Exhibit 10.1

Execution Version

 

AMENDMENT NO. 2

 

AMENDMENT NO. 2, dated as of May 29, 2015 (this “Amendment”), to the CREDIT
AGREEMENT, dated as of May 30, 2012, as amended by Amendment No. 1, dated as of
May 31, 2013 (as the same may be further amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among GENERAC ACQUISITION CORP., a Delaware corporation
(“Holdings”), GENERAC POWER SYSTEMS, INC., a Wisconsin corporation (the “Lead
Borrower”), the Domestic Subsidiaries of the Lead Borrower listed on the
signature pages thereto, as borrowers (and together with the Lead Borrower,
collectively, the “Borrowers”), the financial institutions party thereto from
time to time as lenders (collectively, the “Lenders”), and BANK OF AMERICA,
N.A., as administrative agent (in such capacity, together with its successors
and assigns, the “Administrative Agent”) and the other agents named therein.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make, and
have made certain loans and extensions for credit to the Borrowers;

 

WHEREAS, the Lead Borrower has requested that certain provisions of the Credit
Agreement be amended as set forth herein;

 

WHEREAS, the Lenders are willing to agree to such amendments, in each case on
the terms set forth herein; and

 

WHEREAS, the Lenders that execute and deliver this Amendment in the capacity of
a consenting Lender constitute all of the Lenders;

 

NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth, the parties hereto agree as follows:

 

 

 

SECTION 1.     Defined Terms; References. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement. Each reference to (x) “hereof”, “hereunder”,
“herein” and “hereby” and each other similar reference and each reference to
“this Agreement” and each other similar reference contained in the Credit
Agreement and (y) “thereof”, “thereunder”, “therein” and “thereby” and each
other similar reference and each reference to the Credit Agreement and each
other similar reference contained in the other Loan Documents shall, in each
case, as of the Amendment No. 2 Effective Date (as defined below), refer to the
Credit Agreement as amended hereby.

 

SECTION 2.     Amendments to the Credit Agreement. (i) The Credit Agreement is,
effective as of the Amendment No. 2 Effective Date (as defined below), hereby
amended to delete the stricken text (indicated textually in the same manner as
the following example: stricken text) and to add the double-underlined text
(indicated textually in the same manner as the following example:
double-underlined text) as set forth in the pages of the Credit Agreement
attached as Exhibit A hereto and (ii) Schedule 2.01 attached hereto shall amend
and restate the corresponding schedule in the Credit Agreement.

 

SECTION 3.     Effectiveness. This Amendment shall become effective as of the
date (the “Amendment No. 2 Effective Date”) on which the following conditions
have been satisfied:

 

 
 

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3.1.      The Administrative Agent (or its counsel) shall have received duly
executed and completed counterparts hereof (in the form provided and specified
by the Administrative Agent) that, when taken together, bear the signatures of
each Loan Party and each of the Lenders.

 

3.2.      To the extent invoiced before the Amendment No. 2 Effective Date, the
Administrative Agent shall have received all fees required to be paid to the
Administrative Agent on or prior to the Amendment No. 2 Effective Date, and all
expenses for which invoices have been presented (including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent).

 

3.3.      The Administrative Agent shall have received, for the account of each
Lender (each, a “Consenting Lender”) that has executed and delivered a
counterpart to this Amendment to the Administrative Agent pursuant to the
instructions provided by the Administrative Agent prior to 5:00 p.m., New York
City time, on May 29, 2015, a consent fee in an amount equal to (i) 0.075% of
such Consenting Lender’s Revolver Commitment immediately prior to giving effect
to the Amendment No. 2 Effective Date and (ii) 0.125% of the difference between
(x) the amount of such Consenting Lender’s Revolver Commitment immediately after
giving effect to the Amendment No. 2 Effective Date and (y) the amount of such
Consenting Lender’s Revolver Commitment immediately prior to giving effect to
the Amendment No. 2 Effective Date.

 

3.4.      Each of the representations and warranties made by any Loan Party in
or pursuant to the Loan Documents (including this Amendment) is true and correct
in all material respects (except any representation and warranty which is
qualified by materiality, which is correct and accurate in all respects) on and
as of the Amendment No. 2 Effective Date as if made on such date; provided if
any such representation and warranty is expressly made only as of a prior date,
such representation and warranty is true as of such prior date.

 

3.5.      The Administrative Agent shall have received, on behalf of itself and
the Lenders on the Amendment No. 2 Effective Date, a written opinion of each of
(i) Sidley Austin LLP, special counsel for Holdings and the Borrowers and (ii)
Reinhart Boerner Van Deuren S.C., special Wisconsin counsel for Holdings and the
Borrowers, in each case, (A) dated the Amendment No. 2 Effective Date,
(B) addressed to the Administrative Agent and the Lenders on the Amendment No. 2
Effective Date and (C) in form and substance reasonably satisfactory to the
Administrative Agent and covering such other matters relating to the Loan
Parties and the transactions contemplated hereby as the Administrative Agent
shall reasonably request, and each of Holdings and the Borrowers hereby instruct
its counsel to deliver such opinions.

 

3.6.      The Administrative Agent shall have received with respect to each
Mortgaged Property located in the United States or any territory thereof, (i) a
completed “life-of-loan” Federal Emergency Management Agency standard flood
hazard determination (together with a notice about Special Flood Hazard Area
status and flood disaster assistance duly executed by the applicable Loan Party
relating thereto) and (ii) if any Mortgaged Property is located within a special
flood hazard area, a copy of, or a certificate as to coverage under, and a
declaration page relating to, the insurance policies required by Section 5.02(b)
of the Credit Agreement and the applicable provisions of the Security Documents,
each of which shall (A) be endorsed or otherwise amended to include a “standard”
or “New York” lender’s loss payable or mortgagee endorsement (as applicable),
(B) name the Administrative Agent, on behalf of the Secured Parties, as
additional insured and loss payee/mortgagee and (C) identify the address of each
property that has improvements located in a Special Flood Hazard Area, the
applicable flood zone designation and the flood insurance coverage and
deductible relating thereto and (iv) be otherwise in form and substance
reasonably satisfactory to the Lenders.

 

 
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3.7.      The Administrative Agent shall have received in the case of each Loan
Party each of the items referred to in clauses (a), (b), (c) and (d) below:

 

(a)     a copy of the certificate or articles of incorporation, certificate of
limited partnership or certificate of formation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the Secretary of
State (or other similar official) of the jurisdiction of its organization, and a
certificate as to the good standing (to the extent such concept or a similar
concept exists under the laws of such jurisdiction) of each such Loan Party as
of a recent date from such Secretary of State (or other similar official);

 

(b)     a certificate of the secretary or assistant secretary or similar officer
of each Loan Party dated the Amendment No. 2 Effective Date and certifying:

 

(i)     that attached thereto is a true and complete copy of the by-laws (or
limited partnership agreement, limited liability company agreement or other
equivalent governing documents) of such Loan Party as in effect on the Amendment
No. 1 Effectiveness Date;

 

(ii)     that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors (or equivalent governing body) of such Loan
Party authorizing the execution, delivery and performance of this Amendment to
which such person is a party and that such resolutions have not been modified,
rescinded or amended and are in full force and effect on the Amendment No. 2
Effective Date;

 

(iii)     that the certificate or articles of incorporation, certificate of
limited partnership or certificate of formation of such Loan Party has not been
amended since the date of the last amendment thereto disclosed pursuant to
clause (a) above;

 

(iv)     as to the incumbency and specimen signature of each officer executing
this Amendment or any other document delivered in connection herewith on behalf
of such Loan Party; and

 

(v)     as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party;

 

(c)     a certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary or similar officer executing
the certificate pursuant to clause (b) above; and

 

(d)     a certificate of a Responsible Officer of Holdings or the Lead Borrower
certifying that as of the Amendment No. 2 Effective Date (i) all the
representations and warranties described in each of Section 4.01(b) of the
Credit Agreement and this Amendment are true and correct in all material
respects as of the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date), (ii) the representation and warranties set
forth in Section 5 below are true and correct in all respects and (iii) that as
of the Amendment No. 2 Effective Date, no Default or Event of Default has
occurred and is continuing or would result from any Borrowing to occur on the
date hereof or the application of the proceeds thereof.

 

3.8.      No Default or Event of Default shall have occurred and be continuing
on or after giving effect to the Amendment No. 2 Effective Date.

 

 
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SECTION 4.     Post-Closing Requirements

 

4.1.     Within 90 days after the Amendment No. 2 Effective Date, or such later
date as the Administrative Agent may agree in its sole discretion, the Loan
Parties shall deliver to the Administrative Agent the following items:

 

(a)     With respect to each Mortgaged Property, an executed amendment to the
existing Mortgage encumbering such Mortgaged Property in form and substance
reasonably satisfactory to the applicable Administrative Agent and in form
suitable for recording in the applicable jurisdiction (each a “Mortgage
Amendment”);

 

(b)     With respect to each Mortgage Amendment, a “down-date” endorsement to
the existing Title Policy in form and substance reasonably satisfactory to the
Administrative Agent revising the date of said Title Policy to be the date and
time of recording of said Mortgage Amendment, or if such endorsement is not
available, a “modification” endorsement together with a current title search,
reflecting that the applicable Mortgaged Property is free and clear of all Liens
other than Liens permitted under the Mortgage (each a “Title Endorsement”);

 

(c)     With respect to each Mortgage Amendment, favorable opinions of counsel
in the jurisdiction in which the Mortgaged Property is located and the
jurisdiction in which the applicable mortgagor or grantor is formed, addressed
to the Administrative Agent and the Secured Parties, and in form and substance
reasonably satisfactory to the Administrative Agent; and

 

(d)     Evidence of payment of all title insurance premiums, search and
examination charges, mortgage recording taxes, fees, costs and expenses, and
escrow and related charges required for the recording of each Mortgage Amendment
and issuance of each Title Endorsement.

 

SECTION 5.     Representations and Warranties. To induce the other parties
hereto to enter into this Amendment, each of Holdings and the Borrower
represents and warrants to each of the Lenders and the Administrative Agent
that:

 

5.1.      The execution, delivery and performance by each Loan Party to this
Amendment, and the consummation of the transactions contemplated hereby, are
within their respective corporate or other powers, have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(i) violate the certificate or articles of incorporation or other constitutive
documents or by-laws of any Loan Party, (ii) result in the creation or
imposition of any Lien on any asset of any Loan Party, except Liens created
under the Loan Documents and Liens permitted by Section 6.02 of the Credit
Agreement, (iii) violate or result in a default under any provision of any
indenture, certificate of designation for preferred stock, agreement or other
instrument to which Holdings, any Borrower or any such Subsidiary Loan Party is
a party or by which any of them or any of their property is or may be bounds or
(iv) violate any law, statute, rule or regulation applicable to such party;
except with respect to any breach, default, contravention or violation referred
to in clauses (ii), (iii) or (iv), to the extent that such breach, default,
contravention or violation would not reasonably be expected to have a Material
Adverse Effect; and

 

5.2.      This Amendment has been duly executed and delivered by each of the
Loan Parties party thereto, and constitutes a legal, valid and binding
obligation of each such Loan Party, enforceable against it in accordance with
its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or other similar laws affecting creditors’
rights generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.

 

 
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5.3.     No Default has occurred and is continuing.

 

SECTION 6.     FATCA Status. The Administrative Agent and the Lenders
acknowledge and agree that, solely for purposes of determining the applicability
of U.S. Federal withholding Taxes imposed by FATCA, from and after the Amendment
No. 2 Effective Date, the Credit Agreement (together with any Loans or other
extensions of credit pursuant thereto) will not be treated as a “grandfathered
obligation” within the meaning of Treasury Regulation Section 1.471-2(b)(2)(i).

 

SECTION 7.     Effect of Amendment.

 

7.1.      Except as expressly set forth herein, this Amendment shall not by
implication or otherwise limit, impair, constitute a waiver of or otherwise
affect the rights and remedies of the Lenders or the Administrative Agent under
the Credit Agreement or any other Loan Document, and shall not alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Credit Agreement or any other provision of the
Credit Agreement or of any other Loan Document, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. Nothing
herein shall be deemed to entitle the Borrower to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or different circumstances.

 

7.2.      On and after the Amendment No. 2 Effective Date, each reference in the
Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words
of like import, and each reference to the Credit Agreement in any other Loan
Document shall be deemed a reference to the Credit Agreement as amended hereby.
This Amendment shall constitute a “Loan Document” for all purposes of the Credit
Agreement and the other Loan Documents.

 

SECTION 8.     General.

 

8.1.      GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.2.      Costs and Expenses. The Borrower agrees to reimburse the
Administrative Agent for its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Amendment, including, without limitation, the reasonable out-of-pocket fees,
charges and disbursements of counsel to the Administrative Agent.

 

8.3.      Counterparts. This Amendment 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. Delivery of any executed counterpart of a signature page of
this Amendment by telecopy or email transmission shall be effective as delivery
of a manually executed counterpart of this Amendment.

 

8.4.      Headings. The headings of this Amendment are used for convenience of
reference only, are not part of this Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this Amendment.

 

[remainder of page intentionally left blank]

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the date first above written.

 

 

GENERAC ACQUISITION CORP.

 

 

 

 

 

       

 

By:

/s/York A. Ragen

 

 

 

Name: York A. Ragen

 

 

 

Title: Chief Financial Officer

 

 

 

 

GENERAC POWER SYSTEMS, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/York A. Ragen

 

 

 

Name: York A. Ragen

 

 

 

Title: Chief Financial Officer

 

 

 

 

GENERAC MOBILE PRODUCTS, LLC

 

 

 

 

 

 

 

 

 

 

By:

/s/York A. Ragen

 

 

 

Name: York A. Ragen

 

 

 

Title: Secretary and Treasurer

 

 

 

 

MAC, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/York A. Ragen

 

 

 

Name: York A. Ragen

 

 

 

Title: Chief Financial Officer

 

 

 

 

Signature Page to Amendment No. 2

 

 
 

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BANK OF AMERICA, N.A.,

 

 

 

as Administrative Agent

 

       

 

 

 

 

 

By:

/s/Brad H. Breidenbach

 

 

 

Name: Brad H. Breidenbach

 

 

 

Title: Senior Vice President

 

 

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

 

By:

/s/ Brad H. Breidenbach

 

 

 

Name: Brad H. Breidenbach

 

 

 

Title: Senior Vice President

 

 

 

     

Signature Page to Amendment No. 2

 

 
 

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JPMorgan Chase Bank, N.A.

 

 

 

 

 

 

By:

/s/John Morrone

 

 

 

Name: John Morrone

 

 

 

Title: Authorized Signatory

 

 

 

 

Signature Page to Amendment No. 2

 

 
 

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WELLS FARGO BANK, N.A.

 

 

 

 

 

 

By:

/s/Tony Leadbetter

 

 

 

Name: Tony Leadbetter

 

 

 

Title: Duly Authorized Signatory

 

 

 

 

Signature Page to Amendment No. 2

 

 
 

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GOLDMAN SACHS BANK USA

 

 

 

 

 

 

By:

/s/Rebecca Kratz

 

 

 

Name: Rebecca Kratz

 

 

 

Title: Authorized Signatory

 

 

 

 

Signature Page to Amendment No. 2

 

 
 

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KEYBANK NATIONAL ASSOCIATION

 

 

 

 

 

 

By:

/s/Nadine M. Eames

 

 

 

Name: Nadine M. Eames

 

 

 

Title: Vice President

 

 

 

 

Signature Page to Amendment No. 2

 

 
 

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EXHIBIT A TO AMENDMENT NO. 2

 

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CREDIT AGREEMENT

Dated as of May 30, 2012,

As amended and as of May 31, 2013 and

 

As amended and restated as of May 29, 2015,

 

among

GENERAC ACQUISITION CORP.,
as Holdings,

GENERAC POWER SYSTEMS, INC. and its Domestic Subsidiaries listed as Borrowers on
the Signature pages hereto,
as Borrowers,

THE LENDERS PARTY HERETO,

BANK OF AMERICA, N.A.,
as Administrative Agent,

JPMORGAN CHASE BANK, N.A.
and
GOLDMAN SACHS BANK USA,
as Syndication AgentsAgent,

and

WELLS FARGO BANK, N.A.,
as Documentation Agent

 

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MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES LLC,
and
GOLDMAN SACHSWELLS FARGO BANK USA, N.A.,
as Joint Lead Arrangers and as Joint Bookrunners

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE I

     

Definitions

     

SECTION 1.01.

Defined Terms

1

SECTION 1.02.

Terms Generally

4645

SECTION 1.03.

Accounting Terms

46

SECTION 1.04.

Rounding

4746

SECTION 1.05.

Timing of Payment or Performance

4746

SECTION 1.06.

Classification

47

SECTION 1.07.

References to Laws

4847

SECTION 1.08.

Pro Forma

4847

SECTION 1.09.

Exchange Rates; Currency Equivalents.

4847

     

ARTICLE II  

     

The Credits  

     

SECTION 2.01.

Revolver Commitments

4847

SECTION 2.02.

Loans and Borrowings

48

SECTION 2.03.

Requests for Borrowings and Notices

4948

SECTION 2.04.

Swingline Loans; Settlement

49

SECTION 2.05.

Letters of Credit

50

SECTION 2.06.

Funding of Borrowings

5453

SECTION 2.07.

Interest Elections

5554

SECTION 2.08.

Repayment of Loans; Termination of Revolver Commitments

5655

SECTION 2.09.

Evidence of Debt

5655

SECTION 2.10.

Application of Payment in the Dominion Accounts

5756

SECTION 2.11.

[Reserved]

5756

SECTION 2.12.

Fees

5756

SECTION 2.13.

Interest

5857

SECTION 2.14.

Alternate Rate of Interest

5958

SECTION 2.15.

Increased Costs

5958

SECTION 2.16.

Break Funding Payments

6059

SECTION 2.17.

Taxes

6160

SECTION 2.18.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

6463

SECTION 2.19.

Mitigation Obligations; Replacement of Lenders

6564

SECTION 2.20.

Illegality

6766

SECTION 2.21.

Defaulting Lenders

6766

SECTION 2.22.

Revolver Commitment Increase

6867

SECTION 2.23.

Extension Offers

7069

SECTION 2.24.

Overadvances

7271

SECTION 2.25.

Protective Advances

7271

SECTION 2.26.

Lead Borrower

7372

 

 
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Page

 

ARTICLE III  

     

Representations and Warranties  

     

SECTION 3.01.

Organization; Powers

7372

SECTION 3.02.

Authorization

7372

SECTION 3.03.

Enforceability

7473

SECTION 3.04.

Governmental Approvals

7473

SECTION 3.05.

Financial Statements

7473

SECTION 3.06.

No Material Adverse Effect

7573

SECTION 3.07.

Title to Properties; Possession Under Leases

7573

SECTION 3.08.

Subsidiaries

7574

SECTION 3.09.

Litigation; Compliance with Laws

7574

SECTION 3.10.

Investment Company Act

7674

SECTION 3.11.

[Reserved]

7674

SECTION 3.12.

Federal Reserve Regulations

7675

SECTION 3.13.

Tax Returns

7675

SECTION 3.14.

No Material Misstatements

7675

SECTION 3.15.

Employee Benefit Plans

7776

SECTION 3.16.

Environmental Matters

7776

SECTION 3.17.

Security Documents

7876

SECTION 3.18.

Solvency

7877

SECTION 3.19.

Labor Matters

7977

SECTION 3.20.

Insurance

7978

SECTION 3.21.

USA PATRIOT Act and OFAC

7978

     

ARTICLE IV  

     

Conditions of Lending  

     

SECTION 4.01.

Closing Date

8078

SECTION 4.02.

Conditions Precedent to All Credit Extensions

8381

     

ARTICLE V  

     

Affirmative Covenants  

     

SECTION 5.01.

Existence; Businesses and Properties

8482

SECTION 5.02.

Insurance

8483

SECTION 5.03.

Taxes

8583

SECTION 5.04.

Financial Statements, Reports, etc.

8583

SECTION 5.05.

Litigation and Other Notices

8786

SECTION 5.06.

Compliance with Laws

8886

SECTION 5.07.

Maintaining Records; Access to Properties and Inspections

8886

SECTION 5.08.

Compliance with Environmental Laws

8987

SECTION 5.09.

Further Assurances; Mortgages

8988

SECTION 5.10.

Fiscal Year; Accounting

9189

SECTION 5.11.

[Reserved]

9189

SECTION 5.12.

Collateral Monitoring and Reporting

9190

SECTION 5.13.

Use of Proceeds

9391

 

 
 

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Page

 

SECTION 5.14.

Certification of Public Information

9391

     

ARTICLE VI  

     

Negative Covenants  

     

SECTION 6.01.

Indebtedness

9492

SECTION 6.02.

Liens

9795

SECTION 6.03.

Sale and Lease-Back Transactions

102100

SECTION 6.04.

Investments, Loans and Advances

102100

SECTION 6.05.

Mergers, Consolidations and Dispositions

104102

SECTION 6.06.

Dividends and Distributions

108106

SECTION 6.07.

Transactions with Affiliates

110108

SECTION 6.08.

Business of Holdings, the Borrowers and the Subsidiaries

111109

SECTION 6.09.

Limitation on Modifications of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements; etc.

112110

SECTION 6.10.

Financial Covenant

114112

     

ARTICLE VII  

     

Events of Default  

     

SECTION 7.01.

Events of Default

115113

SECTION 7.02.

Allocation

118115

     

ARTICLE VIII  

     

The Agents  

     

SECTION 8.01.

Appointment, Authority and Duties of the Administrative Agent

119116

SECTION 8.02.

Agreements Regarding Collateral and Field Examination Reports

120117

SECTION 8.03.

Reliance By the Administrative Agent

120118

SECTION 8.04.

Action Upon Default

120118

SECTION 8.05.

Payments Received by Defaulting Lender

121118

SECTION 8.06.

Limitation on Responsibilities of the Administrative Agent

121118

SECTION 8.07.

Successor Administrative Agent and Co-Agents

121119

SECTION 8.08.

Due Diligence and Non-Reliance

122120

SECTION 8.09.

Remittance of Payments and Collections

122120

SECTION 8.10.

The Administrative Agent in its Individual Capacity

123120

SECTION 8.11.

Administrative Agent Titles

123121

SECTION 8.12.

Bank Product Providers

123121

SECTION 8.13.

Survival

123121

SECTION 8.14.

Withholding Tax

123121

SECTION 8.15.

Indemnification

124121

 

 
 

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Page

 

ARTICLE IX  

     

Miscellaneous  

     

SECTION 9.01.

Notices

124122

SECTION 9.02.

Survival of Agreement

125123

SECTION 9.03.

Binding Effect

125123

SECTION 9.04.

Successors and Assigns

126123

SECTION 9.05.

Expenses; Indemnity

129127

SECTION 9.06.

Right of Set-off

131129

SECTION 9.07.

Applicable Law

132129

SECTION 9.08.

Waivers; Amendment

132129

SECTION 9.09.

Interest Rate Limitation

135132

SECTION 9.10.

Entire Agreement

135132

SECTION 9.11.

WAIVER OF JURY TRIAL

135133

SECTION 9.12.

Severability

136133

SECTION 9.13.

Counterparts

136133

SECTION 9.14.

Headings

136133

SECTION 9.15.

Jurisdiction; Consent to Service of Process

136133

SECTION 9.16.

Confidentiality

137134

SECTION 9.17.

Release of Liens and Guarantees

138135

SECTION 9.18.

USA PATRIOT Act

138135

SECTION 9.19.

Marshalling; Payments Set Aside

138135

SECTION 9.20.

Obligations Several; Independent Nature of Lenders’ Rights

138136

SECTION 9.21.

Electronic Execution of Assignments

139136

SECTION 9.22.

Acknowledgements

139136

SECTION 9.23.

Lender Action

139136

SECTION 9.24.

Judgment Currency.

140137

 

 
 

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

 

 

Exhibits and Schedules

 

Exhibit A

Form of Assignment and Acceptance

Exhibit B

Form of Administrative Questionnaire

Exhibit C

Form of Borrowing Request

Exhibit D

Form of Interest Election Request

Exhibit E

Form of Collateral Agreement

Exhibit F

Form of Solvency Certificate

Exhibit G

Form of Subordination Provisions

Exhibit H

Form of Intercompany Note

Exhibit I

Form of Compliance Certificate

Exhibit J

[RESERVED]

Exhibit K

[RESERVED]

Exhibit L-1

Form of U.S. Tax Compliance Certificate (Foreign Lenders that are not
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit L-2

Form of U.S. Tax Compliance Certificate (Foreign Participants that are not
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit L-3

Form of U.S. Tax Compliance Certificate (Foreign Participants that are
Partnerships for U.S. Federal Income Tax Purposes)

Exhibit L-4

Form of U.S. Tax Compliance Certificate (Foreign Lenders that are Partnerships
for U.S. Federal Income Tax Purposes)

Exhibit M

Form of Note

Exhibit N

Form of Intercreditor Agreement

Exhibit O

Form of Borrowing Base Certificate

Exhibit P

Applicable Margin Certificate

   

Schedule 1.01(a)

Bank Product Debt

Schedule 2.01

Revolver Commitments

Schedule 2.05(a)

Existing Letters of Credit

Schedule 3.08(a)

Subsidiaries

Schedule 3.17

Financing Statements and Other Filings

Schedule 3.20

Insurance

Schedule 5.12

Deposit Accounts

Schedule 5.09

Mortgaged Properties

Schedule 6.01

Indebtedness

Schedule 6.02

Liens

Schedule 6.04

Investments

Schedule 6.07

Transactions with Affiliates

 

 
-v- 

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CREDIT AGREEMENT dated as of May 30, 2012 (as amended on May 31, 2013 and as
amended and restated on May 29, 2015, this “Agreement”), among GENERAC POWER
SYSTEMS, INC., a Wisconsin corporation (the “Lead Borrower”), each of the other
Borrowers (as hereinafter defined), GENERAC ACQUISITION CORP., a Delaware
corporation (“Holdings”), the LENDERS party hereto from time to time, BANK OF
AMERICA, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) and JPMORGAN CHASE BANK, N.A. and GOLDMAN SACHS BANK USA, as syndication
agentsagent (in such capacity, the “Syndication AgentsAgent”) and WELLS FARGO
BANK, N.A., as documentation agent (in such capacity, the “Documentation
Agent”).

  

 

WHEREAS, (a) the Borrowers have requested that the Lenders extend credit in the
form of Revolver Loans in an aggregate principal amount at any time outstanding
not to exceed $150,000,000,250,000,000, (b) the Borrowers have requested that
the Issuing Bank issue Letters of Credit in an aggregate stated amount at any
time outstanding not to exceed $25,000,000 and (c) the Borrowers have requested
the Swingline Lender to extend credit in the form of Swingline Loans in an
aggregate principal amount at any time outstanding not to exceed $15,000,000;

 

NOW THEREFORE, the Lenders are willing to extend such credit to the Borrowers,
the Swingline Lender is willing to make Swingline Loans to the Borrowers and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrowers on the terms and subject to the conditions set forth herein.
Accordingly, 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” shall mean for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect
on such day plus 0.5%, and (c) the Eurodollar Rate (to the extent ascertainable)
that would be calculated as of such day (or, if such day is not a Business Day,
as of the next preceding Business Day) in respect of a one-month Interest Period
plus 1%. For purposes hereof: “Prime Rate” shall mean the rate of interest per
annum determined from time to time by JPMorgan Chase Bank, N.A. as its prime
rate in effect at its principal office in New York City and notified to the
Borrower (the Prime Rate not being intended to be the lowest rate of interest
charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to
debtors). Any change in the ABR due to a change in the Prime Rate, the Federal
Funds Effective Rate or such Eurodollar Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate, the
Federal Funds Effective Rate or such Eurodollar Rate, respectively.

 

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

 

“ABR Loan” shall mean any Revolver Loan bearing interest at a rate determined by
reference to the ABR in accordance with the provisions of Article II.

 

“Account” shall have the meaning as defined in the UCC, including all rights to
payment for goods sold or leased, or for services rendered.

 

“Account Debtor” shall mean a Person who is obligated under an Account, Chattel
Paper or General Intangible.

 

 
1

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“Adjustment Date” shall mean the first day of January, April, July and October
of each fiscal year.

 

“Administrative Agent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the
form of Exhibit B.

 

“Affected Lender” shall have the meaning assigned to such term in Section 2.20.

 

“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, no Agent or Lender shall be deemed to be an Affiliate of any
Borrower or its Subsidiaries with respect to transactions evidenced by any Loan
Document.

 

“Alternative LC Currency” means Yen.

 

“Alternative LC Currency Equivalent” means, at any time, with respect to any
amount denominated in Dollars, the equivalent amount thereof in the Alternative
LC Currency as determined by the Issuing Bank at such time on the basis of the
Spot Rate (determined in respect of the most recent Revaluation Date) for the
purchase of such Alternative LC Currency with Dollars.

 

“Alternative Currency Letter of Credit Sublimit” means an amount equal to
$10,000,000. The Alternative Currency Letter of Credit Sublimit is part of, and
not in addition to, the Letter of Credit Subline.

 

“Amendment No. 1 Effectiveness Date” shall mean May 31, 2013.

 

“Amendment No. 1 Effectiveness Date Dividend” shall mean the dividend, in an
amount not to exceed $345.0 million, to be paid on, or within 45 days of, the
Amendment No. 1 Effectiveness Date from the Lead Borrower to Holdings from the
proceeds of the Term Loans and to be paid from Holdings to Parent and from
Parent to the holders of the Equity Interests of Parent.

 

“Amendment No. 2 Effective Date” shall mean May 29, 2015.

 

“Agent Indemnitees” shall mean each Agent and its officers, directors,
employees, Affiliates, agents and attorneys.

 

“Agent Professionals” shall mean attorneys, accountants, appraisers, auditors,
environmental engineers or consultants, and other professionals and experts
retained by the Administrative Agent.

 

“Agents” shall mean the Administrative Agent and the Syndication AgentsAgent and
the Documentation Agent.

 

“Agreement” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

 
2

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“Applicable Law” shall mean all applicable laws, rules, regulations and binding
governmental requirements having the force and effect of law applicable to the
Person in question or any of its property or assets, including all applicable
statutory law, common law and equitable principles, and all provisions of
constitutions, treaties, statutes, rules, regulations, orders and decrees of
Governmental Authorities.

 

“Applicable Margin” shall mean with respect to any Type of Revolver Loan, the
per annum margin set forth below, as determined by the Average Availability as
of the most recent Adjustment Date:

 

Level

Average Availability

ABR Loans

Eurodollar Loans

I

≥ 66%

0.750.25%

1.751.25%

II

≥ 33% but < 66%

1.000.50%

2.001.50%

III

< 33%

1.250.75%

2.251.75%

 

Until completion of the first full fiscal quarter after the Closing Date, the
Applicable Margin shall be determined as if Level II were applicable.
Thereafter, the Applicable Margin shall be subject to increase or decrease upon
receipt by the Administrative Agent of the Applicable Margin Certificate
required to be delivered by the Borrowers pursuant to Section 5.12 as of the
last day of the fiscal quarter most recently ended, and each such increase or
decrease in the Applicable Margin shall be effective on the Adjustment Date
occurring immediately after the last day of the fiscal quarter most recently
ended. If the Borrowers fail to deliver any Applicable Margin Certificate (or
any Borrowing Base Certificate) required to be delivered pursuant to Section
5.12 on or before the date required for delivery thereof, then, at the option of
the Required Lenders, the Applicable Margin shall be determined as if Level III
were applicable, from the first day of the calendar month following the date
such Applicable Margin Certificate (or Borrowing Base Certificate) was required
to be delivered until the date of delivery of such Applicable Margin Certificate
(or Borrowing Base Certificate).

 

“Applicable Margin Certificate: a certificate signed and certified as accurate
by a Senior Officer of the Borrowers, substantially in the form of Exhibit P.

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent and the
Borrower (if the Borrower’s consent is required by this Agreement), in the form
of Exhibit A or such other form as shall be approved by the Administrative
Agent.

 

“Availability” shall mean as of any applicable date, the amount by which the
Line Cap at such time exceeds the aggregate amount of Revolver Loans and LC
Obligations on such date.

 

“Availability Reserve” shall mean the sum (without duplication of any other
reserves or items that are otherwise addressed or excluded through eligibility
criteria (including collection rates or collection percentages)) of (a) the
Inventory Reserve; (b) the Rent and Charges Reserve; (c) the Bank Product
Reserve; provided that reserves of the type described in this clause (c) shall
be instituted only after consultation with the Lead Borrower; (d) the Warranty
Liability Reserve; (e) the Dilution Reserve; and (f) such additional reserves
not otherwise addressed in clauses (a) through (e) above, in such amounts and
with respect to such matters, as the Administrative Agent in its Credit Judgment
may elect to establish or modify from time to time.

 

 
3

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Notwithstanding anything to the contrary in this Agreement, (i) such
Availability Reserves shall not be established or changed except upon not less
than three (3) Business Days’ (or such shorter period as may be agreed by the
Lead Borrower) prior written notice to the Lead Borrower, which notice shall
include a reasonably detailed description of such applicable Availability
Reserve being established (during which period (a) the Administrative Agent
shall, if requested, discuss any such Availability Reserve or change with the
Lead Borrower and (b) the Lead Borrower may take such action as may be required
so that the event, condition or matter that is the basis for such Availability
Reserve or change thereto no longer exists or exists in a manner that would
result in the establishment of a lower Availability Reserve or result in a
lesser change thereto, in a manner and to the extent reasonably satisfactory to
the Administrative Agent), and (ii) the amount of any Availability Reserve
established by the Administrative Agent, and any change in the amount of any
Availability Reserve, shall have a reasonable relationship to the event,
condition or other matter that is the basis for such Availability Reserve or
such change. Notwithstanding clause (i) of the preceding sentence, changes to
the Availability Reserves solely for purposes of correcting mathematical or
clerical errors (and such other changes as are otherwise agreed by the Lead
Borrower) shall not be subject to such notice period, it being understood that
no Default or Event of Default shall be deemed to result therefrom, if
applicable, for a period of three (3) Business Days.

 

“Average Availability” shall mean at any Adjustment Date, the average daily
Availability for the fiscal quarter immediately preceding such Adjustment Date.

 

“Average Usage” shall mean the average utilization of Revolver Commitments
during the immediately preceding fiscal quarter.

 

“Bank Product” shall mean any of the following products, services or facilities
extended to the Parent, any Borrower or Subsidiary by a Lender or any of its
Affiliates: (a) Cash Management Services; (b) products under Swap Agreements;
(c) commercial credit card and merchant card services; and (d) other banking
products or services as may be requested by any Borrower or Subsidiary, other
than loans or letters of credit.

 

“Bank Product Debt” shall mean Indebtedness and other obligations (including
Cash Management Obligations) of a Loan Party relating to Bank Products.

 

“Bank Product Reserve” shall mean the aggregate amount of reserves established
by the Administrative Agent from time to time in its discretion in respect of
Secured Bank Product Obligations, which shall in any event include the maximum
amount of all Noticed Hedges.

 

“Bankruptcy Code” shall mean Title 11 of the United States Code or any similar
federal or state law for the relief of debtors.

 

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

 

“Borrowers” shall mean (i) the Lead Borrower and (ii) any Domestic Subsidiaries
of the Lead Borrower that own any assets included in the Borrowing Base and that
execute a counterpart hereto and to any other applicable Loan Document as a
Borrower.

 

“Borrowing” shall mean a group of Revolver Loans of a single Type and, in the
case of Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Borrowing Base” shall mean at any time of calculation, the sum of the following
as set forth in the most recently delivered Borrowing Base Certificate:

 

 
4

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(a)     85% of Eligible Accounts; plus

 

(b)     the lesser of (x) 70% of the lesser of cost (on a basis consistent with
the Lead Borrower’s historical accounting practices) or market value of Eligible
Inventory and (y) 85% of the appraised NOLV Percentage of Eligible Inventory;
plus

 

(c)     the lesser of (x) 70% of the lesser of cost (on a basis consistent with
the Lead Borrower’s historical accounting practices) or market value of Eligible
In-Transit Inventory and (y) 85% of the appraised NOLV Percentage of Eligible
In-Transit Inventory; minus

 

(d)     the Availability Reserve.

 

“Borrowing Base Certificate” shall mean a certificate in the form of Exhibit O,
by which the Borrowers certify calculation of the Borrowing Base in accordance
with Section 5.12.

 

“Borrowing Request” shall mean a request by the Borrower in accordance with the
terms of Section 2.03 and, if written, substantially in the form of Exhibit C.

 

“Budget” shall have the meaning assigned to such term in Section 5.04(e).

 

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law or
other governmental action to remain closed; provided that when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in deposits in Dollars in the
London interbank market.

 

“Capital Expenditures” shall mean, in respect of any period, the aggregate of
all expenditures incurred by the Lead Borrower and the Restricted Subsidiaries
during such period that, in accordance with GAAP, are required to be classified
as capital expenditures, including Capital Lease Obligations incurred, provided,
however, that Capital Expenditures for the Lead Borrower and the Restricted
Subsidiaries shall not include:

 

(a)     expenditures of proceeds of insurance settlements, condemnation awards
and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are made to
replace or repair such lost, destroyed, damaged or condemned assets, equipment
or other property or otherwise to acquire, maintain, develop, construct,
improve, upgrade or repair assets or properties useful in the business of the
Lead Borrower and the Restricted Subsidiaries within twelve (12) months of
receipt of such proceeds,

 

(b)     expenditures that are accounted for as capital expenditures of such
person and that actually have been paid for by a third party (other than the
Lead Borrower or any Restricted Subsidiary thereof) and for which neither the
Lead Borrower nor any Restricted Subsidiary has provided or is required to
provide or incur, directly or indirectly, any consideration or obligation to
such third party or any other person (whether before, during or after such
period),

 

(c)     the purchase price of equipment or property purchased during such period
to the extent the consideration therefor consists of any combination of (x) used
or surplus equipment or property traded in at the time of such purchase and (y)
the proceeds of a reasonably concurrent sale of used or surplus equipment or
property, in each case, in the ordinary course of business, or

 

 
5

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(d)     expenditures that are accounted for as capital expenditures in
connection with transactions constituting Permitted Business Acquisitions.

 

“Capital Lease Obligations” shall mean the obligations of any 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, for purposes hereof, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.

 

“Captive Insurance Subsidiary” shall mean any Restricted Subsidiary that is
subject to regulation as an insurance company (or any Subsidiary thereof).

 

“Cash Collateral” shall mean cash and any interest or other income earned
thereon, or deposit account balances, and any other credit support satisfactory
to the applicable Issuing Bank, that are delivered to the Administrative Agent
to Cash Collateralize any Obligation.

 

“Cash Collateralize” shall mean the pledge and deposit with or the delivery of
Cash Collateral to the Administrative Agent, as security for the payment of any
Obligation, in an amount equal to 102.5% of such outstanding Obligations. “Cash
Collateralization” has a correlative meaning.

 

“Cash Management Obligations” shall mean obligations owed by any Borrower or
Restricted Subsidiary in respect of any overdraft and related liabilities
arising from treasury and treasury management services, Cash Management
Services, credit cards or any automated clearing house transfer of funds.

 

“Cash Management Services” any services provided from time to time by any Lender
or any of its Affiliates to any Borrower or Subsidiary in connection with
operating, collections, payroll, trust, or other depository or disbursement
accounts or similar cash management arrangements, including automated
clearinghouse, e-Payables, electronic funds transfer, wire transfer, controlled
disbursement, overdraft, depository, information reporting, lockbox and stop
payment services.

 

“CCMP” shall mean CCMP Capital Advisors, LLC.

 

“Change in Control” shall mean:

 

(a)     the acquisition of record ownership or direct beneficial ownership
(i.e., excluding indirect beneficial ownership through intermediate entities by
any person which is the subject of clause (b) below) by any person other than
Holdings (or another Parent Entity that has become a Loan Party) of any Equity
Interests in the Lead Borrower, such that after giving effect thereto Holdings
(or another Parent Entity that has become a Loan Party) shall cease to
beneficially own and control 100% of the Equity Interests of the Lead Borrower,
or

 

(b)     the acquisition of beneficial ownership, directly or indirectly, by any
person or group (within the meaning of the Securities Exchange Act of 1934, as
amended, and the rules of the SEC thereunder as in effect on the date hereof),
other than the Permitted Investors and any employee benefit plan and/or person
acting as a trustee, agent or other fiduciary or administrator in respect
thereof, of Equity Interests in Holdings representing more than the greater of
(i) 35% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests in Holdings and (ii) the percentage of the
aggregate ordinary voting power in Holdings held directly or indirectly by the
Permitted Investors.

 

 
6

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“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the Closing Date, (b) any change in law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender (or, for purposes of Section
2.15(b), by any Lending Office of such Lender or by such Lender’s holding
company, if any) with any written 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.

 

“Claims” shall mean all claims, liabilities, obligations, losses, damages,
penalties, judgments, proceedings, interests, costs and expenses of any kind
(including remedial response costs, reasonable attorneys’ fees) at any time
(including after Full Payment of the Obligations, resignation or replacement of
the Administrative Agent or replacement of any Lender) incurred by any
Indemnitee or asserted against any Indemnitee by any Loan Party or other Person,
in any way relating to (a) any Revolver Loans, Letters of Credit, Loan
Documents, or the use thereof or transactions relating thereto, (b) any action
taken or omitted to be taken by an Indemnitee in connection with any Loan
Documents, (c) the existence or perfection of any Liens, or realization upon any
Collateral, (d) exercise of any rights or remedies under any Loan Documents or
Applicable Law, or (e) failure by any Loan Party to perform or observe any terms
of any Loan Document, in each case including all costs and expenses relating to
any investigation, litigation, arbitration or other proceeding (including an
Insolvency Proceeding or appellate proceedings), whether or not the applicable
Indemnitee is a party thereto.

