or the Borrower shall use commercially
reasonable efforts to deliver to the Administrative Agent estoppel certificates
from the landlord with respect to each leased Mortgaged Property, confirming the
nonexistence of any default thereunder and certain other information with
respect to such lease, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and the Collateral Agent.

 

(c)                                  With respect to any Subsidiary (other than
an Excluded Foreign Subsidiary or a Receivables Subsidiary) created or acquired
after the Closing Date (which, for the purposes of this paragraph, shall include
any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary at any
time after the Closing Date) by the Borrower or any of the Subsidiaries,
promptly (and, in any event, within 20 days following such creation or the date
of such acquisition) (i) execute and deliver to the Administrative Agent and the
Collateral Agent such amendments or supplements to the Guarantee and Collateral
Agreement as the Administrative Agent or the Collateral Agent deems necessary or
advisable to grant to the Collateral Agent, for the benefit of the Secured
Parties, a valid, perfected first priority security interest (subject to Liens
expressly permitted by clauses (b) or (d) of Section 6.02) in the Equity
Interests in such new Subsidiary that are owned by the Borrower or any of the
Subsidiaries, (ii) deliver to the Collateral Agent the certificates, if any,
representing such Equity Interests, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement (and provide Guarantees
of the Obligations) and the Intellectual Property Security Agreements and (B) to
take such actions necessary or advisable to grant to the Collateral Agent, for
the benefit of the Secured Parties, a perfected first priority security interest
(subject to Liens expressly permitted by Section 6.02) in the Collateral
described in the Guarantee and Collateral Agreement and the Intellectual
Property Security Agreement with respect to such new Subsidiary, including the
recording of instruments in the United States Patent and Trademark Office and
the United States Copyright Office and the filing of UCC financing statements in
such jurisdictions as may be required by the Guarantee and Collateral Agreement,
the Intellectual Property Security Agreement or by law or as may be requested by
the Administrative Agent or the Collateral Agent and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent and the Collateral
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent and the Collateral Agent.

 

(d)                                 With respect to any Excluded Foreign
Subsidiary created or acquired after the Closing Date directly by the Borrower
or any of its Domestic Subsidiaries, promptly (and, in any event, within 60 days
following such creation or the date of such acquisition) (i) execute and deliver
to the Administrative Agent and the Collateral Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent or the Collateral
Agent deems necessary or advisable in order to grant to the Collateral Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest (subject to Liens expressly permitted by clauses (b) or (d) of
Section 6.02) in the Equity Interests in such new Excluded Foreign Subsidiary
that is directly owned by the Borrower or any of its Domestic Subsidiaries
(provided that in no event shall more

 

76

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

 

than 65% of the total outstanding voting Equity Interests in any such new
Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the
Collateral Agent the certificates (if applicable) representing such Equity
Interests, together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the Borrower or such Domestic Subsidiary, as the
case may be, and take such other action as may be necessary or, in the opinion
of the Administrative Agent or the Collateral Agent, desirable to perfect the
security interest of the Collateral Agent thereon and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent and the Collateral
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent and the Collateral Agent.

 

SECTION 5.10. Further Assurances. From time to time duly authorize, execute and
deliver, or cause to be duly authorized, executed and delivered, such additional
instruments, certificates, financing statements, agreements or documents, and
take all such actions (including filing UCC and other financing statements), as
the Administrative Agent or the Collateral Agent may reasonably request, for the
purposes of implementing or effectuating the provisions of this Agreement and
the other Loan Documents, or of more fully perfecting or renewing the rights of
the Administrative Agent, the Collateral Agent and the Secured Parties with
respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by Holdings, the Borrower or any
Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by the Administrative Agent, the Collateral Agent or
any Lender of any power, right, privilege or remedy pursuant to this Agreement
or the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, each of Holdings
and the Borrower will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments and other documents
and papers that the Administrative Agent, the Collateral Agent or such Lender
may be required to obtain from Holdings, the Borrower or any of the Subsidiaries
for such governmental consent, approval, recording, qualification or
authorization.

 

SECTION 5.11. Interest Rate Protection. The Borrower shall ensure that for at
least three years following the Closing Date no less than 50% of the Borrower’s
long-term Indebtedness (excluding any Revolving Loans, Swingline Loans and
Letters of Credit) effectively bears interest at a fixed rate, either by its
terms or through the Borrower entering into, as promptly as practicable (and in
any event no later than the 180th day after the Closing Date), Hedging
Agreements reasonably acceptable to the Administrative Agent.

 

ARTICLE VI

 

Negative Covenants

 

Each of Holdings and the Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in full
and all Letters of Credit have been cancelled or have expired and all amounts
drawn thereunder have been reimbursed in full, neither Holdings nor the Borrower
will, nor will it cause or permit any of the Subsidiaries to:

 

77

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

 

SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:

 

(a)                                  Indebtedness existing on the Closing Date
and set forth in Schedule 6.01 and any Permitted Refinancing Indebtedness in
respect of any such Indebtedness;

 

(b)                                 Indebtedness created hereunder and under the
other Loan Documents (including any Incremental Term Loans);

 

(c)                                  unsecured intercompany Indebtedness of
Holdings, the Borrower and the Subsidiaries to the extent permitted by
Section 6.04(a) or Section 6.04(i) so long as such Indebtedness is subordinated
to the Obligations pursuant to an Affiliate Subordination Agreement;

 

(d)                                 Indebtedness of the Borrower or any
Subsidiary incurred to finance the acquisition, construction or improvement of
any fixed or capital assets; provided that (i) such original Indebtedness is
incurred prior to or within 120 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this Section 6.01(d), when combined with the aggregate
principal amount of all Capital Lease Obligations and Synthetic Lease
Obligations incurred pursuant to Section 6.01(e), shall not exceed $25,000,000
at any time outstanding;

 

(e)                                  Capital Lease Obligations and Synthetic
Lease Obligations in an aggregate principal amount, when combined with the
aggregate principal amount of all Indebtedness incurred pursuant to
Section 6.01(d), not exceeding $25,000,000 at any time outstanding;

 

(f)                                    Indebtedness of the Borrower under the
Subordinated Notes and Indebtedness of the Subsidiary Guarantors under any
Guarantees in respect of the Subordinated Notes and any Permitted Refinancing
Indebtedness in respect of any such Indebtedness;

 

(g)                                 Indebtedness of any person that becomes a
Subsidiary after the Closing Date hereof; provided that (i) such Indebtedness
exists at the time such person becomes a Subsidiary and is not created in
contemplation of or in connection with such person becoming a Subsidiary,
(ii) immediately before and after such person becomes a Subsidiary, no Default
or Event of Default shall have occurred and be continuing and (iii) the
aggregate principal amount of Indebtedness permitted by this
Section 6.01(g) shall not exceed $7,500,000 at any time outstanding;

 

(h)                                 unsecured Indebtedness of the Borrower or
the Subsidiary Guarantors that is subordinated to the Obligations to the same
degree (or to a greater degree) as the Subordinated Notes, in each case (i) that
does not mature, and is not subject to mandatory repurchase, redemption or
amortization (other than pursuant to customary asset sale or change of control
provisions requiring redemption or repurchase only if and to the extent
permitted by this Agreement) prior to the date that is six months after the Term
Loan Maturity Date and (ii) that is not exchangeable or convertible into
Indebtedness of the

 

78

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

 

Borrower or any Subsidiary (other than other Indebtedness permitted by this
clause) or any preferred stock or other Equity Interest (other than common
equity); provided that either (A) the Net Cash Proceeds thereof are used to
refinance Term Loans or refinance and permanently reduce commitments in respect
of Revolving Loans or (B) the proceeds thereof are used to consummate a
Permitted Acquisition or an Investment permitted pursuant to Section 6.04(k)
(including financing the cash consideration payable in connection with a
Permitted Acquisition or such an Investment or refinancing any Indebtedness of
the Acquired Entity and the payment of related fees and expenses); provided,
further, that the aggregate principal amount of Indebtedness permitted by clause
(B) of this Section 6.01(h) shall not exceed $5,000,000 at any time outstanding;