 

“Closing Date” shall mean May 30, 2012.

 

“Closing Date Dividend” shall mean the dividend, in an amount not to exceed
$410.0 million, to be paid on, or within 45 days of, the Closing Date from the
Borrower to Holdings from the proceeds of the Term Loans and to be paid from
Holdings to Parent and from Parent to the holders of the Equity Interests of
Parent.

 

“Code” shall mean the Internal Revenue Code of 1986.

 

“Collateral” shall mean all the “Collateral” as defined in any Security Document
and shall also include the Mortgaged Properties, if any.

 

“Collateral Agreement” shall mean the Guarantee and Collateral Agreement in the
form of Exhibit E, among Parent (but solely in respect of Section 2 of the
Collateral Agreement), Holdings, the Lead Borrower, each Subsidiary Loan Party
and the Administrative Agent.

 

“Collateral and Guarantee Requirement” shall mean the requirement that, in each
case subject to the Intercreditor Agreement:

 

(a)     on the Closing Date, the Administrative Agent shall have received (I)
from Parent (but solely in respect of Section 2 of the Collateral Agreement)
Holdings, the Lead Borrower and each Subsidiary Loan Party, a counterpart of the
Collateral Agreement duly executed and delivered on behalf of such person and
(II) an Acknowledgment and Consent in the form attached to the Collateral
Agreement, executed and delivered by each issuer of Pledged Collateral (as
defined in the Collateral Agreement), if any, that is a Loan Party,

 

 
7

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(b)     on the Closing Date or as otherwise provided in the Collateral
Agreement, the Administrative Agent for the benefit of the Secured Parties shall
have received (I) a pledge of all the issued and outstanding Equity Interests of
(A) the Lead Borrower, (B) each Domestic Subsidiary (other than a Disregarded
Domestic Subsidiary) and (C) each Special Purpose Subsidiary (to the extent such
pledge is permitted under the securitization agreements applicable to such
Subsidiary), in the case of any such Domestic Subsidiary or Special Purpose
Subsidiary, which is a Restricted Subsidiary owned on the Closing Date directly
by or on behalf of Holdings, the Lead Borrower or any Subsidiary Loan Party;
(II) a pledge of 65% of the outstanding voting Equity Interests and 100% of the
outstanding non-voting Equity Interests of (A) each “first tier” material
Foreign Subsidiary and (B) each material Disregarded Domestic Subsidiary, in
each case which is a Restricted Subsidiary directly owned by Holdings, the Lead
Borrower or a Subsidiary Loan Party; and (III) all certificates or other
instruments (if any) representing such Equity Interests, together with stock
powers or other instruments of transfer with respect thereto endorsed in blank,

  

(c)     on the Closing Date, all Indebtedness having, in the case of each
instance of Indebtedness, an aggregate principal amount in excess of $5.0
million (other than (i) intercompany current liabilities incurred in the
ordinary course of business in connection with the cash management operations of
Holdings and its Subsidiaries or (ii) to the extent that a pledge of such
promissory note or instrument would violate applicable law) that is owing to any
Loan Party and evidenced by a promissory note or an instrument and shall have
been pledged pursuant to the Collateral Agreement, and the Administrative Agent
for the benefit of the Secured Parties shall have received all such promissory
notes or instruments, together with note powers or other instruments of transfer
with respect thereto endorsed in blank,

 

(d)     within ninety (90) days of the Closing Date (or such longer period as
the Administrative Agent shall agree), the Lead Borrower or a Subsidiary Loan
Party, as applicable, shall grant to the Administrative Agent security interests
and mortgages in the Mortgaged Property referred to in Schedule 5.09 owned on
the Closing Date pursuant to a Mortgage, record or file, the Mortgage in such
manner and in such places as is required by law to establish, perfect, preserve
and protect the Liens pursuant to the Mortgages and pay, all Taxes, fees and
other charges payable in connection therewith. Unless otherwise waived by the
Administrative Agent in its reasonable discretion, with respect to each such
Mortgage, the Lead Borrower shall deliver to the Administrative Agent
contemporaneously therewith (A) a policy or policies or marked-up unconditional
binder of title insurance or foreign equivalent thereof, as applicable, paid for
by the Lead Borrower issued by a nationally recognized title insurance company
insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as permitted by
Section 6.02, together with such endorsements, coinsurance and reinsurance as
the Administrative Agent may reasonably request, (B) the legal opinions of local
U.S. counsel in the state where such Mortgaged Property is located, in form and
substance reasonably satisfactory to the Administrative Agent and (C) the Flood
Documentation,

 

(e)     on the Closing Date, or as otherwise provided in the Collateral
Agreement, the Administrative Agent for the benefit of the Secured Parties,
shall have been granted security interests in personal property of Holdings, the
Lead Borrower or any such Subsidiary Loan Parties in accordance with the
Collateral Agreement,

 

(f)     in the case of any person that becomes a Subsidiary Loan Party after the
Closing Date, the Administrative Agent shall have received a supplement to the
Collateral Agreement, in the form specified therein, duly executed and delivered
on behalf of such Subsidiary Loan Party,

 

 
8

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(g)     after the Closing Date, (A) all the outstanding Equity Interests of any
person that becomes a Subsidiary Loan Party after the Closing Date, (B) all the
Equity Interests of the Lead Borrower issued after the Closing Date and (C)
subject to Section 5.09(g) and Section 6.02(w), all other Equity Interests of
any other Subsidiary that are acquired by a Loan Party after the Closing Date,
shall have been pledged pursuant to the Collateral Agreement (including any
Special Purpose Subsidiary (to the extent such pledge is permitted under the
securitization agreements applicable to such Subsidiary)) (provided that in no
event shall more than 65% of the issued and outstanding voting Equity Interests
and 100% of the outstanding non-voting Equity Interests of (i) any “first tier”
Foreign Subsidiary directly owned by such Loan Party or (ii) any Disregarded
Domestic Subsidiary directly owned by such Loan Party be pledged to secure
Obligations of any Loan Party, and in no event shall any of the issued and
outstanding Equity Interests of any Foreign Subsidiary that is not a “first
tier” Foreign Subsidiary or a Domestic Subsidiary held by a Foreign Subsidiary
be pledged to secure Obligations of any Loan Party), and the Administrative
Agent for the benefit of the Secured Parties shall have received all
certificates or other instruments (if any) representing such Equity Interests,
together with stock powers or other instruments of transfer with respect thereto
endorsed in blank,

 

(h)     on the Closing Date, except as contemplated by any Security Document or
otherwise agreed by the Administrative Agent, all documents and instruments,
including Uniform Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Security Documents
(in each case, including any supplements thereto) and perfect such Liens to the
extent required by, and with the priority required by, the Security Documents,
shall have been filed, registered or recorded or delivered to the Administrative
Agent for filing, registration or the recording concurrently with, or promptly
following, the execution and delivery of each such Security Document,

 

(i)     on the Closing Date, the Administrative Agent shall have received
insurance certificates from the Lead Borrower’s insurance broker or other
evidence reasonably satisfactory to it that all insurance required to be
maintained pursuant to Section 5.02 is in full force and effect and such
certificates shall (i) name the Administrative Agent, as collateral agent on
behalf of the Secured Parties as an additional insured thereunder as its
interests may appear and (ii) in the case of each casualty insurance policy,
contain a loss payable clause or endorsement, reasonably satisfactory in form
and substance to the Administrative Agent, that names the Administrative Agent,
on behalf of Lenders as the loss payee thereunder and, to the extent available,
provides for at least thirty (30) days’ prior written notice to the
Administrative Agent of any cancellation of such policy,

 

(j)     within ninety (90) days (or such later date as Administrative Agent may
agree in its reasonable discretion) of the Closing Date (or, with respect to any
Deposit Account other than Excluded Deposit Accounts opened following the
Closing Date, the date such Loan Party notifies the Administrative Agent of the
opening of such Deposit Account or the date any Person becomes a Loan Party
hereunder), (i) each Loan Party shall cause each bank or other depository
institution at which any Deposit Account other than any Excluded Deposit Account
is maintained, to enter into a Deposit Account Control Agreement that provides
for such bank or other depository institution to transfer to a Dominion Account,
on a daily basis, all balances in each Deposit Account other than any Excluded
Deposit Account maintained by any Loan Party with such depository institution
for application to the Obligations then outstanding following the receipt by
such bank or other depository institution of a Liquidity Notice (it being
understood that the Administrative Agent shall reasonably promptly deliver a
copy of such Liquidity Notice to the Lead Borrower), (ii) the Borrowers shall
establish the Dominion Account and obtain an agreement (in form satisfactory to
the Administrative Agent) from the Dominion Account bank, establishing the
Administrative Agent’s control over and Lien in the Dominion Account, which may
be exercised by the Administrative Agent during any Liquidity Period, requiring
immediate deposit of all remittances received to a Dominion Account, (iii) each
Loan Party irrevocably appoints the Administrative Agent as such Loan Party’s
attorney-in-fact to collect such balances during a Liquidity Period to the
extent any such delivery is not so made and (iv) each Loan Party shall instruct
each Account Debtor to make all payments with respect to Current Asset
Collateral into Deposit Accounts subject to Deposit Account Control Agreements;
and

 

 
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(k)     the Borrowers shall use commercially reasonable efforts to obtain Lien
Waivers for all locations holding Inventory with a value in excess of $1,000,000
within (90) days (or such longer period as the Administrative Agent may agree in
its reasonable discretion) following the Closing Date.

 

“Collateral Questionnaire” shall mean a certificate in form reasonably
satisfactory to the Administrative Agent that provides information with respect
to the personal or mixed property of each Loan Party.

 

“Commitment Revolver Termination Date” shall mean the earliest to occur of (a)
the Revolver Termination Date; (b) the date on which the Borrowers terminate the
Revolver Commitments pursuant to Section 2.08; or (c) the date on which the
Revolver Commitments are terminated pursuant to Section 7.01.

 

“Commodity Exchange Act” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), and any successor statute.

 

“Company Competitor” shall mean any person that competes with or which is
affiliated with a person that competes with the business of Holdings, the
Borrowers and their Subsidiaries from time to time, in each case as specifically
identified by the Lead Borrower to the Administrative Agent from time to time in
writing.

 

“Consolidated Fixed Charge Coverage Ratio” shall mean the ratio, determined on a
consolidated basis for the Borrowers and their Restricted Subsidiaries for the
most recent four fiscal quarters period, of (a) EBITDA minus (i) Capital
Expenditures (except those financed with Indebtedness for borrowed money other
than the Revolver Loans) paid in cash for such period and (ii) the aggregate
amount of federal, state, local and foreign income taxes paid or payable
currently in cash for such period to (b) Consolidated Fixed Charges paid or
payable currently in cash for such period.

 

“Consolidated Fixed Charges” shall mean, with respect to the Borrowers and the
Restricted Subsidiaries on a consolidated basis for any period, the sum (without
duplication) of (a) Interest Expense (but excluding, in any event (w)
Transactions Costs and annual administrative or other agency fees, (x) fees and
expenses associated with Dispositions, Investments and any issuances of Equity
Interests or Indebtedness (in each case (A) not prohibited under this Agreement
and (B) whether or not consummated) and (y) amortization of deferred financing
costs) for such period less any interest income for such period received or
(without duplication) to be received currently in cash, (b) regularly scheduled
principal payments on funded Indebtedness paid or payable currently in cash for
such period (other than payments made by the Borrowers and their Restricted
Subsidiaries to the Borrowers and their Subsidiaries), (c) all cash dividends or
other distributions paid by the Lead Borrower or any Restricted Subsidiary
during such period to any Person other than the Lead Borrower or any Restricted
Subsidiary (excluding items eliminated in consolidation) on any series of
preferred stock or any Refunding Capital Stock of the Lead Borrower or a
Restricted Subsidiary during such period, (d) all cash dividends or other
distributions paid by the Lead Borrower or any Restricted Subsidiary paid to any
Person other than the Lead Borrower or any Restricted Subsidiary (excluding
items eliminated in consolidation) on any series of Equity Interests of the Lead
Borrower or a Restricted Subsidiary that is not Qualified Capital Stock during
such period and (e) Restricted Payments made under clauses (b)(iv) (only to the
extent the Borrowers would have relied on the Investment Conditions to make such
Investment), (c), (f) and (k) of Section 6.06 made in cash during any fiscal
period.

 

 
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“Consolidated Net Income” shall mean, with respect to any person for any period,
the aggregate of the Net Income of such person and its Subsidiaries for such
period, on a consolidated basis; provided, however, that, without duplication,

 

(a)     any net after-tax (A) extraordinary, (B) nonrecurring or (C) unusual
gains or losses or income or expenses (less all fees and expenses relating
thereto) including, without limitation, any severance expenses, and fees,
expenses or charges related to any offering of Equity Interests of any Parent
Entity or the Lead Borrower, any Investment or Indebtedness permitted to be
incurred hereunder or refinancings thereof (in each case, whether or not
successful), including any such fees, expenses or charges related to the
Transactions (including any Transaction Costs), in each case, shall be excluded,

 

(b)     any net after-tax income or loss from discontinued operations and any
net after-tax gain or loss on disposal of discontinued operations shall be
excluded,

 

(c)     any net after-tax gain or loss (less all fees and expenses or charges
relating thereto) attributable to business dispositions or asset dispositions
other than in the ordinary course of business (as determined in good faith by
the board of directors (or equivalent governing body) of the Lead Borrower)
shall be excluded,

 

(d)     any net after-tax income or loss (less all fees and expenses or charges
relating thereto) attributable to the early extinguishment of indebtedness shall
be excluded,

 

(e)     the Net Income for such period of any person that is not a subsidiary of
such person, or is an Unrestricted Subsidiary, or that is accounted for by the
equity method of accounting, shall be included only to the extent of the amount
of dividends or distributions or other payments (including any ordinary course
dividend, distribution or other payment) paid in cash (or to the extent
converted into cash) to the referent person or a subsidiary thereof in respect
of such period,

 

(f)     consolidated Net Income for such period shall not include the cumulative
effect of a change in accounting principles during such period, and

 

(g)     any increase in amortization or depreciation or any non-cash charges
resulting from any amortization, write-up, write-down or write-off of assets
with respect to assets revalued upon the application of purchase accounting
(including tangible and intangible assets, goodwill, deferred financing costs
and inventory (including any adjustment reflected in the “cost of goods sold” or
similar line item of the financial statements)) in connection with the
Transactions, Permitted Business Acquisitions or any merger, consolidation or
similar transaction not prohibited hereunder.

 

“Consolidated Total Assets” shall mean, at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total assets” (or any
like caption) on a consolidated balance sheet of the Lead Borrower and the
Restricted Subsidiaries at such date.

 

“Contractual Obligation” shall mean, as applied to any person, any provision of
any security issued by that person or of any indenture, mortgage, deed of trust,
contract, written undertaking, agreement or other instrument to which that
person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.

 

 
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“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
“Controlling” and “Controlled” shall have meanings correlative thereto.

 

“Credit Judgment” shall mean the Administrative Agent’s commercially reasonable
credit judgment exercised in good faith in accordance with customary business
practices for comparable asset-based lending transactions, as to any factor that
the Administrative Agent reasonably determines: (a) could reasonably be expected
to materially adversely affect the value of Eligible Inventory, Eligible
In-Transit Inventory or Eligible Accounts, the enforceability or priority of the
Administrative Agent’s Liens thereon, or the amount that the Administrative
Agent and the Lenders would be likely to receive (after giving consideration to
delays in payment and costs of enforcement) in liquidation of such Eligible
Inventory, Eligible In-Transit Inventory or Eligible Accounts; or (b) is
evidence that any collateral report or financial information delivered to the
Administrative Agent by any Borrower is incomplete, inaccurate or misleading in
any material respect.

 

“Cure Action”     shall have the meaning assigned to such term in Section
6.10(b).

 

“Current Asset Collateral” shall mean the “Revolving Priority Collateral” as
defined in the Intercreditor Agreement.

 

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

 

“Default Rate” shall have the meaning assigned to such term in Section 2.13(c).

 

“Defaulting Lender” shall mean any Lender that (a) has failed to perform any
funding obligations (including its obligation to fund any portion of
participations in Letters of Credit) hereunder, and such failure is not cured
within two (2) Business Days of the date of the funding obligation; (b) has
notified the Administrative Agent or any Borrower that such Lender does not
intend to comply with its funding obligations hereunder or generally under other
agreements to which it commits to extend credit or has made a public statement
to that effect; (c) has failed, within three (3) Business Days following written
request by the Administrative Agent or the Lead Borrower, to confirm in a manner
reasonably satisfactory to the Administrative Agent and the Lead Borrower that
such Lender will comply with its funding obligations hereunder (provided that
such Lender shall cease to be a Defaulting Lender pursuant to this clause (c)
upon receipt by the Administrative Agent of such confirmation); or (d) has, or
has a direct or indirect parent company that has, become the subject of an
Insolvency Proceeding or taken any action in furtherance thereof, including, in
the case of any Lender, the Federal Deposit Insurance Corporation or any other
state or federal regulatory authority acting in such capacity; provided,
however, that a Lender shall not be a Defaulting Lender solely by virtue of a
Governmental Authority’s ownership of any equity interest in such Lender or
parent company so long as such ownership interest does not result in or provide
such Lender with immunity from the jurisdiction of the courts within the United
States or from the enforcement of judgments or writs of attachment on its assets
or permit such Lender (or such Governmental Authority) to reject, repudiate,
disavow or disaffirm any contracts or agreements made with such Lender.

 

“Deposit Account” shall have the meaning assigned thereto in Article 9 of the
UCC.

 

 
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“Deposit Account Control Agreement” shall mean a Deposit Account control
agreement to be executed by each institution maintaining a Deposit Account
(other than an Excluded Deposit Account) for the Borrower or any other Loan
Party, in each case as required by and in accordance with clause (j) of the
definition of “Collateral and Guarantee Requirement.”

 

“Designated Non-Cash Consideration” shall mean the fair market value (as
determined by the Lead Borrower in good faith) of non-cash consideration
received by the Lead Borrower or a Restricted Subsidiary in connection with a
Disposition pursuant to Section 6.05(g) and the last paragraph of Section 6.05
that is designated as Designated Non-Cash Consideration pursuant to a
certificate of a Responsible Officer, setting forth the basis of such valuation
(which amount will be reduced by the fair market value of the portion of the
non-cash consideration converted to cash or cash equivalents).

 

“Dilution” shall mean, as of any date of determination, a percentage, based upon
the experience of the immediately prior twelve (12) consecutive months per the
latest field examination, that is the result of dividing the Dollar amount of
(a) bad debt write-downs, discounts, advertising allowances, credits, or other
similar dilutive items, in each case, without duplication of any such amounts in
the calculation of Eligible Accounts or other Availability Reserves for any such
period, with respect to the Accounts of the Borrowers during such period, by (b)
billings with respect to Accounts of the Borrowers during such period.

 

“Dilution Reserve” shall mean, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts by one (1)
percentage point for each percentage point by which Dilution is in excess of
five percent (5%).

 

“Disinterested Director” shall mean, with respect to any person and transaction,
a member of the board of managers (or equivalent governing body) of such person
who does not have any material direct or indirect financial interest in or with
respect to such transaction.

 

“Disposition” shall mean any sale, transfer, lease or other disposition of
assets.

 

“Disqualified Institutions” shall mean (a) those banks, financial institutions
or other institutional lenders identified in writing to the Administrative Agent
prior to the Closing Date and (b) Company Competitors.

 

“Disregarded Domestic Subsidiary” shall mean any direct or indirect (other than
through a Foreign Subsidiary) Domestic Subsidiary of which substantially all of
its assets consist of Equity Interests of one or more indirect Foreign
Subsidiaries.

 

“Documentation Agent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.

 

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

 

“Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative LC Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or the Issuing Bank at such
time on the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of Dollars with such Alternative LC Currency.

 

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

 

 
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“Dominion Account” shall mean a special concentration account established by the
Borrowers at Bank of America or another bank reasonably acceptable to the
Administrative Agent, over which the Administrative Agent has exclusive control
for withdrawal purposes pursuant to the terms and provisions of this Agreement
and the other Loan Documents.

 

“EBITDA” shall mean, with respect to the Lead Borrower and the Restricted
Subsidiaries on a consolidated basis for any period, the Consolidated Net Income
of the Lead Borrower and the Restricted Subsidiaries for such period plus the
sum of (a) (in each case without duplication and to the extent the respective
amounts described in subclauses (i) through (xvi) of this clause (a) reduced
such Consolidated Net Income for the respective period for which EBITDA is being
determined):

 

(i)     provision for Taxes based on income, profits or capital of the Lead
Borrower and the Restricted Subsidiaries for such period, including, without
limitation, state, foreign, franchise and similar taxes, and Tax Distributions
made by the Lead Borrower during such period,

 

(ii)     Interest Expense of the Lead Borrower and the Restricted Subsidiaries
for such period,

 

(iii)     depreciation and amortization expenses of the Lead Borrower and the
Restricted Subsidiaries for such period,

 

(iv)     business optimization expenses and restructuring charges and reserves
(which, for the avoidance of doubt, shall include retention, severance, systems
establishment costs, excess pension charges, contract termination costs
(including future lease commitments) and costs to consolidate facilities and
relocate employees); provided that with respect to each business optimization
expense or restructuring charge or reserve, the Lead Borrower shall have
delivered to the Administrative Agent a certificate of the Chief Financial
Officer of the Lead Borrower specifying and quantifying such expense, charge or
reserve and stating that such expense, charge or reserve is a business
optimization expense or restructuring charge or reserve, as the case may be;
provided further that the aggregate amount added back to EBITDA pursuant to this
clause (iv) in any period shall not exceed 20% of the EBITDA (or 25% in the case
of any Permitted Business Acquisitions (it being understood that any such add
backs in excess of the 20% threshold shall solely relate to Permitted Business
Acquisitions)) of the Lead Borrower and the Restricted Subsidiaries for such
period (prior to giving effect to any such add back),

 

(v)     the amount of management, consulting, monitoring, transaction and
advisory fees and related expenses paid to the Permitted Investors (or any
accruals related to such fees and related expenses) during such period,

 

(vi)     Transaction Costs and fees, costs and expenses incurred directly in
connection with any transaction, including any Investment, equity issuance, debt
issuance, refinancing or Disposition (in each case, (A) not prohibited under
this Agreement and (B) whether or not consummated) during such period,

 

(vii)     any non-cash charges reducing Consolidated Net Income (excluding any
such non-cash charge to the extent it represents an accrual of or reserve for
cash charges in any future period or amortization of a prepaid cash expense that
was paid in a prior period not included in the calculation),

 

(viii)     letter of credit fees,

 

 
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(ix)     to the extent reimbursable by third parties pursuant to indemnification
provisions, other transaction fees, costs and expenses, provided that the Lead
Borrower in good faith expects to receive reimbursement for such fees, costs and
expenses within the next four (4) fiscal quarters,

 

(x)     to the extent actually reimbursed by insurance or a third party, costs
of legal settlement, fines, judgments or orders,

 

(xi)     to the extent covered by insurance under which the insurer has been
properly notified and has not denied or contested coverage, expenses with
respect to liability events or casualty events,

 

(xii)     changes in earn-out obligations incurred in connection with any
Permitted Business Acquisition or other Investments permitted under this
Agreement and paid during the applicable period and any similar acquisitions
completed prior to the Closing Date; provided such earn-out obligation is in
effect for no longer than five (5) years from the closing date of the underlying
transaction; provided further that any earn-out obligation with a duration of
longer than two (2) years from the closing date of the underlying transaction
shall not result in an add back to EBITDA in an amount greater than $5.0 million
for any applicable period,

 

(xiii)     any unrealized losses in the fair market value of any Swap
Agreements,

 

(xiv)     (A) any charges or expenses incurred pursuant to any management equity
plan or stock option plan or any other management or employee benefit plan or
agreement, pension plan, any stock subscription or shareholder agreement or any
distributor equity plan or agreement and (B) any charges, costs, expenses,
accruals or reserves in connection with the rollover, acceleration or payout of
equity interests held by management, in each case, to the extent such charges,
costs, expenses, accruals or reserves are funded with an EBITDA Addback
Contribution,

 

(xv)     any net unrealized losses resulting from currency translation losses
related to currency remeasurements of Indebtedness (including any net loss
resulting from Swap Agreements for currency exchange risk) and any unrealized
foreign currency translation losses, and

 

(xvi)     the proceeds of business interruption insurance, in an amount not to
exceed the earnings for the applicable period that such proceeds are intended to
replace; provided that the Lead Borrower in good faith expects to receive such
business interruption proceeds within the next four (4) fiscal quarters,

 

minus (b) (without duplication and to the extent the amounts described in this
clause (b) increased such Consolidated Net Income for the respective period for
which EBITDA is being determined) (i) income tax credits and Restricted Payments
pursuant to Section 6.06(b)(i), (ii) all non-cash gains increasing Consolidated
Net Income of the Lead Borrower and the Restricted Subsidiaries for such period
(but excluding any such gains (x) in respect of which cash or other assets were
received in a prior period or will be received in a future period or (y) which
represent the reversal of any accrual of, or cash reserve for, anticipated cash
charges in any prior period), (iii) any unrealized gains in the fair market
value of any Swap Agreements and (iv) any net unrealized gains resulting from
currency translation gains related to currency remeasurements of Indebtedness
(including any net gain resulting from Swap Agreements for currency exchange
risk) and any unrealized foreign currency translation gains, minus (c) (without
duplication) (i) the amount added back to EBITDA pursuant to clause (a)(ix)
above to the extent such transaction fees, costs and expenses were not
reimbursed within the time period required by such clause (which amount shall be
deducted in the next succeeding fiscal quarter following expiration of the
applicable time period) and (ii) the amount added back to EBITDA pursuant to
clause (a)(xvi) to the extent such business interruption proceeds were not
received within the time period required by such clause (which amount shall be
deducted in the next succeeding fiscal quarter following expiration of the
applicable time period).

 

 
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“EBITDA Addback Contribution” shall mean (a) the net cash proceeds received by
the Lead Borrower from capital contributions to its equity capital, and (b) the
net cash proceeds received by the Lead Borrower from the sale (other than to a
Restricted Subsidiary) or issuance of Qualified Capital Stock of the Lead
Borrower or any Parent Entity, in each case designated as an EBITDA Addback
Contribution pursuant to a certificate of a Responsible Officer of the Lead
Borrower concurrently with the delivery of financial statements for the fiscal
quarter in which the contribution is utilized to offset the charge or expense
add-back pursuant to clause (a)(xiv) of the definition of EBITDA, as the case
may be, which proceeds shall not have been designated as a Cure Action.

 

“Effective Yield” shall mean, with respect to any Indebtedness and as of any
date of determination, the applicable interest rate of such Indebtedness, taking
into account interest rate floors, original issue discount and upfront fees with
respect to such Indebtedness (with original issue discount and fees being
equated to interest rate based on a four-year life to maturity or lesser
remaining average life to maturity) and any amendment made to the interest rate
with respect to such Indebtedness prior to such date of determination, but
excluding arrangement, commitment, structuring and underwriting fees paid to the
Joint Lead Arrangers or their Affiliates (in each case in their capacities as
such) and any amendment fees paid with respect to such Indebtedness to the Joint
Lead Arrangers or their Affiliates (in each case in their capacities as such).

 

“Eligible Accounts” shall mean those Accounts created by a Borrower in the
ordinary course of business, that arise out of such Borrower’s sale of goods or
rendition of services, that comply with each of the representations and
warranties respecting Eligible Accounts made in the Loan Documents, and that are
not excluded as ineligible by virtue of one or more of the excluding criteria
set forth below; provided, however, that such criteria may be revised from time
to time by the Administrative Agent in the Administrative Agent’s Credit
Judgment to address the results of any audit performed by the Administrative
Agent from time to time after the Closing Date. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and
unapplied cash. Eligible Accounts shall not include the following:

 

(a)     Accounts (i) that are more than 60 days past due and (ii) if no due date
is specified, that the Account Debtor has failed to pay within 90 days of
original invoice date,

 

(b)     Accounts owed by an Account Debtor (or its Affiliates) where 50% or more
of all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,

 

(c)     Accounts with respect to which the Account Debtor is an Affiliate of a
Borrower or an employee or agent of a Borrower or any Affiliate of a Borrower,

 

(d)     Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, or any other terms by reason of which the payment by the Account
Debtor may be conditional,

 

(e)     Accounts that are not payable in Dollars,

 

 
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(f)     Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any state thereof, or (iii) is
the government of any country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, unless (x) the
Account is supported by an irrevocable letter of credit reasonably satisfactory
to the Administrative Agent (as to form, substance, and issuer or domestic
confirming bank) which letter of credit is assigned to the Administrative Agent
for benefit of the Secured Parties (with such assignment acknowledged by the
issuing or domestic confirming bank) or, if requested by the Agent, that has
been delivered to the Administrative Agent and is directly drawable by the
Administrative Agent, or (y) the Account is covered by credit insurance in form
substance, and amount, and by an insurer, reasonably satisfactory to the
Administrative Agent,

 

(g)     Accounts in excess of $3,000,000 in the aggregate with respect to which
the Account Debtor is either (i) the United States or any department, agency, or
instrumentality of the United States (exclusive, however, of Accounts with
respect to which the applicable Borrower has complied, to the reasonable
satisfaction of the Administrative Agent, with the Assignment of Claims Act, 31
USC § 3727), or (ii) any state of the United States,

 

(h)     Accounts with respect to which the Account Debtor is a creditor of a
Borrower has or has asserted a right of setoff or that is an open account
payable, or has disputed its obligation to pay all or any portion of the
Account, to the extent of such claim, right of setoff or dispute or open
accounts payable,

 

(i)     Accounts with respect to which an Account Debtor whose total obligations
owing to the Borrowers exceeded 20% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by the Administrative Agent’s Credit
Judgment if the creditworthiness of such Account Debtor deteriorates) of all
Eligible Accounts, to the extent of the obligations owing by such Account Debtor
in excess of such percentage; provided, however, that, in each case, the amount
of Eligible Accounts that are excluded because they exceed the foregoing
percentage shall be determined by the Administrative Agent based on all of the
otherwise Eligible Accounts prior to giving effect to any eliminations based
upon the foregoing concentration limit but shall not be excluded in an amount in
excess of the foregoing percentage,

 

(j)     Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, has gone out of business, or as to which
a Borrower has received notice of an imminent Insolvency Proceeding,

 

(k)     Accounts, the collection of which the Administrative Agent, in its
Credit Judgment, believes to be doubtful by reason of the Account Debtor’s
financial condition,

 

(l)     Accounts that are not subject to a valid and perfected first priority
Administrative Agent’s Lien,

 

(m)     Accounts with respect to which (i) the goods giving rise to such Account
have not been shipped and billed to the Account Debtor, or (ii) the services
giving rise to such Account have not been performed and billed to the Account
Debtor,

 

(n)     Accounts with respect to which the Account Debtor is a Sanctioned Person
or Sanctioned Entity,

 

 
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(o)     Accounts that represent the right to receive progress payments or other
advance billings that are due prior to the completion of performance by the
applicable Borrower of the subject contract for goods or services,

 

(p)     Accounts to the extent that open volume rebates payable in cash exist in
respect of such Accounts (only to the extent of such rebates payable in cash),

 

(q)     Accounts representing late charges (only to the extent of such late
charges),

 

(r)     Accounts representing chargeback receivables,

 

(s)     Accounts with respect to which the Account Debtors are designated by a
Borrower as “do not sell,”

 

(t)     Accounts acquired in connection with a Permitted Acquisition, until the
completion of an appraisal and field examination of such Accounts, in each case,
reasonably satisfactory to the Administrative Agent (which appraisal and field
examination may be conducted prior to the closing of such Permitted
Acquisition),

 

(u)     Accounts with dated terms of more than 120 days from the invoice date,

 

(v)     Accounts in excess of $3,000,000 in the aggregate arising from sales of
goods pursuant to “bill and hold” terms,

 

(w)     Accounts that are in excess of $15,000,000 owed by GE Capital Commercial
Finance Corporation (or any other provider of dealer floor plan financing) as
part of any dealer floor plan financing program that is reasonably acceptable to
the Administrative Agent (it being understood that the dealer floor plan
financing program between GE Capital Commercial Finance Corporation and the Lead
Borrower in effect on the Closing Date is acceptable to the Administrative
Agent), or

 

(x)     Accounts owed by an Account Debtor if any Accounts owed by such Account
Debtor to any Borrower or Restricted Subsidiary (i) have been contributed, sold
or otherwise financed in connection with a Receivables Facility or (ii) arise
out of or are related to any Receivables Facility.

 

“Eligible Assignee” shall mean (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof) and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
“accredited investor” (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans.

 

“Eligible Inventory” shall mean Inventory of a Borrower consisting of finished
goods held for sale in the ordinary course of business or raw materials, that
complies with each of the representations and warranties respecting Eligible
Inventory made in the Loan Documents, and that is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; provided,
however, that such criteria may be revised from time to time by the
Administrative Agent in the Administrative Agent’s Credit Judgment to address
the results of any audit or appraisal performed by the Administrative Agent from
time to time after the Closing Date. In determining the amount to be so
included, Inventory shall be valued at the lower of cost or market on a basis
consistent with Lead Borrower’s historical accounting practices. An item of
Inventory shall not be included in Eligible Inventory if:

 

 
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(a)     a Borrower does not have good, valid, and marketable title thereto,

 

(b)     a Borrower does not have actual and exclusive possession thereof (either
directly or through a bailee or agent of a Borrower),

 

(c)     it is not located at a location in the United States,

 

(d)     it is in-transit to or from a location of a Borrower (other than
in-transit from one location of a Borrower to another location of a Borrower),

 

(e)     it is located on real property leased by a Borrower or in a contract
warehouse, in each case, unless (i) (A) it is subject to a Lien Waiver executed
by the lessor or warehouseman, as the case may be, or (B) a Rent and Charges
Reserve has been established and (ii) it is segregated or otherwise separately
identifiable from goods of others, if any, stored on the premises,

 

(f)     it is the subject of a bill of lading or other document of title,

 

(g)     it is not subject to a valid and perfected first priority Administrative
Agent’s Lien,

 

(h)     it consists of goods returned or rejected by a Borrower’s customers
other than the goods that are undamaged or resalable in the ordinary course of
business,

 

(i)     it consists of goods that are obsolete or slow moving, restrictive or
custom items, or goods that constitute spare parts, packaging and shipping
materials, supplies used or consumed in the Borrowers’ business or, bill and
hold goods, damaged or defective goods, “seconds” or Inventory acquired on
consignment,

 

(j)     it consists of capitalized variances reserved on the Borrower’s books
and records,

 

(k)     it consists of Inventory at locations which totals less than $100,000 at
any given location,

 

(l)     it consists of Inventory consigned to customers in excess of $15,000,000
in the aggregate, or

 

(m)     it was acquired in connection with a Permitted Business Acquisition,
until the completion of an appraisal and field examination of such Inventory, in
each case, reasonably satisfactory to the Administrative Agent (which appraisal
and field examination may be conducted prior to the closing of such Permitted
Business Acquisition).

 

“Eligible In-Transit Inventory” shall mean up to $20,000,000 of Inventory of a
Borrower that is not Eligible Inventory consisting of finished goods or raw
materials, that complies with each of the representations and warranties
respecting Eligible Inventory made in the Loan Documents, and that is ineligible
only because (a) it is in transit to or from a location of a Borrower or (b)
solely in the case of documented inventory “on the water” (which documentation
shall be reasonably satisfactory to the Administrative Agent), it is not located
at a location in the United States. In determining the amount to be so included,
Eligible In-Transit Inventory shall be valued at the lower of cost or market on
a basis consistent with the Lead Borrower’s historical accounting practices. An
item of Inventory shall not be included in Eligible In-Transit Inventory if:

 

 
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(a)     it consists of an estimate of Inventory “on the water,” or

 

(b)     the estimated arrival at a company location is more than 5 weeks in the
future.

 

“Enforcement Action” shall mean any action to enforce any Obligations or Loan
Documents or to exercise any rights or remedies relating to any Collateral
(whether by judicial action, self-help, notification of Account Debtors,
exercise of setoff or recoupment, exercise of any right to vote or act in a Loan
Party’s Insolvency Proceeding, or otherwise), in each case solely to the extent
permitted by the Loan Documents.

 

“environment” shall mean ambient and indoor air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, natural resources such as flora and fauna, the workplace or
as otherwise defined in any Environmental Law.

 

“Environmental Laws” shall mean all laws (including common law), rules,
regulations, codes, ordinances, orders, decrees or judgments, promulgated or
entered into by or with any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the generation,
management, Release or threatened Release of, or actual or alleged exposure to,
any Hazardous Materials or to occupational health and safety (to the extent
relating to the environment or Hazardous Materials).

 

“Equity Interests” of any person shall mean any and all shares, interests,
participations or other equivalents of or interests in (however designated)
equity of such person, including any preferred stock, any limited or general
partnership interest and any limited liability company membership interest and
any and all warrants, rights or options to purchase or other rights to acquire
any of the foregoing.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

 

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

 

“ERISA Event” shall mean (a) any Reportable Event; (b) the existence with
respect to any Loan Party, any ERISA Affiliate or any Plan of a non-exempt
Prohibited Transaction; (c) the failure by any Plan to satisfy the minimum
funding standards (within the meaning of Section 412 of the Code or Section 302
of ERISA), applicable to such Plan, whether or not waived; (d) the filing
pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, the failure to make by its due date a required installment under Section
430(j) of the Code with respect to any Plan or the failure to make any required
contribution to a Multiemployer Plan; (e) the receipt by any Loan Party or any
ERISA Affiliate from the PBGC or a plan administrator of any notice relating to
an intention to terminate any Plan or to appoint a trustee to administer any
Plan under Section 4042 of ERISA; (f) the receipt by any Loan Party or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan
Party or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, Insolvent, in Reorganization, or terminated (within the meaning
of Section 4041A of ERISA); or (g) the failure by any Loan Party or any ERISA
Affiliate to pay when due (after expiration of any applicable grace period) any
installment payment with respect to Withdrawal Liability under Section 4201 of
ERISA.

 

 
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“Eurocurrency Reserve Requirements” shall mean, for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves) under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.

 

“Eurodollar Base Rate” shall mean, with respect to each day during each Interest
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00
A.M., London time, two (2) Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on such page (or otherwise
on such screen), the “Eurodollar Base Rate” shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 A.M., London time,
two (2) Business Days prior to the commencement of such Interest Period.

 

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

 

“Eurodollar Loan” shall mean any Revolver Loan bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the provisions
of Article II.

 

“Eurodollar Rate” shall mean, with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined for such
day in accordance with the following formula:

 

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

 

“Event of Default” shall have the meaning assigned to such term in Section 7.01.

 

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

 

“Excluded Deposit Account” shall mean (x) a Deposit Account (i) which is used
for the sole purpose of making payroll and withholding tax payments related
thereto and other employee wage and benefit payments and accrued and unpaid
employee compensation (including salaries, wages, benefits and expense
reimbursements), (ii) which is used for paying taxes, including sales taxes,
(iii) which is used as an escrow account or as a fiduciary or trust account or
(iv) which, individually or together with any other Deposit Accounts that are
Excluded Deposit Accounts pursuant to this clause (iv), has an average daily
balance for any fiscal month of less than $3,000,000 and (y) the Net Proceeds
Pledged Account.

 

 
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“Excluded Subsidiary” shall mean (a) any Restricted Subsidiary that is
prohibited by law, regulation or Contractual Obligation from providing a
Guarantee of the Obligations or that would require a governmental (including
regulatory) consent, approval, license or authorization in order to provide such
Guarantee, (b) any Restricted Subsidiary for which the Guaranteeing of the
Obligations by such Subsidiary would result in material adverse tax consequences
as reasonably determined by the Lead Borrower, (c) any Disregarded Domestic
Subsidiary, (d) any Domestic Subsidiary that is a direct or indirect Subsidiary
of a Disregarded Domestic Subsidiary, (e) any not-for profit Restricted
Subsidiary, Captive Insurance Subsidiary or Special Purpose Subsidiary, (f) any
Foreign Subsidiary and (g) any Restricted Subsidiary to the extent that the
burden or cost of obtaining a Guarantee of the Obligations from such Subsidiary
outweighs the benefit afforded thereby, as reasonably determined by the
Administrative Agent and the Lead Borrower.

 

“Excluded Swap Obligation” shall mean, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guarantee of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
as applicable, such Swap Obligation (or any Guarantee thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Guarantor’s failure to
constitute an “eligible contract participant,” as defined in the Commodity
Exchange Act and the regulations thereunder, at the time the Guarantee of (or
grant of such security interest by, as applicable) such Guarantor becomes or
would become effective with respect to such Swap Obligation. If a Swap
Obligation arises under a master agreement governing more than one Swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to Swaps for which such Guarantee or security interest is or
becomes illegal.