 

(i)                                     Indebtedness under performance, surety,
appeal or indemnity bonds or with respect to workers’ compensation claims, in
each case incurred in the ordinary course of business;

 

(j)                                     Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; provided that such Indebtedness is promptly covered by the Borrower or
any Subsidiary;

 

(k)                                  Indebtedness of a Receivables Subsidiary in
respect of Securitization Transactions solely to the extent the Net Cash
Proceeds thereof are used to refinance Term Loans or refinance and permanently
reduce commitments in respect of Revolving Loans; provided that the aggregate
principal amount of Indebtedness permitted by this Section 6.01(k) shall not
exceed $15,000,000 at any time outstanding;

 

(l)                                     Indebtedness incurred by Foreign
Subsidiaries in an aggregate principal amount not exceeding $12,500,000 at any
time outstanding;

 

(m)                               to the extent constituting Indebtedness of the
Borrower or any Subsidiary, customary indemnification or deferred purchase price
adjustments, including wholly contingent earn-outs or similar obligations, in
each case incurred in connection with the acquisition of any business or assets,
including Equity Interests, permitted to be acquired hereunder; provided that
the maximum aggregate liability in respect of all such obligations permitted by
this clause (m) shall not exceed 25% of the purchase price for such
acquisitions;

 

(n)                                 Permitted Holdings Indebtedness; and

 

(o)                                 other Indebtedness (including subordinated
Indebtedness) of the Borrower or the Subsidiaries in an aggregate principal
amount not exceeding $20,000,000 at any time outstanding; provided that the
aggregate principal amount of such Indebtedness permitted by this
Section 6.01(o) that is incurred by a Loan Party that is secured shall not
exceed $2,000,000 at any time outstanding.

 

SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on any
property or assets (including Equity Interests or other securities of any
person, including any

 

79

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

 

Subsidiary) now owned or hereafter acquired by it or on any income or revenues
or rights in respect of any thereof, except:

 

(a)                                  Liens on property or assets of the Borrower
and the Subsidiaries existing on the Closing Date and set forth in
Schedule 6.02; provided that such Liens shall secure only those obligations
which they secure on the Closing Date and refinancings, extensions, renewals and
replacements thereof permitted hereunder;

 

(b)                                 any Lien created under the Loan Documents
(including in respect of Hedging Agreements that are permitted by the terms of
the Security Documents to be secured thereunder);

 

(c)                                  any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Subsidiary; provided
that (i) such Lien is not created in contemplation of or in connection with such
acquisition, (ii) such Lien does not apply to any other property or assets of
the Borrower or any Subsidiary and (iii) such Lien does not materially interfere
with the use, occupancy and operation of any Mortgaged Property;

 

(d)                                 Liens for taxes not yet due or which are
being contested in compliance with Section 5.03;

 

(e)                                  carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s or other like Liens arising in the ordinary course of
business and securing obligations that are not overdue for a period of more than
30 days or which are being contested in compliance with Section 5.03;

 

(f)                                    pledges and deposits made in the ordinary
course of business in compliance with workmen’s compensation, unemployment
insurance and other social security laws or regulations;

 

(g)                                 pledges and deposits to secure the
performance of bids, trade contracts (other than for Indebtedness), leases
(other than Capital Lease Obligations), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(h)                                 zoning restrictions, easements,
rights-of-way, restrictions on use of Real Property and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of the Subsidiaries or the ability of the
Borrower or any of the Subsidiaries to utilize such property for its intended
purpose;

 

(i)                                     purchase money security interests in
Real Property, improvements thereto or other fixed or capital assets hereafter
acquired (or, in the case of improvements, constructed) by the Borrower or any
Subsidiary; provided that (i) such security interests secure Indebtedness
permitted by Section 6.01, (ii) such security interests are incurred, and the
Indebtedness secured thereby is created, within 90 days after such acquisition
(or

 

80

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

 

construction) and (iii) such security interests do not apply to any other
property or assets of the Borrower or any Subsidiary;

 

(j)                                     judgment Liens securing judgments not
constituting an Event of Default under Article VII;

 

(k)                                  any interest or title of a lessor,
sublessor or licensor under any lease (including a capital lease or synthetic
lease) or license entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business and covering only the assets so leased or licensed,
as the case may be, and including any Liens arising from precautionary UCC
financing statements filed under any such lease;

 

(l)                                     Liens on cash deposits and other funds
maintained with a depositary institution, in each case arising in the ordinary
course of business by virtue of any statutory or common law provision relating
to banker’s liens, including Section 4-210 of the UCC;

 

(m)                               Liens of sellers of goods to the Borrower or
any of the Subsidiaries arising under Section 2-502 of the UCC in the ordinary
course of business; provided that such Liens apply only to the goods sold and
secure only the unpaid purchase price for such goods and related expenses;

 

(n)                                 Liens in favor of customs and revenue
authorities arising as a matter of law and securing payment of customs duties in
connection with the importation of goods;

 

(o)                                 Liens arising from an agreement by the
Borrower or any of the Subsidiaries to Dispose of any asset in accordance with
the provisions hereof; provided that such Liens apply only to the assets to be
Disposed of;

 

(p)                                 Liens in connection with Securitization
Transactions permitted by Section 6.01(k) on the assets that are the subject of
such Securitization Transactions; provided that such Liens apply only to assets
in respect of which security interests are customarily granted in connection
with asset securitization transactions involving accounts receivable;

 

(q)                                
                                                     Liens on assets owned or
leased by the Foreign Target securing not more than $12,500,000 of Indebtedness
at any time outstanding; and

 

(r)                                    Liens not otherwise permitted by this
Section 6.02 so long as neither (i) the aggregate outstanding principal amount
of the obligations secured thereby nor (ii) the aggregate fair market value of
the assets subject thereto exceeds $2,000,000 at any one time.

 

SECTION 6.03. Sale and Lease-Back Transactions. Enter into any arrangement,
directly or indirectly, with any person whereby it shall sell or transfer any
property, real or personal or mixed, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other
property which it intends to use for substantially the same purpose or purposes
as the property being sold or transferred unless (a) the sale of such property

 

81

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

 

is permitted by Section 6.05 and (b) any Capital Lease Obligations, Synthetic
Lease Obligations or Liens arising in connection therewith are permitted by
Sections 6.01 and 6.02, respectively.