 

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, any Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrowers hereunder, (a) income taxes
imposed on (or measured by) its net income (or franchise taxes imposed in lieu
of net income taxes) by the United States of America (or any state thereof) or
the jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located or any other jurisdiction as a result of
such recipient engaging in a trade or business in such jurisdiction for tax
purposes, (b) any branch profits tax or any similar tax that is imposed by any
jurisdiction described in clause (a) above, (c) in the case of a Lender making a
Revolver Loan to the Borrowers, any withholding tax imposed by the United States
or imposed by the jurisdiction in which such Lender is incorporated or has its
principal place of business that (x) is in effect and would apply to amounts
payable hereunder to such person (assuming applicable forms required under
Section 2.17(e) have not been delivered by such person) at the time such person
becomes a party to such Revolver Loan to the Borrowers (or designates a new
Lending Office) except to the extent that such person (or its assignor, if any)
was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from a Loan Party with respect to any
withholding tax pursuant to Section 2.17(a) or Section 2.17(c) or (y) is
attributable to such person’s failure to comply with Section 2.17(e) with
respect to such Revolver Loan unless such failure to comply with Section 2.17(e)
is a result of a change in law after the date such Lender becomes a party to
such Revolver Loan to the Borrowers (or designates a new Lending Office), (d)
any interest, additions to taxes or penalties with respect to the foregoing and
(e) any withholding taxes imposed pursuant to FATCA.

 

“Existing Credit Agreement” shall mean the Credit Agreement, dated as of
February 9, 2012, among Holdings, the Lead Borrower, the lenders party thereto
from time to time, JPMorgan Chase Bank, N.A., as administrative agent, and the
other agents and parties party thereto from time to time.

 

“Existing Debt” shall mean the Indebtedness outstanding under the Existing
Credit Agreement.

 

 
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“Existing Letters of Credit” shall mean the letters of credit issued under the
Existing Credit Agreement (including any banker’s acceptances or other payment
obligations arising therefrom) and outstanding as of the Closing Date and set
forth on Schedule 2.05(a).

 

“Extended Revolver Loans” shall have the meaning assigned to such term in
Section 2.23(a)(ii).

 

“Extended Revolver Commitment” shall have the meaning assigned to such term in
Section 2.23(a)(ii).

 

“Extension” shall have the meaning assigned to such term in Section 2.23(a).

 

“Extension Offer” shall have the meaning assigned to such term in Section
2.23(a).

 

“FATCA” shall mean Sections 1471 through 1474, as of the date of this Agreement
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with) and any current or future regulations or
official interpretations thereof.

 

“FCCR Test Amount” shall mean as defined in Section 6.10.

 

“Federal Funds Effective Rate” shall mean, for any day the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided, (i) if such day
is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Administrative Agent, in its capacity as a Lender,
on such day on such transactions as determined by the Administrative Agent.

 

“Fee Letter” shall mean that certain Fee Letter dated May 30, 2012 by and among
the Lead Borrower and the Administrative Agent.

 

“Fees” shall have the meaning assigned to such term in Section 2.12(a).

 

“Financial Officer” of any person shall mean the Chief Financial Officer,
principal accounting officer, Treasurer, Assistant Treasurer or Controller of
such person.

 

“Flood Documentation” means, with respect to each Mortgaged Property located in
the United States or any territory thereof, (i) a completed “life-of-loan”
Federal Emergency Management Agency standard flood hazard determination
(together with a notice about Special Flood Hazard Area status and flood
disaster assistance duly executed by the applicable Loan Party relating thereto)
and (ii) a copy of, or a certificate as to coverage under, and a declaration
page relating to, the insurance policies required by Section 5.02(b) hereof and
the applicable provisions of the Security Documents, each of which shall (A) be
endorsed or otherwise amended to include a “standard” or “New York” lender’s
loss payable or mortgagee endorsement (as applicable), (B) name the
Administrative Agent, on behalf of the Secured Parties, as additional insured
and loss payee/mortgagee and (C) identify the address of each property located
in a Special Flood Hazard Area, the applicable flood zone designation and the
flood insurance coverage and deductible relating thereto and (iv) be otherwise
in form and substance reasonably satisfactory to the Administrative Agent.

 

 
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“Foreign Benefit Arrangement” shall mean any employee benefit arrangement
mandated by non-U.S. law that is maintained or contributed to by any Loan Party
or any ERISA Affiliate.

 

“Foreign Plan” shall mean each employee benefit plan (within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to
U.S. law and is maintained or contributed to by any Loan Party or any ERISA
Affiliate.

 

“Foreign Plan Event” shall mean, with respect to any Foreign Benefit Arrangement
or Foreign Plan, (a) the failure to make or, if applicable, accrue in accordance
with normal accounting practices, any employer or employee contributions
required by applicable law or by the terms of such Foreign Benefit Arrangement
or Foreign Plan; (b) the failure to register or loss of good standing with
applicable regulatory authorities of any such Foreign Benefit Arrangement or
Foreign Plan required to be registered; or (c) the failure of any Foreign
Benefit Arrangement or Foreign Plan to comply with any material provisions of
applicable law and regulations or with the material terms of such Foreign
Benefit Arrangement or Foreign Plan.

 

“Foreign Lender” shall mean any Lender that is not a U.S. Person.

 

“Foreign Subsidiary” shall mean any Subsidiary that is incorporated or organized
under the laws of any jurisdiction other than the United States of America, any
State thereof or the District of Columbia.

 

“Fronting Exposure” shall mean a Defaulting Lender’s Pro Rata share of LC
Obligations or Swingline Loans, as applicable, except to the extent allocated to
other Lenders or Cash Collateralized under Section 2.21.

 

“Full Payment” shall mean with respect to any Obligations, (a) the full cash
payment thereof (other than obligations for taxes, indemnification, charges and
other inchoate or contingent or reimbursable liabilities for which no claim or
demand for payment has been made or, in the case of indemnification, no notice
has been given (or, in each case, reasonably satisfactory arrangements have
otherwise been made)), including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in such proceeding); and
(b) if such Obligations are LC Obligations or inchoate or contingent in nature
(other than inchoate or contingent or reimbursable obligations for which no
claim or demand for payment has been made or, in the case of indemnification, no
notice has been given (or reasonably satisfactory arrangements have otherwise
been made)), Cash Collateralization thereof. No Revolver Loans shall be deemed
to have been paid in full until all Revolver Commitments related to such
Revolver Loans have expired or been terminated.

 

“GAAP” shall mean generally accepted accounting principles in effect from time
to time in the United States.

 

“Governmental Authority” shall mean any federal, state, local or foreign court
or governmental agency, authority, instrumentality or regulatory or legislative
body or any entity or officer exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any government or any
court, in each case whether associated with a state of the United States, the
United States, or a foreign entity or government.

 

 
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“Guarantee” of or by any person (the “guarantor”) shall mean (a) any obligation,
contingent or otherwise, of the guarantor 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 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 (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay or otherwise) 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 thereof, (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 such Indebtedness or other
obligation, (iv) entered into for the purpose of assuring in any other manner
the holders of such Indebtedness or other obligation of the payment thereof or
to protect such holders against loss in respect thereof (in whole or in part) or
(v) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or other obligation, or (b) any Lien on any
assets of the guarantor securing any Indebtedness of any other person, whether
or not such Indebtedness or other obligation is assumed by the guarantor;
provided, however, that the term “Guarantee” shall not include (x) endorsements
for collection or deposit, in either case in the ordinary course of business,
(y) customary and reasonable indemnity obligations in effect on the Closing Date
or entered into in connection with any acquisition or disposition of assets
permitted under this Agreement or (z) any dealer related inventory repurchase
obligations. The amount of any Guarantee for purposes of clause (b) shall be
deemed to be equal to the lesser of (i) the aggregate unpaid amount of such
Indebtedness and (ii) the fair market value of the property encumbered thereby
as determined by such person in good faith.

 

“guarantor” shall have the meaning assigned to such term in the definition of
the term “Guarantee.”

 

“Guarantor” shall have the meaning assigned to such term in the Collateral
Agreement.

 

“Hazardous Materials” shall mean all pollutants, contaminants, wastes,
chemicals, materials, substances and constituents of any nature which are
subject to regulation by any Governmental Authority or which would reasonably be
likely to give rise to liability under any Environmental Law, including, without
limitation, explosive or radioactive substances or petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls or radon gas.

 

“Holdings” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

“IFRS” shall mean international accounting standards within the meaning of the
IAS Regulation 1606/2002 to the extent applicable to the relevant financial
statements.

 

“Immaterial Subsidiary” shall mean, at any time, any Restricted Subsidiary of
the Lead Borrower (i) having total assets (as determined in accordance with
GAAP) in an amount of less than 2.5% of Consolidated Total Assets of the Lead
Borrower and its Restricted Subsidiaries, (ii) contributing less than 2.5% to
EBITDA for the Test Period of twelve (12) consecutive fiscal months most
recently ended for which financial statements have been delivered pursuant to
Section 5.04 and (iii) contributing less than 2.5% to consolidated revenues of
the Lead Borrower and its Restricted Subsidiaries for the Test Period of twelve
(12) consecutive fiscal months most recently ended for which financial
statements have been delivered pursuant to Section 5.04; provided, however, that
the total assets (as so determined), EBITDA contribution (as so determined) and
revenue (as so determined) of all Immaterial Subsidiaries shall not exceed 2.5%
of Consolidated Total Assets of the Lead Borrower and its Restricted
Subsidiaries, 2.5% of EBITDA for the relevant period or 2.5% of the consolidated
revenues of the Lead Borrower and its Restricted Subsidiaries for the relevant
period, as the case may be. In the event that total assets of all Immaterial
Subsidiaries exceeds 2.5% of Consolidated Total Assets of the Lead Borrower and
its Restricted Subsidiaries, the total contribution to EBITDA of all Immaterial
Subsidiaries exceeds 2.5% of EBITDA for any relevant Test Period for which
financial statements have been delivered pursuant to Section 5.04 or the total
revenue of all Immaterial Subsidiaries exceeds 2.5% of consolidated revenues of
the Lead Borrower and its Restricted Subsidiaries for any relevant Test Period
for which financial statements have been delivered pursuant to Section 5.04, as
the case may be, (i) such Restricted Subsidiaries shall no longer constitute
Immaterial Subsidiaries to be excluded as Immaterial Subsidiaries until such
2.5% thresholds are met and (ii) to the extent not otherwise excluded as a
Subsidiary Loan Party, shall comply with the Collateral and Guarantee
Requirement.

 

 
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“Increase Date” shall have the meaning assigned to such term in Section 2.22(b).

 

“Increase Loan Lender” shall have the meaning assigned to such term in Section
2.22(b).

 

“Incremental Equivalent Debt” shall have the meaning assigned to such term in
Section 6.01(j).

 

“Incurrence Conditions” shall mean as to any relevant action contemplated in
this Agreement, (i) no Event of Default has then occurred and is continuing or
would result from any action and (ii) (1) the Consolidated Fixed Charge Coverage
Ratio would be at least 1.0 to 1.0 on a Pro Forma Basis for such action and (2)
(I) Availability on a Pro Forma Basis immediately after giving effect to such
action would be greater than the greater of (x) 17.5% of the Line Cap and (y)
$17.5 million and (II) over the 20 consecutive Business Days prior to
consummation of such action, Availability averaged no less than the greater of
(x) 17.5% of the Line Cap and (y) $17.5 million, also on a Pro Forma Basis for
such action.

 

“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 to the
extent the same would appear as a liability on a balance sheet prepared in
accordance with GAAP, (c) all obligations of such person under conditional sale
or other title retention agreements relating to property or assets purchased by
such person, (d) all obligations of such person issued or assumed as the
deferred purchase price of property or services (other than current intercompany
liabilities (but not any refinancings, extensions, renewals or replacements
thereof) incurred in the ordinary course of business and maturing within three
hundred sixty-five (365) days after the incurrence thereof), to the extent that
the same would be required to be shown as a long term liability on a balance
sheet prepared in accordance with GAAP, (e) all Guarantees by such person of
Indebtedness of others, (f) all Capital Lease Obligations of such person, (g)
all payments that such person would have to make in the event of an early
termination, on the date Indebtedness of such person is being determined, in
respect of outstanding Swap Agreements net of payments such person would receive
in the event of early termination on such date of determination, (h) the
principal component of all obligations, contingent or otherwise, of such person
as an account party in respect of letters of credit and (i) the principal
component of all obligations of such person in respect of bankers’ acceptances.
The Indebtedness of any person shall include the Indebtedness of any partnership
in which such person is a general partner, other than to the extent that the
instrument or agreement evidencing such Indebtedness expressly limits the
liability of such person in respect thereof. The Indebtedness of the Lead
Borrower and the Restricted Subsidiaries shall exclude (i) accrued expenses and
accounts and trade payables, (ii) liabilities under vendor agreements to the
extent such indebtedness may be satisfied through non-cash means such as
purchase volume earnings credits and (iii) reserves for deferred income taxes.

 

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

 

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

 

 
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“Information” shall have the meaning assigned to such term in Section 3.14(a).

 

“Insolvency Proceeding” shall mean any case or proceeding commenced by or
against a Person under any state, federal, provincial, territorial or foreign
law for, or any agreement of such Person to, (a) the entry of an order for
relief under the Bankruptcy Code, or any other insolvency, bankruptcy, debtor
relief or debt adjustment law; (b) the appointment of a receiver, interim
receiver, monitor, trustee, liquidator, administrator, conservator, custodian or
other similar Person for such Person or any part of its Property, including, in
the case of any Lender, the Federal Deposit Insurance Corporation or any other
state or federal regulatory authority acting in such capacity; or (c) an
assignment for the benefit of creditors.

 

“Insolvent” with respect to any Multiemployer Plan, shall mean the condition
that such plan is insolvent within the meaning of Section 4245 of ERISA.

 

“Intercompany Note” shall mean the Intercompany Note substantially in the form
of Exhibit H.

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement, in the form of
Exhibit N, among the Administrative Agent and the Term Agent and acknowledged by
the Lead Borrower and the other Loan Parties.

 

“Interest Election Request” shall mean a request by a Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

 

“Interest Expense” shall mean, with respect to any person for any period, the
sum without duplication of (a) gross interest expense of such person for such
period on a consolidated basis, including (i) the amortization of debt
discounts, (ii) the amortization of all fees (including fees with respect to
Swap Agreements) payable in connection with the incurrence of Indebtedness to
the extent included in interest expense and (iii) the portion of any payments or
accruals with respect to Capital Lease Obligations allocable to interest expense
and (b) capitalized interest of such person. For purposes of the foregoing,
gross interest expense shall be determined after giving effect to any net
payments made or received and costs incurred by the Lead Borrower and the
Restricted Subsidiaries with respect to Swap Agreements (provided that payments
and costs upon the settlement or termination of a Swap Agreement will not be
included in Interest Expense).

 

“Interest Payment Date” shall mean, (a) 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 (3) months’ duration, each day that would have been an Interest
Payment Date had successive Interest Periods of three (3) months’ duration been
applicable to such Borrowing and, in addition, the date of any refinancing or
conversion of such Borrowing with or to a Borrowing of a different Type and (b)
with respect to any ABR Loan, the first day of April, July, October and January
of each year.

 

“Interest Period” shall mean, as to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as applicable, and
ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter (or 9 or 12 months, if agreed by all Lenders) or shorter
period, as the Borrower may elect, or the date any Eurodollar Borrowing is
converted to an ABR Borrowing in accordance with Section 2.07 or repaid or
prepaid in accordance with Section 2.08 or Section 2.10; provided, that 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. Interest
shall accrue from and including the first day of an Interest Period to but
excluding the last day of such Interest Period.

 

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

 

“Inventory” shall have the meaning as defined in the UCC including all goods
intended for sale, lease, display or demonstration, all work in process, and all
raw materials, and other materials and supplies of any kind that are or could be
used in connection with the manufacture, printing, packing, shipping,
advertising, sale, lease or furnishing of such goods, or otherwise used or
consumed in a Loan Party’s business (but excluding Equipment).

 

“Inventory Reserve” shall mean a reserve established by the Administrative
Agent, in its Credit Judgment, to reflect factors that may negatively impact the
value of Eligible Inventory.

 

“Investment Conditions” shall mean as to any relevant action contemplated in
this Agreement, (i) no Event of Default has then occurred and is continuing or
would result from any action and (ii) either (A) (1) the Consolidated Fixed
Charge Coverage Ratio would be at least 1.0 to 1.0 on a Pro Forma Basis for such
action and (2) (I) Availability on a Pro Forma Basis immediately after giving
effect to such action would be greater than the greater of (x) 10% of the Line
Cap and (y) $10 million and (II) over the 20 consecutive Business Days prior to
consummation of such action, Availability averaged no less than the greater of
(x) 10% of the Line Cap and (y) $10 million, also on a Pro Forma Basis for such
action or (B) (I) Availability on a Pro Forma Basis immediately after giving
effect to such action would be greater than the greater of (x) 12.5% of the Line
Cap and (y) $12.5 million and (II) over the 20 consecutive Business Days prior
to consummation of such action, Availability averaged no less than the greater
of (x) 12.5% of the Line Cap and (y) $12.5 million, also on a Pro Forma Basis
for such action or (B) (I) Availability on a Pro Forma Basis immediately after
giving effect to such action would be greater than the greater of (x) 25% of the
Line Cap and (y) $25 million and (II) over the 20 consecutive Business Days
prior to consummation of such action, Availability averaged no less than the
greater of (x) 25% of the Line Cap and (y) $25 million, also on a Pro Forma
Basis for such action.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Issuing Bank” shall mean Bank of America or any Affiliate of Bank of America,
any other Lender reasonably acceptable to the Lead Borrower and the
Administrative Agent (such consent not to be unreasonably withheld or delayed by
either party) who agrees to issue Letters of Credit, or any replacement issuer
appointed pursuant to Section 2.19, it being understood that Wells Fargo Bank,
N.A. is an acceptable Issuing Bank.

 

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

 

“Issuing Bank Indemnitees” shall mean the Issuing Bank and its officers,
directors, employees, Affiliates, agents and attorneys.

 

“Joint Lead Arrangers” shall mean Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities LLC and Goldman SachsWells Fargo Bank USA,
N.A.

 

“Joint Venture” shall mean a joint venture or similar arrangement, whether in
corporate, partnership or other legal form which is not a Subsidiary but in
which the Borrower or any Subsidiary owns or controls any Equity Interests;
provided, in no event shall any corporate Subsidiary of any person be considered
to be a Joint Venture to which such person is a party.

 

 
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“Junior Lien Indebtedness” shall mean Indebtedness (other than the Term Loans or
any Replacement Term Loans secured on a pari passu basis with the Term Loans) of
the Borrower or any Restricted Subsidiary that is expressly subordinated, in
writing, in right of security in respect of the Collateral to the Obligations.

 

“LC Application” shall mean an application by the Lead Borrower to the Issuing
Bank for issuance of a Letter of Credit, in form reasonably satisfactory to the
Issuing Bank.

 

“LC Conditions” shall mean the following conditions necessary for issuance of a
Letter of Credit: (a) after giving effect to such issuance, total LC Obligations
do not exceed the Letter of Credit Subline, and, if no Revolver Loans are
outstanding, the LC Obligations do not exceed the Borrowing Base; (b) each
Letter of Credit shall expire not later than the earlier of (i) 365 days from
issuance (or such longer period as may be agreed between the Issuing Bank and
the applicable Borrower) and (ii) the fifth Business Day prior to the Revolver
Termination Date; provided that any Letter of Credit may provide for an
automatic renewal thereof for additional periods of up to 365 days (which in no
event shall extend beyond the date referred to in clause (b)(ii), except to the
extent Cash Collateralized or backstopped pursuant to arrangements reasonably
acceptable to the relevant Issuing Bank); (c) the Letter of Credit and payments
thereunder are denominated in Dollars or the Alternative LC Currency; and (d)
the form of the proposed Letter of Credit is satisfactory to the Administrative
Agent and the Issuing Bank in their reasonable discretion.

 

“LC Documents” shall mean all documents, instruments and agreements (including
LC Requests and LC Applications) delivered by the Borrowers or any other Person
to the Issuing Bank or the Administrative Agent in connection with any Letter of
Credit.

 

“LC Obligations” shall mean the sum (without duplication) of (a) all amounts
owing by the Borrowers for any drawings under Letters of Credit (including any
bankers’ acceptances or other payment obligations arising therefrom); and (b)
the stated amount of all outstanding Letters of Credit.

 

“LC Request” shall mean a request for issuance of a Letter of Credit, to be
provided by the Lead Borrower to the Issuing Bank, in form satisfactory to the
Issuing Bank.

 

“L/C Disbursements” shall mean payments or disbursements made by an Issuing Bank
pursuant to a Letter of Credit.

 

“Lead Borrower” shall have the meaning assigned to such term in the introductory
paragraph.

 

“Lender” shall mean each financial institution listed on Schedule 2.01 (other
than any such person that has ceased to be a party hereto pursuant to an
Assignment and Acceptance in accordance with Section 9.04), as well as any
person that becomes a “Lender” hereunder in accordance with Section 9.04.

 

“Lender Party” shall mean the Administrative Agent, each Issuing Bank, the
Swingline Lender or any other Lender.

 

“Lending Office” shall mean, as to any Lender, the applicable branch, office or
Affiliate of such Lender designated by such Lender to make Loans.

 

“Letter of Credit” shall mean any standby or documentary letter of credit issued
by the Issuing Bank for the account of any Borrower or any of the Borrowers’
Subsidiaries, or any indemnity, guarantee, exposure transmittal memorandum or
similar form of credit support issued by the Administrative Agent or the Issuing
Bank for the benefit of any Borrower or any of the Borrowers’ Subsidiaries.
Letters of Credit may be issued in Dollars or in the Alternative LC Currency.

 

 
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“Letter of Credit Subline” shall mean $25,000,000, which amount shall include
the Alternative Currency Letter of Credit Sublimit.

 

“Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, hypothecation, pledge, encumbrance, charge or security interest in or on
such asset and (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.

 

“Lien Waiver: shall mean an agreement, in form reasonably satisfactory to the
Administrative Agent, by which (a) for any material Collateral located on leased
premises, the lessor waives or subordinates any Lien it may have on the
Collateral, and agrees to permit the Administrative Agent and Term Agent to
enter upon the premises and remove the Collateral or to use the premises to
store the Collateral as permitted hereunder; and (b) for any Collateral held by
a warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents (as defined in the Collateral Agreement) in its possession
relating to the Collateral as agent for the Administrative Agent and Term Agent,
and agrees to deliver the Collateral to the Administrative Agent or Term Agent
upon request, in accordance with such agreement.

 

“Line Cap” shall mean equal to an amount that is the lesser of (a) the aggregate
amount of all Revolver Commitments and (b) the then applicable Borrowing Base.

 

“Liquidity Event” shall mean the occurrence of a date when (a) (x) Availability
plus (y) the amount of Qualified Cash (up to $5,000,000) on such date (but not
to exceed Availability on such date) shall have been less than the greater of
(i) 10% of the Line Cap and (ii) $10,000,000, in either case for five
consecutive Business Days, until such date as (b) (x) Availability plus (y) the
amount of Qualified Cash (up to $5,000,000) on such date (but not to exceed
Availability on such date) shall have been at least equal to the greater of (i)
10% of the Line Cap and (ii) $10,000,000 for 30 consecutive calendar days. It
being understood and agreed that for purposes of this Agreement and the other
Loan Documents, a Liquidity Event shall not be deemed to occur as a result of
the initial Borrowings, if any, on the Closing Date unless and until additional
Borrowings are made and a Liquidity Event subsequently occurs as a result of
such additional Borrowings.

 

“Liquidity Notice” shall mean a written notice delivered by the Administrative
Agent at any time during a Liquidity Period to any bank or other depository at
which any Deposit Account (other than any Excluded Deposit Account) is
maintained directing such bank or other depository (a) to remit all funds in
such Deposit Account to a Dominion Account, or in the case of a Dominion
Account, to the Administrative Agent on a daily basis, and (b) to cease
following directions or instructions given to such bank or other depository by
any Loan Party regarding the disbursement of funds from such Deposit Account
(other than any Excluded Deposit Account), and (c) to follow all directions and
instructions given to such bank or other depository by the Administrative Agent
in each case, pursuant to the terms of any Deposit Account Control Agreement in
place.

 

“Liquidity Period” shall mean any period throughout which (a) a Liquidity Event
has occurred and is continuing or (b) a Specified Event of Default has occurred
and is continuing.

 

 
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“Loan Documents” shall mean this Agreement, the Intercreditor Agreement, any
Supplemental Intercreditor Agreement, the Security Documents, the Fee Letter and
any Note issued under Section 2.09(d) and any amendments (including any
amendments pursuant to Section 2.22, Section 2.23, Section 9.08(d) and Section
9.08(e)) and waivers to any of the foregoing.

 

“Loan Parties” shall mean Holdings, the Borrowers, the Subsidiary Loan Parties
and any Parent Entity, in lieu of Holdings, that has executed and delivered an
assumption agreement in substantially the form of Exhibit D to the Collateral
Agreement and become a “Guarantor” and “Grantor” thereunder.

 

“Local Time” shall mean New York City time.

 

“Management Group” shall mean the group consisting of the directors, officers
and other management personnel of any Parent Entity, the Lead Borrower and the
Restricted Subsidiaries.

 

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

 

“Material Adverse Effect” shall mean a material adverse effect with respect to
(a) the business, assets, financial condition or results of operations, in each
case of Holdings, the Lead Borrower and the Restricted Subsidiaries, taken as a
whole, or (b) the validity or enforceability of the Loan Documents or the rights
or remedies of the Administrative Agent and the Lenders thereunder, in each
case, taken as a whole.

 

“Maturity Date” shall mean May 31, 2018.

 

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

 

“Minimum Extension Condition” shall have the meaning assigned to such term in
Section 2.23(b).

 

“Monthly Reporting Period” shall mean the occurrence of a date when, for a
period of five consecutive Business Days either (x) the sum of outstanding
Revolver Loans and LC Obligations have exceeded $15.0 million or (y),
Availability has been less than $100.0125.0 million, until such date that (x)
the sum of outstanding Revolver Loans and LC Obligations have not exceeded $15.0
million and (y) Availability has not been less than $100.0125.0 million, in each
case, for a period of five consecutive Business Days.

 

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

 

“Mortgaged Properties” shall mean the properties listed on Schedule 5.09 and the
owned real properties of the Loan Parties encumbered by a Mortgage pursuant to
Section 5.09.

 

“Mortgage” shall have the meaning assigned to such term in Section 5.09(c).

 

“Multiemployer Plan” shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or accruing an obligation to make contributions, or has
within any of the preceding six (6) plan years made or accrued an obligation to
make contributions.

 

 
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“Net Income” shall mean, with respect to any person, the net income (loss) of
such person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends.

 

“Net Proceeds” shall mean an amount equal to 100% of the cash proceeds actually
received by any Borrower or any of the Restricted Subsidiaries (including any
cash payments received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable or
otherwise and including casualty insurance settlements and condemnation awards,
but only as and when received) from any loss, damage, destruction or
condemnation of, or any Disposition to any person of any asset or assets of any
Borrower or any Restricted Subsidiary in a single transaction or series of
related transactions, net of (i) attorneys’ fees, accountants’ fees, investment
banking fees, survey costs, title insurance premiums, and related search and
recording charges, transfer taxes, deed or mortgage recording taxes, payments of
debt and other obligations relating to the applicable asset then due and payable
or required to be paid or discharged by the purchaser or transferee of such
asset (other than pursuant hereto or pursuant to any Junior Lien Indebtedness),
other customary expenses and brokerage, consultant and other customary fees and
expenses actually incurred in connection therewith, (ii) Taxes paid or payable
as a result thereof or any Tax Distributions resulting therefrom and (iii) any
reserve for adjustment in respect of (A) the sale price of such asset or assets
established in accordance with GAAP and (B) any liabilities associated with such
asset or assets and retained by such Borrower or such Restricted Subsidiary
after such sale, transfer or other disposition thereof, including pension and
other post-employment benefit obligations associated with such transaction.

 

“Net Proceeds Pledged Account” shall mean a Deposit Account held at, and subject
to the sole dominion and control of, the Term Agent which holds solely proceeds
of Term Priority Collateral pending reinvestment or application to the Term
Facility.

 

“NOLV Percentage” shall mean the net orderly liquidation value of Eligible
Inventory or Eligible In-Transit Inventory, as applicable, expressed as a
percentage, expected to be realized at an orderly, negotiated sale held within a
reasonable period of time, net of all liquidation expenses, as determined from
the most recent appraisal of the Borrowers’ Eligible Inventory or Eligible
In-Transit Inventory performed pursuant to the terms of this Agreement.

 

“Non-Consenting Lender” shall have the meaning assigned to such term in Section
2.19(c).

 

“Nonpublic Information” shall mean information which has not been disseminated
in a manner making it available to investors generally, within the meaning of
Regulation FD.

 

“Note” shall have the meaning assigned to such term in Section 2.09(d).

 

“Noticed Hedge” shall mean Secured Bank Product Obligations arising under a Swap
Agreement, in respect of which the notice delivered to the Administrative Agent
by the applicable Secured Bank Product Provider and the applicable Borrower (as
required under the definition of “Secured Bank Product Provider”) confirms that
such Swap Agreement shall be deemed a “Noticed Hedge” hereunder for all
purposes, including the application of Availability Reserves and Section 7.02,
so long as no Overadvance would result from establishment of a Bank Product
Reserve with respect to such Swap Agreement; provided that, if the amount of
Secured Bank Product Obligations arising under such Swap Agreement is increased
in accordance with the definition of “Secured Bank Product Obligations”, then
such Secured Bank Product Obligations shall only constitute a Noticed Hedge to
the extent that a Bank Product Reserve can be established with respect to such
Swap Agreement without resulting in an Overadvance.

 

 
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“Obligations” shall mean for purposes of the Loan Documents, all obligations of
every nature of each Loan Party from time to time owed to the Agents (including
former Agents) or the Lenders, under any Loan Document, whether for principal,
interest (including interest which, but for the filing of a petition in
bankruptcy with respect to such Loan Party, would have accrued on any such
Obligation, whether or not a claim is allowed against such Loan Party for such
interest in the related bankruptcy proceeding), LC Obligations, fees, expenses,
indemnification or otherwise. For the avoidance of doubt, Revolver Loans made
pursuant to any Revolver Commitment Increases incurred under Section 2.22 shall
constitute Obligations.

 

“OFAC” shall mean the Office of Foreign Assets Control of the United States
Department of the Treasury.

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, the Loan Documents, and any and all interest
and penalties related thereto.

 

“Overadvance” shall have the meaning of such term assigned to such term in
Section 2.24.

 

“Overadvance Loan” shall mean a ABR Loan made when an Overadvance exists or is
caused by the funding thereof.

 

“Parent” shall mean Generac Holdings Inc.

 

“Parent Entity” shall mean any of (i) Holdings and (ii) any other person of
which Holdings is a Subsidiary.

 

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

 

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

 

“Payment Conditions” shall mean as to any relevant action contemplated in this
Agreement, (i) no Event of Default has then occurred and is continuing or would
result from any action and (ii) either (A) (1) the Consolidated Fixed Charge
Coverage Ratio would be at least 1.0 to 1.0 on a Pro Forma Basis for such action
and (2) (I) Availability on a Pro Forma Basis immediately after giving effect to
such action would be greater than the greater of (x) 17.512.5% of the Line Cap
and (y) $17.512.5 million and (II) over the 20 consecutive Business Days prior
to consummation of such action, Availability averaged no less than the greater
of (x) 17.512.5% of the Line Cap and (y) $17.512.5 million, also on a Pro Forma
Basis for such action or (B) (I) Availability on a Pro Forma Basis immediately
after giving effect to such action would be greater than the greater of (x) 30%
of the Line Cap and (y) $3017.5% of the Line Cap and (y) $17.5 million and (II)
over the 20 consecutive Business Days prior to consummation of such action,
Availability averaged no less than the greater of (x) 30% of the Line Cap and
(y) $3017.5% of the Line Cap and (y) $17.5 million, also on a Pro Forma Basis
for such action.

 

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

 

 
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“Permitted Business Acquisition” shall mean any acquisition by a Borrower or any
Restricted Subsidiary of all or substantially all of the assets of, or a
majority of the outstanding Equity Interests (other than directors’ qualifying
shares and similar de minimis holdings required by applicable law in, a person
or division or line of business of a person (but in any event including any
Investment in a Subsidiary which serves to increase such Borrower’s or any
Restricted Subsidiary’s respective equity ownership in such Subsidiary),
provided that: (i) on the date of execution of the purchase agreement in respect
of such acquisition, no Event of Default shall have occurred and be continuing
or would result therefrom; (ii) if the aggregate cash consideration to be paid
by such Borrower or any Restricted Subsidiary exceeds $10.0 million, such
Borrower shall have delivered to the Administrative Agent at least five (5) days
prior to such acquisition a certificate of a Responsible Officer of such
Borrower to such effect, together with all financial information for such
Subsidiary or assets that is reasonably requested by the Administrative Agent
and available to such Borrower, (iii) if (with respect to any acquisition of a
person or any Equity Interests in a person) the acquired person shall not become
a Subsidiary Loan Party or (with respect to any acquisition of assets) the
assets shall be acquired by a Subsidiary that is not a Subsidiary Loan Party,
the aggregate amount of cash or property in connection with such acquisition
shall not exceed $50.0150.0 million plus amounts permitted by Sections 6.04(q),
(r), (t), or (v) (and, without duplication, clause (v) to the extent made with
an Investment pursuant to Sections 6.04(q), (r), or (t)) and (iv) the Investment
Conditions shall be satisfied on a Pro Forma Basis for such Permitted Business
Acquisition.

 

“Permitted Debt Securities” shall mean unsecured Indebtedness of a Borrower or
any Restricted Subsidiary, (i) that is expressly subordinated to the prior
payment in full of the Obligations pursuant to provisions substantially similar
to those set forth in Exhibit G or otherwise on terms reasonably satisfactory to
the Administrative Agent (it being understood that customary high yield
subordination terms prevailing at the time of determination shall be deemed to
be so satisfactory), (ii) the terms of which do not provide for any scheduled
repayment, mandatory redemption (other than pursuant to customary provisions
relating to redemption or repurchase upon change of control or sale of assets)
or sinking fund obligation prior to the date that is, at the time of issuance of
such Indebtedness, ninety-one (91) days after the Revolver Termination Date,
(iii) in the case of Indebtedness with an outstanding principal amount in excess
of $35.0 million, the covenants, events of default, and remedy provisions of
which, taken as a whole, are not materially more restrictive to, or the
mandatory repurchase or redemption provisions thereof are not materially more
onerous or expansive in scope, taken as a whole, on, the Borrowers and the
Restricted Subsidiaries than the terms of the Loan Documents in the good faith
determination of the Lead Borrower and (iv) in respect of which no Subsidiary of
any Borrower that is not an obligor under the Loan Documents is an obligor.

 

“Permitted Investments” shall mean:

 

(a)     direct obligations of the United States of America or any member of the
European Union or any agency thereof or obligations guaranteed by the United
States of America or any member of the European Union or any agency thereof, in
each case with maturities not exceeding two (2) years;

 

(b)     time deposit accounts, certificates of deposit and money market deposits
maturing within one hundred eighty (180) days of the date of acquisition thereof
issued by a bank or trust company that is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by the
United States of America having capital, surplus and undivided profits in excess
of $250.0 million and whose long-term debt, or whose parent holding company’s
long-term debt, is rated A (or such similar equivalent rating or higher by at
least one (1) nationally recognized statistical rating organization (as defined
in Rule 436 under the Securities Act);

 

 
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(c)     repurchase obligations with a term of not more than one hundred eighty
(180) days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above;

 

(d)     commercial paper, maturing not more than one (1) year after the date of
acquisition, issued by a corporation organized and in existence under the laws
of the United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment therein
is made of P-2 (or higher) according to Moody’s, or A-1 (or higher) according to
S&P;

 

(e)     securities with maturities of two (2) years or less from the date of
acquisition issued or fully guaranteed by any State, commonwealth or territory
of the United States of America, or by any political subdivision or taxing
authority thereof, and rated at least A by S&P or A by Moody’s;

 

(f)     shares of mutual funds whose investment guidelines restrict 95% of such
funds’ investments to those satisfying the provisions of clauses (a) through (e)
above;

 

(g)     money market funds that (i) comply with the criteria set forth in Rule
2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa
by Moody’s and (iii) have portfolio assets of at least $5.0 billion; and

 

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

 

“Permitted Investors” shall mean (a) the Sponsors and (b) the members of the
Management Group.

 

“Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund (collectively, to “Refinance”), the Indebtedness
being Refinanced (or previous refinancings thereof constituting Permitted
Refinancing Indebtedness); provided that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the Indebtedness so
Refinanced (plus unpaid accrued interest and premium thereon, any committed or
undrawn amounts and underwriting discounts, fees, commissions and expenses,
associated with such Permitted Refinancing Indebtedness), except as otherwise
permitted under Section 6.01, (b) other than with respect to Indebtedness
permitted pursuant to Section 6.01(h), Section 6.01(i) and Section 6.01(q), such
Permitted Refinancing Indebtedness has a final maturity date equal to or later
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced, (c) other than in respect of Indebtedness
permitted by Section 6.01(a), Section 6.01(o), Section 6.01(y) and Section
6.01(aa), if the Indebtedness being Refinanced is by its terms subordinated in
right of payment to the Obligations under this Agreement, such Permitted
Refinancing Indebtedness shall be subordinated in right of payment to such
Obligations on terms not materially less favorable to the Lenders as those
contained in the documentation governing the Indebtedness being Refinanced,
taken as a whole, (d) no Permitted Refinancing Indebtedness shall have obligors
or contingent obligors that were not obligors or contingent obligors (or that
would not have been required to become obligors or contingent obligors) in
respect of the Indebtedness being Refinanced except to the extent otherwise
permitted under Section 6.01 or Section 6.04 and (e) if the Indebtedness being
Refinanced is (or would have been required to be) secured with the Current Asset
Collateral, such Permitted Refinancing Indebtedness shall be either secured on a
pari passu basis with the Term Facility Debt and subject to the Intercreditor
Agreement or secured on a junior basis with respect to the Current Asset
Collateral pursuant to an intercreditor arrangement reasonably satisfactory to
the Administrative Agent; and provided further, that, except as otherwise
provided herein, with respect to a Refinancing of Permitted Debt Securities such
Permitted Refinancing Indebtedness shall meet the requirements of clauses (i),
(ii), (iii) and (iv) of the definition of “Permitted Debt Securities”.

 

 
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“person” shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company,
individual or family trust, or other organization (whether or not a legal
entity), or any government or any agency or political subdivision thereof.

 

“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 Code
or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4062 or
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

 

“Platform” shall have the meaning assigned to such term in Section 5.14.

 

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

 

“primary obligor” shall have the meaning assigned to such term in the definition
of the term “Guarantee.”

 

“Prime Rate” shall have the meaning assigned to such term in the definition of
the term “ABR.”

 

 
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“Pro Forma Basis” shall mean, as to any calculation of the Consolidated Fixed
Charge Coverage Ratio and Consolidated Total Assets for any events as described
below that occur subsequent to the commencement of any period of four (4)
consecutive quarters (the “Reference Period”) for which the financial effect of
such events is being calculated, and giving effect to the events for which such
calculation is being made, such calculation as will give pro forma effect to
such events as if such events occurred on the first day of the Reference Period
or in the case of Consolidated Total Assets, after giving effect thereto (it
being understood and agreed that (x) unless otherwise specified, such Reference
Period shall be deemed to be the four (4) consecutive fiscal quarters ending on
the last day of the most recently ended fiscal quarter of the Lead Borrower and
its Subsidiaries for which financial statements are available and such pro forma
adjustments shall be excluded to the extent already accounted for in the
calculation of EBITDA for such period and (y) if any person that became a
Restricted Subsidiary or was merged, amalgamated or consolidated with or into
the Lead Borrower or any Restricted Subsidiary shall have experienced any event
requiring adjustments pursuant to this definition, then such calculation shall
give pro forma effect thereto for such period as if such event occurred at the
beginning of such period): (i) in making any determination of EBITDA, pro forma
effect shall be given to any asset disposition of a Restricted Subsidiary,
manufacturing facility or line of business, to any asset acquisition, any
discontinued operation or any operational change and any Subsidiary
Redesignation in each case that occurred during the Reference Period (or, in the
case of determinations made with respect to any action the taking of which
hereunder is subject to compliance on a Pro Forma Basis or otherwise with the
Consolidated Fixed Charge Coverage Ratio (any such action, a “Restricted
Action”) occurring during the Reference Period or thereafter and through and
including the date of such determination) and (ii) in making any determination
on a Pro Forma Basis, (x) all Indebtedness (including Indebtedness incurred or
assumed and for which the financial effect is being calculated, whether incurred
under this Agreement or otherwise, but excluding normal fluctuations in
revolving Indebtedness incurred for working capital purposes) incurred or
permanently repaid, returned, redeemed or extinguished during the Reference
Period (or, in the case of determinations made with respect to any Restricted
Action, occurring during the Reference Period or thereafter and through and
including the date of such determination) shall be deemed to have been incurred
or repaid, returned, redeemed or extinguished at the beginning of such period
(it being understood that for purposes of any calculation of the Consolidated
Fixed Charge Coverage Ratio and Consolidated Total Assets, the use of proceeds
of any such Indebtedness shall be taken into account in such calculation) and
(y) Interest Expense of such person attributable to (A) interest on any
Indebtedness, for which pro forma effect is being given as provided in the
preceding clause (x), bearing floating interest rates shall be computed on a pro
forma basis utilizing the rate which is or would be in effect with respect to
such Indebtedness as at the relevant date of determination as if such rate had
been actually in effect during the period for which pro forma effect is being
given taking into account any interest hedging arrangements applicable to such
Indebtedness, (B) any Capital Lease Obligation shall be deemed to accrue at an
interest rate reasonably determined by a Responsible Officer of the Lead
Borrower to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP and (C) interest on any Indebtedness that may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rate, shall be determined to have
been based upon the rate actually chosen, or if none, then based upon such
optional rate chosen as the Lead Borrower or Restricted Subsidiary may
designate.

 

Pro forma calculations made pursuant to the definition of the term “Pro Forma
Basis” shall be determined in good faith by a Responsible Officer of the Lead
Borrower and, for any fiscal period ending on or prior to the first anniversary
of any such asset acquisition, asset disposition, discontinued operation or
operational change, Subsidiary Redesignation or Unrestricted Subsidiary
Designation, may include adjustments to reflect operating expense reductions and
other operating improvements or synergies reasonably expected to result from
such asset acquisition, asset disposition, discontinued operation, operational
change, or Subsidiary Redesignation and for purposes of determining compliance
with the Consolidated Fixed Charge Coverage Ratio such adjustments may reflect
additional operating expense reductions and other additional operating
improvements and synergies that (x) would be includable in pro forma financial
statements prepared in accordance with Regulation S-X and (y) such other
adjustments not includable in Regulation S-X under the Securities Act for which
substantially all of the steps necessary for the realization thereof have been
taken or are reasonably anticipated by the Lead Borrower to be taken in the next
twelve (12)-month period following the consummation thereof and, are estimated
on a good faith basis by the Lead Borrower; provided, however that the aggregate
amount of any such adjustments pursuant to clause (y) shall not exceed (together
with the aggregate add back to EBITDA pursuant to clause (a)(iv) thereof with
respect to the applicable four (4) fiscal quarter period) 20% of the EBITDA (or
25% in the case of any Permitted Business Acquisitions (it being understood that
any such add backs or adjustments in excess of the 20% threshold shall solely
relate to Permitted Business Acquisitions)) of the Lead Borrower and the
Restricted Subsidiaries for any four (4) fiscal quarter period (prior to giving
effect to any add back pursuant to clause (a)(iv) thereof). The Lead Borrower
shall deliver to the Administrative Agent a certificate of a Responsible Officer
of the Lead Borrower setting forth such demonstrable or additional operating
expense reductions and other operating improvements or synergies and information
and calculations supporting them in reasonable detail.

 

“Pro Rata” shall mean with respect to any Lender, a percentage (rounded to the
ninth decimal place) determined (a) while Revolver Commitments are outstanding,
by dividing the amount of such Lender’s Revolver Commitment by the aggregate
amount of all Revolver Commitments; and (b) at any other time, by dividing the
amount of such Lender’s Revolver Loans and LC Obligations by the aggregate
amount of all outstanding Revolver Loans and LC Obligations.

 

 
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“Prohibited Transaction” shall have the meaning assigned to such term in Section
406 of ERISA and/or Section 4975(c) of the Code.

 

“Projections” shall mean the projections of Holdings, the Borrowers and their
Subsidiaries provided to the Administrative Agent prior to the Closing Date.

 

“Protective Advance” shall mean as defined in Section 2.25.

 

“Qualified Capital Stock” shall mean any Equity Interest of any person that does
not by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable or exercisable) or upon the happening of any
event (a) provide for scheduled payments of dividends in cash (other than at the
option of the issuer) prior to the date that is, at the time of issuance of such
Equity Interest, ninety-one (91) days after the Revolver Termination Date, (b)
become mandatorily redeemable at the option of the holder thereof (other than
for Qualified Capital Stock or pursuant to customary provisions relating to
redemption upon a change of control or sale of assets) pursuant to a sinking
fund obligation or otherwise prior to the date that is, at the time of issuance
of such Equity Interest, ninety-one (91) days after the Revolver Termination
Date or (c) become convertible or exchangeable at the option of the holder
thereof for Indebtedness or Equity Interests that are not Qualified Capital
Stock; provided further, that if any such Equity Interest is issued pursuant to
a plan for the benefit of the employees, directors, officers, managers or
consultants of Holdings (or any Parent Entity thereof), any Borrower or its
Subsidiaries or by any such plan to such persons, such Equity Interest shall not
be regarded as an Equity Interest not constituting Qualified Capital Stock
solely because it may be required to be repurchased by Holdings (any Parent
Entity), a Borrower or its Subsidiaries in order to satisfy applicable
regulatory obligations.

 

“Qualified Cash” shall mean cash and Permitted Investments of the Lead Borrower
and the Restricted Subsidiaries that (i) are subject to Deposit Account Control
Agreements in form and substance reasonably satisfactory to the Administrative
Agent (which will not prohibit withdrawal of such funds by the Lead Borrower or
such Restricted Subsidiaries in the absence of an Event of Default), (ii) do not
include customer deposits or unapplied cash and (iii) do not otherwise
constitute proceeds from the Disposition of any Current Asset Collateral, in the
case of clauses (ii) or (iii), only to the extent the assets giving rise to such
customer deposits, unapplied cash or proceeds, as the case may be, are at that
time included in the calculation of the Borrowing Base for purposes of
calculating Availability in connection with the FCCR Test Amount or determining
whether a Liquidity Event has occurred.

 

“Receivables Facility” means any of one or more receivables financing facilities
as amended, supplemented, modified, extended, renewed, restated or refunded from
time to time, the obligations of which are non-recourse (except for Standard
Receivables Undertakings) to any Borrower or any of the Restricted Subsidiaries
(other than a Special Purpose Subsidiary) pursuant to which a Borrower or any of
the Restricted Subsidiaries sells their accounts receivable to either (a) a
Person that is not a Restricted Subsidiary or (b) a Special Purpose Subsidiary
that in turn sells its accounts receivable to a Person that is not a Restricted
Subsidiary; provided that any accounts receivable sold in connection with a
Receivables Facility shall (i) be owed by an Account Debtor that is not
organized under the laws of the United States or any state thereof and (ii) not
otherwise constitute Eligible Accounts; provided further that any such
Receivables Facility shall be on customary terms and conditions for receivables
financings of this type.

 

“Receivables Fees” shall mean customary distributions or payments made directly
or by means of discounts with respect to any accounts receivable or
participation interest therein issue or sold in connection with, and any other
customary fees paid to a Person that is not a Restricted Subsidiary in
connection with any Receivables Facility permitted by Section 6.01(z).

 

 
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“Reference Period” shall have the meaning assigned to such term in the
definition of the term “Pro Forma Basis.”

 

“Refinance” shall have the meaning assigned to such term in the definition of
the term “Permitted Refinancing Indebtedness,” and “Refinanced” shall have a
meaning correlative thereto.

 

“Refunding Capital Stock” shall have the meaning assigned to such term in
Section 6.06(l).

 

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

 

“Regulation FD” shall mean Regulation FD as promulgated by the U.S. Securities
and Exchange Commission under the Securities Act and Exchange Act as in effect
from time to time.

 

“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 person (other than a
natural person) that is engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the ordinary
course of its activities and is administered, advised or managed by (i) such
Lender, (ii) an Affiliate of such Lender or (iii) an entity or an Affiliate of
an entity that administers, advises or manages such Lender.

 

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

 

“Release” shall mean any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, emanating or migrating in, into, onto or through the environment.

 

“Rent and Charges Reserve” shall mean the aggregate of (a) all past due rent and
other amounts due and owing by a Loan Party to any landlord, warehouseman,
processor, repairman, mechanic, shipper, freight forwarder, broker or other
Person who possesses any Eligible Inventory and could legally assert a Lien on
any Inventory; and (b) a reserve at least equal to three months’ rent and other
periodic charges that would reasonably be expected to be payable to any such
Person, unless it has executed a Lien Waiver, in each case, excluding any
amounts being disputed in good faith.

 

“Reorganization” shall mean, with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

 

“Report” shall have the meaning assigned to such term in Section 8.02(b).

 

“Replacement Term Loans” shall mean any indebtedness or other financial
accommodation that has been incurred to extend, increase, renew, refund, replace
(whether upon or after termination or otherwise) or refinance (including by
means of issuances of debt securities) in whole or in part from time to time
indebtedness and other obligations under the Term Facility in accordance with
the terms thereof.

 

 
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“Reportable Event” shall mean any reportable event as defined in Section 4043(c)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by an ERISA Affiliate that is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the Code), other than
those events as to which the thirty (30)-day notice period referred to in
Section 4043(c) of ERISA has been waived.

 

“Required Lenders” shall mean, at any time, the Lenders holding more than 50% of
the aggregate amount of Revolver Commitments and Revolver Loans outstanding at
any time; provided, however the Revolver Commitments and Revolver Loans of any
Defaulting Lender shall be excluded from such calculation.

 

“Reserve Percentage” shall mean the reserve percentage (expressed as a decimal,
rounded up to the nearest 1/8th of 1%) applicable to member banks under
regulations issued from time to time by the Board of Governors for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as “Eurocurrency liabilities”).

 

“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 Action” shall have the meaning assigned to such term in the
definition of “Pro Forma Basis.”

 

“Restricted Debt Payment” shall have the meaning assigned to such term in
Section 6.09(b).

 

“Restricted Payments” shall have the meaning assigned to such term in Section
6.06.

 

“Restricted Subsidiary” shall mean each Subsidiary of the Lead Borrower that is
not an Unrestricted Subsidiary.

 

“Revaluation Date” means with respect to any Letter of Credit, each of the
following: (i) each date of issuance of a Letter of Credit denominated in an
Alternative LC Currency, (ii) each date of an amendment of any such Letter of
Credit having the effect of increasing the amount thereof (solely with respect
to the increased amount), (iii) each date of any payment by the Issuing Bank
under any Letter of Credit denominated in an Alternative LC Currency, and (iv)
such additional dates as the Administrative Agent or the Issuing Bank shall
reasonably determine or the Required Lenders shall reasonably require.

 

“Revolver Commitment” shall mean for any Lender, its obligation to make Revolver
Loans and to participate in LC Obligations up to the maximum principal amount
shown on Schedule 2.01, as hereafter modified pursuant to an Assignment and
Acceptance to which it is a party. “Revolver Commitments” means the aggregate
amount of such commitments of all Lenders.

 

“Revolver Commitment Increase” shall have the meaning assigned to such term in
Section 2.22(a).

 

“Revolver Commitment Increase Notice” shall have the meaning assigned to such
term in Section 2.22(b).

 

 
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“Revolver Facility” shall mean the Revolver Commitments and the Revolver Loans
made hereunder.

 

“Revolver Loans” shall mean a loan made pursuant to Section 2.01, including,
without duplication, any Swingline Loan (to the extent the context so requires
the same), Overadvance Loan and Extended Revolver Loan.

 

“Revolver Termination Date” shall mean the date that is five years after the
Closing Date,May 29, 2020, or, with respect to any Extended Revolving Commitment
or Extended Revolving Loan, the date agreed to in the applicable Extension
pursuant to Section 2.23, or, with respect to any Revolver Commitment Increase
or any Revolver Loan made pursuant thereto, the date agreed to pursuant to
Section 2.22.2.22; provided that the Revolver Termination Date shall be March 1,
2020 if the Term Loans have not been repaid, refinanced, redeemed or otherwise
defeased or discharged prior to such date.

 

“Revolving Facility Percentage” shall mean, with respect to any Lender, the
percentage of the total Revolver Commitments represented by such Lender’s
Revolver Commitment. If the Revolver Commitments have terminated or expired, the
Revolving Facility Percentages shall be determined based upon the Revolver
Commitments most recently in effect, giving effect to any assignments pursuant
to Section 9.04.

 

“Revolving Priority Collateral” shall have the meaning assigned to such term in
the Intercreditor Agreement.

 

“S&P” shall mean Standard & Poor’s Financial Services LLC.

 

“Sale and Lease-Back Transaction” shall have the meaning assigned to such term
in Section 6.03.

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Secured Bank Product Obligations” shall mean Bank Product Debt, including,
without limitation, the Bank Product Debt set forth in Schedule 1.01(a) as of
the date hereof, owing to a Secured Bank Product Provider, up to the maximum
amount (in the case of any Secured Bank Product Provider other than Bank of
America and its Affiliates so long as Bank of America is the Administrative
Agent) reasonably specified by such provider in writing to the Administrative
Agent, which amount may be established or increased (by further written notice
to the Administrative Agent from time to time) as long as no Default or Event of
Default exists.

 

“Secured Bank Product Provider” shall mean (a) Bank of America or any of its
Affiliates; and (b) any other Lender or Affiliate of a Lender that is providing
a Bank Product (provided such provider delivers written notice to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, which has been countersigned by the Lead Borrower to
designate such Bank Product as a Secured Bank Product Obligation, (i) describing
the Bank Product and setting forth the maximum amount to be secured by the
Collateral and the methodology to be used in calculating such amount, and (ii)
agreeing to be bound by Section 8.12).

 

“Secured Obligations” shall mean the Obligations and the Secured Bank Product
Obligations.

 

“Secured Parties” shall mean the “Secured Parties” as defined in the Collateral
Agreement.

 

 
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“Securities Act” shall mean the Securities Act of 1933.

 

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

 

“Settlement Report” shall mean a report summarizing Revolver Loans and
participations in LC Obligations outstanding as of a given settlement date,
allocated to the Lenders on a Pro Rata basis in accordance with their Revolver
Commitments.

 

“Special Purpose Subsidiary” shall mean a Restricted Subsidiary (other than a
Borrower) that (a) is engaged solely in (x) the business of acquiring, selling,
collecting, financing or refinancing receivables (including any thereof
constituting or evidenced by chattel paper, instruments or general intangibles),
accounts (as defined in the Uniform Commercial Code as in effect in any
jurisdiction from time to time) and other accounts, all proceeds thereof and all
rights (contractual and other), collateral and other assets relating thereto and
(y) any business or activities incidental or related to such business, in each
case permitted by this Agreement and (b) is designated as a “Special Purpose
Subsidiary” by a Borrower.

 

“Specified Event of Default” shall mean any Event of Default arising under
Section 7.01(b), (c), (d) (solely relating to a failure to comply with Section
5.12(c)), (h) (with respect to the Lead Borrower only), (i) (with respect to the
Lead Borrower only), (e)(i) and (e)(ii) (solely relating to a failure to comply
with clause (j) of the definition of “Collateral and Guarantee Requirement”).

 

“Sponsors” shall mean CCMP and its Affiliates.

 

“Spot Rate” shall mean for any currency the rate determined by the Issuing Bank
to be the rate quoted by the Person acting in such capacity as the spot rate for
the purchase by such Person of such currency with another currency through its
principal foreign exchange trading office at approximately 11:00 a.m. on the
date two Business Days prior to the date as of which the foreign exchange
computation is made; provided that the Issuing Bank may obtain such spot rate
from another financial institution designated by the Administrative Agent or the
Issuing Bank if the Person acting in such capacity does not have as of the date
of determination a spot buying rate for any such currency; and provided further
that the Issuing Bank may use such spot rate quoted on the date as of which the
foreign exchange computation is made in the case of any Letter of Credit
denominated in an Alternative LC Currency.

 

“Subordinated Indebtedness” shall mean any Indebtedness of a Borrower or any
Restricted Subsidiary that is expressly subordinated in right of payment to the
Obligations.

 

“Subordinated Intercompany Debt” shall have the meaning assigned to such term in
Section 6.01(d).

 

“Subsidiary” shall mean, with respect to any person (herein referred to as the
“parent”), any corporation, partnership, association or other business entity of
which securities or other ownership interests representing more than 50% of the
ordinary voting power or more than 50% of the partnership interests are, at the
time any determination is being made, directly or indirectly, owned, Controlled
or held by the parent.

 

“Subsidiary Loan Party” shall mean each Restricted Subsidiary that is a Wholly
Owned Subsidiary of the Lead Borrower, other than (a) any Foreign Subsidiary of
the Lead Borrower, (b) any Subsidiary of a Foreign Subsidiary, (c) any
Unrestricted Subsidiary, (d) any Immaterial Subsidiary or (e) any Excluded
Subsidiary.

 

 
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“Subsidiary Redesignation” shall have the meaning provided in the definition of
“Unrestricted Subsidiary” contained in this Section 1.01.

 

“Supermajority Lenders” shall mean the Lenders holding more than 66⅔% of the
aggregate amount of Revolver Commitments and Revolver Loans outstanding at any
time; provided, however the Revolver Commitments and Revolver Loans of any
Defaulting Lender shall be excluded from such calculation.

 

“Supplemental Intercreditor Agreement” shall mean any intercreditor agreement
entered into after the Closing Date by the Administrative Agent with respect to
the Collateral.

 

“Swap” shall mean any agreement, contract, or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swap 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 (1) or more rates, currencies, 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 that no phantom
stock or other employee benefit plan providing for payments only on account of
services provided by current or former directors, officers, employees, members
of management or consultants of Holdings, a Borrower or any of their
Subsidiaries shall be a Swap Agreement.

 

“Swap Obligation” shall mean, with respect to any person, any obligation to pay
or perform under any Swap.

 

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

 

“Swingline Lender” shall mean any Lender who advances a Swingline Loan to any
Borrower.

 

“Swingline Loan” shall mean any Borrowing of ABR Loans funded with the
Administrative Agent’s or any other Swingline Lender’s funds, until such
Borrowing is settled among the Lenders or repaid by the Borrowers.

 

“Syndication AgentsAgent” shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.

 

“Tax Distribution” shall have the meaning assigned to such term in Section
6.06(f).

 

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties
(including stamp duties), deductions, charges (including ad valorem charges) or
withholdings imposed by any Governmental Authority and any and all interest and
penalties related thereto.

 

“Tax Sharing Agreement” shall mean the Tax Sharing Agreement dated as of
November 10, 2006 among the Lead Borrower and GPS CCMP Acquisition Corp.

 

 
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“Term Agent” shall mean JPMorgan Chase Bank, N.A., in its capacity as
administrative agent and collateral agent under the Term Documents, or any
successor administrative agent or collateral agent under the Term Documents.

 

“Term Documents” shall mean the Term Facility, any guarantees issued thereunder
and the collateral and security documents (and intercreditor agreements) entered
into in connection therewith.

 

“Term Facility” shall mean the Credit Agreement entered into as of the Closing
Date by and among the Lead Borrower, Holdings, the lenders party thereto in
their capacities as lenders thereunder, the Term Agent, the other agents and
parties party thereto from time to time.

 

“Term Facility Debt” shall mean Indebtedness in respect of the Term Facility.

 

“Term Loans” shall mean the term loans borrowed under the Term Facility.

 

“Term Priority Collateral” shall have the meaning assigned to such term in the
Intercreditor Agreement.

 

“Test Period” shall mean, on any date of determination, the period of four (4)
consecutive fiscal quarters (taken as one (1) accounting period) of the Lead
Borrower then most recently ended for which financial statements are available.

 

“Transaction Costs” shall mean fees and expenses payable or otherwise borne by
Holdings, any other Parent Entity, the Borrowers and their Subsidiaries in
connection with the Transactions occurring on or about the Closing Date.

 

“Transactions” shall mean, collectively, (a) the transactions to occur pursuant
to the Loan Documents, including (i) the execution and delivery of the Loan
Documents and the initial borrowings hereunder, (ii) the repayment of the
Existing Debt (as defined in the Term Facility) and (iii) the making of
Amendment No. 1 Effective Date Dividend and (b) the execution and delivery of
the Term Documents.

 

“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
Eurodollar Rate and the ABR.

 

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

 

“Unrestricted Subsidiary” shall mean any Subsidiary of the Lead Borrower
designated by the Lead Borrower as an Unrestricted Subsidiary hereunder by
written notice to the Administrative Agent; provided that the Lead Borrower
shall only be permitted to so designate an Unrestricted Subsidiary (each an
“Unrestricted Subsidiary Designation”) so long as (a) as of the date of such
designation, no Default or Event of Default exists or would result therefrom,
(b) as of the date of such designation, the designation of such Unrestricted
Subsidiary shall comply with Section 6.04, with the amount of the fair market
value of any assets owned by such Unrestricted Subsidiary and any of its
Subsidiaries at the time of the designation thereof being deemed an Investment
pursuant to Section 6.04 (as reasonably determined by the Lead Borrower in good
faith), (c) after giving effect to the respective Unrestricted Subsidiary
Designation, Availability shall not be less than 15% of the Line Cap and (d) as
of the date of such designation, the Lead Borrower shall have delivered to the
Administrative Agent an officer’s certificate executed by a Responsible Officer
of the Lead Borrower, certifying to such officer’s knowledge, compliance with
the requirements of preceding clauses (a) through (c), inclusive, and containing
the calculations required by the preceding clause (c). The Lead Borrower may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes
of the credit documentation (each, a “Subsidiary Redesignation”); provided that
(i) no Default or Event of Default then exists or would occur as a consequence
of any such Subsidiary Redesignation (including, but not limited to, under
Sections 6.01 and 6.02), (ii) after giving effect to the respective Subsidiary
Redesignation, Availability shall not be less than 15% of the Line Cap, (iii)
treating such Subsidiary Redesignation as a contribution to the Lead Borrower of
an amount equal to the fair market value of such Unrestricted Subsidiary (as
reasonably determined by the Lead Borrower in good faith) and (iv) the Lead
Borrower shall have delivered to the Administrative Agent an officer’s
certificate executed by a Responsible Officer of the Lead Borrower, certifying
to such officer’s knowledge, compliance with the requirements of preceding
clauses (i) through (iii), inclusive and containing the calculations required by
the preceding clause (ii).

 

 
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“Unrestricted Subsidiary Designation” shall have the meaning assigned thereto in
the definition of “Unrestricted Subsidiary.”

 

“Unused Line Fee Rate” shall mean (i) initially, 0.50% per annum on the average
daily unused Availability, calculated based upon the actual number of days
elapsed over a 360-day year payable quarterly in arrears and (ii) from and after
the delivery by the Lead Borrower to the Administrative Agent of the Borrowing
Base Certificate for the first full fiscal quarter completed after the Closing
Date, determined by reference to the following grid on a per annum basis based
on the Average Usage as a percentage of the Revolver Commitments during the
immediately preceding fiscal quarter:

 

Average Usage

Unused Line Fee Rate

< 50%

0.500.375%

≥ 50%

0.3750.25%

 

“U.S. Person” shall mean any person that is a “United States Person” as defined
in Section 7701(a)(30) of the Code.

 

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Adequate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title
III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

 

“Warranty Claim Reserve” represents 3 months of the current liability accrual
for warranty claims incurred according to GAAP.

 

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

 

“Wholly Owned Subsidiary” of any person shall mean a subsidiary of such person,
all of the outstanding Equity Interests of which (other than directors’
qualifying shares or nominee or other similar shares (including shares issued to
foreign nationals) required pursuant to applicable law) are owned by such person
or another Wholly Owned Subsidiary of such person.

 

“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.

 

 
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“Yen” and “¥” mean the lawful currency of Japan.

 

SECTION 1.02.       Terms Generally.

 

(a)     The definitions set forth or referred to in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. The words
“herein,” “hereto,” “hereof” and “hereunder” and words of similar import when
used in any Loan Document shall refer to such Loan Document as a whole and not
to any particular provision thereof. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation.” All references herein to Articles, Sections,
Exhibits and Schedules shall be deemed references to Articles and Sections of,
and Exhibits and Schedules to, the Loan Documents in which the reference appears
unless the context shall otherwise require.

 

(b)     Except as otherwise expressly provided herein, any reference in this
Agreement to any Loan Document or other document, agreement or instrument
(including any by-laws, limited partnership agreement, limited liability company
agreement, articles of incorporation, certificate of limited partnership or
certificate of formation, as the case may be) shall mean such Loan Document,
agreement or instrument as amended, restated, amended and restated,
supplemented, otherwise modified, replaced, renewed, extended or refinanced from
time to time and any reference in this Agreement to any person shall include a
reference to such person’s permitted assigns and successors-in-interest.

 

SECTION 1.03.       Accounting Terms.

 

(a)     Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Lead Borrower notifies the
Administrative Agent that the Lead Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Closing Date in GAAP or in the application thereof (including the conversion to
IFRS as described below) on the operation of such provision (or if the
Administrative Agent notifies the Lead Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith; provided further that if an amendment is requested by
the Lead Borrower or the Required Lenders, then the Lead Borrower and the
Administrative Agent shall negotiate in good faith to enter into an amendment of
such affected provisions (without the payment of any amendment or similar fees
to the Lenders) to preserve the original intent thereof in light of such change
in GAAP or the application thereof subject to the approval of the Required
Lenders (not to be unreasonably withheld, conditioned or delayed); provided
further that all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts and ratios referred to herein shall
be made without giving effect to (i) any election under Accounting Standards
Codification 825-10-25 (previously referred to as Statement of Financial
Accounting Standards 159) (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of a Borrower or any Subsidiary at “fair
value,” as defined therein and (ii) any treatment of Indebtedness in respect of
convertible debt instruments under Accounting Standards Codification 470-20 (or
any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any such Indebtedness in a reduced
or bifurcated manner as described therein, and such Indebtedness shall at all
times be valued at the full stated principal amount thereof. If the Lead
Borrower notifies the Administrative Agent that it is required to report under
IFRS or has elected to do so through an early adoption policy, “GAAP” shall mean
international financial reporting standards pursuant to IFRS (provided that
after such conversion, the Lead Borrower cannot elect to report under GAAP).

 

 
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(b)     Notwithstanding anything to the contrary contained in paragraph (a)
above or the definition of Capital Lease Obligations, in the event of an
accounting change requiring all leases to be capitalized, only those leases
(assuming for purposes hereof that they were in existence on the date hereof)
that would constitute Capital Lease Obligations on the date hereof shall be
considered Capital Lease Obligations and all calculations and deliverables under
this Agreement or any other Loan Document shall be made in accordance therewith
(provided that all financial statements delivered to the Administrative Agent in
accordance with the terms of this Agreement after the date of such accounting
change shall contain a schedule showing the adjustments necessary to reconcile
such financial statements with GAAP as in effect immediately prior to such
accounting change).

 

SECTION 1.04.       Rounding. Except as otherwise expressly provided herein, any
financial ratios required to be maintained by the Lead Borrower pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other
component, carrying the result to one (1) place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding up if there is no nearest number).

 

SECTION 1.05.       Timing of Payment or Performance. When the payment of any
obligation or the performance of any covenant, duty or obligation is stated to
be due or performance required on a day which is not a Business Day (other than
as described in the definition of ABR, Federal Funds Rate or Interest Period),
the date of such payment or performance shall extend to the immediately
succeeding Business Day and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

SECTION 1.06.       Classification. For purposes of determining compliance at
any time with Sections 6.01, 6.02, 6.04, 6.05, 6.06, 6.07 and 6.09, in the event
that any Lien, Investment, Indebtedness, Disposition, Restricted Payment,
affiliate transaction, contractual restriction or prepayment of Indebtedness
meets the criteria of more than one (1) of the categories of transactions or
items permitted pursuant to any clause of such Sections 6.01, 6.02, 6.04, 6.05,
6.06, 6.07 and 6.09, the Lead Borrower, in its sole discretion, may classify or
reclassify such transaction or item (or portion thereof) and will only be
required to include the amount and type of such transaction (or portion thereof)
in any one (1) category.

 

SECTION 1.07.       References to Laws. Unless otherwise expressly provided
herein, references to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting
such law.

 

SECTION 1.08.       Pro Forma. Notwithstanding anything to the contrary
contained herein, financial ratios and tests (including the Consolidated Fixed
Charge Coverage Ratio and the amount of Consolidated Total Assets) pursuant to
this Agreement shall be calculated in the manner prescribed by the definition of
“Pro Forma Basis.”

 

SECTION 1.09.       Exchange Rates; Currency Equivalents.(a)     The Issuing
Bank shall determine the Spot Rates as of each Revaluation Date to be used for
calculating Dollar Equivalent amounts of Letters of Credit denominated in
Alternative LC Currencies. Such Spot Rates shall become effective as of such
Revaluation Date and shall be the Spot Rates employed in converting any amounts
between the applicable currencies until the next Revaluation Date to occur.
Except for purposes of financial statements delivered by Loan Parties hereunder
or calculating financial covenants hereunder or except as otherwise provided
herein, the applicable amount of any currency (other than Dollars) for purposes
of the Loan Documents shall be such Dollar Equivalent amount as so determined by
the Issuing Bank in accordance with this Section 1.09.

 

 
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(b)     Wherever in this Agreement in connection with the issuance, amendment or
extension of a Letter of Credit, an amount, such as a required minimum or
multiple amount, is expressed in Dollars, but such Letter of Credit is
denominated in an Alternative LC Currency, such amount shall be the relevant
Alternative LC Currency Equivalent of such Dollar amount (rounded to the nearest
unit of such Alternative LC Currency, with 0.5 of a unit being rounded upward),
as determined by the Issuing Bank.

 

ARTICLE II

The Credits

 

SECTION 2.01.       Revolver Commitments. Each Lender agrees, severally on a Pro
Rata basis up to its Revolver Commitment, on the terms set forth herein, to make
Revolver Loans to the Borrowers from time to time on the Closing Date through
the Commitment Revolver Termination Date. The Revolver Loans may be repaid and
reborrowed as provided herein. In no event shall the Lenders have any obligation
to honor a request for a Revolver Loan if the unpaid balance of Revolver Loans
outstanding at such time (including the requested Revolver Loan) would exceed
the then applicable Borrowing Base.

 

SECTION 2.02.       Loans and Borrowings.

 

(a)     All Loans shall be made by the Lenders ratably in accordance with their
respective Revolver Commitments. The failure of any Lender to make any Revolver
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder.

 

(b)     Subject to Section 2.14, each Borrowing (other than a Swingline
Borrowing) shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Swingline Borrowing shall be
an ABR Borrowing. Each Lender at its option may make any ABR Loan or Eurodollar
Loan by causing any domestic or foreign branch or Affiliate of such Lender to
make such Revolver Loan; provided that, any exercise of such option shall not
affect the obligation of the Borrower to repay such Revolver Loan in accordance
with the terms of this Agreement and such Lender shall not be entitled to any
amounts payable under Section 2.15 or 2.17 solely in respect of increased costs
resulting from such exercise and existing at the time of such exercise.

 

(c)     Borrowings of more than one Type may be outstanding at the same time;
provided that, without the consent of the Administrative Agent, there shall not
at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.

 

(d)     Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the MaturityRevolver Termination Date.

 

SECTION 2.03.       Requests for Borrowings and Notices.

 

(a)     To request a Borrowing of Revolver Loans, the Lead Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 1:00 p.m., Local Time, three (3) Business
Days before the date of the proposed Borrowing or (b) in the case of an ABR
Borrowing, not later than 1:00 p.m., Local Time, one (1) Business Day before the
date of the proposed Borrowing. Such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery, fax or other
electronic transmission (including.”pdf” or.”tif”) to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Lead Borrower. Such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

 

 
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(i)     the aggregate amount of the requested Borrowing;

 

(ii)     the date of such Borrowing, which shall be a Business Day;

 

(iii)     whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

 

(iv)     in the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

 

(v)     the location and number of the Borrowers’ account to which funds are to
be disbursed.

 

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to a requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected a Eurodollar Borrowing with an Interest Period of one (1)
month’s duration. Promptly following receipt of the Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender’s Revolver Loan to be
made as part of the requested Borrowing.

 

SECTION 2.04.       Swingline Loans; Settlement.

 

(a)     The Administrative Agent may, but shall not be obligated to, advance
Swingline Loans to the Borrowers, up to an aggregate outstanding amount of
$15,000,000. Each Swingline Loan shall constitute a Revolver Loan for all
purposes, except that payments thereon shall be made to the Administrative Agent
for its own account. The obligation of the Borrowers to repay Swingline Loans
shall be evidenced by the records of the Administrative Agent and need not be
evidenced by any promissory note. The Borrowers acknowledge that in the event
that a reallocation of the Swingline Loan Fronting Exposure of a Defaulting
Lender pursuant to Section 2.21 does not fully cover the Swingline Loan Fronting
Exposure of such Defaulting Lender, the Administrative Agent may require the
Borrowers to, at its option, prepay or Cash Collateralize such remaining
Fronting Exposure in respect of each outstanding Swingline Loan and will have no
obligation to issue new Swingline Loans, or to extend, renew or amend existing
Swingline Loans to the extent such Fronting Exposure would exceed the
commitments of the non-Defaulting Lenders, unless such remaining Fronting
Exposure is Cash Collateralized.

 

(b)     Settlement among the Lenders and the Administrative Agent with respect
to Swingline Loans and other Revolver Loans shall take place on a date
determined from time to time by the Administrative Agent (but at least weekly),
in accordance with the Settlement Report delivered by the Administrative Agent
to the Lenders. Between settlement dates, the Administrative Agent may in its
discretion apply payments on Revolver Loans to Swingline Loans, regardless of
any designation by the Borrowers or any provision herein to the contrary. Each
Lender’s obligation to make settlements with the Administrative Agent is
absolute and unconditional, without offset, counterclaim or other defense, and
whether or not the Revolver Commitments have terminated, an Overadvance exists
or the conditions in Section 4.02 are satisfied. If, due to an Insolvency
Proceeding with respect to a Borrower or otherwise, any Swingline Loan may not
be settled among the Lenders hereunder, then each Lender shall be deemed to have
purchased from the Administrative Agent a Pro Rata participation in each unpaid
Swingline Loan and shall transfer the amount of such participation to the
Administrative Agent, in immediately available funds, within one Business Day
after the Administrative Agent’s request therefor.

 

 
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(c)     Provisions Related to Revolver Commitment Increases and Extended
Revolving Commitments with Respect to Swingline Loans. If the maturity date in
respect of any tranche of Revolver Commitments occurs at a time when another
tranche or tranches of Revolver Commitments is or are in effect with a longer
maturity date, then on the earliest occurring maturity date all then outstanding
Swingline Loans shall be repaid in full on such date (and there shall be no
adjustment to the participations in such Swingline Loans as a result of the
occurrence of such maturity date); provided, however, that if on the occurrence
of such earliest maturity date (after giving effect to any repayments of
Revolver Loans and any reallocation of Letter of Credit participations as
contemplated in Section 2.05(b)), there shall exist sufficient unutilized
Extended Revolving Commitments or Revolver Commitment Increases so that the
respective outstanding Swingline Loans could be incurred pursuant the Extended
Revolving Commitments or Revolver Commitment Increases which will remain in
effect after the occurrence of such maturity date, then there shall be an
automatic adjustment on such date of the participations in such Swingline Loans
and the same shall be deemed to have been incurred solely pursuant to the
relevant Extended Revolver Commitments or Revolver Commitment Increases, and
such Swingline Loans shall not be so required to be repaid in full on such
earliest maturity date.

 

SECTION 2.05.       Letters of Credit.

 

(a)     Issuance of Letters of Credit. At any time on or after the Closing Date,
the Issuing Banks may issue Letters of Credit denominated in Dollars or in an
Alternative LC Currency totaling up to a maximum of $25,000,000 in aggregate
principal amount from time to time until 30 days prior to the Revolver
Termination Date (or until the Commitment Revolver Termination Date, if
earlier), on the terms set forth herein, including the following:

 

(i)     Each Borrower acknowledges that the Issuing Bank’s issuance of any
Letter of Credit is conditioned upon the Issuing Bank’s receipt of a LC
Application with respect to the requested Letter of Credit, as well as such
other instruments and agreements as the Issuing Bank may customarily require for
issuance of a letter of credit of similar type and amount. The Issuing Bank
shall have no obligation to issue any Letter of Credit unless (i) the Issuing
Bank receives a LC Request and LC Application at least 3 Business Days (or
shorter period of time as may be agreed by the Administrative Agent in its
reasonable discretion) prior to the requested date of issuance; and (ii) each LC
Condition is satisfied. If, in sufficient time to act, the Issuing Bank receives
written notice from Required Lenders that a LC Condition has not been satisfied,
the Issuing Bank shall not issue the requested Letter of Credit. Prior to
receipt of any such notice, the Issuing Bank shall not be deemed to have
knowledge of any failure of LC Conditions. In the event that a reallocation of
the Fronting Exposure with respect to LC Obligations of a Defaulting Lender
pursuant to Section 2.21(a) does not fully cover the Fronting Exposure with
respect to LC Obligations of such Defaulting Lender and such Defaulting Lender
has not Cash Collateralized its obligations or otherwise made arrangements
reasonably satisfactory to the Issuing Bank, the applicable Issuing Bank may
require the Borrowers to Cash Collateralize such remaining Fronting Exposure in
respect of each outstanding Letter of Credit and will have no obligation to
issue new Letters of Credit, or to extend, renew or amend existing Letters of
Credit to the extent the Fronting Exposure with respect to LC Obligations would
exceed the commitments of the non-Defaulting Lenders, unless such remaining
Fronting Exposure with respect to LC Obligations is Cash Collateralized.

 

 
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(ii)     Letters of Credit may be requested by a Borrower to support obligations
incurred in the ordinary course of business, to backstop or replace Existing
Letters of Credit through the issuance of new Letters of Credit for the account
of the issuers of such Existing Letters of Credit (including, by
“grandfathering” such Existing Letters of Credit in this Agreement), for any
purpose permitted under this Agreement and the other Loan Documents or as
otherwise approved by the Administrative Agent. The renewal or extension of any
Letter of Credit shall be treated as the issuance of a new Letter of Credit,
except that delivery of a new LC Application may be required or waived at the
discretion of the Issuing Bank.

 

(iii)     The Borrowers assume all risks of the acts, omissions or misuses of
any Letter of Credit by the beneficiary. In connection with issuance of any
Letter of Credit, none of the Administrative Agent, the Issuing Bank or any
Lender shall be responsible for the existence, character, quality, quantity,
condition, packing, value or delivery of any goods purported to be represented
by any LC Documents; any differences or variation in the character, quality,
quantity, condition, packing, value or delivery of any goods from that expressed
in any LC Documents; the form, validity, sufficiency, accuracy, genuineness or
legal effect of any LC Documents or of any endorsements thereon; the time,
place, manner or order in which shipment of goods is made; partial or incomplete
shipment of, or failure to ship, any goods referred to in a Letter of Credit or
LC Documents; any deviation from instructions, delay, default or fraud by any
shipper or other Person in connection with any goods, shipment or delivery; any
breach of contract between a shipper or vendor and a Borrower; errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise;
errors in interpretation of technical terms; the misapplication by a beneficiary
of any Letter of Credit or the proceeds thereof; or any consequences arising
from causes beyond the control of the Issuing Bank, the Administrative Agent or
any Lender, including any act or omission of a Governmental Authority. The
Issuing Bank shall be fully subrogated to the rights and remedies of each
beneficiary whose claims against the Borrowers are discharged with proceeds of
any Letter of Credit.

 

(iv)     In connection with its administration of and enforcement of rights or
remedies under any Letters of Credit or LC Documents, the Issuing Bank shall be
entitled to act, and shall be fully protected in acting, upon any certification,
documentation or communication in whatever form believed by the Issuing Bank, in
good faith, to be genuine and correct and to have been signed, sent or made by a
proper Person. The Issuing Bank may consult with and employ legal counsel,
accountants and other experts to advise it concerning its obligations, rights
and remedies, and shall be entitled to act upon, and shall be fully protected in
any action taken in good faith reliance upon, any advice given by such experts.
The Issuing Bank may employ agents and attorneys-in-fact in connection with any
matter relating to Letters of Credit or LC Documents

 

(v)     Notwithstanding anything to the contrary in this Section 2.05(a), the
foregoing shall not be construed to excuse any Issuing Bank from liability to
the Borrowers to the extent of any direct damages (as opposed to consequential
damages) suffered by the Borrowers that are caused by such Issuing Bank’s
failure to exercise reasonable care when determining whether drafts and other
documents presented under a Letter of Credit comply with the terms thereof, that
are the result of gross negligence, bad faith or willful misconduct on the apart
of the applicable Issuing Bank.

 

(vi)     For the avoidance of doubt, (a) no LC Documents shall (i) contain any
representations and warranties, covenants or events of default not set forth in
this Agreement and any representations and warranties, covenants and events of
default shall be subject to the same qualifiers, exceptions and exclusions as
those set forth in this Agreement or (ii) provide for any collateral security or
Liens and (b) to the extent any of the foregoing provisions are contained
therein and not contained herein, then such provisions shall be rendered null
and void and any such qualifiers, exceptions and exclusions contained herein
shall be deemed incorporated therein, mutatis mutandis.

 

 
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(b)     Reimbursement; Participations.