 

SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire any
Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances or capital contributions to, or make or
permit to exist any investment or any other interest in, any other person (all
of the foregoing, “Investments”), except:

 

(a)                                  (i) Investments by Holdings, the Borrower
and the Subsidiaries existing on the Closing Date in the Equity Interests of, or
in the form of loans or advances to, the Borrower and the Subsidiaries and
(ii) additional Investments by Holdings, the Borrower and the Subsidiaries in
the Equity Interests of, or in the form of loans or advances to, the Borrower
and the Subsidiaries; provided that (A) any such Equity Interests held by a Loan
Party shall be pledged pursuant to the Guarantee and Collateral Agreement
(subject to the limitation referred to in Section 5.09(d) in the case of any
Excluded Foreign Subsidiary), (B) in the case of clause (ii), the aggregate
amount of additional Investments by Loan Parties in Subsidiaries that are not
Subsidiary Guarantors (including the Foreign Target) shall not exceed
$30,000,000 (unless otherwise reduced by the amount of Asset Sales to the
Foreign Target pursuant to Section 6.05(b)(i)) at any time outstanding and
(C) if such Investment shall be in the form of a loan or advance, such loan or
advance shall be unsecured and subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement and, if such loan or advance shall be made by
a Loan Party, it shall be evidenced by a promissory note pledged to the
Collateral Agent for the ratable benefit of the Secured Parties pursuant to the
Guarantee and Collateral Agreement (provided that this clause (C) shall not
apply to the loans and advances made and to be made to Jineng pursuant to the
commitments existing on the Closing Date or to the Foreign Target);

 

(b)                                 Permitted Investments;

 

(c)                                  Investments received in connection with the
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;

 

(d)                                 the Borrower and the Subsidiaries may make
loans and advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $2,000,000;

 

(e)                                  the Acquisition and Permitted Acquisitions;

 

(f)                                    Investments existing on the Closing Date
and set forth on Schedule 6.04;

 

(g)                                 extensions of trade credit in the ordinary
course of business;

 

(h)                                 Investments made as a result of the receipt
of non-cash consideration from a Disposition of any asset in compliance with
Section 6.05;

 

82

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

 

(i)                                     intercompany loans and advances to
Holdings to the extent that the Borrower may pay dividends to Holdings pursuant
to Section 6.06 (and in lieu of paying such dividends); provided that such
intercompany loans and advances (i) shall be made for the purposes, and shall be
subject to all the applicable limitations set forth in, Section 6.06 and
(ii) shall be unsecured and subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement;

 

(j)                                     Investments made by any person that
becomes a Subsidiary after the Closing Date; provided that (i) such Investments
exist at the time such person becomes a Subsidiary and are not made in
contemplation of or in connection with such person becoming a Subsidiary and
(ii) at the time such person becomes a Subsidiary no portion of such Investments
may represent a commitment or other obligation to make or fund any additional
Investment that has not been made on funded at such time; and

 

(k)                                  in addition to Investments permitted by
paragraphs (a) through (j) above, additional Investments by the Borrower and the
Subsidiaries so long as the aggregate amount invested, loaned or advanced
pursuant to this clause (determined without regard to any write-downs or
write-offs of such investments, loans and advances) does not exceed $15,000,000
in the aggregate.

 

SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions. (a) 
Merge into or consolidate with any other person, or permit any other person to
merge into or consolidate with it, or liquidate or dissolve, or Dispose of (in
one transaction or in a series of transactions) all or substantially all the
assets (whether now owned or hereafter acquired) of the Borrower or less than
all the Equity Interests of any Subsidiary, or purchase, lease or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all of the assets of any other person, except for (i) the purchase and sale by
the Borrower or any Subsidiary of inventory or the Disposition of obsolete or
worn-out assets, assets that are no longer useful or scrap, in each case in the
ordinary course of business, (ii) the sale or discount by the Borrower or any
Subsidiary, in each case without recourse and in the ordinary course of
business, of overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof
consistent with customary industry practice (and not as part of any bulk sale or
financing transaction), (iii) sales of accounts receivable or interests therein
and other customary assets in Securitization Transactions permitted under
Section 6.01(k), (iv) the Disposition by any Subsidiary that is not a Loan Party
of its assets that do not constitute Collateral in connection with a foreclosure
by the applicable lenders with respect to any Indebtedness of such Subsidiary to
the extent that such assets are collateral security for such Indebtedness,
(v) the licensing of intellectual property in the ordinary course of business,
(vi) the settlement, release or surrender of tort or other litigation claims and
(vii) if at the time thereof and immediately after giving effect thereto no
Event of Default or Default shall have occurred and be continuing, (x) the
merger or consolidation of any wholly-owned Subsidiary into or with the Borrower
in a transaction in which the Borrower is the surviving corporation, (y) the
merger or consolidation of any Subsidiary into or with any other Subsidiary in a
transaction in which the surviving entity is a Subsidiary (provided that (A) the
Borrower shall own, directly or indirectly, beneficially and of record, Equity
Interests representing a percentage of the

 

83

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

 

aggregate ordinary voting power and aggregate equity value represented by the
issued and outstanding Equity Interest in such surviving Subsidiary that is
equal to or greater than the percentage of the aggregate ordinary voting power
and the aggregate equity value represented by the issued and outstanding Equity
Interests that were owned immediately prior to such merger or consolidation,
directly or indirectly, beneficially and of record, by the Borrower in such
other merged or consolidated Subsidiary, (B) if any party to any such
transaction is a Loan Party, the surviving entity of such transaction shall be a
Loan Party, (C) if any party to any such transaction is a Domestic Subsidiary,
the surviving entity of such transaction shall be a Domestic Subsidiary and
(D) if any person other than the Borrower or a wholly-owned Subsidiary receives
any consideration in connection with such transaction, such transaction shall
comply with the provisions of Section 6.04, if applicable) and (z) Permitted
Acquisitions or other Investments by the Borrower or any Subsidiary that are
expressly permitted by Section 6.04.

 

(b)                                 Engage in any Asset Sale otherwise permitted
under paragraph (a) above unless

 

(i)                                     in the case of other than Exempted Asset
Sales, (A) such Asset Sale is for consideration at least 75% of which is cash
(and no portion of the remaining consideration shall be in the form of
Indebtedness of the Borrower or any Subsidiary), (B) such consideration is at
least equal to the fair market value of the assets being Disposed of and (C) the
fair market value of all assets Disposed of pursuant to this paragraph
(b)(i) shall not exceed

 

(I)                                    $2,000,000 in any fiscal year, or

 

(II)                                (a) in the case of other than the Foreign
Target, $7,500,000 in the aggregate and (b) in the case of the Foreign Target,
in the aggregate, an amount equal to (i) at the Borrower’s election (as set
forth in a certificate delivered to the Administrative Agent pursuant to
Section 5.04(c)(ii)), either (x) the aggregate amount of Capital Expenditures
permitted for the Foreign Target pursuant to Section 6.10(b) or (y) the amount
of Investments made to the Foreign Target pursuant to Section 6.04(a) minus
(ii) the fair market value (determined in good faith by the Borrower) of assets
transferred to the Foreign Target; or

 

(ii)                                  such Asset Sale is a Permitted Asset Swap;
or

 

(iii)                               in the case of Exempted Asset Sales, the
aggregate cash consideration and the value (determined in good faith by the
Borrower) of the non-cash consideration received does not exceed $5,000,000.

 

SECTION 6.06. Restricted Payments; Restrictive Agreements. (a)  Declare or make,
or agree to declare or make, directly or indirectly, any Restricted Payment
(including pursuant to any Synthetic Purchase Agreement), or incur any
obligation (contingent or otherwise) to do so; provided, however, that (i) any
Subsidiary may declare and pay dividends or make other distributions, including
in the form of additional Equity Interests, ratably to its equity holders,
(ii) so long as no Event of Default or Default shall have occurred and be
continuing or would result therefrom, the Borrower may, or may pay dividends or
make other distributions to Holdings so that Holdings may, repurchase its Equity
Interests owned by employees of Holdings, the Borrower or the Subsidiaries or
make payments to employees of Holdings, the Borrower or the Subsidiaries upon
termination of employment in connection with the exercise of stock

 