 

(i)     If the Issuing Bank honors any request for payment under a Letter of
Credit, the Borrowers shall pay to the Issuing Bank, by 2:00 p.m. (New York
time) (or such later time as the Administrative Agent may agree) within one
Business Day following receipt by the Lead Borrower of notice from the relevant
Issuing Bank (“Reimbursement Date”), the amount paid by the Issuing Bank under
such Letter of Credit, together with interest at the interest rate for ABR Loans
from the Reimbursement Date until payment by the Borrowers. In the case of a
Letter of Credit denominated in an Alternative LC Currency, the Lead Borrower
shall reimburse the Issuing Bank in such Alternative LC Currency, unless (A) the
Issuing Bank (at its option) shall have specified in such notice that it will
require reimbursement in Dollars, or (B) in the absence of any such requirement
for reimbursement in Dollars, the Lead Borrower shall have notified the Issuing
Bank promptly following receipt of the notice of drawing that the Lead Borrower
will reimburse the Issuing Bank in Dollars. In the case of any such
reimbursement in Dollars of a drawing under a Letter of Credit denominated in an
Alternative LC Currency, the Issuing Bank shall notify the Lead Borrower of the
Dollar Equivalent of the amount of the drawing promptly following the
determination thereof. The obligation of the Borrowers to reimburse the Issuing
Bank for any payment made under a Letter of Credit shall be absolute,
unconditional, irrevocable, and joint and several, and, subject to Section
2.05(a)(v), shall be paid without regard to any lack of validity or
enforceability of any Letter of Credit or the existence of any claim, setoff,
defense or other right that the Borrowers may have at any time against the
beneficiary. Unless the Lead Borrower notifies the Administrative Agent that it
intends to reimburse the Issuing Bank for a drawing under a Letter of Credit,
whether or not Lead Borrower submits a Borrowing Request, Borrowers shall be
deemed to have requested a Borrowing of ABR Loans in an amount necessary to pay
all amounts (expressed in Dollars in the amount of the Dollar Equivalent thereof
in the case of a Letter of Credit denominated in an Alternative LC Currency) due
Issuing Bank on any Reimbursement Date and each Lender agrees to fund its Pro
Rata share of such Borrowing whether or not the Revolver Commitments have
terminated, an Overadvance exists or is created thereby, or the conditions in
Section 4.02 are satisfied. Upon the issuance of a Letter of Credit, each Lender
shall be deemed to have irrevocably and unconditionally purchased from the
Issuing Bank, without recourse or warranty, an undivided Pro Rata interest and
participation in all LC Obligations relating to the Letter of Credit. If the
Issuing Bank makes any payment under a Letter of Credit and the Borrowers do not
reimburse such payment on the Reimbursement Date, the Administrative Agent shall
promptly notify the Lenders and each Lender shall promptly (within one Business
Day) and unconditionally pay to the Administrative Agent, for the benefit of the
Issuing Bank, the Lender’s Pro Rata share of such payment, expressed in Dollars
in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit
denominated in an Alternative LC Currency.

 

(ii)     The obligation of each Lender to make payments to the Administrative
Agent for the account of the Issuing Bank, in Dollars, in connection with the
Issuing Bank’s payment under a Letter of Credit for dollar-denominated payments
shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever, and shall be made
in accordance with this Agreement under all circumstances, irrespective of: any
lack of validity or unenforceability of any Loan Documents; any draft,
certificate or other document presented under a Letter of Credit having been
determined to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect; or the
existence of any setoff or defense that any Loan Party may have with respect to
any Obligations. The Issuing Bank does not assume any responsibility for any
failure or delay in performance or any breach by any Borrower or other Person of
any obligations under any LC Documents. The Issuing Bank does not make to the
Lenders any express or implied warranty, representation or guaranty with respect
to the Collateral, LC Documents or any Loan Party. The Issuing Bank shall not be
responsible to any Lender for: any recitals, statements, information,
representations or warranties contained in, or for the execution, validity,
genuineness, effectiveness or enforceability of any LC Documents; the validity,
genuineness, enforceability, collectability, value or sufficiency of any
Collateral or the perfection of any Lien therein; or the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal
status of any Loan Party.

 

 
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(iii)     No Issuing Bank shall be liable to any Lender or other Person for any
action taken or omitted to be taken in connection with any LC Documents except
as a result of its actual gross negligence, bad faith or willful misconduct. The
Issuing Bank shall not have any liability to any Lender if the Issuing Bank
refrains from any action under any Letter of Credit or LC Documents until it
receives written instructions from Required Lenders.

 

(c)     Cash Collateral. Except as otherwise provided herein, if any LC
Obligations, whether or not then due or payable, shall for any reason be
outstanding at any time (a) that an Event of Default has occurred and is
continuing, (b) that Availability is less than zero, (c) after the Commitment
Revolver Termination Date, or (d) within 5 Business Days prior to the Revolver
Termination Date, then the Borrowers shall, at the Issuing Bank’s or the
Administrative Agent’s request, Cash Collateralize the stated amount of all
outstanding Letters of Credit and pay to the Issuing Bank the amount of all
other LC Obligations. If the Borrowers fail to provide any Cash Collateral as
required hereunder, the Administrative Agent may (and shall upon direction of
Required Lenders) advance, as Revolver Loans, the amount of the Cash Collateral
required (whether or not the Revolver Commitments have terminated, an
Overadvance exists or the conditions in Section 4.2 are satisfied).

 

(d)     Provisions Related to Revolver Commitment Increases and Extended
Revolving Commitment with respect to Letters of Credit. If the maturity date in
respect of any tranche of Revolver Commitments occurs prior to the expiration of
any Letter of Credit, then (i) if one or more other tranches of Revolver
Commitments in respect of which the maturity date shall not have occurred are
then in effect, such Letters of Credit shall automatically be deemed to have
been issued (including for purposes of the obligations of the Lenders to
purchase participations therein and to make Revolver Loans and payments in
respect thereof pursuant to Section 2.05(b) under (and ratably participated in
by the Lenders pursuant to) the Revolver Commitments in respect of such
non-terminating tranches up to an aggregate amount not to exceed the aggregate
principal amount of the unutilized Revolver Commitments thereunder at such time
(it being understood that no partial face amount of any Letter of Credit may be
so reallocated)) and (ii) to the extent not reallocated pursuant to immediately
preceding clause (i), the Borrower shall Cash Collateralize any such Letter of
Credit in accordance with Section 2.05(c). Commencing with the maturity date of
any tranche of Revolver Commitments, the sublimit for Letters of Credit shall be
agreed with the Lenders under the extended tranches.

 

(e)     Resignation or Removal of the Issuing Bank. The Issuing Bank may resign
at any time upon at least 30 days prior notice to the Administrative Agent and
the Lead Borrower. Any Issuing Bank may be replaced at any time by written
agreement among the Lead Borrower, the Administrative Agent, the replaced
Issuing Bank and the successor Issuing Bank. On the effective date of such
resignation or replacement, the Issuing Bank shall have no further obligation to
issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall
continue to have all rights and obligations of an Issuing Bank hereunder,
including under Sections 2.05, 8.06, and 9.05, relating to any Letter of Credit
issued prior to such date. The Administrative Agent shall promptly appoint a
replacement Issuing Bank, which, as long as no Event of Default under Sections
7.01(b), (c), (h) (with respect to the Lead Borrower only) and (i) (with respect
to the Lead Borrower only) has occurred and is continuing, shall be reasonably
acceptable to the Borrowers.

 

 
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SECTION 2.06.       Funding of Borrowings.

 

(a)     Each Lender shall make a Revolver Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
p.m., Local Time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders; provided that
Swingline Loans shall be made as provided in Section 2.04. The Administrative
Agent will make the proceeds of such Revolver Loans available to the Borrowers
by promptly crediting the amounts so received, in like funds, to an account
designated by the Borrowers in the applicable Borrowing Request.

 

(b)     Unless the Administrative Agent shall have received notice from a Lender
prior to the date of the Borrowing Request that such Lender will not make
available to the Administrative Agent such Lender’s share of the Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrowers a corresponding
amount. In such event, if a Lender has not in fact made its share of the
Borrowing available to the Administrative Agent, then the applicable Lender and
the Borrowers severally agree to pay to the Administrative Agent (provided, that
any such payment by the Borrowers to the Administrative Agent is without
prejudice to any claim the Borrowers may have against such applicable Lender)
forthwith on demand (without duplication) such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrowers to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrowers, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Revolver Loan included in such Borrowing.

 

SECTION 2.07.       Interest Elections.

 

(a)     Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrowers may elect to convert such Borrowing to a different
Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrowers may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Revolver Loans comprising such Borrowing, and the
Revolver Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, which may not
be converted or continued.

 

(b)     To make an election pursuant to this Section, the Borrowers shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrowers were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly (but in any event
on the same Business Day) by hand delivery, fax or other electronic transmission
(including.”pdf” or.”tif”) to the Administrative Agent of a written Interest
Election Request in the form of Exhibit D and signed by the Borrowers.

 

(c)     Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

 

 
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(i)     the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

 

(ii)     the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

 

(iii)     whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

(iv)     if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period.”

 

(d)     Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender to which such Interest Election
Request relates of the details thereof and of such Lender’s portion of each
resulting Borrowing.

 

(e)     If the Borrowers fail to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the written
request (including a request through electronic means) of the Required Lenders,
so notifies the Borrowers, then, so long as an Event of Default is continuing
(i) no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

SECTION 2.08.       Repayment of Loans; Termination of Revolver Commitments.

 

(a)     Revolver Loans shall be due and payable in full on the Revolver
Termination Date, unless payment is sooner required hereunder. Revolver Loans
may be prepaid from time to time, without penalty or premium. If any Disposition
includes the disposition of Current Assets Collateral, then, if a Liquidity
Event shall have occurred and be continuing, the Net Proceeds of such
disposition shall be applied to the Revolver Loans within ten Business Days
following such Disposition, other than such Net Proceeds not in excess of
$1,000,000 in the aggregate, and the Borrowers shall deliver an updated
Borrowing Base Certificate on the date of any such Disposition.

 

(b)     To the extent that at any time outstanding Revolver Loans and LC
Obligations exceed the Line Cap, the Borrowers shall first repay such
outstanding Revolver Loans (and thereafter Cash Collateralize such outstanding
LC Obligations, to the extent remaining) in an amount equal to such excess.

 

(c)     The Revolver Commitments shall terminate on the Revolver Termination
Date, unless sooner terminated in accordance with this Agreement. Upon at least
3 days (or such shorter period of time as the Administrative Agent may agree in
its reasonable discretion) prior written notice to the Administrative Agent at
any time, the Borrowers may, at their option, terminate the Revolver Commitments
and this Agreement. Any notice of termination given by the Borrowers shall be
irrevocable; provided that such notice may state that such notice is conditioned
upon the effectiveness of other credit facilities or transactions, in which case
such notice may be revoked by the Borrowers (by notice to the Administrative
Agent on or prior to the specified effective date) if such condition is not
satisfied. On the Revolver Termination Date, the Borrowers shall make Full
Payment of all Obligations.

 

 
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(d)     The Borrowers may permanently reduce the Revolver Commitments, on a Pro
Rata basis for each Lender, upon at least 5 days (or such shorter period of time
as the Administrative Agent may agree in its reasonable discretion) prior
written notice to the Administrative Agent delivered at any time, which notice
shall specify the amount of the reduction and shall be irrevocable once given.
Each reduction shall be in a minimum amount of $1,000,000, or an increment of
$100,000 in excess thereof.

 

SECTION 2.09.       Evidence of Debt.

 

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

 

(b)     The Administrative Agent (or its agent or sub-agent appointed by it)
shall maintain the Register, as set forth in Section 9.04(b)(iv), in which it
shall record (i) the amount of each Revolver Loan made hereunder and Type
thereof and the Interest Period (if any) applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) any amount received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.

 

(c)     The entries made in the accounts maintained pursuant to paragraph (a) or
(b) of this Section shall be prima facie evidence of the existence and amounts
of the obligations recorded therein absent manifest error; provided 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 obligation of the Borrowers
to repay the Revolver Loans in accordance with the terms of this Agreement and,
provided further that in the event of any inconsistency between the Register and
any Lender’s records, the recordations in the Register shall govern.

 

(d)     Any Lender may request that the Revolver Loans made by it be evidenced
by a promissory note (a “Note”) in the form of Exhibit M. In such event, the
Borrowers shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) and in a form approved by the Administrative
Agent and the Borrowers. Thereafter, the Revolver Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one (1) or more
promissory notes in such form payable to the payee named therein.

 

SECTION 2.10.       Application of Payment in the Dominion Accounts. Upon
delivery of a written notice to the Lead Borrower from the Administrative Agent
that specifies that “cash dominion” is being instituted, the ledger balance in
the Dominion Account as of the end of a Business Day shall be applied to reduce
the outstanding Secured Obligations at the beginning of the next Business Day
during any Liquidity Period. If, as a result of such application, a credit
balance exists, the balance shall accrue interest in favor of the Borrowers and
shall be made available to the Borrowers as long as no Event of Default is
continuing. During a Liquidity Period, each Borrower irrevocably waives the
right to direct the application of any payments or Collateral proceeds in the
Dominion Account or any Deposit Account subject to a Deposit Account Control
Agreement, and agrees that the Administrative Agent shall have the continuing,
exclusive right to apply and reapply the same against the outstanding Secured
Obligations, in accordance with the terms of this Agreement and the other Loan
Documents.

 

 
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SECTION 2.11.       [Reserved].

 

SECTION 2.12.       Fees.

 

(a)     The Borrowers agree to pay to the Administrative Agent, for the account
of the Administrative Agent, the agency fees set forth in the Fee Letter, at the
times and in the amount specified therein (the “Fees”).

 

(b)     Unused Line Fee. The Borrowers shall pay to the Administrative Agent,
for the Pro Rata benefit of the Lenders (other than any Defaulting Lender), a
fee equal to the Unused Line Fee Rate multiplied by the amount by which the
Revolver Commitments (other than Revolver Commitments of a Defaulting Lender)
exceed the average daily balance of outstanding Revolver Loans (other than
Swingline Loans) and stated amount of outstanding Letters of Credit during any
fiscal quarter (such fee, the “Unused Line Fee”). Such fee shall be payable in
arrears, on the first day of each fiscal quarter.

 

(c)     LC Facility Fees. The Borrowers shall pay (a) to the Administrative
Agent, for the Pro Rata benefit of the Lenders, a fee equal to the Applicable
Margin in effect for LIBOR Loans times the average daily stated amount of
outstanding Letters of Credit, which fee shall be payable in arrears, on the
first Business Day of each fiscal quarter; (b) to the applicable Issuing Bank,
for its own account, a fronting fee not in excess of 0.125% per annum of the
stated amount of each Letter of Credit, which fee shall be calculated based upon
the actual number of days elapsed over a 360-day year and payable in arrears, on
the first day of each fiscal quarter; and (c) to the applicable Issuing Bank,
for its own account, all customary charges associated with the issuance,
registration, amending, negotiating, payment, processing, transfer and
administration of Letters of Credit, which charges shall be paid as and when
incurred upon demand.

 

(d)     All Fees set forth in Section 2.12(b) and (c) shall be paid on the dates
due, in immediately available funds, to the Administrative Agent. Once paid,
none of the Fees shall be refundable under any circumstances.

 

(e)     Closing Fee. The Borrowers agree to pay on the Closing Date to each
Lender party to this Agreement on the Closing Date, as compensation for the
making of such Revolver Commitment, a closing fee (the “Closing Fee”) in an
amount equal to 0.50% of the stated principal amount of such Lender’s Revolver
Commitment on the Closing Date. Such Closing Fee will be in all respects fully
earned, due and payable on the Closing Date and non-refundable and
non-creditable thereafter.

 

SECTION 2.13.       Interest.

 

(a)     The Revolver Loans comprising each ABR Borrowing shall bear interest at
the ABR plus the Applicable Margin.

 

(b)     The Revolver Loans comprising each Eurodollar Borrowing shall bear
interest at the Eurodollar Rate for the Interest Period in effect for such
Borrowing plus the Applicable Margin.

 

(c)     Notwithstanding the foregoing, if any principal of or interest on any
Revolver Loan or any Fees or other amount payable by the Borrowers hereunder is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of overdue principal of, or interest on,
any Revolver Loan, 2% plus the rate otherwise applicable to such Revolver Loan
as provided in the preceding paragraphs of this Section or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section (in each case, the “Default Rate”).

 

 
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(d)     Accrued interest on each Revolver Loan shall be payable in arrears on
each Interest Payment Date for such Revolver Loan and on the Revolver
Termination Date; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Revolver Loan, accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and (iii) in the event of any conversion of any Eurodollar Loan prior to the end
of the current Interest Period therefor, accrued interest on such Eurodollar
Loan shall be payable on the effective date of such conversion.

 

(e)     All interest hereunder shall be computed on the basis of a year of three
hundred sixty (360) days, except that interest computed by reference to the ABR
at times when the ABR is based on the Prime Rate shall be computed on the basis
of a year of three hundred sixty-five (365) days (or three hundred sixty-six
(366) days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable ABR, Eurodollar Base Rate or Eurodollar Rate shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error.

 

(f)     In the event that any Borrowing Base Certificate or related information
for any period delivered pursuant to Section 5.12 is inaccurate while the
Revolver Commitments are in effect, and such inaccuracy, if corrected, would
have led to the application of a higher Applicable Margin for such period than
the Applicable Margin actually used to determine interest rates for such period,
then (a) the Borrowers shall promptly deliver to the Administrative Agent a
corrected Borrowing Base Certificate for such period, (b) the Applicable Margin
for such period shall be retroactively determined based on the Average
Availability as set forth in the corrected Borrowing Base Certificate, and (c)
the Borrowers shall promptly pay to the Administrative Agent (for the account of
the Lenders during such period or their successors and permitted assigns) the
accrued additional interest owing as a result of such increased Applicable
Margin for such period. This Section 2.13(f) shall not limit the rights of the
Administrative Agent under this Section 2.13 or Article VII.

 

SECTION 2.14.       Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

 

(a)     the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Eurodollar Base Rate or the Eurodollar Rate, as
applicable, for such Interest Period; or

 

(b)     the Administrative Agent is advised by the Required Lenders that the
Eurodollar Base Rate or the Eurodollar Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their Revolver Loans included in such Borrowing for such Interest
Period;

 

then the Administrative Agent shall give written notice thereof to the Borrowers
and the Lenders as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing shall be converted to or continued as on the last day of the
Interest Period applicable thereto an ABR Borrowing, and (ii) if the Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.

 

 
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SECTION 2.15.       Increased Costs.

 

(a)     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 (except any such reserve requirement reflected in
the Eurodollar Rate) or Issuing Bank; or

 

(ii)     subject any Lender Party to any Taxes (other than (A) Indemnified Taxes
paid or payable under Section 2.17, (B) Other Taxes and (C) Excluded Taxes) on
its loans, loan principal, letters of credit, commitments, or other obligations,
or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)     impose on any Lender or 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 of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or Issuing
Bank hereunder (whether of principal, interest or otherwise), then within thirty
(30) days of receipt of a certificate of the type specified in paragraph (d)
below the Borrowers will pay to such Lender or Issuing Bank, as applicable, such
additional amount or amounts as will compensate such Lender or Issuing Bank, as
applicable, for such additional costs incurred or reduction suffered.

 

(b)     If any Lender or Issuing Bank determines that any Change in Law
regarding capital requirements or liquidity requirements has or would have the
effect of reducing the rate of return on such Lender’s or Issuing Bank’s capital
or on the capital of such Lender’s or Issuing Bank’s holding company, if any, as
a consequence of this Agreement or the Revolver Loans made by, or participations
in Letters of Credit held by, such Lender, or the Letters of Credit issued by
such Issuing Bank, to a level below that which such Lender or such or Issuing
Bank or such Lender’s or such Issuing Bank’s holding company could have achieved
but for such Change in Law (taking into consideration such Lender’s or Issuing
Bank’s policies and the policies of such Lender’s or Issuing Bank’s holding
company with respect to capital adequacy and liquidity), then from time to time
within thirty (30) days of receipt of a certificate of the type specified in
paragraph (d) below the Borrowers shall pay to such Lender or such Issuing Bank,
as applicable, such additional amount or amounts as will compensate such Lender
or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for
any such reduction suffered.

 

(c)     Notwithstanding anything herein to the contrary, (i) all requests,
rules, guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or by United States or foreign regulatory
authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements and directives thereunder or issued in connection therewith or in
implementation thereof, shall in each case be deemed to be a Change in Law,
regardless of the date enacted, adopted, issued or implemented.

 

(d)     A certificate of a Lender or an Issuing Bank setting forth in reasonable
detail the calculation of the amount or amounts necessary to compensate such
Lender or Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) of this Section shall be delivered to the Borrowers and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
or Issuing Bank, as applicable, the amount shown as due on any such certificate
within thirty (30) days after receipt thereof.

 

 
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(e)     Promptly after any Lender or any Issuing Bank has determined that it
will make a request for increased compensation pursuant to this Section 2.15,
such Lender or Issuing Bank shall notify the Borrowers thereof. Failure or delay
on the part of any Lender or Issuing Bank to demand compensation pursuant to
this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s
right to demand such compensation; provided that the Borrowers shall not be
required to compensate a Lender or an Issuing Bank pursuant to this Section for
any increased costs or reductions incurred more than ninety (90) days prior to
the date that such Lender or Issuing Bank, as applicable, notifies the Borrowers
of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s or Issuing Bank’s intention to claim compensation therefor;
provided, further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the ninety (90)-day period referred to
above shall be extended to include the period of retroactive effect thereof.

 

SECTION 2.16.       Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Borrowers pursuant to Section 2.19, then, in any such event, the Borrowers
shall compensate each Lender for the loss, cost and expense attributable to such
event (excluding loss of margin). Such loss, cost and expense to any Lender
shall be deemed to be the amount reasonably determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Eurodollar
Rate that would have been applicable to such Loan but exclusive of the
Applicable Margin relating thereto, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case of
a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for U.S.
Dollar deposits of a comparable amount and period from other banks in the
Eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered to the Borrowers and shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
within thirty (30) days after receipt thereof.

 

SECTION 2.17.       Taxes.

 

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

 

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

 

 
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(c)     Each Loan Party shall indemnify the Administrative Agent, each Lender
and each Issuing Bank, within ten (10) days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or such Issuing Bank, as applicable, on or
with respect to any payment by or on account of any obligation of such Loan
Party hereunder (including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto. A
certificate as to the amount of such payment or liability, prepared in good
faith and delivered to such Loan Party by a Lender or an Issuing Bank or by the
Administrative Agent on its own behalf, on behalf of another Agent or on behalf
of a Lender or an Issuing Bank, shall be conclusive absent manifest error.

 

(d)     As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by a Loan Party to a Governmental Authority, such Loan Party shall deliver
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.

 

(e)     (i) Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested by the Borrowers or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrowers or
the Administrative Agent as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by the Borrowers or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two (2) sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.17(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

 

(ii)     Without limiting the generality of the foregoing, in the event that the
Borrowers are each a U.S. Person,

 

(A)     any Lender that is a U.S. Person shall deliver to the Borrowers and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrowers or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from U.S.
federal backup withholding tax;

 

(B)     any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), whichever of the following is applicable:

 

(i)     in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

 
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(ii)     executed originals of IRS Form W-8ECI;

 

(iii)     in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit L-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in Section
881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed
originals of IRS Form W-8BEN; or

 

(iv)     to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit L-2 or
Exhibit L-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one (1) or more direct or indirect partners of such Foreign
Lender are claiming the portfolio interest exemption, such Foreign Lender may
provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit
L-4 on behalf of each such direct and indirect partner;

 

(C)     any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrowers or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrowers or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

(D)     if a payment made to a Lender under any Loan Document would be subject
to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrowers and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the
Borrowers or the Administrative Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such additional documentation reasonably requested by the Borrowers or the
Administrative Agent as may be necessary for the Borrowers and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment.
Solely for purposes of this clause (D), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

 

 
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Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrowers and the Administrative
Agent in writing of its legal inability to do so.

 

(f)     If the Administrative Agent or a Lender determines, in its sole
discretion exercised in good faith, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by a Loan
Party or with respect to which such Loan Party has paid additional amounts
pursuant to this Section 2.17, it shall pay over such refund to such Loan Party
(but only to the extent of indemnity payments made, or additional amounts paid,
by such Loan Party under this Section 2.17 with respect to the Indemnified Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender (including any Taxes imposed with
respect to such refund) as is determined by the Administrative Agent or Lender
and in its sole discretion, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund); provided
that such Loan Party, upon the request of the Administrative Agent or such
Lender, agrees to repay as soon as reasonably practicable the amount paid over
to such Loan Party (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section 2.17(f) shall not be
construed to require the Administrative Agent or any Lender to make available
its Tax returns (or any other information relating to its Taxes which it deems
confidential) to the Loan Parties or any other person.

 

(g)     Each Lender shall severally indemnify the Administrative Agent, within
ten (10) days after demand therefor, for (i) any Taxes attributable to such
Lender (but only to the extent that any Loan Party has not already indemnified
the Administrative Agent for such Taxes and without limiting the obligation of
the Loan Parties to do so) and (ii) any Taxes attributable to such Lender’s
failure to comply with the provisions of Section 9.04(c) relating to the
maintenance of a Participant Register, in either case, that are payable or paid
by the Administrative Agent in connection with any Loan Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (g).

 

(h)     For purposes of this Section 2.17, the term “Lender” includes any
Issuing Bank and the Swingline Lender.

 

SECTION 2.18.       Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a)     Unless otherwise specified, the Borrowers shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of L/C Disbursements, or of amounts payable under Section 2.15,
2.16, or 2.17, or otherwise) prior to 2:00 p.m., Local Time, on the date when
due, in immediately available funds, without condition or deduction for any
defense, recoupment, set-off or counterclaim. Any amounts received after such
time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent to the applicable account designated to the Borrowers by
the Administrative Agent, except payments to be made directly to the applicable
Issuing Bank or the Swingline Lender as expressly provided herein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other person to the appropriate recipient promptly following
receipt thereof. All payments hereunder shall be made in Dollars. Any payment
required to be made by the Administrative Agent hereunder shall be deemed to
have been made by the time required if the Administrative Agent shall, at or
before such time, have taken the necessary steps to make such payment in
accordance with the regulations or operating procedures of the clearing or
settlement system used by the Administrative Agent to make such payment.

 

 
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(b)     If at any time insufficient funds are received by and available to the
Administrative Agent from the Borrowers to pay fully all amounts of principal,
unreimbursed L/C Disbursements, interest and fees then due from the Borrowers
hereunder, such funds (except as otherwise provided in the Collateral Agreement
with respect to the application of amounts realized from the Collateral) shall
be applied (i) first, towards payment of interest and fees then due from the
Borrowers hereunder, ratably among the parties entitled thereto in accordance
with the amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed L/C Disbursements then due from
the Borrowers hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and unreimbursed L/C Disbursements then
due to such parties.

 

(c)     If (other than (x) any payment obtained by a Lender as consideration for
the assignment or sale of a participation in any of its Revolver Loans to any
assignee or participant, including any assignee or participation that is a Loan
Party, the Sponsors or any of their respective Affiliates or (y) as otherwise
expressly provided elsewhere herein, including, without limitation, as provided
in or contemplated by Section 2.22, Section 2.23, Sections 9.04(f) or Section
9.08(d)) any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolver Loans or participations in L/C Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolver Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolver Loans and participations in L/C Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolver Loans and
participations in L/C Disbursements and Swingline Loans; provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph (c) shall not be construed to apply to any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement. The Borrowers consent to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrowers rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrowers
in the amount of such participation.

 

(d)     Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the applicable Issuing Bank hereunder
that the Borrowers will not make such payment, the Administrative Agent may
assume that the Borrowers have made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the applicable Issuing Bank, as applicable, the amount due. In such event, if
the Borrowers have not in fact made such payment, then each of the Lenders or
the applicable Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

 

 
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(e)     If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(b), 2.05(b), 2.06(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

 

(f)     Each borrowing by the Borrowers from the Lenders hereunder shall be made
pro rata according to the respective Revolving Facility Percentages of the
relevant Lenders.

 

SECTION 2.19.       Mitigation Obligations; Replacement of Lenders.

 

(a)     If any Lender requests compensation under Section 2.15, or if the
Borrowers is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different Lending
Office for funding or booking its Revolver Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
Affiliates, if, in the reasonable judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as applicable, in the future and (ii) would not subject such
Lender to any material unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender in any material respect. The Borrowers hereby
agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)     If any Lender requests compensation under Section 2.15, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender is a Defaulting Lender or becomes an Affected Lender, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, (i) terminate the Revolver Commitments of such Lender
and repay all Obligations of the Borrowers owing to such Lender relating to the
Revolver Loans and participations held by such Lender as of such termination
date or (ii) require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrowers shall have received
the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Revolver Loans, participations
in L/C Disbursements and Swingline Loans, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrowers
(in the case of all other amounts), (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments, (iv) the Borrowers shall be liable to such
Lender under Section 2.16 if any Eurodollar Loan owing to such Lender is repaid
or purchased other than on the last day of the Interest Period relating thereto,
(v) such assignment shall otherwise comply with Section 9.04 (provided that the
Borrowers shall be obligated to pay the registration and processing fee referred
to therein) and (vi) until such time as such Revolver Commitments are
terminated, obligations are repaid or such assignment is consummated, the
Borrowers shall pay all additional amounts (if any) required pursuant to Section
2.15 or Section 2.17, as the case may be. Nothing in this Section 2.19 shall be
deemed to prejudice any rights that the Borrowers, the Administrative Agent or
any Lender may have against any replaced Lender. Each Lender hereby grants to
the Administrative Agent an irrevocable power of attorney (which power is
coupled with an interest) to execute and deliver, on behalf of such Lender as
assignor, any Assignment and Acceptance necessary to effectuate any assignment
of such Lender’s interests hereunder in the circumstances contemplated by this
Section 2.19(b).

 

 
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(c)     If any Lender (such Lender, a “Non-Consenting Lender”) has failed to
consent to a proposed amendment, waiver, discharge or termination which pursuant
to the terms of Section 9.08 requires the consent of all of the Lenders or all
of the Lenders affected and with respect to which the Required Lenders shall
have granted their consent, then the Borrowers shall have the right (unless such
Non-Consenting Lender grants such consent) to replace such Non-Consenting Lender
by (i) terminating the Revolver Commitments of such Lender and repaying all
obligations of the Borrowers owing to such Lender relating to the Revolver Loans
and participations held by such Lender as of such termination date or (ii)
requiring such Non-Consenting Lender to assign (in accordance with and subject
to the restrictions contained in Section 9.04) all or the affected portion of
its Revolver Loans and its Revolver Commitments hereunder to one (1) or more
assignees, provided that: (a) all Obligations of the Borrowers owing to such
Non-Consenting Lender being replaced shall be paid in full to such
Non-Consenting Lender concurrently with such assignment, (b) the replacement
Lender shall purchase the foregoing by paying to such Non-Consenting Lender a
price equal to the principal amount thereof plus accrued and unpaid interest
thereon, (c) the Borrowers shall be liable to such Lender under Section 2.16 if
any Eurodollar Loan owing to such Lender is repaid or purchased other than on
the last day of the Interest Period relating thereto, (d) such assignment shall
otherwise comply with Section 9.04 (provided that the Borrower shall be
obligated to pay the registration and processing fee referred to therein) and
(e) the replacement Lender shall grant its consent with respect to the
applicable proposed amendment, waiver, discharge or termination. Each Lender
hereby grants to the Administrative Agent an irrevocable power of attorney
(which power is coupled with an interest) to execute and deliver, on behalf of
such Lender as assignor, any Assignment and Acceptance necessary to effectuate
any assignment of such Lender’s interests hereunder in the circumstances
contemplated by this Section 2.19(c).

 

SECTION 2.20.       Illegality. If any Lender reasonably determines that any
Change in Law has made it unlawful, or that any Governmental Authority has
asserted after the Closing Date that it is unlawful, for any Lender or its
applicable Lending Office to make or maintain any Eurodollar Loans, then, on
notice thereof by such Lender to the Borrowers through the Administrative Agent
(at which time such Lender shall be deemed an “Affected Lender”), any
obligations of such Affected Lender to make or continue Eurodollar Loans or to
convert ABR Borrowings to Eurodollar Borrowings shall be suspended until such
Affected Lender notifies the Administrative Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrowers shall upon demand from such Affected Lender (with a
copy to the Administrative Agent), either convert all Eurodollar Borrowings of
such Affected Lender to ABR Borrowings, either on the last day of the Interest
Period therefor, if such Affected Lender may lawfully continue to maintain such
Eurodollar Borrowings to such day, or immediately, if such Affected Lender may
not lawfully continue to maintain such Loans. Upon any such prepayment or
conversion, the Borrowers shall also pay accrued interest on the amount so
prepaid or converted.

 

SECTION 2.21.       Defaulting Lenders.

 

(a)     Reallocation of Pro Rata Share; Amendments. For purposes of determining
the Lenders’ obligations to fund or acquire participations in Revolver Loans
(including, Swingline Loans) or Letters of Credit, the Administrative Agent may
exclude the Revolver Commitments and Revolver Loans of any Defaulting Lender(s)
from the calculation of Pro Rata shares and any Revolver Commitments or Fronting
Exposure of any such Defaulting Lender shall automatically be reallocated among
the non-Defaulting Lenders Pro Rata in accordance with their Revolver
Commitments up to an amount such that the Revolver Commitment of each
non-Defaulting Lender does not exceed its Revolver Commitments, so long as the
conditions set forth in Section 4.02 are satisfied at the time of such
reallocation. A Defaulting Lender shall have no right to vote on any amendment,
waiver or other modification of a Loan Document, except as provided in Section
9.08.

 

 
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(b)     Payments; Fees. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of a Defaulting
Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or
otherwise, and including any amounts made available to the Administrative Agent
by that Defaulting Lender pursuant to Section 9.06), shall be applied at such
time or times as may be determined by the Administrative Agent as follows:
first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder; second, to the payment on a Pro Rata basis of
any amounts owing by that Defaulting Lender to any applicable Issuing Banks and
Swingline Lenders hereunder; third, if so reasonably determined by the
Administrative Agent or reasonably requested by the applicable Issuing Bank or
Swingline Lender, to be held as Cash Collateral for the Fronting Exposure of
such Defaulting Lender; fourth, to the funding of any Revolver Loan in respect
of which that Defaulting Lender has failed to fund its portion thereof as
required by this Agreement, as determined by the Administrative Agent; fifth, if
so determined by the Administrative Agent or the Lead Borrower, to be held in a
deposit account and released in order to satisfy obligations of that Defaulting
Lender to fund Revolver Loans under this Agreement and to Cash Collateralize any
Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender; sixth,
to the payment of any amounts owing to the Lenders, the Issuing Banks or
Swingline Lenders as a result of any judgment of a court of competent
jurisdiction obtained by any Lender, any Issuing Bank or any Swingline Lender
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; seventh, to the payment of any amounts
owing to the Borrowers as a result of any judgment of a court of competent
jurisdiction obtained by any Borrower against that Defaulting Lender as a result
of that Defaulting Lender’s breach of its obligations under this Agreement; and
eighth, to that Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if (x) such payment is a payment of the
principal amount of any Revolver Loans or LC Obligations in respect of which
that Defaulting Lender has not fully funded its appropriate share and (y) such
Revolver Loans or LC Obligations were made at a time when the conditions set
forth in Section 4.02 were satisfied or waived, such payment shall be applied
solely to pay the Revolver Loans of, and LC Obligations owed to, all
non-Defaulting Lenders on a Pro Rata basis prior to being applied to the payment
of any Revolver Loans of, or LC Obligations owed to, that Defaulting Lender. Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.21(b) shall be deemed paid to and
redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto. A Lender shall not be entitled to receive any fees accruing hereunder
during the period in which it is a Defaulting Lender, and the unfunded portion
of its Revolver Commitment shall be disregarded for purposes of calculating the
Unused Line Fee Rate under Section 2.12(b). To the extent any LC Obligations
owing to a Defaulting Lender are reallocated to other Lenders, Letter of Credit
fees attributable to such LC Obligations under Section 2.12(c) shall be paid to
such other Lenders. The Administrative Agent shall be paid all Letter of Credit
fees attributable to LC Obligations that are not so reallocated.

 

(c)     Cure. The Borrowers, the Administrative Agent and the Issuing Bank may
agree in writing that a Lender is no longer a Defaulting Lender. At such time,
Pro Rata shares shall be reallocated without exclusion of such Lender’s Revolver
Commitments and Revolver Loans, and all outstanding Revolver Loans, LC
Obligations and other exposures under the Revolver Commitments shall be
reallocated among the Lenders and settled by the Administrative Agent (with
appropriate payments by the reinstated Lender) in accordance with the readjusted
Pro Rata shares. Unless expressly agreed in writing by the Borrowers, the
Administrative Agent and the Issuing Bank (each of which shall make such
determination, in its sole discretion), no reinstatement of a Defaulting Lender
shall constitute a waiver or release of claims against such Lender. The failure
of any Lender to fund a Revolver Loan, to make a payment in respect of LC
Obligations or otherwise to perform its obligations hereunder shall not relieve
any other Lender of its obligations, and no Lender shall be responsible for
default by another Lender. No reallocation hereunder shall constitute a wavier
or release of any claim of any party hereunder against a Defaulting Lender
arising from that Lender having become a Defaulting Lender, including any claim
of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased
exposure following such reallocation.

 

 
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SECTION 2.22.       Revolver Commitment Increase.

 

(a)     Subject to the terms and conditions set forth herein, after the
ClosingAmendment No. 2 Effective Date, the Borrowers shall have the right to
request, by written notice to the Administrative Agent, an increase in the
Revolver Commitments (a “Revolver Commitment Increase”) in an aggregate amount
not to exceed $50,000,000100,000,000 (it being understood that any increase in
the Revolver Commitment effected on the Amendment No. 2 Effective Date shall not
reduce such amount); provided that (a) the Borrowers shall only be permitted to
request 3 Revolver Commitment Increases during the term of this Agreement, (b)
any Revolver Commitment Increase shall be in a minimum amount of $10,000,000,
and (c) after giving effect to all such Revolver Commitment Increases, the
aggregate amount of the Revolver Commitments outstanding shall not exceed
$200,000,000.350,000,000.

 

(b)     Each notice submitted pursuant to this Section 2.22 (a “Revolver
Commitment Increase Notice”) requesting a Revolver Commitment Increase shall
specify the amount of the increase in the Revolver Commitments being requested.
Upon receipt of a Revolver Commitment Increase Notice, the Administrative Agent
may (at the direction of the Lead Borrower) promptly notify the Lenders and each
Lender may (subject to the Lead Borrower’s consent) have the right to elect to
have its Revolver Commitment increased by its Pro Rata share (it being
understood and agreed that a Lender may elect to have its Revolver Commitment
increased in excess of its Pro Rata share in its discretion if any other Lender
declines to participate in the Revolver Commitment Increase) of the requested
increase in Revolver Commitments; provided that (i) each Lender may elect or
decline, in its sole discretion, to have its Revolver Commitment increased in
connection with any requested Revolver Commitment Increase, it being understood
that no Lender shall be obligated to increase its Revolver Commitment or make
any Revolver Loan under any Revolver Commitment Increase unless it, in its sole
discretion, so agrees and, if a Lender fails to respond to any Revolver
Commitment Increase Notice within five (5) Business Days after such Lender’s
receipt of such request, such Lender shall be deemed to have declined to
participate in such Revolver Commitment Increase, (ii) if any Lender declines to
participate in any Revolver Commitment Increase and, as a result, commitments
from additional financial institutions are required in connection with the
Revolver Commitment Increase, any Person or Persons providing such commitment
shall be subject to the written consent of the Administrative Agent, the
Swingline Lender and the Issuing Bank (such consent not to be unreasonably
withheld or delayed), if such consent would be required pursuant to the
definition of Eligible Assignee and (iii) in no event shall a Defaulting Lender
be entitled to participate in such Revolver Commitment Increase. In the event
that any Lender or other Person agrees to participate in any Revolver Commitment
Increase (each an “Increase Loan Lender”), such Revolver Commitment Increase
shall become effective on such date as shall be mutually agreed upon by the
Increase Loan Lenders and the Lead Borrower, which date shall be as soon as
practicable after the date of receipt of the Revolver Commitment Increase Notice
(such date, the “Increase Date”); provided that the establishment of such
Revolver Commitment Increase and the obligation of such Increase Loan Lenders to
make the Revolver Loans thereunder shall be subject to the satisfaction of each
of the following conditions: (1) no Event of Default would exist after giving
effect thereto; (2) the Revolver Commitment Increase shall be effected pursuant
to one or more joinder agreements executed and delivered by the Lead Borrower,
the Administrative Agent, and the Increase Loan Lenders, each of which shall be
reasonably satisfactory to the Lead Borrower, the Administrative Agent, and the
Increase Loan Lenders; (3) Loan Parties shall execute and deliver or cause to be
executed and delivered to the Administrative Agent such amendments to the Loan
Documents, legal opinions and other documents as the Administrative Agent may
reasonably request in connection with any such transaction, which amendments,
legal opinions and other documents shall be reasonably satisfactory to the
Administrative Agent; and (4) the Borrowers shall have paid to the
Administrative Agent and the Lenders such additional fees as may be required to
be paid by the Borrowers in connection therewith.

 

 
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(c)     On the Increase Date, upon fulfillment of the conditions set forth in
this Section 2.22, (i) the Administrative Agent shall effect a settlement of all
outstanding Revolver Loans among the Lenders that will reflect the adjustments
to the Revolver Commitments of the Lenders as a result of the Revolver
Commitment Increase, (ii) the Administrative Agent shall notify the Lenders and
Loan Parties of the occurrence of the Revolver Commitment Increase to be
effected on the Increase Date, (iii) Schedule 2.01 shall be deemed modified to
reflect the revised Revolver Commitments of the affected the Lenders and (iv)
Notes will be issued, at the expense of the Borrowers, to any Lender
participating in the Revolver Commitment Increase and requesting a Note.

 

(d)     The terms and provisions of the Revolver Commitment Increase shall be
identical to the Revolver Loans and the Revolver Commitments (other than with
respect to fees) and, for purposes of this Agreement and the other Loan
Documents, all Revolver Loans made under the Revolver Commitment Increase shall
be deemed to be Revolver Loans. Without limiting the generality of the
foregoing, (i) the rate of interest applicable to the Revolver Commitment
Increase shall be the same as the rate of interest applicable to the existing
Revolver Loans, (ii) unused line fees applicable to the Revolver Commitment
Increase shall be calculated using the same Unused Line Fee Rates applicable to
the existing Revolver Loans, (iii) the Revolver Commitment Increase shall share
ratably in any mandatory prepayments of the Revolver Loans, (iv) after giving
effect to such Revolver Commitment Increases and prior to the Commitment
Revolver Termination Date, Revolver Commitments shall be reduced on a Pro Rata
basis, and (v) the Revolver Commitment Increase shall rank pari passu in right
of payment and security with the existing Revolver Loans. Notwithstanding the
foregoing or anything to the contrary contained in the Loan Documents (including
Section 9.08), the rate of interest and the Unused Line Fee Rate or similar fee
interest rate applicable to the existing Revolver Loans may, at the sole option
of the Borrowers, be increased in excess of the rate of interest and/or fee
applicable thereto to match that applicable to the Revolver Commitment Increase.
Each joinder agreement and any amendment to any Loan Document requested by the
Administrative Agent in connection with the establishment of the Revolver
Commitment Increase may, without the consent of any of the Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be reasonably
necessary or appropriate, in the opinion of the Administrative Agent and the
Lead Borrower, to effect the provisions of this Section 2.22.

 

SECTION 2.23.       Extension Offers.

 

(a)     Notwithstanding anything to the contrary in this Agreement, pursuant to
one or more offers (each, an “Extension Offer”) made from time to time by the
Borrowers to all Lenders of Revolver Commitments with a like maturity date on a
Pro Rata basis and on the same terms to each such Lender, the Borrowers are
hereby permitted to consummate from time to time transactions with individual
Lenders that accept the terms contained in such Extension Offers to extend the
maturity date of each such Lender’s Revolver Commitments and otherwise modify
the terms of such Revolver Commitments pursuant to the terms of the relevant
Extension Offer (including, without limitation, by increasing the interest rate
or fees payable in respect of such Revolver Commitments (and related
outstandings)) (each, an “Extension,” and each group of Revolver Commitments, as
applicable, in each case as so extended, as well as the original Revolver
Commitments (in each case not so extended), being a “tranche”; any Extended
Revolver Commitments shall constitute a separate tranche of Revolver Commitments
from the tranche of Revolver Commitments from which they were converted), so
long as the following terms are satisfied:

 

(i)     no Event of Default shall have occurred and be continuing at the time
the offering document in respect of an Extension Offer is delivered to the
Lenders,

 

 
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(ii)     except as to interest rates, fees and final maturity (which shall be
determined by the Borrowers and set forth in the relevant Extension Offer), the
Revolver Commitment of any Lender that agrees to an Extension (an “Extending
Revolver Lender”) with respect to all or a portion of such Revolver Commitment
extended (an “Extended Revolver Commitment”), and the related outstandings
(“Extended Revolver Loans”), shall be a Revolver Commitment (or related
outstandings, as the case may be) with the same terms as the original Revolver
Commitments (and related outstandings); provided that (1) the Borrowing and
repayment (except for (A) payments of interest and fees at different rates on
Extended Revolving Commitments (and related outstandings), (B) repayments
required upon the maturity date of the non-extending Revolver Commitments and
(C) repayments made in connection with a permanent repayment and termination of
commitments) of Revolver Loans with respect to Extended Revolving Commitments
after the applicable Extension date shall be made on a pro rata basis with all
other Revolver Commitments, (2) subject to the provisions of Sections 2.04(c)
and 2.05(d) to the extent dealing with Swingline Loans and Letters of Credit
which mature or expire after a maturity date when there exists Extended
Revolving Commitments with a longer maturity date, all Swingline Loans and
Letters of Credit shall be participated on a Pro Rata basis by all Lenders with
Revolver Commitments in accordance with their percentage of the Revolver
Commitments (and except as provided in Sections 2.04(c) and 2.05(d) without
giving effect to changes thereto on an earlier maturity date with respect to
Swingline Loans and Letters of Credit theretofore incurred or issued), (3) the
permanent repayment of Revolver Loans with respect to, and termination of,
Extended Revolving Commitments after the applicable Extension date shall be made
on a Pro Rata basis with all other Revolver Commitments, except that the
Borrowers shall be permitted to permanently repay and terminate commitments of
any such tranche of Revolver Commitments on a better than Pro Rata basis as
compared to any other tranche of Revolver Commitments with a later maturity date
than such tranche of Revolver Commitments, (4) assignments and participations of
Extended Revolving Commitments and extend Revolver Loans shall be governed by
the same assignment and participation provisions applicable to Revolver
Commitments and Revolver Loans and (5) at no time shall there be Revolver
Commitments hereunder (including Extended Revolving Commitment and any original
Revolver Commitments) which have more than three different maturity dates,

 

(iii)     if the aggregate principal of Revolver Commitments in respect of which
Lenders shall have accepted the relevant Extension Offer shall exceed the
maximum aggregate principal amount of Revolver Commitments, as the case may be,
offered to be extended by the Borrowers pursuant to such Extension Offer, then
the Revolver Commitments, as the case may be, of such Lenders shall be extended
ratably up to such maximum amount based on the respective principal amounts (but
not to exceed actual holdings of record) with respect to which such Lenders have
accepted such Extension Offer,

 

(iv)     all documentation in respect of such Extension shall be consistent with
the foregoing and

 

(v)     any applicable Minimum Extension Condition shall be satisfied unless
waived by the applicable Borrower.

 

(b)     With respect to all Extensions consummated by the Borrowers pursuant to
this Section 2.23(b), (i) such Extensions shall not constitute voluntary or
mandatory payments or prepayments for purposes of Sections 2.08, 2.18, 9.06 and
9.19 and (ii) an Extension Offer is required to be in a minimum amount of
$5,000,000, provided that the Borrowers may at their election specify as a
condition (a “Minimum Extension Condition”) to consummating any such Extension
that a greater minimum amount of Revolver Commitments of any or all applicable
tranches be tendered. The Administrative Agent and the Lenders hereby consent to
the transactions contemplated by this Section 2.23 (including, for the avoidance
of doubt, payment of any interest, fees or premium in respect of any Extended
Revolving Commitments on such terms as may be set forth in the relevant
Extension Offer) and hereby waive the requirements of any provision of this
Agreement (including, without limitation, Sections 2.08, 2.18, 9.06 and 9.19) or
any other Loan Document that may otherwise prohibit any such Extension or any
other transaction contemplated by this Section 2.23.

 

 
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(c)     No consent of any Lender or the Administrative Agent shall be required
to effectuate any Extension, other than the consent of each Lender agreeing to
such Extension with respect to one or more of its Revolver Commitments (or a
portion thereof). All Extended Revolving Commitments and all obligations in
respect thereof shall be Secured Obligations under this Agreement and the other
Loan Documents that are secured by the Collateral on a pari passu basis with all
other applicable Obligations under this Agreement and the other Loan Documents.
The Lenders hereby irrevocably authorize the Administrative Agent to enter into
amendments to this Agreement and the other Loan Documents with the Borrowers as
may be necessary in order to establish new tranches or sub-tranches in respect
of the Revolver Commitments so extended and such technical amendments as may be
necessary or appropriate in the reasonable opinion of the Administrative Agent
and the Borrowers in connection with the establishment of such new tranches or
sub-tranches, in each case on terms consistent with this Section 2.23. In
addition, if so provided in such amendment and with the consent of each Issuing
Bank, participations in Letters of Credit expiring on or after the latest
maturity date (but in no event later than the date that is five (5) Business
Days prior to the Revolver Termination Date) in respect of the Revolver
Commitments shall be re-allocated from Lenders holding non-extended Revolver
Commitments to Lenders holding Extended Revolver Commitments in accordance with
the terms of such amendment; provided, however, that such participation
interests shall, upon receipt thereof by the relevant Lenders holding Revolver
Commitments, be deemed to be participation interests in respect of such Revolver
Commitments and the terms of such participation interests (including, without
limitation, the commission applicable thereto) shall be adjusted accordingly.
Without limiting the foregoing, in connection with any Extensions the respective
Loan Parties shall (at their expense) amend (and the Administrative Agent is
hereby directed to amend) any Mortgage that has a maturity date prior to the
then latest applicable Revolver Termination Date so that such maturity date is
extended to the then applicable Revolver Termination Date.

 

(d)     In connection with any Extension, the Borrowers shall provide the
Administrative Agent at least 10 Business Days (or such shorter period as may be
agreed by the Administrative Agent in its reasonable discretion) prior written
notice thereof.

 

SECTION 2.24.     Overadvances. If the aggregate Revolver Loans outstanding
exceed the Borrowing Base (an “Overadvance”) at any time, the excess amount
shall be payable by the Borrowers on demand by the Administrative Agent, but all
such Revolver Loans shall nevertheless constitute Secured Obligations secured by
the Collateral and entitled to all benefits of the Loan Documents. The
Administrative Agent may require the Lenders to honor requests for Overadvance
Loans and to forbear from requiring the Borrowers to cure an Overadvance, (a)
when no other Event of Default is known to the Administrative Agent, as long as
(i) the Overadvance does not continue for more than 30 consecutive days (and no
Overadvance may exist for at least five consecutive days thereafter before
further Overadvance Loans are required), and (ii) the aggregate amount of all
Overadvances and Protective Advances is not known by the Administrative Agent to
exceed 10% of the Borrowing Base and (b) regardless of whether an Event of
Default exists, if the Administrative Agent discovers an Overadvance not
previously known by it to exist, as long as from the date of such discovery the
Overadvance (i) is not increased by more than $500,000, and (ii) does not
continue for more than 30 consecutive days. In no event shall Overadvance Loans
be required that would cause the aggregate outstanding Revolver Loans and LC
Obligations to exceed the aggregate Revolver Commitments. The making of any
Overadvance shall not create nor constitute a Default or Event of Default; it
being understood that the making or continuance of an Overadvance shall not
constitute a waiver by the Administrative Agent or the Lenders of the then
existing Event of Default. In no event shall any Borrower or other Loan Party be
permitted to require any Overadvance Loan to be made.

 

 
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SECTION 2.25.     Protective Advances. The Administrative Agent shall be
authorized, in its discretion, following notice to and consultation with the
Lead Borrower, at any time, to make ABR Loans (“Protective Advances”) (a) in an
aggregate amount, together with the aggregate amount of all Overadvance Loans,
not to exceed 10% of the Borrowing Base, if the Administrative Agent deems such
Protective Advances necessary or desirable to preserve and protect the
Collateral, or to enhance the collectability or repayment of the Obligations; or
(b) to pay any other amounts chargeable to Loan Parties under any Loan
Documents, including costs, fees and expenses; provided that, the aggregate
amount of outstanding Protective Advances plus the outstanding amount of
Revolver Loans and LC Obligations shall not exceed the aggregate Revolver
Commitments. Each Lender shall participate in each Protective Advance on a Pro
Rata basis. Required Lenders may at any time revoke the Administrative Agent’s
authority to make further Protective Advances under clause (a) by written notice
to the Administrative Agent. Absent such revocation, the Administrative Agent’s
determination that funding of a Protective Advance is appropriate shall be
conclusive. The Administrative Agent may use the proceeds of such Protective
Advances to (a) protect, insure, maintain or realize upon any Collateral; or (b)
defend or maintain the validity or priority of the Administrative Agent’s Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien; provided that the Administrative Agent shall use reasonable
efforts to notify the Lead Borrower after paying any such amount or taking any
such action and shall not make payment of any item that is being Properly
Contested.

 

SECTION 2.26.     Lead Borrower. Each Borrower hereby designates the Lead
Borrower as its representative and agent for all purposes under the Loan
Documents, including requests for Revolver Loans and Letters of Credit,
designation of interest rates, delivery or receipt of communications,
preparation and delivery of Borrowing Base and financial reports, receipt and
payment of Obligations, requests for waivers, amendments or other
accommodations, actions under the Loan Documents (including in respect of
compliance with covenants), and all other dealings with the Administrative
Agent, the Issuing Bank or any Lender. The Lead Borrower hereby accepts such
appointment. The Administrative Agent and the Lenders shall be entitled to rely
upon, and shall be fully protected in relying upon, any notice or communication
(including any Borrowing Request) delivered by the Lead Borrower on behalf of
any Borrower. The Administrative Agent and the Lenders may give any notice or
communication with a Borrower hereunder to the Lead Borrower on behalf of such
Borrower. Each of the Administrative Agent, the Issuing Bank and the Lenders
shall have the right, in its discretion, to deal exclusively with the Lead
Borrower for any or all purposes under the Loan Documents. Each Borrower agrees
that any notice, election, communication, representation, agreement or
undertaking made on its behalf by the Lead Borrower shall be binding upon and
enforceable against it.

 

ARTICLE III

Representations and Warranties

 

Each of Holdings (solely to the extent applicable to it) and each Borrower
represents and warrants to each of the Lenders that:

 

SECTION 3.01.     Organization; Powers. Each of Holdings, each Borrower and each
of the Restricted Subsidiaries (a) is a limited partnership, limited liability
company or corporation duly organized, validly existing and in good standing
(or, if applicable in a foreign jurisdiction, enjoys the equivalent status under
the laws of any jurisdiction of organization outside the United States) under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted, (c) is qualified to do business and in good standing in each
jurisdiction where such qualification is required; except in each case referred
to in this Section 3.01 (other than in clause (a) and clause (b), respectively,
with respect to each Borrower), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

 
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SECTION 3.02.     Authorization. The execution, delivery and performance by
Holdings, each Borrower and each of the Subsidiary Loan Parties of each of the
Loan Documents to which it is a party, and the borrowings hereunder, the
transactions forming a part of the Transactions and the payment of the
Transaction Costs (a) have been duly authorized by all corporate, stockholder,
limited partnership or limited liability company action required to be obtained
by Holdings, each Borrower and such Subsidiary Loan Parties and (b) will not (i)
violate (A) any provision of (x) law, statute, rule or regulation applicable to
such party, or (y) of the certificate or articles of incorporation or other
constitutive documents or by-laws of Holdings, any Borrower or any such
Subsidiary Loan Party, (B) any applicable order of any court or any rule,
regulation or order of any Governmental Authority or (C) any provision of any
indenture, certificate of designation for preferred stock, agreement or other
instrument to which Holdings, any Borrower or any such Subsidiary Loan Party 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, give rise to a right of or
result in any cancellation or acceleration of any right or obligation (including
any payment) or to a loss of a material benefit under any such indenture,
certificate of designation for preferred stock, agreement or other instrument,
where any such conflict, violation, breach or default referred to in clause
(b)(i)(A)(x), (b)(i)(B), (b)(i)(C) or (b)(ii) of this Section 3.02, could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, 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, any Borrower or any such Subsidiary Loan Party, other than the Liens
created by the Loan Documents and Liens permitted by Section 6.02 hereof.

 

SECTION 3.03.     Enforceability. This Agreement has been duly executed and
delivered by Holdings and each Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party that is party thereto
will constitute, a legal, valid and binding obligation of such Loan Party
enforceable against each such Loan Party in accordance with its terms, subject
to (i) the effects of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or other similar laws affecting creditors’ rights
generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii)
implied covenants of good faith and fair dealing.

 

SECTION 3.04.     Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions and the payment of the
Transaction Costs, except for (a) the filing of Uniform Commercial Code
financing statements, (b) filings with the United States Patent and Trademark
Office and the United States Copyright Office and comparable offices in foreign
jurisdictions and equivalent filings in foreign jurisdictions, (c) recordation
of the Mortgages, (d) such as have been made or obtained and are in full force
and effect and (e) such actions, consents, approvals, registrations or filings
the failure to be obtained or made which could not reasonably be expected to
have a Material Adverse Effect.

 

 
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SECTION 3.05.     Financial Statements.

 

(a)     The audited consolidated balance sheets of the Lead Borrower and its
Subsidiaries at December 31, 2009, 2010 and 2011, and the audited consolidated
statements of income and cash flows of the Lead Borrower and its Subsidiaries
for such fiscal years, reported on by and accompanied by an audit opinion from
Ernst & Young, copies of which have heretofore been furnished to each Lender,
present fairly in all material respects the consolidated financial condition of
the Lead Borrower and its Subsidiaries for such periods and as at such dates and
the consolidated results of operations and cash flows of the Lead Borrower and
its Subsidiaries for the years then ended.

 

(b)     The unaudited interim consolidated balance sheet of the Lead Borrower
and its Subsidiaries as at March 31, 2012, and the related unaudited interim
consolidated statements of income and cash flows for the three (3)-month period
then ended (including for the comparable period in fiscal year 2011), present
fairly in all material respects the consolidated financial condition of the Lead
Borrower and its Subsidiaries as at such date (subject to normal year-end audit
adjustments). All such financial statements have been prepared in accordance
with GAAP (subject to (i) normal year-end adjustments and (ii) the absence of
notes), except as approved by the aforementioned firm of accountants and
disclosed therein.

 

SECTION 3.06.     No Material Adverse Effect. Since December 31, 2012, no event,
development, circumstance or change has occurred that has or would reasonably be
expected to have a Material Adverse Effect.

 

SECTION 3.07.     Title to Properties; Possession Under Leases.

 

(a)     Each of Holdings, the Borrowers and the Restricted Subsidiaries has good
and insurable fee simple title to the Mortgaged Properties, and good and
insurable fee simple title to, or good and valid interests in easements or other
limited property interests in, as applicable, all its other real properties and
has good and valid title to its personal property and assets, in each case, free
and clear of Liens except for defects in title that do not impair the value
thereof in any material respect or interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes and Liens expressly permitted by Section 6.02 or arising
by operation of law and except where the failure to have such title or interest
or existence of such Lien could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

 

(b)     Each of Holdings, the Borrowers and the Restricted Subsidiaries owns or
possesses, or is licensed or otherwise has the right to use, all patents,
trademarks, service marks, trade names and copyrights and all licenses and
rights with respect to the foregoing, reasonably necessary for the present
conduct of its business, without any conflict (of which the Borrowers have been
notified in writing) with the rights of others, except where the failure to have
such rights or where such conflicts and restrictions could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

SECTION 3.08.     Subsidiaries.

 

(a)     Schedule 3.08(a) sets forth as of the Closing Date the name and
jurisdiction of incorporation, formation or organization of each Subsidiary of
Holdings and, as to each such Subsidiary, the percentage of each class of
outstanding Equity Interests owned by Holdings or by any such Subsidiary.

 

 
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(b)     As of the Closing Date, there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than
directors’ qualifying shares) of any nature relating to any Equity Interests of
any Restricted Subsidiary.

 

SECTION 3.09.     Litigation; Compliance with Laws.

 

(a)     There are no actions, suits, investigations or proceedings at law or in
equity or by or on behalf of any Governmental Authority or in arbitration now
pending against, or to the knowledge of Holdings or the Lead Borrower threatened
in writing against, Holdings or the Lead Borrower or any of the Restricted
Subsidiaries or any business, property or rights of any such person (i) that
involve any Loan Document, the Transactions or the payment of the Transaction
Costs or (ii) that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

 

(b)     None of Holdings, the Lead Borrower, the Restricted Subsidiaries or
their respective properties or assets is in violation of any law, rule or
regulation (including any zoning, building, ordinance, code or approval or any
building permit, but excluding any Environmental Laws that are the subject of
Section 3.16) or any restriction of record or agreement affecting any Mortgaged
Property, or is in default with respect to any judgment, writ, injunction or
decree of any Governmental Authority, where such violation or default could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

SECTION 3.10.     Investment Company Act. None of Holdings, any Borrower or any
Restricted Subsidiary is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended.

 

SECTION 3.11.     [Reserved].

 

SECTION 3.12.     Federal Reserve Regulations.

 

(a)     None of Holdings, any Borrower or any Restricted Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock.

 

(b)     No part of the proceeds of any Loan will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, (i) to purchase
or carry Margin Stock or to extend credit to others for the purpose of
purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose that entails a violation of,
or that is inconsistent with, the provisions of the Regulations of the Board,
including Regulation U or Regulation X.

 

SECTION 3.13.     Tax Returns.

 

(a)     Each of Holdings, the Borrowers and their Subsidiaries has filed or
caused to be filed all U.S. federal, state, local and non-U.S. Tax returns
required to have been filed by it that are material to such companies, taken as
a whole, and each such Tax return is true and correct in all material respects,
except, in each case, as could not be, individually or in the aggregate,
reasonably expected to have a Material Adverse Effect;

 

(b)     Each of Holdings, the Borrowers and their Subsidiaries has timely paid
or caused to be timely paid all Taxes shown to be due and payable by it on the
returns referred to in clause (a) and all other Taxes or assessments (or made
adequate provision (in accordance with GAAP) for the payment of all such amounts
due) with respect to all periods or portions thereof ending on or before the
Closing Date (except Taxes or assessments that are being contested in good faith
by appropriate proceedings in accordance with Section 5.03 and for which
Holdings, the Borrowers or any of its Subsidiaries (as the case may be) has set
aside on its books adequate reserves in accordance with GAAP), which Taxes, if
not paid or adequately provided for, could, individually or in the aggregate,
reasonably be expected to have, a Material Adverse Effect; and

 

 
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(c)     Other than as could not be, individually or in the aggregate, reasonably
expected to have a Material Adverse Effect, with respect to each of Holdings,
the Borrowers and their Subsidiaries, no tax lien has been filed, and, to the
knowledge of the Lead Borrower and its Subsidiaries, no claim is being asserted,
with respect to any such Taxes.

 

SECTION 3.14.     No Material Misstatements.

 

(a)     As of the Closing Date only, all written information (other than the
Projections, other forward looking information and information of a general
economic or industry specific nature) (the “Information”) concerning Holdings,
the Lead Borrower, its Subsidiaries and the Transactions included in the
Information Memorandum or otherwise prepared by or on behalf of the foregoing or
their representatives and made available, by or on behalf of Holdings or the
Lead Borrower, to the Joint Lead Arrangers, any Lenders or the Administrative
Agent in connection with the Transactions or any other transactions contemplated
hereby, when taken as a whole, were true and correct in all material respects as
of the Closing Date and does not as of such date contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the
circumstances under which such statements were made.

 

(b)     The Projections furnished to the Joint Lead Arrangers, the
Administrative Agent or the Lenders have been prepared in good faith based upon
assumptions believed by the Lead Borrower to be reasonable at the time made, as
of the date the Projections were furnished to the Joint Lead Arrangers, the
Administrative Agent or the Lenders and as of the Closing Date (it being
understood that actual results may vary from the Projections and that such
variations may be material).

 

SECTION 3.15.     Employee Benefit Plans.

 

(a)     Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect: (i) each Loan Party and each ERISA
Affiliate is in compliance with the applicable provisions of ERISA and the
provisions of the Code relating to Plans and the regulations and published
interpretations thereunder; and (ii) no ERISA Event has occurred or is
reasonably expected to occur; the present value of all accumulated benefit
obligations under each Plan (based on those assumptions used for purposes of
Accounting Standards Codification No. 715: Compensation Retirement Benefits) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed the fair market value of the assets of such Plan allocable to
such accrued benefits and the present value of all accrued benefit obligations
of all underfunded Plans did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the value of the assets of all such
underfunded Plans.

 

(b)     Except as could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, no Foreign Plan Event has
occurred.

 

SECTION 3.16.     Environmental Matters. Except as to matters that could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect: (i) no written notice of violation, request for information,
order, complaint or assertion of penalty has been received by the Borrowers or
any of the Restricted Subsidiaries, and there are no judicial, administrative or
other actions, suits or proceedings pending or, to the knowledge of the
Borrowers, threatened which allege a violation of or liability under any
Environmental Laws or concerning Hazardous Materials, in each case relating to
the Borrowers or any of the Restricted Subsidiaries, (ii) each of the Borrowers
and the Restricted Subsidiaries has all permits necessary for its operations to
comply with all applicable Environmental Laws and is, and during the term of all
applicable statutes of limitation, has been, in compliance with the terms of
such permits and with all other applicable Environmental Laws, (iii) no
Hazardous Material is located at any property currently or formerly owned,
operated or leased by the Borrowers or any of the Restricted Subsidiaries in
quantities or concentrations that would reasonably be expected to give rise to
any liability or obligation of the Borrowers or any of the Restricted
Subsidiaries under any Environmental Laws, and no Hazardous Material has been
generated by or on behalf of the Borrowers or any of the Restricted Subsidiaries
that has been transported to or Released at or from any location in a manner
that would reasonably be expected to give rise to any liability or obligation of
the Borrowers or any of the Restricted Subsidiaries, and (iv) there is no
agreement to which the Borrowers or any of the Restricted Subsidiaries is a
party in which the Borrowers or any of the Restricted Subsidiaries has assumed
or undertaken, or retained, responsibility for any known or reasonably likely
liability or obligation arising under or relating to Environmental Laws.

 

 
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SECTION 3.17.     Security Documents.

 

(a)     The Collateral Agreement is effective to create in favor of the
Administrative Agent (for the benefit of the Secured Parties) a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof. In the case of the Pledged Collateral described in the Collateral
Agreement, when certificates or promissory notes, as applicable, representing
such Pledged Collateral are delivered to the Administrative Agent (together with
transfer powers or endorsements executed in blank), in the case of Deposit
Accounts, when Deposit Account Control Agreements are entered into by the
Administrative Agent, and in the case of the other Collateral described in the
Collateral Agreement (other than registered copyrights and copyright
applications), when financing statements and other filings described on Schedule
3.17 are filed in the offices specified on Schedule 3.17, the Administrative
Agent (for the benefit of the Secured Parties) shall have a fully perfected Lien
on, and security interest in, all right, title and interest of the Loan Parties
in such Collateral and, subject to Section 9-315 of the New York Uniform
Commercial Code, the proceeds thereof, as security for the Obligations, in each
case to the extent security interests in such Collateral can be perfected by
delivery of such certificates or notes, as applicable, representing Pledged
Collateral, the execution of Deposit Account Control Agreements or the filing
Uniform Commercial Code financing statements, as applicable, in each case prior
and superior in right to any other person (except, in the case of Collateral
other than Pledged Collateral, Liens expressly permitted by Section 6.02 and
Liens having priority by operation of law).

 

(b)     When the Collateral Agreement or a summary thereof is properly filed in
the United States Copyright Office or the United States Patent and Trademark
Office, as applicable, the Administrative Agent (for the benefit of the Secured
Parties) shall have a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties thereunder in the Collateral
consisting of registered copyrights and copyright applications, in each case
prior and superior in right to any other person except Liens expressly permitted
by Section 6.02 and Liens having priority by operation of law (it being
understood that subsequent recordings in the United States Copyright Office or
United States Patent and Trademark Office, as the case may be, may be necessary
to perfect a lien on registered copyrights and copyright applications acquired
by the grantors after the Closing Date).

 

(c)     The Mortgages shall be effective to create in favor of the
Administrative Agent (for the benefit of the Secured Parties) a legal, valid and
enforceable Lien on all of the Loan Parties’ right, title and interest in and to
the Mortgaged Property thereunder and the proceeds thereof, and when such
Mortgages are filed or recorded in the proper real estate filing or recording
offices, the Administrative Agent (for the benefit of the Secured Parties) shall
have a fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Mortgaged Property and, to the extent
applicable, subject to Section 9-315 of the Uniform Commercial Code, the
proceeds thereof, in each case prior and superior in right to any other person,
other than with respect to the rights of a person pursuant to Liens expressly
permitted by Section 6.02 and Liens having priority by operation of law.

 

 
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SECTION 3.18.     Solvency. Immediately after giving effect to the Transactions
and the payment of the Transaction Costs on the Closing Date and immediately
following the making of the Revolver Loans on the Closing Date and after giving
effect to the application of the proceeds of the Revolver Loans, (i) the fair
value of the assets of Holdings, the Lead Borrower and its Subsidiaries on a
consolidated basis, at a fair valuation, will exceed the debts and liabilities,
direct, subordinated, contingent or otherwise, of Holdings, the Lead Borrower
and its Subsidiaries on a consolidated basis, respectively; (ii) the present
fair saleable value of the property of Holdings, the Lead Borrower and its
Subsidiaries on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of Holdings, the Lead Borrower and its
Subsidiaries on a consolidated basis, respectively, on their debts and other
liabilities, direct, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) Holdings, the Lead Borrower
and its Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, direct, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) Holdings, the Lead Borrower
and its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.

 

SECTION 3.19.     Labor Matters. Except as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect: (a) there
are no strikes or other labor disputes pending or, to the knowledge of Holdings
or the Lead Borrower, threatened in writing against the Borrowers or any of the
Restricted Subsidiaries; (b) the hours worked and payments made to employees of
the Borrowers and the Restricted Subsidiaries have not been in violation of the
Fair Labor Standards Act or any other applicable law dealing with such matters;
(c) all persons treated as contractors by the Borrower and the Restricted
Subsidiaries are properly categorized as such, and not as employees, under
applicable law; and (d) all payments due from the Borrowers or any of the
Restricted Subsidiaries or for which any claim may be made against the Borrowers
or any of the Restricted Subsidiaries, 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 the Borrowers or such Restricted Subsidiary to the
extent required by GAAP. Except as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect the consummation of the
Transactions and the payment of the Transaction Costs will not give rise to a
right of termination or right of renegotiation on the part of any union under
any material collective bargaining agreement to which the Lead Borrower or any
of its Subsidiaries (or any predecessor) is a party or by which Holdings, the
Lead Borrower or any of its Subsidiaries (or any predecessor) is bound.

 

SECTION 3.20.     Insurance. Schedule 3.20 sets forth a true, complete and
correct description of all material insurance maintained by or on behalf of
Holdings, the Lead Borrower or the Restricted Subsidiaries as of the Closing
Date. Except as, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, as of such date, such insurance is
in full force and effect.

 

SECTION 3.21.     USA PATRIOT Act and OFAC.

 

(a)     To the extent applicable, each Loan Party is in compliance, in all
material respects, with the (i) Trading with the Enemy Act, as amended, and each
of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) USA PATRIOT Act. To
the knowledge of the Lead Borrower, no part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended.

 

 
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(b)     None of the Borrowers or any Restricted Subsidiary nor, to the knowledge
of the Lead Borrower, any director, officer, agent, employee or controlled
Affiliate of the Borrowers is currently the subject of any U.S. sanctions
program administered by OFAC; and the Borrowers will not directly or indirectly
use the proceeds of the Loans or otherwise knowingly make available such
proceeds to any Person, for the purpose of financing the activities of any
Person currently the subject of any U.S. sanctions program administered by OFAC,
except to the extent licensed or otherwise approved by OFAC.

 

ARTICLE IV

Conditions of Lending

 

The Administrative Agent, Swingline Lenders, the Issuing Bank and the Lenders
shall not be required to fund any Revolver Loans or Swingline Loans, or arrange
for the issuance of any Letters of Credit on the Closing Date, until the
following conditions are satisfied or waived:

 

SECTION 4.01.     Closing Date. On the Closing Date:

 

(a)     The Administrative Agent shall have received a Borrowing Request as
required by Section 2.03 (or a Borrowing Request shall have been deemed given in
accordance with the last paragraph of Section 2.03).

 

(b)     The representations and warranties set forth in Article III hereof shall
be true and correct in all material respects as of such date, 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 be true and correct in all
material respects as of such earlier date).

 

(c)     At the time of and immediately after giving effect to the Closing Date
and upon the making of any Revolver Loans, no Event of Default or Default shall
have occurred and be continuing.

 

(d)     The Administrative Agent (or its counsel) shall have received from each
party hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include fax or other electronic transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 

(e)     The Administrative Agent (or its counsel) shall have received duly
executed counterparts of the Intercreditor Agreement, signed on behalf of the
Administrative Agent and the Term Agent and acknowledged by the Borrowers and
the other Loan Parties.

 

 
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(f)     The Administrative Agent shall have received, on behalf of itself and
the Lenders on the Closing Date, a written opinion of each of (i) Weil, Gotshal
& Manges LLP, special counsel for Holdings and the Borrowers, (ii) Burr and
Forman LLP, special Georgia counsel for Holdings and the Borrowers and (iii)
Reinhart Boerner Van Deuren S.C., special Wisconsin counsel for Holdings and the
Borrowers, in each case (A) dated the Closing Date, (B) addressed to the
Administrative Agent and the Lenders on the Closing Date and (C) in form and
substance reasonably satisfactory to the Administrative Agent and covering such
other matters relating to the Loan Documents and the Transactions as the
Administrative Agent shall reasonably request, and each of Holdings and the
Borrowers hereby instruct its counsel to deliver such opinions.

 

(g)     The Administrative Agent shall have received in the case of each Loan
Party each of the items referred to in clauses (i), (ii), (iii) and (iv) below:

 

(i)     a copy of the certificate or articles of incorporation, certificate of
limited partnership or certificate of formation, including all amendments
thereto, of each Loan Party, certified as of a recent date by the Secretary of
State (or other similar official) of the jurisdiction of its organization, and a
certificate as to the good standing (to the extent such concept or a similar
concept exists under the laws of such jurisdiction) of each such Loan Party as
of a recent date from such Secretary of State (or other similar official);

 

(ii)     a certificate of the secretary or assistant secretary or similar
officer of each Loan Party dated the Closing Date and certifying:

 

(A)     that attached thereto is a true and complete copy of the by-laws (or
limited partnership agreement, limited liability company agreement or other
equivalent governing documents) of such Loan Party as in effect on the Closing
Date,

 

(B)     that attached thereto is a true and complete copy of resolutions duly
adopted by the board of directors (or equivalent governing body) of such Loan
Party (or its managing general partner or managing member) authorizing the
execution, delivery and performance of the Loan Documents to which such person
is a party and, in the case of the Borrowers, the borrowings hereunder, and that
such resolutions have not been modified, rescinded or amended and are in full
force and effect on the Closing Date,

 

(C)     that the certificate or articles of incorporation, certificate of
limited partnership or certificate of formation of such Loan Party has not been
amended since the date of the last amendment thereto disclosed pursuant to
clause (i) above,

 

(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,

 

(E)     as to the absence of any pending proceeding for the dissolution or
liquidation of such Loan Party;

 

(iii)     a certificate of another officer as to the incumbency and specimen
signature of the Secretary or Assistant Secretary or similar officer executing
the certificate pursuant to clause (ii) above; and

 

 
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(iv)     a certificate of a Responsible Officer of Holdings or the Lead Borrower
certifying that as of the Closing Date (i) all the representations and
warranties described in Section 4.01(b) are true and correct to the extent set
forth therein and (ii) that as of the Closing Date, no Default or Event of
Default has occurred and is continuing or would result from any Borrowing to
occur on the date hereof or the application of the proceeds thereof.

 

(h)     (i) The Collateral and Guarantee Requirement shall have been satisfied,
(ii) the Administrative Agent shall have received a duly completed Collateral
Questionnaire dated the Closing Date, together with all attachments contemplated
thereby, (iii) the Administrative Agent shall have received the results of a
search of the Uniform Commercial Code (or equivalent) filings made with respect
to the Loan Parties and copies of the financing statements (or similar
documents) disclosed by such search and (iv) the Administrative Agent shall have
received evidence reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or similar documents) are either
permitted by Section 6.02 or have been released (or authorized for release in a
manner reasonably satisfactory to the Administrative Agent).

 

(i)     The Lenders shall have received the financial statements, Projections
and other financial information referred to in Section 3.05 and Section 3.14.

 

(j)     On the Closing Date, substantially concurrently with the funding of the
Loans, Holdings and its Subsidiaries shall have (i) amended and restated the
Existing Debt and caused the termination of any revolving commitments to lend or
make other revolving extensions of credit under the Existing Credit Agreement
and (ii) made arrangements satisfactory to the Administrative Agent with respect
to the cancellation of any letters of credit outstanding with respect to the
Indebtedness being so repaid or terminated, or the issuance of Letters of Credit
hereunder to support the obligations of Holdings and its Subsidiaries with
respect thereto.

 

(k)     The Lenders shall have received a solvency certificate substantially in
the form of Exhibit F and signed by the Chief Financial Officer of the Lead
Borrower.

 

(l)     The Administrative Agent shall have received all fees payable thereto or
to any Lender on or prior to the Closing Date and, to the extent invoiced, all
other amounts due and payable pursuant to the Loan Documents on or prior to the
Closing Date, including, to the extent invoiced, reimbursement or payment of all
reasonable out-of-pocket expenses (including reasonable fees, charges and
disbursements of Cahill Gordon & Reindel LLP) required to be reimbursed or paid
by the Loan Parties hereunder or under any other Loan Document.

 

(m)     Since December 31, 2011, there shall not have occurred and there is no
circumstance or occurrence that is reasonably likely to have (individually or in
the aggregate) a Material Adverse Effect.

 

(n)     To the extent requested by the Administrative Agent not less than two
(2) days prior to the Closing Date, the Administrative Agent shall have
received, at least one (1) day prior to the Closing Date, all documentation and
other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the USA PATRIOT Act.

 

(o)     The Administrative Agent shall have received duly executed originals (or
copies thereof, to the reasonable satisfaction of the Administrative Agent) of a
letter of direction from the Borrowers addressed to the Administrative Agent, on
behalf of itself and Lenders, with respect to the disbursement on the Closing
Date of the proceeds of the Loans made on such date.

 

 
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(p)     The Administrative Agent shall have received a Borrowing Base
Certificate prepared as of the last day of the most recent month ended at least
15 Business Days prior to the Closing Date.

 

Each Agent and each Lender, by delivering its signature page to this Agreement
and funding a Loan on the Closing Date shall be deemed to have acknowledged
receipt of and consented to and approved each Loan Document and each other
document required to be approved by any Agent or Lender, as applicable, on the
Closing Date.

 

SECTION 4.02.     Conditions Precedent to All Credit Extensions. On the date of
each Borrowing (including each Swingline Borrowing) and on the date of each
issuance, amendment, extension or renewal of a Letter of Credit:

 

(a)     the Lead Borrower shall have delivered to the Administrative Agent a
customary Borrowing Request, or LC Request as the case may be;

 

(b)     (i) Availability on the proposed date of such Borrowing shall be
adequate to cover the amount of such Borrowing and (ii) if, on a Pro Forma Basis
immediately after giving effect to such proposed Borrowing or issuance,
amendment, extension or renewal of a Letter of Credit, either (x) outstanding
Revolver Loans and LC Obligations would exceed $15.0 million or (y) Availability
would be less than $100.0 million (such event, a “Reporting Trigger Event”),
then the Borrowers shall deliver an updated Borrowing Base Certificate that
would have been delivered if a Monthly Reporting Period was then in effect,
which shall only be required to contain updates as to the amount of the gross
Accounts and Inventory; provided that the Borrowers shall not be required to
deliver an updated Borrowing Base Certificate for each subsequent Credit
Extension after such Reporting Trigger Event; provided however that to the
extent the Borrowers are no longer subject to a Monthly Reporting Period and a
subsequent Reporting Trigger Event occurs, the Borrower will be required to
provide an updated Borrowing Base Certificate as described above in connection
with such Credit Extension. For the avoidance of doubt, delivery of any updated
Borrowing Base Certificate pursuant to this Section 4.02(b) shall be in addition
to, and shall not affect, the Borrowers’ requirements to deliver Borrowing Base
Certificates pursuant to Section 5.12(a);

 

(c)     other than on the Closing Date, no Default or Event of Default shall
exist at the time of, or result from, such funding or issuance;

 

(d)     other than on the Closing Date, the representations and warranties of
each Loan Party set forth in Article III of this Agreement or in any Security
Document shall be true and correct in all material respects (without duplication
of any materiality qualifier contained therein) on the date of, and upon giving
effect to, such funding or issuance (except for representations and warranties
that expressly relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as such earlier
date);

 

(e)     in the case of a Letter of Credit to be denominated in the Alternative
LC Currency, there shall not have occurred any change in national or
international financial, political or economic conditions or currency exchange
rates or exchange controls which in the reasonable opinion of the Administrative
Agent or the Issuing Bank would make it impracticable for such Letter of Credit
to be denominated in the Alternative LC Currency; and

 

 
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(f)     with respect to the issuance of any Letter of Credit, the LC Conditions
shall be satisfied.

 

Each request by the Borrowers for funding of a Revolver Loan, or issuance of a
Letter of Credit shall constitute a representation by the Borrowers that the
conditions in clauses (b) through (d) above are satisfied on the date of such
request and on the date of such funding or issuance.

 

ARTICLE V

Affirmative Covenants

 

Each of Holdings (solely as to Sections 5.01, 5.05 and 5.09 as applicable to it)
and the Borrowers covenant and agree with each Lender that so long as any
Revolver Commitments or Obligations (other than (i) contingent obligations as to
which no claim or demand for payment has been made, or in the case of
indemnification obligations, no notice has been given, and (ii) Obligations that
have been Cash Collateralized, as applicable) are outstanding, unless the
Required Lenders shall otherwise consent in writing, the Borrowers (and Holdings
solely to the extent applicable to it) will, and the Borrowers will cause each
of the Restricted 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 (i) where the failure to do
so would not reasonably be expected to have a Material Adverse Effect, (ii) as
otherwise expressly permitted under Section 6.05 and (iii) the liquidation or
dissolution of any Restricted Subsidiary if the assets of such Restricted
Subsidiaries are acquired by any Borrower or a Subsidiary of any Borrower.