84

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

 

options, stock appreciation rights or similar equity incentives or equity based
incentives pursuant to management incentive plans or in connection with the
death or disability of such employees or make customary and reasonable salary
and bonus and other benefits payments to officers, employees and consultants of
Holdings or payments of customary fees and expenses of members of the board of
directors of Holdings in an aggregate amount for this clause (ii) not to exceed
$1,500,000 in any fiscal year (it being agreed that any such amount not utilized
in any fiscal year may be carried forward and utilized in any subsequent fiscal
year so long as the aggregate amount of such repurchases or payments pursuant to
this clause (ii) shall not exceed $3,000,000 in any fiscal year), (iii) the
Borrower may make Restricted Payments to Holdings (x) in an amount not to
exceed, when taken together with the aggregate amount of all loans or advances
made pursuant to Section 6.04(i) for such purpose, $1,000,000 in any fiscal year
to the extent necessary to pay general corporate and overhead expenses incurred
by Holdings in the ordinary course of business and (y) in an amount necessary to
pay the Tax liabilities of Holdings directly attributable to (or arising as a
result of) the operations of the Borrower and the Subsidiaries pursuant to the
Tax Sharing Agreement, as such agreement exists on the Closing Date and with
such changes after the Closing Date as may be approved by the Administrative
Agent; provided that all Restricted Payments made to Holdings pursuant to clause
(iii) shall be used by Holdings for the purpose specified herein within 20 days
of the receipt thereof, (iv) so long as no Event of Default or Default shall
have occurred and be continuing or would result therefrom, the Borrower may pay
dividends or make other distributions to Holdings so that Holdings may pay those
fees, costs and expenses that are expressly permitted by clause (c) of
Section 6.07 and (v) so long as no Event of Default or Default shall have
occurred and be continuing or would result therefrom, the Borrower may make
Restricted Payments to Holdings, and Holdings may, in turn, make such Restricted
Payments to its equity holders so long as (A) the Borrower would be in
compliance with the covenants set forth in Sections 6.11 and 6.13 and the
Leverage Ratio would be 3.25 to 1.00 or less, in each case, as of the most
recently completed period ending prior to such transaction for which the
financial statements and certificates required by Section 5.04(a) or
5.04(b) were required to be delivered or for which comparable financial
statements have been filed with or furnished to the Securities and Exchange
Commission, after giving pro forma effect to such transaction and to any other
event occurring after such period as to which pro forma recalculation is
appropriate as if such transaction had occurred as of the first day of such
period and (B) at the time of, after giving effect to, such transaction, there
shall be at least $7,500,000 of unused and available Revolving Credit
Commitments.

 

(b)                                 Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of Holdings, the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(ii) the ability of any Subsidiary to pay dividends or other distributions with
respect to any of its Equity Interests or to make or repay loans or advances to
the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (A) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(B) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary or its assets
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary or its assets that are to be sold and such sale is permitted
hereunder, (C) the foregoing shall not apply to restrictions and conditions
imposed on any Subsidiary that is not a Loan Party by the terms of any
Indebtedness of such Subsidiary permitted to be incurred hereunder, (D) clause
(i) of the foregoing shall not apply to

 

85

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

 

restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (E) clause
(i) of the foregoing shall not apply to restrictions or conditions imposed by
the Subordinated Note Documents as in effect on the Closing Date and (F) clause
(i) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

 

SECTION 6.07. Transactions with Affiliates. Except for transactions by or among
Loan Parties or transactions with the Foreign Target pursuant to Sections 6.01,
6.04, 6.05 and 6.10, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that (a) Holdings, the Borrower
or any Subsidiary may engage in any of the foregoing transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to Holdings, the Borrower or such Subsidiary than could be obtained on
an arm’s-length basis from unrelated third parties, (b) Restricted Payments
may be made to the extent provided in Section 6.06, (c) so long as no Event of
Default or Default shall have occurred and be continuing or would result
therefrom, fees may be paid to the Sponsor or any of its Affiliates in an
aggregate amount not to exceed $1,500,000 in any fiscal year plus all reasonable
out-of-pocket costs and expenses and indemnification amounts incurred by the
Sponsor or any such Affiliate, in each case in connection with their performance
of management, consulting, monitoring, financial advisory or other services with
respect to Holdings, the Borrower and the Subsidiaries, (d) payments may be made
under the Tax Sharing Agreement, as such agreement exists on the Closing Date
and with such changes after the Closing Date as may be approved by the
Administrative Agent, and (e) the Transactions may be consummated, including the
making of any payments on the Closing Date in connection therewith.

 

SECTION 6.08. Business of Holdings, the Borrower and Subsidiaries; Limitation on
Hedging Agreements. (a)  With respect to Holdings, engage in any business
activities or have any assets or liabilities other than (i) its ownership of the
Equity Interests in the Borrower, (ii) liabilities incidental thereto, including
its liabilities pursuant to the Loan Documents, and (iii) Permitted Holdings
Indebtedness.

 

(b)                                 With respect to the Borrower and the
Subsidiaries, engage at any time in any business or business activity other than
a Permitted Business.

 

(c)                                  Enter into any Hedging Agreement other than
(a) any such agreement or arrangement entered into in the ordinary course of
business and consistent with prudent business practice to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities or (b) any such agreement entered
into to hedge against fluctuations in interest rates or currency incurred in the
ordinary course of business and consistent with prudent business practice;
provided that in each case such agreements or arrangements shall not have been
entered into for speculation purposes.

 

SECTION 6.09. Other Indebtedness and Agreements; Amendments to Acquisition
Documentation. (a)  Permit any waiver, supplement, modification, amendment,
termination or release of any indenture, instrument or agreement pursuant to
which any Material Indebtedness of any Loan Party is outstanding if the effect
of such waiver, supplement, modification,

 

86

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

 

amendment, termination or release would materially increase the obligations of
the obligor or confer additional material rights on the holder of such
Indebtedness in a manner adverse to any Loan Party or the Lenders.

 

(b)                                 (i)  Make any distribution, whether in cash,
property, securities or a combination thereof, other than regular scheduled
payments of principal and interest as and when due (to the extent not prohibited
by applicable subordination provisions), in respect of, or pay, or offer or
commit to pay, or directly or indirectly (including pursuant to any Synthetic
Purchase Agreement) redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any Indebtedness
that is subordinated to the Obligations, including the Subordinated Notes.

 

(c)                                  (i)  Permit any waiver, supplement,
modification, amendment, termination or release of, or fail to enforce strictly
the terms and conditions of, any of the indemnities made in favor of Holdings,
the Borrower and the Subsidiaries pursuant to the Acquisition Documentation such
that after giving effect thereto such indemnities shall be materially less
favorable to the interests of the Loan Parties or the Secured Parties with
respect thereto or (ii) otherwise permit any waiver, supplement, modification,
amendment, termination or release of, or fail to enforce strictly the terms and
conditions of, any of the Acquisition Documentation except to the extent that
such waiver, supplement, modification, amendment, termination or release or
failure to enforce could not reasonably be expected to have a Material Adverse
Effect.

 

SECTION 6.10. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by the Borrower and the Subsidiaries to exceed (a) in the case
of other than by the Foreign Target, $5,000,000 in any fiscal year; provided
that the amount of permitted Capital Expenditures set forth above in respect of
any fiscal year commencing with the fiscal year ending on December 31, 2005,
shall be increased (but not decreased) by (i) the amount of unused Capital
Expenditures permitted pursuant to this clause (a) for the immediately preceding
fiscal year less (ii) an amount equal to unused Capital Expenditures under this
clause (a) carried forward to such preceding fiscal year, and (b) in the case of
the Foreign Target, $10,000,000 (unless otherwise reduced by the amount of Asset
Sales to the Foreign Target pursuant to Section 6.05(b)(i)) per each fiscal year
2006, 2007 and 2008 (provided, that the amount of Capital Expenditures incurred
pursuant to this clause (b) shall not exceed $25,000,000 (unless otherwise
reduced by the amount of Asset Sales to the Foreign Target pursuant to
Section 6.05(b)(i)) at any time outstanding during the term of this Agreement).