 

(b)     Except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect, do or cause to be done all things necessary to
(i) lawfully obtain, preserve, renew, extend and keep in full force and effect
the permits, franchises, authorizations, patents, trademarks, service marks,
trade names, copyrights, licenses and rights with respect thereto reasonably
necessary to the normal conduct of the business of the Lead Borrower and the
Restricted Subsidiaries and (ii) at all times maintain and preserve all property
reasonably necessary to the normal conduct of the business of the Lead Borrower
and the Restricted Subsidiaries and keep such property in satisfactory 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 in accordance with prudent industry practice (in each case except as
expressly permitted by this Agreement).

 

SECTION 5.02.     Insurance.

 

(a)     Except where the failure to do so would not reasonably be expected to
have a Material Adverse Effect, maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by similarly situated companies engaged in the same or
similar businesses operating in the same or similar locations. Each such policy
of insurance shall (i) name the Administrative Agent, on behalf of Secured
Parties as an additional insured thereunder as its interests may appear and (ii)
in the case of each casualty insurance policy, contain a loss payable clause or
endorsement, reasonably satisfactory in form and substance to the Administrative
Agent, that names the Administrative Agent, on behalf of Lenders as the loss
payee thereunder and to the extent available provides for at least thirty (30)
days’ prior written notice to the Administrative Agent of any cancellation of
such policy.

 

 
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(b)     If at any time the area in which the Premises (as defined in the
Mortgages) are located is designated a special “flood hazard area” in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), obtain flood insurance in such reasonable total amount as the
Administrative Agent may from time to time reasonably require, and otherwise
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973, as it may be amended from time to time.

 

SECTION 5.03.     Taxes.

 

Except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect, pay and discharge promptly when due all material Taxes,
imposed upon it or upon its income or profits or in respect of its property, as
well as all lawful claims which, if unpaid, might give rise to a Lien (other
than a Lien permitted under Section 6.02) upon such properties or any part
thereof except to the extent not overdue by more than thirty (30) days or, if
more than thirty (30) days overdue (a) the validity or amount thereof shall be
contested in good faith by appropriate proceedings, and the Borrowers or the
affected Restricted Subsidiary, as applicable, shall have set aside on its books
reserves in accordance with GAAP with respect thereto and (b) in the case of a
Tax or claim which has or may become a Lien on any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such Tax or claim.

 

SECTION 5.04.     Financial Statements, Reports, etc. Furnish to the
Administrative Agent (which will promptly furnish such information to the
Lenders):

 

(a)     within one hundred ten (110) days after the end of each fiscal year
(commencing with fiscal year 2012), (x) a consolidated balance sheet and related
statements of operations, cash flows and owners’ equity showing the financial
position of the Parent and its Subsidiaries as of the close of such fiscal year
and the consolidated results of its operations during such year and setting
forth in comparative form the corresponding figures for the prior fiscal year,
which consolidated balance sheet and related statements of operations, cash
flows and owners’ equity shall be audited by independent public accountants of
recognized national standing and accompanied by an opinion of such accountants
(which opinion shall be without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements fairly present,
in all material respects, the financial condition and results of operations of
the Parent and its Subsidiaries on a consolidated basis in accordance with GAAP,
(y) a consolidating balance sheet and related statements of operations and cash
flows showing the financial position of the Lead Borrower and its Restricted
Subsidiaries as of the close of such fiscal year and the consolidating results
of its operations during such year and setting forth in comparative form the
corresponding figures for the prior fiscal year, which consolidating financial
information shall not be subject to the audit procedures set forth in clause (x)
but shall be certified by a Financial Officer of the Lead Borrower to the extent
that such consolidating financial statements fairly present, in all material
respects, the financial condition and results of operations of the Lead Borrower
and its Restricted Subsidiaries on a consolidating basis in accordance with
GAAP) and (z) in the case of the information required pursuant to clause (x) or
clause (y) supporting schedules reconciling such consolidated (or consolidating,
as applicable) balance sheet and related statements of operations and cash flows
with the consolidated (or consolidating, as applicable) financial condition and
results of operations of the Parent or the Lead Borrower, as applicable, for the
relevant period (it being understood that the delivery by the Lead Borrower of
annual reports on Form 10-K of the Parent and its consolidated Subsidiaries
shall satisfy the requirements of this Section 5.04(a) to the extent such annual
reports include the information specified herein);

 

 
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(b)     within forty-five (45) days after the end of each of the first three (3)
fiscal quarters of each fiscal year (commencing with the second fiscal quarter
of 2012), (x) a consolidated balance sheet and related statements of operations
and cash flows showing the financial position of the Parent and its Subsidiaries
as of the close of such fiscal quarter and the consolidated results of its
operations during such fiscal quarter and the then-elapsed portion of the fiscal
year and setting forth in comparative form the corresponding figures for the
corresponding periods of the prior fiscal year, all of which shall be in
reasonable detail and which consolidated balance sheet and related statements of
operations and cash flows shall be certified by a Financial Officer of the Lead
Borrower on behalf of the Lead Borrower as fairly presenting, in all material
respects, the financial position and results of operations of the Parent and its
Subsidiaries on a consolidated basis in accordance with GAAP (subject to normal
year-end audit adjustments and the absence of footnotes), (y) a consolidating
balance sheet and related statements of operations and cash flows showing the
financial position of the Lead Borrower and its Restricted Subsidiaries as of
the close of such fiscal quarter and the consolidating results of its operations
during such fiscal quarter and the then-elapsed portion of the fiscal year and
setting forth in comparative form the corresponding figures for the
corresponding periods of the prior fiscal year, all of which shall be in
reasonable detail and which consolidating balance sheet and related statements
of operations and cash flows shall be certified by a Financial Officer of the
Lead Borrower on behalf of the Lead Borrower as fairly presenting, in all
material respects, the financial position and results of operations of the Lead
Borrower and its Restricted Subsidiaries on a consolidating basis in accordance
with GAAP and (z) in the case of information required pursuant to clause (x) or
clause (y), supporting schedules reconciling such consolidated (or
consolidating, as applicable) balance sheet and related statements of operations
and cash flows with the consolidated (or consolidating, as applicable) financial
position and results of operations of the Parent or the Lead Borrower, as
applicable, for the relevant period (it being understood that the delivery by
the Lead Borrower of quarterly reports on Form 10-Q of the Parent and its
consolidated Subsidiaries shall satisfy the requirements of this Section 5.04(b)
to the extent such quarterly reports include the information specified herein);

 

(c)     (i) concurrently with any delivery of financial statements under
paragraphs (a) or (b) above, a certificate of a Financial Officer of the Lead
Borrower in substantially the form attached hereto as Exhibit I (x) certifying
that no Default or Event of Default has occurred or, if such a Default or an
Event of Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and (y)
setting forth the reasonably detailed calculations with respect to the
Consolidated Fixed Charge Coverage Ratio for such period, whether or not the
requirements of Section 6.10 are then in effect;

 

(d)     promptly after the same become publicly available, copies of all
periodic and other publicly available reports, proxy statements and, to the
extent requested by the Administrative Agent, other materials filed by Holdings,
the Lead Borrower or any of its Subsidiaries with the SEC or any securities
exchange, or after an initial public offering, distributed to its stockholders
generally, as applicable and all press releases and other statements made
available generally by Holdings or any of its Subsidiaries to the public
concerning material developments in the business of Holdings or any of its
Subsidiaries;

 

(e)     within ninety (90) days after the beginning of each fiscal year, a
detailed consolidated and consolidated quarterly budget for such fiscal year
(including a projected consolidated and consolidated balance sheet of the Lead
Borrower and its Subsidiaries as of the end of such fiscal year, and the related
consolidated and consolidated statements of projected cash flow and projected
income) and, as soon as available, significant revisions, if any, of such budget
and quarterly projections with respect to such fiscal year (to the extent that
such revisions have been approved by the Lead Borrower’s board of directors (or
equivalent governing body)), including a description of underlying assumptions
with respect thereto (collectively, the “Budget”), which Budget shall in each
case be accompanied by the statement of a Financial Officer of the Lead Borrower
to the effect that, to such Financial Officer’s knowledge, the Budget is a
reasonable estimate for the period covered thereby;

 

 
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(f)     promptly following a request therefor, all documentation and other
information that the Administrative Agent reasonably requests on its behalf or
on behalf of any Lender in order to comply with its ongoing obligations under
applicable “know your customer” and anti-money laundering rules and regulations,
including the USA PATRIOT Act;

 

(g)     together with the delivery of the annual compliance certificate required
by Section 5.04(c), deliver an updated Collateral Questionnaire reflecting all
changes since the date of the information most recently received pursuant to
this paragraph (g) or Section 5.09(f);

 

(h)     promptly following reasonable request therefore from the Administrative
Agent, copies of (i) any documents described in Sections 101(f) and/or (j) of
ERISA with respect to any Plan, and/or (ii) any notices or documents described
in Sections 101(f), (k) and/or (l) of ERISA requested with respect to any
Multiemployer Plan; provided, that if any Loan Party or any ERISA Affiliate has
not requested such documents or notices from the administrator or sponsor of the
applicable Plan or Multiemployer Plan, then, upon reasonable request of the
Administrative Agent, the Loan Party(ies) and/or the ERISA Affiliate(s) shall
promptly make a request for such documents or notices from such administer or
sponsor and the Borrowers shall provide copies of such documents and notices to
the Administrative Agent promptly after receipt thereof;

 

(i)     promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of Holdings, the Borrowers
or any of its Subsidiaries, or compliance with the terms of any Loan Document,
as in each case the Administrative Agent may reasonably request (for itself or
on behalf of any Lender);

 

(j)     at the Administrative Agent’s reasonable request, from time to time, a
listing of each Borrower’s trade payables, specifying the trade creditor and
balance due, and a detailed trade payable aging;

 

(k)     at any time when Qualified Cash is to be included in any calculation
hereunder, a report on the balance and Deposit Account location of such
Qualified Cash of up to $5,000,000, and updates thereto as frequently as
reasonably necessary if at any time the amount of such Qualified Cash to be so
included varies from the latest report provided to the Administrative Agent in
accordance with this Section 5.04(k);

 

(l)     together with the delivery of the Borrowing Base Certificate pursuant to
Section 5.12(d), at any time when there are any Letters of Credit issued in the
Alternative LC Currency, the Borrowers shall deliver a report detailing the
Dollar Equivalent of the total outstanding amount of any such Letters of Credit
denominated in the Alternative LC Currency.

 

SECTION 5.05.     Litigation and Other Notices. Furnish to the Administrative
Agent written notice of the following promptly after any Responsible Officer of
Holdings or the Borrowers obtain actual knowledge thereof:

 

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

 

 
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(b)     any action, suit or proceeding, whether at law or in equity or by or
before any Governmental Authority or in arbitration, against Holdings, the
Borrowers or any of their Subsidiaries would reasonably be expected to have a
Material Adverse Effect;

 

(c)     the occurrence of any ERISA Event or Foreign Plan Event that,
individually or together with all other ERISA Events or Foreign Plan Events that
have occurred, would reasonably be expected to have a Material Adverse Effect;
and

 

(d)     any other development specific to Holdings, the Borrowers or any of
their Subsidiaries that is not a matter of general public knowledge and that has
had, or would reasonably be expected to have, a Material Adverse Effect.

 

SECTION 5.06.     Compliance with Laws. Comply with all laws, rules, regulations
and orders of any Governmental Authority applicable to it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect; provided that
this Section 5.06 shall not apply to Environmental Laws, which are the subject
of Section 5.08, or to laws related to Taxes, which are the subject of Section
5.03.

 

SECTION 5.07.     Maintaining Records; Access to Properties and Inspections.

 

(a)     Maintain all financial records in a manner sufficient to permit the
preparation of consolidated financial statements in accordance with GAAP.

 

(b)     Permit the Administrative Agent, subject (except when an Event of
Default exists) to reasonable advance notice to, and reasonable coordination
with, the Lead Borrower and normal business hours, to visit and inspect the
Properties of any Borrower, at the Borrowers’ expense as provided in clause (c)
below, inspect, audit and make extracts from any Borrower’s corporate, financial
or operating records, and discuss with its officers, employees, agents, advisors
and independent accountants (subject to such accountants’ customary policies and
procedures) such Borrower business, financial condition, assets and results of
operations (it being understood that a representative of the Lead Borrower is
allowed to be present in any discussions with officers, employees, agent,
advisors and independent accountants); provided that the Administrative Agent
shall only be permitted to conduct one field examination and one inventory
appraisal with respect to any Collateral comprising the Borrowing Base per
12-month period; provided further, that if at any time Availability is (i) less
than 3025% of the Line Cap for a period of 5 consecutive Business Days during
such 12-month period, one additional field examination and one additional
inventory appraisal of Current Asset Collateral will be permitted in such
12-month period and (ii) during any Liquidity Period, one additional field
examination and one additional inventory appraisal of Current Asset Collateral
be permitted in such 12-month period, except that during the existence and
continuance of an Event of Default, there shall be no limit on the number of
additional field examinations and inventory appraisals of Current Asset
Collateral that shall be permitted at the Administrative Agent’s request. No
such inspection or visit shall unduly interfere with the business or operations
of any Borrower, nor result in any damage to the Property or other Collateral.
No inspection shall involve invasive testing without the prior written consent
of the Lead Borrower. Neither the Administrative Agent nor any Lender shall have
any duty to any Borrower to make any inspection, nor to share any results of any
inspection, appraisal or report with any Borrower. Each of the Borrowers
acknowledges that all inspections, appraisals and reports are prepared by the
Administrative Agent and Lenders for their purposes, and the Borrowers shall not
be entitled to rely upon them. Notwithstanding the foregoing, the Administrative
Agent shall be entitled to one additional inventory appraisal with respect to
any Collateral comprising the Borrowing Base to be completed within 90 days of
the Amendment No. 2 Effective Date.

 

 
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(c)     Reimburse the Administrative Agent for all reasonable out-of-pocket
costs and expenses (other than any legal fees or costs and expenses covered
under Section 9.05) of the Administrative Agent in connection with (i)
examinations of any Borrower’s books and records or any other financial or
Collateral matters as the Administrative Agent deems appropriate; and (ii) field
examinations and inventory appraisals of Collateral comprising the Borrowing
Base; in each case subject to the limitations on such examinations, audits and
appraisals permitted under the preceding paragraph. Subject to and without
limiting the foregoing, the Borrowers specifically agree to pay the
Administrative Agent’s then standard charges for examination activities,
including the standard charges of the Administrative Agent’s internal appraisal
group. This Section shall not be construed to limit the Administrative Agent’s
right to use third parties for such purposes.

 

SECTION 5.08.     Compliance with Environmental Laws.

 

(a)     Comply, and make reasonable efforts to cause all lessees and other
persons occupying its properties to comply, with all Environmental Laws
applicable to its operations and properties; and obtain and renew all
authorizations and permits required pursuant to Environmental Law for its
operations and properties, in each case in accordance with Environmental Laws.
This clause (a) shall be deemed not breached by a noncompliance with the
foregoing if, upon learning of such noncompliance, the Lead Borrower and any of
its affected Subsidiaries promptly undertake reasonable efforts to eliminate
such noncompliance, and such noncompliance and the elimination thereof, in the
aggregate with any other noncompliance with any of the foregoing and the
elimination thereof, could not reasonably be expected to have a Material Adverse
Effect.

 

(b)     Except as could not reasonably be expected to have a Material Adverse
Effect, generate, use, treat, store, release, dispose of, and otherwise manage
Hazardous Materials in a manner that would not reasonably be expected to result
in a material liability to the Lead Borrower or any of the Restricted
Subsidiaries or to materially affect any real property owned or leased by any of
them; and take reasonable efforts to prevent any other person from generating,
using, treating, storing, releasing, disposing of, or otherwise managing
Hazardous Materials in a manner that could reasonably be expected to result in a
material liability to, or materially affect any real property owned or operated
by, the Lead Borrower or any of the Restricted Subsidiaries.

 

SECTION 5.09.     Further Assurances; Mortgages.

 

(a)     Execute any and all further documents, financing statements, agreements
and instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, Mortgages and other
documents and recordings of Liens in stock registries), that may be required
under any applicable law, or that the Administrative Agent may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties and provide to the
Administrative Agent, from time to time upon reasonable request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority (subject to the Intercreditor Agreement) of the Liens created or
intended to be created by the Security Documents.

 

(b)     If any asset (other than real property or improvements thereto or any
interest therein) that has an individual fair market value in an amount greater
than $5.0 million (as reasonably estimated by the Lead Borrower) is acquired by
Holdings, the Borrowers or any Subsidiary Loan Party after the Closing Date or
owned by an entity at the time it becomes a Subsidiary Loan Party (in each case
other than assets constituting Collateral under a Security Document that become
subject to the Lien of such Security Document upon acquisition thereof), cause
such asset to be subjected to a Lien securing the Obligations and take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties, subject to paragraph (c) and paragraph (g) below.

 

 
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(c)     Upon the request of the Administrative Agent, grant and cause each of
the Subsidiary Loan Parties to grant to the Administrative Agent (or, if the
Administrative Agent shall so direct, a collateral agent, sub-agent or similar
agent) security interests and mortgages in fee owned real property of the
Borrowers or any such Subsidiary Loan Parties acquired after the Closing Date
and having a value at the time of acquisition in excess of $5.0 million (as
reasonably estimated by the Borrowers) pursuant to documentation in such form as
is reasonably satisfactory to the Administrative Agent (each, a “Mortgage”) and
constituting valid and enforceable Liens subject to no other Liens except as are
permitted by Section 6.02. Unless otherwise waived by the Administrative Agent,
with respect to each such Mortgage, the Borrowers shall deliver (at its expense)
to the Administrative Agent contemporaneously therewith (i) a policy or policies
or marked-up unconditional binder of title insurance or foreign equivalent
thereof, as applicable, paid for by the Borrowers, issued by a nationally
recognized title insurance company insuring the Lien of each such Mortgage as a
valid first Lien on the Mortgaged Property described therein, free of any other
Liens except as permitted by Section 6.02, together with such endorsements,
coinsurance and reinsurance as the Administrative Agent may reasonably request
and (ii) the legal opinions of local U.S. counsel in the state where such real
property is located, in form and substance reasonably satisfactory to the
Administrative Agent.

 

(d)     If (i) any additional Restricted Subsidiary is formed or acquired after
the Closing Date or (ii) any Restricted Subsidiary ceases to be an Immaterial
Subsidiary pursuant to the definition thereof, and, in each case, if such
Subsidiary is a Subsidiary Loan Party, concurrently with the delivery of
financial statements pursuant to Section 5.04(a) or (b), notify the
Administrative Agent and the Lenders thereof and, within twenty (20) Business
Days after such date or such longer period as the Administrative Agent shall
agree, cause the Collateral and Guarantee Requirement to be satisfied with
respect to such Subsidiary and with respect to any Equity Interest in or
Indebtedness of such Subsidiary Loan Party owned by or on behalf of any Loan
Party.

 

(e)     If any additional Foreign Subsidiary (which Subsidiary is a “first tier”
Foreign Subsidiary), Disregarded Domestic Subsidiary or Special Purpose
Subsidiary (to the extent a pledge of the Equity Interests of such Subsidiary is
permitted under the securitization agreements applicable to such Subsidiary) is
formed or acquired after the Closing Date and if such Subsidiary is a Subsidiary
Loan Party, concurrently with the delivery of financial statements pursuant to
Section 5.04(a) or (b), notify the Administrative Agent and the Lenders thereof
and, within twenty (20) Business Days after such date or such longer period as
the Administrative Agent shall reasonably agree, cause the Collateral and
Guarantee Requirement to be satisfied with respect to any Equity Interest in
such Subsidiary owned by or on behalf of any Loan Party.

 

(f)     (i) Furnish to the Administrative Agent prompt written notice of any
change in (A) any Loan Party’s corporate or organization name, (B) any Loan
Party’s organizational form or (C) any Loan Party’s organizational
identification number; provided that neither Holdings nor the Borrower shall
effect or permit any such change unless all filings have been made, or will have
been made within any applicable statutory period, under the Uniform Commercial
Code or otherwise that are required in order for the Administrative Agent to
continue at all times following such change to have a valid, legal and perfected
security interest in all the Collateral for the benefit of the Secured Parties
and (ii) promptly notify the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.

 

 
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(g)     The Collateral and Guarantee Requirement and the provisions of this
Section 5.09 need not be satisfied with respect to (i) all leasehold real
property, (ii) any asset (including any fee owned real property but excluding
any personal property in which a security interest may be created under the
terms of any existing Security Documents pursuant to the Uniform Commercial
Code) that has an individual fair market value in an amount less than $5.0
million (as reasonably estimated by the Lead Borrower), (iii) Equity Interests
of any partnerships, joint ventures and any non-Wholly Owned Subsidiary which
cannot be pledged without the consent of one (1) or more third parties, (iv)
margin stock, (v) security interests to the extent the same would result in
adverse tax consequences as reasonably determined by the Lead Borrower, (vi) any
property and assets the pledge of which would require governmental consent,
approval, license or authorization, (vii) all foreign intellectual property and
any “intent-to-use” trademark applications prior to the filing of a “Statement
of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if
any, that, and solely during the period, if any, in which, the grant of a
security interest therein would impair the validity or enforceability of such
intent-to-use trademark application under applicable federal law and (viii)
other assets which the Administrative Agent, in consultation with the Borrower,
determines, in its reasonable discretion, should be excluded taking into account
the practical operations of the Borrowers’ business and its client
relationships. Notwithstanding anything to the contrary herein, (ix) the Loan
Parties shall not be required to grant a security interest in any Collateral or
perfect a security interest in any Collateral to the extent (A) the burden or
cost of obtaining or perfecting a security interest therein outweighs the
benefit of the security afforded thereby as reasonably determined by the Lead
Borrower and the Administrative Agent or (B) if the granting of a security
interest in such asset would be prohibited by enforceable anti-assignment
provisions of contracts or applicable law or with respect to any assets to the
extent such a pledge would violate the terms of any contract with respect to
such assets (in each case, after giving effect to the applicable anti-assignment
provisions of the Uniform Commercial Code or other applicable law) or would
trigger termination pursuant to any “change of control” or similar provision in
any contract, (y) no foreign law security or pledge agreement shall be required
and (z) the following Collateral shall not be required to be perfected (A) motor
vehicles and any other assets subject to state law certificate of title
statutes, (B) commercial torts claims and (C) letter of credit rights to the
extent not perfected by the filing of a financing statement under the Uniform
Commercial Code.

 

SECTION 5.10.     Fiscal Year; Accounting. In the case of Holdings and the Lead
Borrower, cause its fiscal year to end on December 31.

 

SECTION 5.11.     [Reserved].

 

SECTION 5.12.     Collateral Monitoring and Reporting.

 

(a)     Borrowing Base Certificates. The Borrowers shall deliver to the
Administrative Agent (and the Administrative Agent shall promptly deliver same
to the Lenders) quarterly Borrowing Base Certificates within 20 days of the
fiscal quarter then ended prepared as of the close of business on the last
Business Day of the previous fiscal quarter (provided that (1) during a Monthly
Reporting Period, the Borrowers shall deliver to the Administrative Agent
monthly Borrowing Base Certificates by the 20th day of each month prepared as of
the close of business on the last Business Day of the previous month or (2) a
Liquidity Event shall have occurred and be continuing, the Borrowers shall
deliver to the Administrative Agent weekly Borrowing Base Certificates by
Wednesday of every week prepared as of the close of business on Friday of the
previous week, which weekly Borrowing Base Certificates shall be in standard
form unless otherwise reasonably agreed to by the Administrative Agent; it being
understood that (i) Inventory amounts shown in the Borrowing Base Certificates
delivered on a weekly basis will be based on the Inventory amount (a) set forth
in the most recent weekly report, where possible, and (b) for the most recently
ended month for which such information is available with regard to locations
where it is impracticable to report Inventory more frequently, and (ii) the
amount of Eligible Accounts shown in such Borrowing Base Certificate will be
based on the amount of the gross Accounts set forth in the most recent weekly
report, less the amount of ineligible Accounts reported for the most recently
ended month). All calculations of Availability in any Borrowing Base Certificate
shall be made by the Borrowers and certified by a Responsible Officer, provided
that the Administrative Agent may from time to time review and adjust any such
calculation in consultation with the Lead Borrower (a) to reflect its reasonable
estimate of declines in value of any Collateral, due to collections received in
the Dominion Account or otherwise; (b) to adjust advance rates to reflect
changes in dilution, quality, mix and other factors affecting Collateral; and
(c) to the extent the calculation is not made in accordance with this Agreement
or does not accurately reflect the Availability Reserve. By the 20th day after
the end of each fiscal quarter (commencing with the fiscal quarter ending June
30, 2012), the Borrowers shall deliver (i) to the Administrative Agent an
Applicable Margin Certificate setting forth a calculation of the Average
Availability for the fiscal quarter most recently ended and the corresponding
Applicable Margins, and (ii) updates, if any, to Schedule O to the Collateral
Questionnaire to reflect all locations of Inventory at the end of the fiscal
quarter then ended.

 

 
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(b)     Records and Schedules of Accounts. Each Borrower shall keep accurate and
complete records of its Accounts, including all payments and collections
thereon, and shall submit to the Administrative Agent sales, collection,
reconciliation and other reports in form satisfactory to the Administrative
Agent on a periodic basis (but not more frequently than at the time of delivery
of each of the financials required pursuant to Section 5.04(a) and (b)). Each
Borrower shall also provide to the Administrative Agent, on or before the 20th
day of each month, a detailed aged trial balance of all Accounts as of the end
of the preceding month, specifying each Account’s Account Debtor name and the
amount, invoice date and due date as the Administrative Agent may reasonably
request. If Accounts owing from any single Account Debtor in an aggregate face
amount of $5,000,000 or more cease to be Eligible Accounts, the Borrowers shall
notify the Administrative Agent of such occurrence promptly (and in any event
within three Business Days) after any Responsible Officer of the Lead Borrower
has actual knowledge thereof.

 

(c)     Maintenance of Dominion Account. The Borrowers shall maintain Dominion
Accounts pursuant to lockbox or other arrangements reasonably acceptable to the
Administrative Agent and shall establish such lockbox or other arrangement as
provided in clause (j) of the definition of “Collateral and Guarantee
Requirement.” The Administrative Agent and the Lenders assume no responsibility
to the Borrowers for any lockbox arrangement or Dominion Account, including any
claim of accord and satisfaction or release with respect to any check, draft or
other item of payment payable to a Borrower (including those constituting
proceeds of Collateral) accepted by any bank.

 

(d)     Proceeds of Collateral. The Borrowers shall request in writing and
otherwise take all necessary steps to ensure that all payments on Accounts
(other than Accounts with balances less than $1,000,000) or otherwise relating
to Current Asset Collateral are made directly to a Deposit Account subject to a
Deposit Account Control Agreement (or a lockbox relating to a Dominion Account).
If any Borrower receives cash or any check, draft or other item of payment
payable to a Borrower with respect to any Collateral, it shall hold the same in
trust for the Administrative Agent and promptly deposit the same into any such
Deposit Account or Dominion Account.

 

(e)     Administration of Deposit Accounts. Schedule 5.12 sets forth all Deposit
Accounts (other than Excluded Deposit Accounts) maintained by the Loan Parties,
including all Dominion Accounts, as of the Closing Date. Subject to clause (j)
of the definition of “Collateral and Guarantee Requirement,” each Loan Party
shall take all actions necessary to establish the Administrative Agent’s control
(within the meaning of the UCC) over each such Deposit Account other than
Excluded Deposit Accounts at all times. Each Loan Party shall be the sole
account holder of each Deposit Account and shall not allow any other Person
(other than the Administrative Agent and the Term Agent) to have control over a
Deposit Account or any deposits therein. Each Borrower shall promptly notify the
Administrative Agent of any opening or closing of a Deposit Account, and shall
not open any Deposit Accounts (other than any Excluded Deposit Accounts) at a
Bank not reasonably acceptable to the Administrative Agent.

 

 
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SECTION 5.13.     Use of Proceeds. The Borrowers will use Letters of Credit,
Revolver Loans and Swingline Loans (a) on the Closing Date, to consummate the
Transactions and pay the Transaction Costs and (b) after the Closing Date, for
working capital needs and other general corporate purposes of the Borrowers and
their Subsidiaries.

 

SECTION 5.14.     Certification of Public Information.

 

(a)     Concurrently with the delivery of any document or notice required to be
delivered pursuant to any Loan Document, the Borrowers shall indicate in writing
whether such document or notice contains Nonpublic Information. The Borrowers
and each Lender acknowledge that certain of the Lenders may be “public-side”
Lenders (Lenders that do not wish to receive material non-public information
with respect to the Borrowers, their Subsidiaries or their securities) and, if
documents or notices required to be delivered pursuant to this Section 5.14 or
otherwise are being distributed through IntraLinks/IntraAgency, Syndtrak or
another relevant website or other information platform (the “Platform”), any
document or notice that the Borrowers have indicated contains Nonpublic
Information shall not be posted on that portion of the Platform designated for
such public-side Lenders. If the Borrowers have not indicated whether a document
or notice delivered pursuant to this Section 5.14 contains Nonpublic
Information, the Administrative Agent shall post such document or notice solely
on that portion of the Platform designated for Lenders who wish to receive
material non-public information with respect to the Borrowers, their
Subsidiaries and their securities. The Borrowers acknowledge and agree that the
list of Disqualified Institutions does not constitute Nonpublic Information and
shall be posted promptly to all Lenders by the Administrative Agent (including
any updates thereto).

 

(b)     Each “public-side” Lender as described in paragraph (a) of this Section
agrees to cause at least one (1) individual at or on behalf of such Lender to at
all times have selected the “private side information” or similar designation on
the content declaration screen of the Platform in order to enable such Lender or
its delegate, in accordance with such Lender’s compliance procedures and
applicable law, including United States federal and state securities laws, to
make reference to information that is not made available through the “public
side information” portion of the Platform and that may contain Nonpublic
Information with respect to Holdings, the Borrowers or the securities of any of
the foregoing for purposes of United States federal or state securities laws. In
the event that any “public-side” Lender has determined for itself to not access
any information disclosed through the Platform or otherwise, such “public-side”
Lender acknowledges that (i) other Lenders may have availed themselves of such
information and (ii) none of the Borrowers, the Agents or the Joint Lead
Arrangers has any responsibility for such “public-side” Lender’s decision to
limit the scope of the information it has obtained in connection with this
Agreement and the other Loan Documents.

 

ARTICLE VI

Negative Covenants

 

Each of Holdings (solely as to Section 6.08(a)) and the Borrowers covenant and
agree with each Lender that, so long as any Revolver Commitments or Obligations
(other than (i) contingent obligations as to which no claim or demand for
payment has been made, or, in the case of indemnification obligations, no notice
has been given, and (ii) Obligations that have been Cash Collateralized, as
applicable) are outstanding, unless the Required Lenders shall otherwise consent
in writing, the Borrowers will not and will not permit any of their Restricted
Subsidiaries to (and Holdings as to Section 6.08(a), will not):

 

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

 

(a)     Indebtedness of any Loan Party under the Loan Documents;

 

(b)     Indebtedness pursuant to Swap Agreements not incurred for speculative
purposes;

 

(c)     Indebtedness owed to (including obligations in respect of letters of
credit or bank guarantees or similar instruments for the benefit of) any person
providing workers’ compensation, securing unemployment insurance and other
social security laws or regulation, health, disability or other employee
benefits or property, casualty or liability insurance or self-insurance or other
similar obligations to the Lead Borrower or any Restricted Subsidiary;

 

(d)     Indebtedness of any Borrower to any Subsidiary and of any Subsidiary to
any Borrower or any other Subsidiary (including pursuant to the Intercompany
Note), provided that (i) Indebtedness of any Subsidiary that is not a Subsidiary
Loan Party to the Loan Parties shall be permitted under Section 6.04 and (ii)
Indebtedness of the Lead Borrower and of any other Loan Party to any Subsidiary
that is not a Subsidiary Loan Party (the “Subordinated Intercompany Debt”) shall
be subordinated to the Obligations pursuant to the subordination terms set forth
in the Intercompany Note;

 

(e)     Indebtedness in respect of bids, trade contracts (other than for debt
for borrowed money), leases (other than Capital Lease Obligations), statutory
obligations, surety, stay, customs and appeal bonds, performance, performance
and completion and return of money bonds, government contracts, financial
assurances and completion guarantees and similar obligations, in each case
provided in the ordinary course of business, including those incurred to secure
health, safety and environmental obligations in the ordinary course of business
(including Indebtedness in respect of letters of credit, bank guarantees or
similar instruments in lieu of such items to support the issuance thereof);

 

(f)     Cash Management Obligations and other Indebtedness in respect of netting
services, overdraft protection and similar arrangements, in each case, in
connection with cash management and deposit accounts;

 

(g)      (x) Indebtedness assumed or acquired in connection with Permitted
Business Acquisitions, which Indebtedness may be secured or unsecured, and
provided that (A) such Indebtedness exists at the time of such Permitted
Business Acquisition and is not created in contemplation of such event and (B)
after giving effect to the assumption or acquisition of such Indebtedness, the
Incurrence Conditions are satisfied and (y) any Permitted Refinancing
Indebtedness incurred to Refinance such Indebtedness; provided that in the case
of clauses (x) and (y) if such Indebtedness is incurred by the Lead Borrower or
any Loan Party and secured with the Current Asset Collateral, such Indebtedness
shall be either secured on a pari passu basis with the Term Facility Debt and
subject to the Intercreditor Agreement or secured on a junior basis with respect
to the Current Asset Collateral pursuant to an intercreditor arrangement
reasonably satisfactory to the Administrative Agent;

 

 
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(h)     Capital Lease Obligations, mortgage financings and purchase money
Indebtedness (including any industrial revenue bond, industrial development bond
and similar financings) incurred by any Borrower or any Restricted Subsidiary
prior to or within two hundred seventy (270) days after the acquisition, lease,
repair or improvement of the respective asset in order to finance such
acquisition, lease, repair or improvement, and any Permitted Refinancing
Indebtedness in respect thereof, in an aggregate outstanding principal amount
that at the time of, and after giving effect to, the incurrence thereof
(together with Indebtedness outstanding pursuant to paragraph (i) of this
Section 6.01) would not exceed the greater of (x) $50.0 million and (y) an
amount equal to 3% of the Consolidated Total Assets of the Lead Borrower and the
Restricted Subsidiaries for the Test Period most recently ended on or prior to
the date of determination for which financial statements are available;

 

(i)     Capital Lease Obligations incurred by any Borrower or any Restricted
Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted
under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof
in an aggregate outstanding principal amount that at the time of, and after
giving effect to the incurrence of (together with Indebtedness outstanding
pursuant to paragraph (h) of this Section 6.01) would not exceed the greater of
(x) $50.0 million and (y) an amount equal to 3% of the Consolidated Total Assets
of the Lead Borrower and the Restricted Subsidiaries for the Test Period most
recently ended on or prior to the date of determination for which financial
statements are available;

 

(j)     Indebtedness of the Borrowers under the Term Facility in an aggregate
outstanding principal (or committed) amount not to exceed $1,200.0 million,
provided that such amount may be increased by any Incremental Term Loans and/or
Incremental Equivalent Debt (each as defined in the Term Facility) so long as
the sum of (x) any Revolver Commitment Increase, (y) the aggregate initial
principal amount of Incremental Term Loans and (z) the aggregate initial
principal amount of Incremental Equivalent Debt does not exceed $300.0 million;

 

(k)     Guarantees (i) by the Loan Parties of the Indebtedness described in
Section 6.01(j) and Section 6.01(o), (ii) by any Borrower or any Loan Party
(which guarantees shall be subordinated in the case of any Permitted Debt
Securities or any Permitted Refinancing Indebtedness in respect thereof on terms
no less favorable than the subordination applicable to the guarantees or
refinanced Indebtedness) of any Indebtedness of any other Loan Party permitted
to be incurred under this Agreement, (iii) by any Borrower or any Loan Party of
Indebtedness otherwise permitted hereunder of any Subsidiary that is not a
Subsidiary Loan Party, (iv) by any Restricted Subsidiary that is not a Loan
Party of Indebtedness of Holdings and its Subsidiaries to the extent, in the
case of clauses (iii) and (iv), such Guarantees are permitted by Section 6.04;
provided that Guarantees by any Borrower or any Loan Party under this Section
6.01(k) of any other Indebtedness of a person that is subordinated to the
Obligations shall be expressly subordinated to the Obligations on terms not
materially less favorable to the Lenders as those contained in the subordination
of such other Indebtedness to the Obligations; provided further that no
Guarantee by Holdings or any of its Subsidiaries of any Subordinated
Indebtedness or the Indebtedness described in Section 6.01(j) shall be permitted
unless Holdings or the applicable Subsidiaries, as the case may be, shall have
also provided a Guarantee of the Obligations under the Loan Documents on
substantially the terms set forth in the applicable Guarantee of such
Indebtedness or on terms acceptable to the Administrative Agent;

 

(l)     Indebtedness arising from agreements of any Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase or acquisition
price or similar obligations (including without limitation earn-out
obligations), in each case, incurred or assumed in connection with the
acquisition or Disposition of any business or assets (including Equity Interests
of Subsidiaries) of any Borrower or any Subsidiary permitted by Section 6.04 or
Section 6.05, other than Guarantees of Indebtedness incurred by any person
acquiring all or any portion of such business or assets for the purpose of
financing such acquisition;

 

 
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(m)     [Reserved];

 

(n)     Indebtedness consisting of (i) the financing of insurance premiums or
(ii) take-or-pay obligations contained in supply arrangements, in each case, in
the ordinary course of business;

 

(o)     (i) additional Indebtedness of any Borrower or any Restricted Subsidiary
and (ii) any Permitted Refinancing Indebtedness in respect thereof; provided
that (A) such Indebtedness shall be (1) Subordinated Indebtedness that
constitutes Permitted Debt Securities, (2) unsecured Indebtedness that matures
no earlier than the date that is, at the time of such incurrence or issuance,
ninety-one (91) days after the Revolver Termination Date or (3) secured
Indebtedness, so long as (x) after giving effect to such incurrence or issuance,
no Event of Default shall have occurred and be continuing, (y) such Indebtedness
is secured only by Liens permitted by Section 6.02(v) and (B) after giving
effect to any such incurrence or issuance of Indebtedness that is not
Subordinated Indebtedness, the Incurrence Conditions are satisfied; provided
that if such Indebtedness is incurred by the Lead Borrower or any Loan Party and
secured with the Current Asset Collateral, such Indebtedness shall be either
secured on a pari passu basis with the Term Facility Debt and subject to the
Intercreditor Agreement or secured on a junior basis with respect to the Current
Asset Collateral pursuant to an intercreditor arrangement reasonably
satisfactory to the Administrative Agent;

 

(p)     [Reserved];

 

(q)     Indebtedness existing on the Closing Date and set forth on Schedule 6.01
and any Permitted Refinancing Indebtedness incurred to Refinance such
Indebtedness;

 

(r)     Indebtedness supported by a Letter of Credit, in a principal amount not
in excess of the stated amount of such Letter of Credit and (ii) letters of
credit or bank guarantees (other than any Letter of Credit issued hereunder)
incurred by Foreign Subsidiaries having an aggregate face amount not to exceed
$15.0 million outstanding at any time;

 

(s)     Indebtedness incurred by the Borrowers and their Restricted Subsidiaries
representing (i) deferred compensation to directors, officers, employees,
members of management and consultants of Holdings, any Parent Entity, any
Borrower or any Restricted Subsidiary in the ordinary course of business and
(ii) deferred compensation or other similar arrangements in connection with the
Transactions, any Permitted Business Acquisition or any Investment permitted
hereby;

 

(t)     Indebtedness consisting of promissory notes issued by the Borrowers and
their Restricted Subsidiaries to current or former directors, officers,
employees, members of management or consultants of, Holdings, any Parent Entity,
any Borrower or any Subsidiary (or their respective estate, heirs, family
members, spouse, former spouse, domestic partner or former domestic partner) to
finance the purchase or redemption of Equity Interests of any Parent Entity
permitted by Section 6.06;

 

(u)     Indebtedness in respect of (x) letters of credit, bankers’ acceptances
supporting trade payables, warehouse receipts or similar facilities entered into
in the ordinary course of business or (y) any Letter of Credit issued in favor
of any Issuing Bank or Swingline Lender to support any Defaulting Lender’s
participation in Letters of Credit issued, or Swingline Loans made hereunder;

 

 
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(v)     Indebtedness arising out of the creation of any Lien (other than for
Liens securing debt for borrowed money) permitted under Section 6.02;

 

(w)     Indebtedness incurred in the ordinary course of business in respect of
obligations of any Borrower or any Restricted Subsidiary to pay the deferred
purchase price of goods or services or progress payments in connection with such
goods and services;

 

(x)     unfunded pension fund and other employee benefit plan obligations and
liabilities incurred in the ordinary course of business to the extent that they
are permitted to remain unfunded under applicable law; and

 

(y)     other Indebtedness of any Borrower or any Restricted Subsidiary, in an
aggregate outstanding principal amount that at the time of, and after giving
effect to, the incurrence thereof would not exceed $35.0150.0 million and any
Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;

 

(z)     Indebtedness in respect of Receivables Facilities in an aggregate
principal amount outstanding at any one time not to exceed $15.0 million;

 

(aa)     (i) additional Indebtedness of Foreign Subsidiaries in an aggregate
amount not to exceed $50.0150.0 million and (ii) any Permitted Refinancing
Indebtedness in respect thereof; provided that, in each case, such Indebtedness
is secured only by Liens permitted by Section 6.02(gg); and

 

(bb)     all premium (if any), interest (including post-petition interest),
fees, expenses, charges and additional or contingent interest on Indebtedness
described in paragraphs (a) through (aa) above.