 

SECTION 6.11. Interest Coverage Ratio. After December 31, 2005, permit the
Interest Coverage Ratio on the last day of any fiscal quarter during any period
set forth below to be less than the ratio set forth opposite such period below:

 

Period

 

Ratio

 

 

 

 

 

January 1, 2006 through March 31, 2007

 

1.70 to 1.00

 

April 1, 2007 through June 30, 2007

 

1.75 to 1.00

 

July 1, 2007 through September 30, 2007

 

1.80 to 1.00

 

October 1, 2007 through December 31, 2007

 

1.85 to 1.00

 

January 1, 2008 through December 31, 2008

 

2.00 to 1.00

 

Thereafter

 

2.25 to 1.00

 

 

87

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

 

SECTION 6.12. Leverage Ratio. After December 31, 2005, permit the Leverage Ratio
on the last day of any fiscal quarter during any period set forth below to be
greater than the ratio set forth opposite such period below:

 

Period

 

Ratio

 

 

 

 

 

January 1, 2006 through June 30, 2007

 

6.95 to 1.00

 

July 1, 2007 through September 30, 2007

 

6.75 to 1.00

 

October 1, 2007 through December 31, 2007

 

6.50 to 1.00

 

January 1, 2008 through December 31, 2008

 

5.50 to 1.00

 

January 1, 2009 through December 31, 2009

 

5.00 to 1.00

 

Thereafter

 

4.50 to 1.00

 

 

SECTION 6.13. Fixed Charge Coverage Ratio. After December 31, 2005, permit the
Fixed Charge Coverage Ratio on the last day of any fiscal quarter during any
period set forth below to be less than the ratio set forth opposite such period
below:

 

Period

 

Ratio

 

 

 

 

 

January 1, 2006 through March 31, 2007

 

1.25 to 1.00

 

April 1, 2007 through June 30, 2007

 

1.30 to 1.00

 

July 1, 2007 through September 30, 2007

 

1.35 to 1.00

 

Thereafter

 

1.40 to 1.00

 

 

SECTION 6.14. Fiscal Year. With respect to Holdings or the Borrower, change its
fiscal year-end to a date other than December 31.

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01. In case of the happening of any of the following events (“Events
of Default”):

 

(a)                                  any representation or warranty made or
deemed made in or in connection with any Loan Document or the Borrowings or
issuances of Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished in connection with or pursuant to any
Loan Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;

 

(b)                                 default shall be made in the payment of any
principal of any Loan or the reimbursement with respect to any L/C Disbursement
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;

 

88

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

 

(c)                                  default shall be made in the payment of any
interest on any Loan or L/C Disbursement or any Fee or any other amount (other
than an amount referred to in (b) above) due under any Loan Document, when and
as the same shall become due and payable, and such default shall continue
unremedied for a period of three Business Days;

 

(d)                                 default shall be made in the due observance
or performance by Holdings, the Borrower or any Subsidiary of any covenant,
condition or agreement contained in Section 5.01(a), 5.05 or 5.08 or in
Article VI;

 

(e)                                  default shall be made in the due observance
or performance by Holdings, the Borrower or any Subsidiary of any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clauses (b), (c) or (d) above) and such default shall continue
unremedied for a period of 30 days following the earlier of (i) knowledge
thereof by a Responsible Officer of a Loan Party and (ii) written notice thereof
by the Administrative Agent or any Lender to a Loan Party;

 

(f)                                    Holdings, the Borrower or any Subsidiary
shall (i) fail to pay any principal or interest, regardless of amount, due in
respect of any Material Indebtedness, when and as the same shall become due and
payable (after giving effect to any applicable grace period), or (ii) any other
event or condition occurs that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (ii) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

 

(g)                                 an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of Holdings, the Borrower or any Subsidiary, or of
a substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for Holdings,
the Borrower or any Subsidiary or for a substantial part of the property or
assets of Holdings, the Borrower or a Subsidiary or (iii) the winding-up or
liquidation of Holdings, the Borrower or any Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(h)                                 Holdings, the Borrower or any Subsidiary
shall (i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for Holdings, the Borrower

 

89

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

 

or any Subsidiary or for a substantial part of the property or assets of
Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;

 

(i)                                     one or more judgments for the payment of
money in an aggregate amount in excess of $5,000,000 (excluding therefrom any
amount covered by insurance as to which the applicable insurer has acknowledged
in writing its obligation to cover) shall be rendered against Holdings, the
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of Holdings, the Borrower or any
Subsidiary to enforce any such judgment;

 

(j)                                     an ERISA Event described in clause
(b) of the definition thereof shall have occurred or any other ERISA Event shall
have occurred that, when taken together with all other such ERISA Events, could
reasonably be expected to result in liability of the Borrower and its ERISA
Affiliates in an aggregate amount exceeding $5,000,000;

 

(k)                                  any Guarantee under the Guarantee and
Collateral Agreement for any reason shall cease to be in full force and effect
(other than in accordance with its terms), or any Guarantor shall deny in
writing that it has any further liability under its Guarantee (other than as a
result of the discharge of such Guarantor in accordance with the terms of the
Loan Documents);

 

(l)                                     any Lien purported to be created under
any Security Document shall cease to be, or shall be asserted by the Borrower or
any other Loan Party not to be, a valid, perfected and, with respect to the
Secured Parties, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) Lien on any material Collateral covered
thereby, except to the extent that any such loss of perfection or priority
results from the failure of the Collateral Agent to maintain possession of
certificates representing Equity Interests pledged under the Guarantee and
Collateral Agreement; or

 

(m)                               there shall have occurred a Change in Control;

 

then, and in every such event (other than an event with respect to Holdings or
the Borrower described in paragraph (g) or (h) above), and at any time
thereafter during the continuance of such event either or both of the following
actions may be taken: (i) the Administrative Agent may, and at the request of
the Majority Facility Lenders with respect to the Revolving Credit Facility
shall, by notice to the Borrower, terminate forthwith the Revolving Credit
Commitments and the Swingline Commitment and (ii) the Administrative Agent may,
and at the request of the Required Lenders shall, declare the Loans then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall become
forthwith due

 

90

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

 

and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding,
and the Administrative Agent and the Collateral Agent shall have the right to
take all or any actions and exercise any remedies available to a secured party
under the Security Documents or applicable law or in equity; and in any event
with respect to Holdings or the Borrower described in paragraph (g) or
(h) above, the Revolving Credit Commitments and the Swingline Commitment shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and any unpaid accrued Fees and all other
liabilities of the Borrower accrued hereunder and under any other Loan Document,
shall automatically become due and payable, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding, and the Administrative Agent and the Collateral Agent
shall have the right to take all or any actions and exercise any remedies
available to a secured party under the Security Documents or applicable law or
in equity. The Majority Facility Lenders with respect to the Revolving Credit
Facility may, by notice to the Administrative Agent, rescind a termination of
the Revolving Credit Commitments and the Swingline Commitment described in
clause (i) above in this paragraph and the Required Lenders may, by notice to
the Administrative Agent, rescind an acceleration of the Loans described in
clause (ii) above in this paragraph.

 

Notwithstanding anything to the contrary contained in this Section 7.01, in the
event the Borrower fails to comply with any financial covenant contained in
Sections 6.11, 6.12, or 6.13 Holdings shall have the right, no later than ten
(10) Business Days after the delivery of the financial statements and
certificates required by Section 5.04(a) or (b), as applicable, with respect to
such applicable fiscal quarter, to issue Cure Securities for cash in an
aggregate amount not in excess of the lesser of (x) the minimum amount necessary
to cure the relevant failure to comply with such financial covenant and (y)
$15,000,000, the net cash proceeds of which shall be contributed to the common
equity capital of the Borrower (collectively, the “Cure Right”), and upon the
receipt by the Borrower of such cash (the “Cure Amount”), such financial
covenant shall be recalculated giving effect to the following pro forma
adjustments:

 

(a)  Consolidated EBITDA shall be increased, in accordance with the definition
thereof, solely for the purpose of measuring such financial covenant and not for
any other purpose under this Agreement (for the avoidance of doubt, Consolidated
EBITDA shall only be adjusted for the purposes of the quarterly tests pursuant
to Sections 6.11, 6.12 and 6.13 and shall not be increased for purposes of
determining any other covenant or definition which incorporates such covenants),
by an amount equal to the Cure Amount;

 

(b) if, after giving effect to the foregoing recalculations, the Borrower shall
then be in compliance with the requirements of such financial covenant, the
Borrower shall be deemed to have satisfied the requirements of such financial
covenant as of the relevant date of determination with the same effect as though
there had been no failure to comply therewith at such date, and the applicable
breach or default of such financial covenant which had occurred shall be deemed
not to have occurred in the first instance for all purposes of this Agreement
and the Loan Documents;

 

91

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

 

(c) to the extent that the Cure Amount proceeds are used to repay Indebtedness,
such Indebtedness shall not be deemed to have been repaid for purposes of
calculating the financial covenants set forth in Sections 6.11, 6.12 and 6.13
for the period with respect to which such Compliance Certificate applies; and

 

(d)  to the extent a fiscal quarter ended for which such financial covenant is
initially recalculated as a result of a Cure Right is included in the
calculation of a financial covenant in a subsequent fiscal period, the Cure
Amount shall be included in the amount of Consolidated EBITDA for such initial
fiscal quarter;

 

provided that the Cure Rights shall not be exercised more than twice in any four
quarter period.

 

ARTICLE VIII

 

The Agents and the Arranger

 

Each of the Lenders and the Issuing Bank hereby irrevocably appoints each of the
Administrative Agent and the Collateral Agent (for purposes of this
Article VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the “Agents”) its agent and authorizes the Agents to take such
actions on its behalf and to exercise such powers as are delegated to such Agent
by the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
the Agents are hereby expressly authorized by the Lenders to execute any and all
documents (including releases and the Security Documents) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.

 

Each bank serving as an Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though
it were not an Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with Holdings, the
Borrower or any Subsidiary or any of their respective Affiliates as if it were
not an Agent hereunder.

 

No Agent shall have any duties or obligations except those expressly set forth
in the Loan Documents. Without limiting the generality of the foregoing, (a) no
Agent shall be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) no Agent shall have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent or the Collateral Agent is required to exercise in writing
by the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.08), and
(c) except as expressly set forth in the Loan Documents, no Agent shall have any
duty to disclose, nor shall it be liable for the failure to disclose, any
information relating to Holdings, the Borrower or any of the Subsidiaries that
is communicated to or obtained by the bank serving as any Agent or any of its
Affiliates in any capacity. The Administrative Agent and the Collateral Agent
shall not be liable for any action

 

92

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

 

taken or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.08) or in the absence of its
own gross negligence or willful misconduct. No Agent shall be deemed to have
knowledge of any Default unless and until written notice thereof is given to
such Agent by Holdings, the Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document,
(ii) the contents of any certificate, report or other document delivered
thereunder or in connection therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth in any
Loan Document, (iv) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Loan
Document, other than to confirm receipt of items expressly required to be
delivered to such Agent.

 

Each Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed
or sent by the proper person. Each Agent may also rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
person, and shall not incur any liability for relying thereon. Each Agent
may consult with legal counsel (who may be counsel for Holdings or the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

Each Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by it. Each Agent and any
such sub-agent may perform any and all its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

 

Subject to the appointment and acceptance of a successor Agent as provided
below, each Agent may resign at any time by notifying the Lenders, the Issuing
Bank and the Borrower. Upon any such resignation of the Administrative Agent or
the Collateral Agent, the Required Lenders shall have the right to appoint a
successor, subject to the Borrower’s approval (not to be unreasonably withheld
or delayed) so long as no Default or Event of Default shall have occurred and be
continuing. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent’s
resignation hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for the benefit of such retiring Agent, its sub-agents and

 

93

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

 

their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while acting as Agent.

 

Each of the Arranger, the Syndication Agent and each Documentation Agent, in its
capacity as such, shall have no duties or responsibilities, and shall incur no
liability, under this Agreement or any other Loan Document.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Agents, the Arranger, the Syndication Agent, each Documentation Agent or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents, the Arranger, the Syndication Agent, each
Documentation Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.

 

To the extent required by any applicable law, the Administrative Agent
may withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax. If the Internal Revenue Service or any other
Governmental Authority asserts a claim that the Administrative Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent of a change in
circumstance which rendered the exemption from, or reduction of, withholding tax
ineffective or for any other reason, such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including any penalties or interest
and together with all expenses (including legal expenses, allocated internal
costs and out-of-pocket expenses) incurred.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01. Notices. Notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by fax, as follows:

 

(a)                                  if to Holdings or the Borrower, to it at
True Temper Sports, Inc., 8275 Tournament Drive, Suite 200, Memphis, TN 38125,
Attention of President and Chief Financial Officer (Fax No. (901) 746-2162),
with a copy to Andrew Mattei, Esq. at Mayer, Brown, Rowe & Maw LLP, 1675
Broadway, New York, NY 10019 (Fax No. (212) 849-5572);

 

(b)                                 if to the Administrative Agent or the
Collateral Agent, to Credit Suisse, Eleven Madison Avenue, New York, NY 10010,
Attention of Loan Services Manager (Fax No. (212) 325-8304); and

 

94

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

 

(c)                                  if to a Lender, to it at its address (or
fax number) set forth in the Lender Addendum or the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.

 

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.

 

SECTION 9.02. Survival of Agreement. All covenants, agreements, representations
and warranties made by Holdings or the Borrower herein and in the certificates
or other instruments prepared or delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the Lenders and the Issuing Bank and shall survive the making by
the Lenders of the Loans and the issuance of Letters of Credit by the Issuing
Bank, regardless of any investigation made by the Lenders or the Issuing Bank or
on their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any Fee or any other amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, the Arranger, any Lender or the Issuing Bank.

 

SECTION 9.03. Binding Effect. This Agreement shall become effective in
accordance with the provisions of the Amendment Agreement.

 

SECTION 9.04. Successors and Assigns. (a)  Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of Holdings, the Borrower, the Administrative Agent,
the Collateral Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.

 

(b)                                 Each Lender may assign to one or more
assignees all or a portion of its interests, rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided, however, that (i) the Administrative Agent must
give its prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) other than any assignment of Term Loans to a
Lender or an Affiliate or Related Fund of a Lender, (ii) in the case of any
assignment of a Revolving Credit Commitment, each of the Issuing Bank, the
Swingline Lender and the Borrower must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed);
provided that the consent of the Borrower shall not be required to any such
assignment during

 

95

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

 

the continuance of any Event of Default, (iii) the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $1,000,000 (or, if less, the
entire remaining amount of such Lender’s Commitment) and shall be in an amount
that is an integral multiple of $1,000,000 (or the entire remaining amount of
such Lender’s Commitment), unless otherwise agreed by the Administrative Agent,
(iv) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance (such Assignment and
Acceptance to be (A) electronically executed and delivered to the Administrative
Agent via an electronic settlement system then acceptable to the Administrative
Agent, which shall initially be the settlement system of ClearPar, LLC, or
(B) manually executed and delivered together with a processing and recordation
fee of $3,500) and (v) the assignee, if it shall not be a Lender immediately
prior to the assignment, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (e) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, (A) the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement and
(B) the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 2.14, 2.16, 2.20 and 9.05,
as well as to any Fees accrued for its account and not yet paid).

 

(c)                                  By executing and delivering an Assignment
and Acceptance, the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other parties
hereto as follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim and that its Term Loan Commitment and Revolving Credit Commitment,
and the outstanding balances of its Term Loans and Revolving Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of Holdings, the Borrower or any Subsidiary
or the performance or observance by Holdings, the Borrower or any Subsidiary of
any of its obligations under this Agreement, any other Loan Document or any
other instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05(a) or delivered pursuant to Section 5.04
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Administrative Agent, the Collateral Agent, the Arranger, such assigning Lender
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own

 

96

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

 

credit decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Administrative Agent and the
Collateral Agent, respectively, by the terms hereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.

 

(d)                                 The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices in The
City of New York a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive absent manifest error and the Borrower, the
Administrative Agent, the Issuing Bank, the Collateral 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 Borrower, the Issuing Bank, the Collateral Agent and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(e)                                  Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, an
Administrative Questionnaire completed in respect of the assignee (unless the
assignee shall already be a Lender hereunder) and the written consent of the
Administrative Agent and, if required, the written consent of the Borrower, the
Swingline Lender and the Issuing Bank to such assignment, the Administrative
Agent shall (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register. No assignment shall be effective
unless it has been recorded in the Register as provided in this paragraph (e).

 

(f)                                    Each Lender may without the consent of
the Borrower, the Swingline Lender, the Issuing Bank or the Administrative Agent
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans); provided, however, 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, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 to the same extent as if they were Lenders (but, with
respect to any particular participant, to no greater extent than the Lender that
sold the participation to such participant) and (iv) the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans or L/C
Disbursements and to approve any amendment, modification or waiver of any
provision of this Agreement (other than amendments, modifications or waivers
decreasing any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans (in each case to the extent
participated in by such

 

97

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

 

participant), extending any scheduled principal payment date or date fixed for
the payment of interest on the Loans (in each case to the extent participated in
by such participant), increasing or extending the Commitments (in each case to
the extent participated in by such participant) or releasing any Guarantor or
all or any substantial part of the Collateral).

 

(g)                                 Any Lender or participant may, in connection
with any assignment or participation or proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that, prior
to any such disclosure of information designated by the Borrower as
confidential, each such assignee or participant or proposed assignee or
participant shall execute an agreement whereby such assignee or participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information on terms no less restrictive than those applicable
to the Lenders pursuant to Section 9.16.

 

(h)                                 Any Lender may at any time assign all or any
portion of its rights under this Agreement to secure extensions of credit to
such Lender or in support of obligations owed by such Lender and, in the case of
any Lender that is a fund that invests in bank loans, such Lender may pledge all
or any portion of its rights under this Agreement to any holder of, trustee for,
or other representative of any holders of, obligations owed or securities issued
by such fund as security for such obligations or securities; provided that no
such assignment or pledge described in this clause (h) shall release a Lender
from any of its obligations hereunder or substitute any such assignee or pledgee
for such Lender as a party hereto.

 

(i)                                     Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle (an “SPC”), identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the Borrower, the
option to provide to the Borrower all or any part of any Loan that such Granting
Lender would otherwise be obligated to make to the Borrower pursuant to this
Agreement; provided that (i) nothing herein shall constitute a commitment by any
SPC to make any Loan and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof. The making of
a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
to the same extent, and as if, such Loan were made by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this Section 9.04, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions (consented to by
the Borrower and Administrative Agent) providing liquidity and/or credit support
to or for the account of such SPC to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information

 

98

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

 

relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC.

 

(j)                                     Neither Holdings nor the Borrower shall
assign or delegate any of its rights or duties hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank and each Lender,
and any attempted assignment without such consent shall be null and void.

 

SECTION 9.05. Expenses; Indemnity. (a)  Holdings and the Borrower agree, jointly
and severally, to pay all reasonable out-of-pocket costs and expenses incurred
by the Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, the Issuing Bank and the Swingline Lender in
connection with the syndication of the credit facilities provided for herein and
the preparation and administration of this Agreement and the other Loan
Documents or in connection with any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative Agent, the
Arranger, the Issuing Bank or any Lender in connection with the enforcement or
protection of its rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or Letters of Credit issued
hereunder, including in each case the fees and disbursements of Latham & Watkins
LLP, counsel for the Administrative Agent and the Collateral Agent, and, in
connection with any such enforcement or protection, the reasonable fees and
disbursements of any counsel for the Administrative Agent or the Collateral
Agent and one other transaction counsel acting on behalf of the Syndication
Agent, each Documentation Agent, the Arranger, the Issuing Bank and the Lenders,
together with any other local and special counsel reasonably required in
connection with such enforcement or protection.

 

(b)                                 Holdings and the Borrower agree, jointly and
severally, to indemnify the Administrative Agent, the Collateral Agent, the
Syndication Agent, each Documentation Agent, the Arranger, each Lender, the
Issuing Bank and each Related Party of any of the foregoing persons (each such
person being called an “Indemnitee”) against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
costs and expenses, including reasonable counsel fees and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the Transactions and the other
transactions contemplated hereunder or thereby, (ii) the use of the proceeds of
the Loans or issuance of Letters of Credit, (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto, or (iv) any actual or alleged presence or Release
of Hazardous Materials on any property owned or operated by Holdings, the
Borrower or any of the Subsidiaries, or any Environmental Liability related in
any way to Holdings, the Borrower or any of the Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related costs and expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from primarily the gross negligence, willful
misconduct or bad faith of such Indemnitee (and, upon any such determination,
any indemnification payments with respect to such losses, claims, damages,
liabilities or related costs and expenses previously received by such Indemnitee
shall be promptly reimbursed by such Indemnitee).

 

99

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

 

(c)                                  To the extent that Holdings and the
Borrower fail to pay any amount required to be paid by them to the
Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, the Issuing Bank or the Swingline Lender, as
the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Collateral Agent, the
Syndication Agent, each Documentation Agent, the Arranger, the Issuing Bank or
the Swingline Lender in its capacity as such. For purposes hereof, a Lender’s
“pro rata share” shall be determined based upon its share of the sum of the
Aggregate Revolving Credit Exposure, outstanding Term Loans and unused
Commitments at the time.

 

(d)                                 To the extent permitted by applicable law,
neither Holdings nor the Borrower shall assert, and each hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.

 

(e)                                  The provisions of this Section 9.05 shall
remain operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the Transactions or the other
transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent, the Collateral Agent, the Syndication Agent, each
Documentation Agent, the Arranger, any Lender or the Issuing Bank. All amounts
due under this Section 9.05 shall be payable on written demand therefor.

 

SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
except to the extent prohibited by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of Holdings or the Borrower against any of and all the
obligations of Holdings or the Borrower now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER
THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN
ACCORDANCE

 

100

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

 

WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS
OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY
CREDITS MOST RECENTLY PUBLISHED AND IN EFFECT, ON THE DATE SUCH LETTER OF CREDIT
WAS ISSUED, BY THE INTERNATIONAL CHAMBER OF COMMERCE (THE “UNIFORM CUSTOMS”)
AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF
NEW YORK.

 

SECTION 9.08. Waivers; Amendment. (a)  No failure or delay of the Administrative
Agent, the Collateral Agent, any Lender or the Issuing Bank in exercising any
power or right hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Collateral Agent, the Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower or any other
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on Holdings or the Borrower in any case shall entitle Holdings
or the Borrower to any other or further notice or demand in similar or other
circumstances.

 

(b)                                 Neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders; provided, however, that no such
agreement shall (i) decrease the principal amount of, or extend the maturity of
or any scheduled principal payment date (subject to the last sentence of
Article VII) or date for the payment of any interest on any Loan or any date for
reimbursement of an L/C Disbursement, or waive or excuse any such payment or any
part thereof, or decrease the rate of interest on any Loan or L/C Disbursement,
without the prior written consent of each Lender adversely affected thereby,
(ii) increase or extend the Commitment or decrease or extend the date for
payment of any Fees of any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the
provisions of Section 9.04(j), the provisions of this Section or the percentage
set forth in the definition of the term “Required Lenders,” or release any
Guarantor (other than in accordance with the terms of the Guarantee and
Collateral Agreement), without the prior written consent of each Lender
adversely affected thereby, (iv) amend or modify the percentage set forth in the
definition of the term “Majority Facility Lenders” without the prior written
consent of each Lender adversely affected thereby, (v) release all or
substantially all of the Collateral without the prior written consent of each
Lender, (vi) change the provisions of any Loan Document in a manner that by its
terms adversely affects the rights in respect of payments due to Lenders holding
Loans of one Class differently from the rights of Lenders holding Loans of any
other Class without the prior written consent of Lenders holding a majority in
interest of the outstanding Loans and unused Commitments of each adversely
affected Class or (vii) modify the protections afforded to an SPC pursuant to
the provisions of Section 9.04(i) without the written consent of such SPC;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative

 

101

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

 

Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder
or under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender, as applicable.

 

SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this
Section 9.09 shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or participations or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

SECTION 9.10. Entire Agreement. This Agreement, the Fee Letters and the other
Loan Documents constitute the entire contract between the parties relative to
the subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Loan Documents. Nothing in this Agreement or in the other Loan Documents,
expressed or implied, is intended to confer upon any person (other than the
parties hereto and thereto, their respective successors and assigns permitted
hereunder (including any Affiliate of the Issuing Bank that issues any Letter of
Credit) and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent, the Collateral Agent, the Syndication Agent,
each Documentation Agent, the Arranger, the Issuing Bank and the Lenders ) any
rights, remedies, obligations or liabilities under or by reason of this
Agreement or the other Loan Documents.

 

SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

 

SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions

 

102

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

 

contained herein and therein shall not in any way be affected or impaired
thereby (it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

 

SECTION 9.13. Counterparts. This Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement or of a Lender Addendum
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Agreement.

 

SECTION 9.14. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

SECTION 9.15. Jurisdiction; Consent to Service of Process. (a)  Each of Holdings
and the Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Collateral Agent, the Syndication
Agent, each Documentation Agent, the Arranger, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or the other Loan Documents against either Holdings or the Borrower or its
properties in the courts of any jurisdiction.

 

(b)                                 Each of Holdings and the Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

 

(c)                                  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.

 

103

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

 

SECTION 9.16. Confidentiality. Each of the Administrative Agent, the Collateral
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information, except that Information may be disclosed (a) to its and its
Affiliates’ officers, directors, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority or quasi-regulatory authority (such
as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) in connection with the exercise of any remedies hereunder or under
the other Loan Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder, (e) subject to a prior or
contemporaneous agreement containing provisions substantially the same as those
of this Section 9.16, to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement and the
other Loan Documents or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Holdings, the
Borrower or any Subsidiary or any of their respective obligations, (f) with the
consent of Holdings or the Borrower or (g) to the extent such Information
becomes publicly available other than as a result of a breach of this
Section 9.16. Each of the Administrative Agent, the Collateral Agent, the
Issuing Bank and the Lenders agrees not to use any Information except for
evaluating the performance of Holdings, the Borrower and the Subsidiaries
hereunder and enforcing the rights, remedies and obligations hereunder and under
the other Loan Documents. For the purposes of this Section, “Information” shall
mean all information received from Holdings or the Borrower and related to the
Borrower or its business, other than any such information that was available to
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
on a nonconfidential basis prior to its disclosure by Holdings or the Borrower;
provided that, in the case of Information received from Holdings or the Borrower
after the Closing Date, such information is clearly identified at the time of
delivery as confidential. Any person required to maintain the confidentiality of
Information as provided in this Section 9.16 shall be considered to have
complied with its obligation to do so if such person has exercised the same
degree of care to maintain the confidentiality of such Information as such
person would accord its own confidential information. Notwithstanding any other
express or implied agreement, arrangement or understanding to the contrary, each
of the parties hereto agrees that each other party hereto (and each of its
employees, representatives or agents) are permitted to disclose to any persons,
without limitation, the tax treatment and tax structure of the Loans and the
other transactions contemplated by the Loan Documents and all materials of any
kind (including opinions and tax analyses) that are provided to the Loan
Parties, the Lenders, the Arranger or any Agent 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 transactions contemplated by the Loan Documents.

 

SECTION 9.17. Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.

 

SECTION 9.18. Effect of Amendment and Restatement of the Existing Credit
Agreement. (a)  On the Amendment Effective Date, the Existing Credit Agreement
shall be

 

104

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

 

amended and restated in its entirety by this Agreement, and the Existing Credit
Agreement shall thereafter be of no further force and effect except to evidence
(i) the incurrence by the Borrowers of the “Obligations” under and as defined in
the Existing Credit Agreement (whether or not such “Obligations” are contingent
as of the Amendment Effective Date), (ii) the representations and warranties
made by Holdings and the Borrowers prior to the Amendment Effective Date (which
representations and warranties shall not be superseded or rendered ineffective
by this Agreement as they pertain to the period prior to the Amendment Effective
Date) and (iii) any action or omission performed or required to be performed
pursuant to such Existing Credit Agreement prior to the Amendment Effective Date
(including any failure, prior to the Amendment Effective Date, to comply with
the covenants contained in such Existing Credit Agreement). The parties hereto
acknowledge and agree that (a) this Agreement and the other Loan Documents,
whether executed and delivered in connection herewith or otherwise, do not
constitute a novation or termination of the “Obligations” (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
prior to the Amendment Effective Date and which remain outstanding, (b) the
“Obligations” are in all respects continuing (as amended and restated hereby and
which are hereinafter subject to the terms herein) and (c) the Liens and
security interests as granted under the applicable Loan Documents securing
payment of such “Obligations” are in all respects continuing and in full force
and effect and are reaffirmed hereby.

 

(b)                                 On and after the Amendment Effective Date,
(i) all references to the Existing Credit Agreement in the Loan Documents (other
than this Agreement) shall be deemed to refer to the Existing Credit Agreement,
as amended and restated hereby, (ii) all references to any section (or
subsection) of the Existing Credit Agreement in any Loan Document (but not
herein) shall be amended to become, mutatis mutandis, references to the
corresponding provisions of this Agreement and (iii) except as the context
otherwise provides, on or after the Amendment Effective Date, all references to
this Agreement herein (including for purposes of indemnification and
reimbursement of fees) shall be deemed to be reference to the Existing Credit
Agreement as amended and restated hereby.

 

(c)                                  This amendment and restatement is limited
as written and is not a consent to any other amendment, restatement or waiver or
other modification, whether or not similar and, except as expressly provided
herein or in any other Loan Document, all terms and conditions of the Loans
Documents remain in full force and effect unless otherwise specifically amended
hereby or by any other Loan Document.

 

(d)                                 This amendment and restatement shall not
alter, modify or in any way amend the schedules and exhibits to the Existing
Credit Agreement (and such schedules and exhibits shall continue to be schedules
and exhibits hereto), other than Schedule 2.01, which Schedule 2.01 as it exists
on the Amendment Effective Date is attached hereto as Exhibit A.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

105

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

 

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

 

TRUE TEMPER CORPORATION

 

 

By:

 

 

Name.

 

Title:

 

 

TRUE TEMPER SPORTS, INC.

 

 

By:

 

 

Name:

 

Title:

 

(signatures continue on next page)

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

 

CREDIT SUISSE, CAYMAN ISLANDS BRANCH (formerly known as Credit Suisse First
Boston, acting through its Cayman Islands Branch), as Administrative Agent,
Collateral Agent, Issuing Bank, Revolving Credit Lender, Term Lender, Swingline
Lender and Arranger

 

By:

 

 

Name:

 

Title:

 

By:

 

 

Name:

 

Title:

 

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