 

SECTION 6.02.     Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including Equity Interests, evidences of Indebtedness or
other securities of any person) at the time owned by it or on any income or
revenues or rights in respect of any thereof, except:

 

(a)     Liens on property or assets of the Borrowers and the Restricted
Subsidiaries existing on the Closing Date and set forth on Schedule 6.02 or, to
the extent not listed in such Schedule, where such property or assets have a
fair market value that does not exceed $5.0 million in the aggregate and any
refinancing, modification, replacement, renewal or extension thereof; provided,
that the Lien does not extend to any additional property other than
after-acquired property that is affixed to or incorporated in the property
covered by such Lien and the proceeds and products thereof;

 

(b)     any Lien (i) created under the Loan Documents, (ii) permitted in respect
of any Mortgaged Property by the terms of the applicable Mortgage, (iii) on cash
or deposits granted in favor of any Swingline Lender or any Issuing Lender
hereunder to cash collateralize any Defaulting Lender’s participation in Letters
of Credit issued, or Swingline Loans made, under this Agreement, as applicable
and (iv) subject to the Intercreditor Agreement, Liens securing Indebtedness
permitted by Section 6.01(j); provided that if any Incremental Equivalent Debt
is incurred by the Lead Borrower or any Loan Party and secured with the Current
Asset Collateral, such Indebtedness shall be either secured on a pari passu
basis with the Term Facility Debt and subject to the Intercreditor Agreement or
secured on a junior basis with respect to the Current Asset Collateral pursuant
to an intercreditor arrangement reasonably satisfactory to the Administrative
Agent

 

 
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(c)     any Lien securing Indebtedness or Permitted Refinancing Indebtedness
permitted by (i) Section 6.01(g), provided that such Lien (A) in the case of
Liens securing Capital Lease Obligations and purchase money Indebtedness,
applies solely to the assets securing such Indebtedness immediately prior to the
consummation of the related Permitted Business Acquisition and after acquired
property, to the extent required by the documentation governing such
Indebtedness (without giving effect to any amendment thereof effected in
contemplation of such acquisition or assumption), and the proceeds and products
thereof; provided, that individual financings otherwise permitted to be secured
hereunder provided by one (1) person (or its affiliates) may be cross
collateralized to other such financings provided by such person (or its
affiliates), (B) in the case of Liens securing Indebtedness other than Capital
Lease Obligations or purchase money Indebtedness, such Liens do not extend to
the property of any person other than the person acquired or formed to make such
acquisition and the subsidiaries of such person (and the Equity Interests in
such person), (C) in the case of clause (A) and clause (B), such Lien is not
created in contemplation of or in connection with such acquisition or
assumption, (D) in the case of a Lien securing Permitted Refinancing
Indebtedness, any such Lien is permitted, subject to compliance with clause (e)
of the definition of the term “Permitted Refinancing Indebtedness” and (E) in
the case of any Indebtedness incurred by the Lead Borrower or any Loan Party and
secured with the Current Asset Collateral, such Indebtedness shall be either
secured on a pari passu basis with the Term Facility Debt and subject to the
Intercreditor Agreement or secured on a junior basis with respect to the Current
Asset Collateral pursuant to an intercreditor arrangement reasonably
satisfactory to the Administrative Agent”;

 

(d)     Liens for Taxes, assessments or other governmental charges or levies
which are not overdue by more than thirty (30) days or, if more than thirty (30)
days overdue, (i) which are being contested in accordance with Section 5.03 or
(ii) with respect to which the failure to make payment could not reasonably be
expected to have a Material Adverse Effect;

 

(e)     landlord’s, carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s, construction or other like Liens arising in the ordinary course of
business and securing obligations that are not overdue by more than thirty (30)
days or, if more than thirty (30) days overdue, (i) which are being contested in
accordance with Section 5.03 or (ii) with respect to which the failure to make
payment could not reasonably be expected to have a Material Adverse Effect;

 

(f)     (i) pledges and deposits made (including to support obligations in
respect of letters of credit, bank guarantees or similar instruments to secure)
in the ordinary course of business in compliance with the Federal Employers
Liability Act or any other workers’ compensation, unemployment insurance and
other social security laws or regulations and deposits securing premiums or
liability to insurance carriers under insurance or self-insurance arrangements
in respect of such obligations or otherwise as permitted in Section 6.01(c) and
(ii) pledges and deposits securing liability for reimbursement or
indemnification obligations of (including to support obligations in respect of
letters of credit, bank guarantees or similar instruments for the benefit of)
insurance carriers in respect of property, casualty or liability insurance to
any Borrower or any Subsidiary provided by such insurance carriers;

 

(g)     (i) deposits to secure the performance of bids, trade contracts (other
than for debt for borrowed money), leases (other than Capital Lease
Obligations), statutory obligations, surety, stay, customs and appeal bonds,
performance, performance and completion and return of money bonds, government
contracts, financial assurances and completion and similar obligations and
similar obligations, including those incurred to secure health, safety and
environmental obligations in the ordinary course of business and (ii)
obligations in respect of letters of credit or bank guarantees that have been
posted to support payment of the items set forth in clause (i) of this Section
6.02(g);

 

 
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(h)     zoning restrictions, easements, trackage rights, leases (other than
Capital Lease Obligations), licenses, special assessments, rights-of-way,
restrictions on use of real property and other similar encumbrances incurred in
the ordinary course of business that, in the aggregate, do not interfere in any
material respect with the ordinary conduct of the business of any Borrower or
any Subsidiary;

 

(i)     Liens securing Capital Lease Obligations, mortgage financings, and
purchase money Indebtedness or improvements thereto hereafter acquired, leased,
repaired or improved by any Borrower or any Restricted Subsidiary (including the
interests of vendors and lessors under conditional sale and title retention
agreements); provided that (i) such security interests secure Indebtedness
permitted by Section 6.01(h) (including any Permitted Refinancing Indebtedness
in respect thereof), (ii) such security interests are created, and the
Indebtedness secured thereby is incurred, within two hundred seventy (270) days
after such acquisition, lease, completion of construction or repair or
improvement (except in the case of any Permitted Refinancing Indebtedness),
(iii) the Indebtedness secured thereby does not exceed the cost of such
equipment or other property or improvements at the time of such acquisition or
construction, including transaction costs (including any fees, costs or expenses
or prepaid interest or similar items) incurred by any Borrower or any Restricted
Subsidiary in connection with such acquisition or construction or material
repair or improvement or financing thereof and (iv) such security interests do
not apply to any other property or assets of any Borrower or any Restricted
Subsidiary (other than to the proceeds and products of and the accessions to
such equipment or other property or improvements but not to other parts of the
property to which any such improvements are made); provided, that individual
financings otherwise permitted to be secured hereunder provided by one person
(or its affiliates) may be cross collateralized to other such financings
provided by such person (or its affiliates);

 

(j)     Liens arising out of (i) sale and lease-back transactions permitted
under Section 6.03 and (ii) any Indebtedness incurred in connection therewith
permitted by Section 6.01(i) (and any Permitted Refinancing Indebtedness in
respect thereof), so long as such Liens attach only to the property sold and
being leased in such transaction and any accessions thereto or proceeds or
products thereof and related property;

 

(k)     Liens securing judgments that do not constitute an Event of Default
under Section 7.01(j);

 

(l)     Liens disclosed by the title insurance policies delivered in connection
with the Mortgages or pursuant to Section 5.09 and any replacement, extension or
renewal of any such Lien; provided that such replacement, extension or renewal
Lien shall not cover any property other than the property that was subject to
such Lien prior to such replacement, extension or renewal; provided, further,
that the Indebtedness and other obligations secured by such replacement,
extension or renewal Lien are permitted by this Agreement;

 

(m)     any interest or title of a lessor, sublessor, licensor or sublicensee
under any leases, subleases, licenses or sublicenses entered into by any
Borrower or any Restricted Subsidiary in the ordinary course of business;

 

(n)     Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts
of any Borrower or any Restricted Subsidiary to permit satisfaction of overdraft
or similar obligations incurred in the ordinary course of business of any
Borrower or any Restricted Subsidiary, (iii) relating to purchase orders and
other agreements entered into with customers of any Borrower or any Restricted
Subsidiary in the ordinary course of business, (iv) attaching to commodity
trading or other brokerage accounts incurred in the ordinary course of business
and (v) encumbering reasonable customary initial deposits and margin deposits;

 

 
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(o)     Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights;

 

(p)     Liens securing obligations in respect letters of credit permitted under
Section 6.01(c), (e), (r) and (u);

 

(q)     (i) leases, subleases, licenses or sublicenses of property in the
ordinary course of business or (ii) rights reserved to or vested in any person
by the terms of any lease, license, franchise, grant or permit held by any
Borrower or any Restricted Subsidiary or by a statutory provision to terminate
any such lease, license, franchise, grant or permit or to require periodic
payments as a condition to the continuance thereof;

 

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

 

(s)     Liens (i) solely on any cash earnest money deposits or Permitted
Investments made by any Borrower or any of the Restricted Subsidiaries in
connection with any letter of intent or purchase agreement with respect to any
Permitted Business Acquisition or other Investment permitted hereunder and (ii)
consisting of an agreement to dispose of any property in a transaction permitted
under Section 6.05;

 

(t)     Liens arising from precautionary UCC financing statements (or similar
filings under other applicable law) regarding operating leases or consignment or
bailee arrangements;

 

(u)     Liens on securities that are the subject of repurchase agreements
constituting Permitted Investments under clause (c) of the definition thereof
arising out of such repurchase transaction;

 

(v)     any Lien securing Indebtedness or Permitted Refinancing Indebtedness
permitted by Section 6.01(o); provided that (i) in the case of any Indebtedness
of Subsidiaries (including Foreign Subsidiaries of the Borrowers and Disregarded
Domestic Subsidiaries) that are not Subsidiary Loan Parties, such Lien applies
solely to the assets and Equity Interests of such Subsidiaries (including
Foreign Subsidiaries of the Borrowers, Disregarded Domestic Subsidiaries, their
respective Subsidiaries, any other Foreign Subsidiary or any Disregarded
Domestic Subsidiary) that are not Subsidiary Loan Parties, (ii) in the case of
any Indebtedness secured with the Current Asset Collateral, such Indebtedness
shall be either secured on a pari passu basis with the Term Facility Debt and
subject to the Intercreditor Agreement or secured on a junior basis with respect
to the Current Asset Collateral pursuant to an intercreditor arrangement
reasonably satisfactory to the Administrative Agent and (iii) in the case of a
Lien securing Permitted Refinancing Indebtedness, any such Lien is permitted,
subject to compliance with clause (e) of the definition of the term “Permitted
Refinancing Indebtedness”;

 

 
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(w)     (i) Liens on Equity Interests in Joint Ventures or Unrestricted
Subsidiaries securing obligations of such Joint Venture or Unrestricted
Subsidiaries, as applicable and (ii) customary rights of first refusal and tag,
drag and similar rights in joint venture agreements entered into in the ordinary
course of business;

 

(x)     Liens in favor of the Borrowers or the Restricted Subsidiaries securing
intercompany Indebtedness permitted under Section 6.04;

 

(y)     Liens (i) arising out of conditional sale, title retention, consignment
or similar arrangements for sale of goods entered into by the Borrowers or the
Restricted Subsidiaries in the ordinary course of business and (ii) arising by
operation of law under Article 2 of the Uniform Commercial Code;

 

(z)     Liens securing Incremental Equivalent Debt (as defined in the Term
Facility), provided that in the case of any Indebtedness incurred by the Lead
Borrower or any Loan Party and secured with the Current Asset Collateral, such
Indebtedness shall be either secured on a pari passu basis with the Term
Facility Debt and subject to the Intercreditor Agreement or secured on a junior
basis with respect to the Current Asset Collateral pursuant to an intercreditor
arrangement reasonably satisfactory to the Administrative Agent;

 

(aa)     other Liens with respect to property or assets of any Borrower or any
Restricted Subsidiaries; provided that the aggregate principal amount of the
Indebtedness or other obligations secured by such Liens does not exceed
$35.0150.0 million at any time outstanding;

 

(bb)     Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;

 

(cc)     If no Letters of Credit are available hereunder, and solely with the
consent of the Administrative Agent (not to be unreasonably withheld), Liens on
specific items of inventory or other goods and the proceeds thereof securing
such person’s obligations in respect of documentary letters of credit or
banker’s acceptances issued or created for the account of such person to
facilitate the purchase, shipment or storage of such inventory or goods;

 

(dd)     ground leases in the ordinary course in respect of real property on
which facilities owned or leased by any Borrower or any of its Subsidiaries are
located;

 

(ee)     (i) Liens securing obligations under Swap Agreements permitted by
Section 6.01 and (ii) Liens securing Cash Management Obligations permitted by
Section 6.01;

 

(ff)     Liens securing obligations under Receivables Facilities permitted by
Section 6.01; and

 

(gg)     any Lien securing Indebtedness or Permitted Refinancing Indebtedness
permitted by Section 6.01(aa); provided that such Lien applies solely to the
assets and Equity Interests of the applicable Foreign Subsidiary and its
Subsidiaries.

 

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, used or useful in its business, whether now owned or
hereafter acquired, and substantially contemporaneously rent or lease from the
transferee such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred (a “Sale and Lease-Back Transaction”), provided that a Sale and
Lease-Back Transaction shall be permitted (a) with respect to property (i) owned
by any Borrower or any Domestic Subsidiary which is a Restricted Subsidiary that
is acquired, leased, repaired or improved after the Closing Date so long as such
Sale and Lease-Back Transaction is consummated within two hundred seventy (270)
days of the acquisition, lease, repair or improvement of such property or (ii)
owned by any Foreign Subsidiary which is a Restricted Subsidiary regardless of
when such property was acquired or (b) with respect to any property owned by any
Borrower or any Domestic Subsidiary which is a Restricted Subsidiary, if at the
time the lease in connection therewith is entered into, and after giving effect
to the entering into of such lease, such lease is otherwise permitted under this
Agreement.

 

 
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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 to or Guarantees of the obligations of,
another person or make a designation of a Restricted Subsidiary as an
Unrestricted Subsidiary of (each, an “Investment”), except:

 

(a)     the Transactions;

 

(b)     Investments among the Borrowers and their Subsidiaries; provided that
the sum of Investments (valued at the time of the making thereof and without
giving effect to any write-downs or write-offs thereof, but net in the case of
intercompany loans, and in any event, after giving effect to any returns,
profits, distributions, and similar amounts, repayment of loans and the release
of guarantees) after the Closing Date by the Borrowers and the Subsidiary Loan
Parties in Subsidiaries (including Foreign Subsidiaries of the Borrowers) that
are not Subsidiary Loan Parties shall not exceed an aggregate net amount equal
to $50.0 million outstanding at any time; and provided further that intercompany
current liabilities incurred in the ordinary course of business in connection
with the cash management operations of the Borrowers and the Restricted
Subsidiaries shall not be included in calculating the limitation in this
paragraph at any time;

 

(c)     Permitted Investments and investments that were Permitted Investments
when made;

 

(d)     Investments arising out of the receipt by any Borrower or any Subsidiary
of promissory notes and other non-cash consideration for Dispositions permitted
under Section 6.05 (excluding Section 6.05(e));

 

(e)     (i) loans and advances to directors, officers, employees, members of
management or consultants of Holdings (or any Parent Entity), any Borrower or
any Restricted Subsidiary in the ordinary course of business not to exceed $10.0
million in the aggregate at any time outstanding (calculated without regard to
write-downs or write-offs thereof) and (ii) advances of payroll payments and
expenses to directors, officers, employees, members of management or consultants
in the ordinary course of business;

 

(f)     accounts receivable, notes receivable, security deposits and prepayments
arising and trade credit granted in the ordinary course of business and any
Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors and other credits to suppliers made in the
ordinary course of business;

 

(g)     Investments under Swap Agreements permitted pursuant to Section 6.01;

 

(h)     Investments existing on, or contractually committed as of, the Closing
Date and set forth on Schedule 6.04 and any modification, replacement, renewal
or extension thereof so long as any such modification, renewal or extension
thereof does not increase the amount of such Investment except by terms thereof
or as otherwise permitted by this Section 6.04;

 

 
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(i)     Investments resulting from pledges and deposits permitted by Section
6.02(b)(iii), (f) and (g);

 

(j)     Investments (i) constituting Permitted Business Acquisitions, (ii) in
any Subsidiary in an amount required to permit such person to consummate a
Permitted Business Acquisition and (iii) in any Subsidiary that is not a
Subsidiary Loan Party consisting of the Equity Interests of any person who is
not a Subsidiary Loan Party;

 

(k)     Guarantees (i) permitted by Sections 6.01(k) and (ii) of leases (other
than Capital Lease Obligations) or of other obligations not constituting
Indebtedness, in each case in the ordinary course of business;

 

(l)     Investments received in connection with the bankruptcy or reorganization
of any person, or settlement of obligations of, or other disputes with or
judgments against, or foreclosure or deed in lieu of foreclosure with respect to
any Lien held as security for an obligation, in each case in the ordinary course
of business;

 

(m)     Investments of any Borrower or any Restricted Subsidiary acquired after
the Closing Date or of a person merged into or consolidated with a Borrower or a
Restricted Subsidiary, in each case, in accordance with Section 6.05 (other than
Section 6.05(e)), after the Closing Date to the extent that such Investments
were not made in contemplation of or in connection with such acquisition, merger
or consolidation and were in existence on the date of such acquisition, merger
or consolidation and any modification, replacement, renewal or extension thereof
so long as any such modification, renewal or extension thereof does not increase
the amount of such Investment except as otherwise permitted by this Section
6.04;

 

(n)     acquisitions by the Borrowers of obligations of one (1) or more
directors, officers, employees, members or management or consultants of
Holdings, the Borrowers or their Subsidiaries in connection with such person’s
acquisition of Equity Interests of Holdings (or its Parent Entity), so long as
no cash is actually advanced by the Borrowers or any of their Subsidiaries to
such persons in connection with the acquisition of any such obligations;

 

(o)     Investments in Holdings in amounts and for purposes for which Restricted
Payments to Holdings are permitted under Section 6.06;

 

(p)     Investments consisting of Indebtedness, Liens, Sale and Lease-Back
Transactions, mergers, consolidations, Dispositions, Restricted Payments,
Affiliate transactions and prepayments and repurchases of Indebtedness permitted
under Section 6.01, 6.02, 6.03, 6.05, 6.06, 6.07(b)(iv), 6.07(b)(viii),
6.07(b)(xvii), 6.09 and 9.04(f) and (i);

 

(q)     Investments by any Borrower or any Restricted Subsidiary in an
outstanding aggregate amount (valued at the time of the making thereof, and
without giving effect to any write-downs or write-offs thereof) not to exceed
$50.0150.0 million, (plus any returns, profits, distributions and similar
amounts, repayments of loans and the release of guarantees in respect of
Investments theretofore made by it pursuant to this paragraph (q);

 

(r)     other Investments by any Borrower or any Restricted Subsidiary so long
as the Investment Conditions are satisfied;

 

 
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(s)     Investments in the ordinary course of business consisting of (A)
endorsements for collection or deposit or (B) customary trade arrangements with
customers;

 

(t)     Investments to the extent the consideration paid therefor consists
solely of Equity Interests of the applicable person or any direct or indirect
parent thereof;

 

(u)     Investments made in the ordinary course of business in connection with
obtaining, maintaining or renewing client and customer contracts and loans or
advances made to, and guarantees with respect to obligations of, distributors,
suppliers, licensors and licensees in the ordinary course of business;

 

(v)     Investments made by any Restricted Subsidiary that is not a Loan Party
to the extent such Investments are made with the proceeds received by such
Restricted Subsidiary from an Investment made by a Loan Party in such Restricted
Subsidiary pursuant to this Section 6.04; and

 

(w)     Investments in, or relating to, a Special Purpose Subsidiary that, in
the good faith determination of the Lead Borrower, are necessary or advisable to
effect any Receivables Facility permitted by Section 6.01(z) or any Investment
in an entity which is not a Restricted Subsidiary to which a Restricted
Subsidiary sells accounts receivable in connection with a Receivables Facility
permitted by Section 6.01(z).

 

SECTION 6.05.     Mergers, Consolidations and Dispositions. Merge into or
consolidate with any other person, or permit any other person to merge into or
consolidate with it, or Dispose of (in one (1) transaction or in a series of
related transactions) all or any part of its assets (whether now owned or
hereafter acquired), or Dispose of any Equity Interests of any Restricted
Subsidiary of any Borrower, except that this Section shall not prohibit:

 

(a)     (i) the Disposition of inventory and equipment in the ordinary course of
business by any Borrower or any Restricted Subsidiary, (ii) the Disposition of
surplus, obsolete, used or worn out property, whether now owned or hereafter
acquired, in the ordinary course of business by any Borrower or any Restricted
Subsidiary, (iii) the leasing or subleasing of real property in the ordinary
course of business by any Borrower or any Restricted Subsidiary or (iv) the
Disposition of Permitted Investments in the ordinary course of business;

 

(b)     if at the time thereof and immediately after giving effect thereto no
Event of Default shall have occurred and be continuing, (i) the merger of any
Subsidiary of Holdings (which shall either be (A) newly formed expressly for the
purpose of such transaction and which owns no assets or (B) a Subsidiary of the
Lead Borrower) into the Lead Borrower in a transaction in which the Lead
Borrower is the surviving or resulting entity or the surviving or resulting
person expressly assumes the obligations of the Lead Borrower in a manner
reasonably satisfactory to the Administrative Agent, (ii) the merger or
consolidation of any Subsidiary with or into any other Subsidiary; provided that
in a transaction involving (A) the Borrowers or (B) any Subsidiary Loan Party, a
Subsidiary Loan Party shall be the surviving or resulting person or such
transaction shall be an Investment permitted by Section 6.04 or (iii) the
liquidation or dissolution of any Restricted Subsidiary (other than a Borrower)
or change in form of entity of any Restricted Subsidiary if the Borrowers
determine in good faith that such liquidation, dissolution or change in form is
in the best interests of the Borrowers;

 

(c)     Dispositions among the Borrowers and their Subsidiaries (upon voluntary
liquidation or otherwise); provided that any Dispositions by a Loan Party to a
person that is not a Loan Party shall be for book value (as reasonably
determined by such person) or such transaction shall, to the extent sold for
less than fair market value (as reasonably estimated by the Borrowers), be made
in compliance with Section 6.04;

 

 
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(d)     Sale and Lease-Back Transactions permitted by Section 6.03;

 

(e)     Liens permitted by Section 6.02, Investments permitted by Section 6.04,
and Restricted Payments permitted by Section 6.06;

 

(f)     Dispositions of receivables in the ordinary course of business (i) not
as part of an accounts receivables financing transaction or (ii) in connection
with the collection, settlement or compromise thereof in a bankruptcy or similar
proceeding;

 

(g)     Dispositions by any Borrower or any Restricted Subsidiary of (i)
Revolving Priority Collateral in an aggregate amount after the Amendment No. 1
Effectiveness Date not to exceed $10.0 million and (ii) Term Priority
Collateral, in each case, not otherwise permitted by this Section 6.05; provided
that the consideration for any Disposition shall be at least 75% cash
consideration (provided that for purposes of the 75% cash consideration
requirement (w) the amount of any Indebtedness or other liabilities of any
Borrower or any Restricted Subsidiary (as shown on such person’s most recent
balance sheet or in the notes thereto) that are assumed by the transferee of any
such assets, (x) the amount of any trade-in value applied to the purchase price
of any replacement assets acquired in connection with such Disposition, (y) any
securities received by such Restricted Subsidiary from such transferee that are
converted by such Restricted Subsidiary into cash or cash equivalents (to the
extent of the cash or cash equivalents received) following the closing of the
applicable Disposition and (z) any Designated Non-Cash Consideration received in
respect of such Disposition having an aggregate fair market value, taken
together with all other Designated Non-Cash Consideration received pursuant to
this clause (z) that is at that time outstanding, not in excess of $25.0 million
in each case, shall be deemed to be cash); provided further that immediately
prior to and after giving effect to such Disposition, no Event of Default shall
have occurred or be continuing; provided further that prior to or concurrently
with any such Disposition of Revolving Priority Collateral, an updated Borrowing
Base Certificate (based on the Borrowing Base Certificate most recently provided
or required to be provided as of that date by the Lead Borrower) shall have been
provided to the Administrative Agent setting forth the adjusted figures thereon
on a Pro Forma Basis for such Disposition;

 

(h)     Dispositions by any Borrower or any Restricted Subsidiary of assets that
were acquired in connection with an acquisition permitted hereunder (including,
without limitation, Permitted Business Acquisitions); provided that any such
sale, transfer, lease or other disposition shall be made or contractually
committed to be made within two hundred seventy (270) days of the date such
assets were acquired by such Borrower or such Subsidiary; and provided further
that, the Payment Conditions are satisfied at the time of such Disposition;

 

(i)     any merger or consolidation in connection with an Investment permitted
under Section 6.04 (including any Subsidiary Redesignation or Unrestricted
Subsidiary Designation); provided that (i) if the continuing or surviving person
is a Restricted Subsidiary, such Restricted Subsidiary shall have complied with
its obligations under Section 5.09 (if any), (ii) in the case of a transaction,
the purpose of which is a Subsidiary Redesignation or an Unrestricted Subsidiary
Designation, such transaction must be consummated in compliance with Section
6.04, and (iii) if a Borrower is a party thereto, such Borrower shall be the
continuing or surviving person or the continuing or surviving person shall
assume the obligations of a Borrower in a manner reasonably acceptable to the
Administrative Agent;

 

 
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(j)     licensing and cross-licensing arrangements involving any technology or
other intellectual property of any Borrower or any Restricted Subsidiary in the
ordinary course of business;

 

(k)     Dispositions of inventory or other property of the Borrowers and the
Restricted Subsidiaries determined by the management of the Borrowers to be no
longer useful or necessary in the operation of the business of the Borrowers or
any of their Subsidiaries;

 

(l)     Permitted Business Acquisitions;

 

(m)     the issuance of Qualified Capital Stock by the Borrowers;

 

(n)     sales of Equity Interests of any Subsidiary of the Borrowers; provided
that, in the case of the sale of the Equity Interests of a Subsidiary Loan Party
which is a Wholly Owned Subsidiary, the purchaser shall be the Borrowers or
another Subsidiary Loan Party or such transaction shall fit within another
clause of this Section 6.05 or constitute an Investment permitted by Section
6.04 (other than Section 6.04(p));

 

(o)     Dispositions of property to the extent that (A) such property is
exchanged for credit against the purchase price of similar replacement property
or (B) the proceeds of such sale, transfer, lease or other disposition are
promptly applied to the purchase price of such replacement property;

 

(p)     leases, subleases, licenses or sublicenses of property in the ordinary
course of business and which do not materially interfere with the business of
the Borrowers and the Restricted Subsidiaries;

 

(q)     Dispositions of property subject to casualty or condemnation proceeding
(including in lieu thereof) upon receipt of the Net Proceeds therefor;

 

(r)     Dispositions of property in the ordinary course of business consisting
of the abandonment of intellectual property rights which, in the reasonable good
faith determination of the Borrowers, are not material to the conduct of the
business of the Borrowers and the Restricted Subsidiaries;

 

(s)     Dispositions of Investments in Joint Ventures to the extent required by,
or made pursuant to, buy/sell arrangements between the joint venture parties set
forth in, joint venture arrangements and similar binding arrangements;

 

(t)     Dispositions of real property and related assets in the ordinary course
of business in connection with relocation activities for directors, officers,
employees, members of management, or consultants of the Borrowers and the
Restricted Subsidiaries;

 

(u)     terminations of Swap Agreements;

 

(v)     the expiration of any option agreement in respect of real or personal
property;

 

(w)     Dispositions of Unrestricted Subsidiaries;

 

 
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(x)     any Restricted Subsidiary of the Borrowers may consummate a merger,
dissolution, liquidation or consolidation, the purpose of which is to effect a
Disposition otherwise permitted under this Section 6.05;

 

(y)     Dispositions permitted by Section 6.04 (other than Section 6.04(p)) and
Section 6.06 (other than Section 6.06(h)) and Liens permitted by Section 6.02;

 

(z)     the Disposition of the asset identified to the Administrative Agent
prior to the Closing Date;

 

(aa)     any surrender or waiver of contractual rights or the settlement,
release or surrender of contractual rights or other litigation claims in the
ordinary course of business;

 

(bb)     Dispositions in connection with the outsourcing of services in the
ordinary course of business; and

 

(cc)     Dispositions (including by capital contribution) of accounts receivable
and related assets, or participations therein, in connection with any
Receivables Facility permitted by Section 6.01(z).

 

Notwithstanding anything to the contrary contained above in this Section 6.05,
(i) no Disposition in excess of $15.0 million shall be permitted by this Section
6.05 (other than Dispositions pursuant to clause (a)(ii), (a)(iii), (b), (c),
(i), (k), (l), (r), (s), (t) (u), (v), (w), (x), (aa), (bb) or (cc) (to the
extent such Disposition is not required to be for fair market value)) unless
such Disposition is for fair market value (as reasonably determined by the
Borrowers) and (ii) no Disposition shall be permitted by paragraph (d) or (k) of
this Section 6.05 unless such Disposition is for at least 75% cash consideration
and (iii) no Disposition in excess of $15.0 million shall be permitted by
paragraph (h) of this Section 6.05 unless such Disposition is for at least 75%
cash consideration; provided that for purposes of the 75% cash consideration
requirement in the foregoing clauses (ii) and (iii), (w) the amount of any
Indebtedness or other liabilities of any Borrower or any Restricted Subsidiary
(as shown on such person’s most recent balance sheet or in the notes thereto)
that are assumed by the transferee of any such assets, (x) the amount of any
trade-in value applied to the purchase price of any replacement assets acquired
in connection with such Disposition, (y) any securities received by such
Restricted Subsidiary from such transferee that are converted by such Restricted
Subsidiary into cash or cash equivalents (to the extent of the cash or cash
equivalents received) following the closing of the applicable Disposition, and
(z) any Designated Non-Cash Consideration received in respect of such
Disposition having an aggregate fair market value, taken together with all other
Designated Non-Cash Consideration received pursuant to this clause (z) that is
at that time outstanding, not in excess of $25.0 million (with the fair market
value of each item of Designated Non-Cash Consideration being measured at the
time received and without giving effect to subsequent changes in value), in each
case, shall be deemed to be cash.

 

SECTION 6.06.     Dividends and Distributions. Declare or pay, directly or
indirectly, any dividend or make any other distribution (by reduction of capital
or otherwise), whether in cash, property, securities or a combination thereof,
with respect to any Equity Interests of the Borrowers (other than dividends and
distributions on such Equity Interests payable solely by the issuance of
additional Equity Interests of the Borrowers) or directly or indirectly redeem,
purchase, retire or otherwise acquire for value any Equity Interests of the
Borrowers or set aside any amount for any such purpose (other than through the
issuance of additional Equity Interests of the person redeeming, purchasing,
retiring or acquiring such shares) (a “Restricted Payment”); provided, however,
that:

 

(a)     the Lead Borrower may make the Closing Date Dividend;

 

 
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(b)     the Borrowers may make Restricted Payments as shall be necessary to
allow Holdings (or any Parent Entity) (i) to pay operating expenses in the
ordinary course of business and other corporate overhead, legal, accounting and
other professional fees and expenses (including, without limitation, those owing
to third parties plus any customary indemnification claims made by directors,
officers, employees, members of management and consultants of Holdings (or any
Parent Entity) attributable to the ownership or operations of Holdings, the
Borrowers and the Restricted Subsidiaries), (ii) to pay fees and expenses
related to any debt or equity offering, investment or acquisition permitted
hereunder (whether or not successful), (iii) to pay franchise or similar taxes
and other fees and expenses required in connection with the maintenance of its
existence and its ownership of the Lead Borrower and in order to permit Holdings
to make payments (other than cash interest payments) which would otherwise be
permitted to be paid by the Borrowers under Section 6.07(b), (iv) to finance any
Investment permitted to be made under Section 6.04; provided, that (A) such
Restricted Payments under this clause (iv) shall be made substantially
concurrently with the closing of such Investment and (B) the Parent Entity
shall, immediately following the closing thereof cause all property acquired to
be contributed to a Borrower or one (1) of the Restricted Subsidiaries or the
merger of the person formed or acquired into the Borrowers or one (1) of the
Restricted Subsidiaries in order to consummate such Investment; and (v) to pay
customary salary, bonus and other benefits payable to directors, officers,
employees, members of management or consultants of Holdings or any Parent Entity
to the extent such salary, bonuses and other benefits are directly attributable
and reasonably allocated to the operations of a Borrower and its Subsidiaries;

 

(c)     the Borrowers may make Restricted Payments the proceeds of which are
used to purchase or redeem (i) the Equity Interests of Holdings or any Parent
Entity (including related stock appreciation rights or similar securities) held
by then present or former directors, officers, employees, members of management
or consultants of any Parent Entity, the Lead Borrower or any of its
Subsidiaries (or the estate, heirs, family members, spouse, former spouse,
domestic partner or former domestic partner of any of the foregoing) or by any
Plan, provided that the aggregate amount of such Restricted Payments under this
paragraph (c) shall not exceed in any fiscal year $15.0 million (plus the sum of
the amount of (x) net proceeds received by a Borrower during such fiscal year
from sales of Equity Interests of Holdings or any Parent Entity to directors,
officers, employees, members of management or consultants of Holdings, any
Borrower or any Subsidiary (or the estate, heirs, family members, spouse, former
spouse, domestic partner or former domestic partner of any of the foregoing), or
any Plan and (y) net proceeds of any key-man life insurance policies received
during such fiscal year), which, if not used in any year, may be carried forward
to the next subsequent fiscal year and (ii) fractional shares of Equity
Interests;

 

(d)     repurchases of Equity Interests in Holdings (or any Parent Entity), any
Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock
options or similar Equity Interests if such repurchased Equity Interests
represent a portion of the exercise price of such options or taxes to be paid in
connection therewith;

 

(e)     [Reserved];

 

(f)     any Borrower and any Subsidiary of any Borrower may make Restricted
Payments to any direct or indirect member of an affiliated group of corporations
that files a consolidated U.S. federal tax return with the Borrowers (the “Tax
Distributions”), provided that, such Tax Distributions shall not exceed the
amount that the Borrowers or such Subsidiaries would have been required to pay
in respect of federal, state or local taxes, as the case may be, in respect of
such year if the Borrowers or such Subsidiaries had paid such taxes directly as
a stand-alone taxpayer or stand-alone group;

 

 
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(g)     [Reserved];

 

(h)     to the extent constituting a Restricted Payment, the Borrowers and the
Restricted Subsidiaries may enter into the transactions expressly permitted by
Section 6.04, Section 6.05 (other than Section 6.05(e)) or Section 6.07;

 

(i)     the proceeds of which shall be used by Holdings to make (or to make a
Restricted Payment to any Parent Equity to enable it to make) cash payments in
lieu of the issuance of fractional shares in connection with the exercise of
warrants, options or other securities convertible into or exchangeable for
Equity Interests of Holdings or any Parent Equity;

 

(j)     payments made or expected to be made by any Borrower or any of its
Restricted Subsidiaries in respect of withholding or similar Taxes payable by
any future, present or former officers, directors, employees, members of
management or consultants of any Borrower (or any Parent Entity) or any of its
Subsidiaries (or the estate, heirs, family members, spouse, former spouse,
domestic partner or former domestic partner of the foregoing) and any
repurchases of Equity Interest in consideration of such payments including
demand repurchases in connection with the exercise of stock options;

 

(k)     the Borrowers may make Restricted Payments to Holdings so long as the
Payment Conditions are satisfied on a Pro Forma Basis immediately after giving
effect to such Restricted Payment;

 

(l)     redemptions, repurchases, retirements or other acquisitions of Equity
Interests of any Borrower or any Parent Entity in exchange for, or out of the
proceeds of the substantially concurrent sale (other than to a Borrower or a
Restricted Subsidiary) of, Equity Interests of any Borrower or any Parent Entity
(to the extent the proceeds of such sale are contributed to the capital of a
Borrower) (in each case, other than any Equity Interests issued or sold that are
not Qualified Capital Stock) (“Refunding Capital Stock”);

 

(m)     distributions or payments of Receivables Fees; and

 

(n)     the Lead Borrower may make the Amendment No. 1 Effectiveness Date
Dividend.

 

SECTION 6.07.     Transactions with Affiliates.

 

(a)     Sell or transfer any property or assets to, or purchase or acquire any
property or assets from, or otherwise engage in any other transaction with, any
of its Affiliates, unless such transaction is (i) otherwise permitted (or
required) under this Agreement or (ii) except with respect to any Investments
permitted by Section 6.04, upon terms no less favorable to the Borrowers or such
Restricted Subsidiary, as applicable, than would be obtained in a comparable
arm’s-length transaction with a person that is not an Affiliate. Any transaction
or series of related transactions involving the payment of less than $10.0
million with any such Affiliate shall be deemed to have satisfied the standard
set forth in clause (ii) above if such transaction is approved by a majority of
the Disinterested Directors of the board of managers (or equivalent governing
body) of any Parent Entity, the Borrowers or such Restricted Subsidiary.

 

 
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(b)     The foregoing paragraph (a) shall not prohibit,

 

(i)     any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the board of directors (or
equivalent governing body) of any Parent Entity,

 

(ii)     loans or advances to directors, officers, employees, members of
management or consultants of Holdings, any Borrower or any of its Subsidiaries
permitted or not prohibited by Section 6.04,

 

(iii)     transactions among Holdings, each Borrower and its Subsidiaries, in
each case otherwise permitted or not prohibited by the Loan Documents,

 

(iv)     the payment of fees and indemnities to directors, officers, employees,
members of management or consultants of any Parent Entity, any Borrower and the
Restricted Subsidiaries in the ordinary course of business,

 

(v)     permitted agreements in existence on the Closing Date and set forth on
Schedule 6.07 or any amendment thereto to the extent such amendment is not
adverse to the Lenders in any material respect,

 

(vi)     (A) any employment or severance agreements or arrangements entered into
by any Borrower or any of the Restricted Subsidiaries in the ordinary course of
business, (B) any subscription agreement or similar agreement pertaining to the
repurchase of Equity Interests pursuant to put/call rights or similar rights
with employees, officers, directors, members of management or consultants, and
(C) any employee compensation, benefit plan or arrangement, any health,
disability or similar insurance plan which covers employees, and any reasonable
employment contract or arrangement and transactions pursuant thereto,

 

(vii)     Restricted Payments permitted under Section 6.06,

 

(viii)     any purchase by Holdings of or contributions to, the equity capital
of the Borrower,

 

(ix)     payments by any Borrower or any of the Restricted Subsidiaries to the
Permitted Investors made for any financial advisory, financing, underwriting or
placement services or in respect of other investment banking activities,
including in connection with acquisitions or divestitures, which payments are
approved by the majority of the board of directors (or equivalent governing
body) of such Borrower, in good faith,

 

(x)     transactions among the Borrowers and the Restricted Subsidiaries for the
purchase or sale of goods, products, parts and services entered into in the
ordinary course of business,

 

(xi)     any transaction in respect of which a Borrower delivers to the
Administrative Agent (for delivery to the Lenders) a letter addressed to the
board of directors (or equivalent governing body) of such Borrower from an
accounting, appraisal or investment banking firm, in each case of nationally
recognized standing, which letter states that such transaction is on terms that
are no less favorable to such Borrower or such Subsidiary, as applicable, than
would be obtained in a comparable arm’s-length transaction with a person that is
not an Affiliate,

 

 
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(xii)     the Transactions, including the payment of all fees, expenses, bonuses
and awards (including Transaction Costs) related to the Transactions,

 

(xiii)     Guarantees permitted by Section 6.01,

 

(xiv)     the issuance and sale of Qualified Capital Stock or Permitted Debt
Securities,

 

(xv)     transactions with customers, clients, suppliers or Joint Ventures for
the purchase or sale of goods and services entered into in the ordinary course
of business,

 

(xvi)     transactions pursuant to the Tax Sharing Agreement,

 

(xvii)     the indemnification of directors, officers, employees, members of
management or consultants of any Parent Entity, any Borrower and its
Subsidiaries in accordance with customary practice, and

 

(xviii)     sales of accounts receivable, or participations therein, in
connection with any Receivables Facility permitted by Section 6.01(z).

 

SECTION 6.08.     Business of Holdings, the Borrowers and the Subsidiaries.
Notwithstanding any other provisions hereof, engage at any time in any business
or business activity other than:

 

(a)     in the case of Holdings, (A) ownership and acquisition of Equity
Interests in a Borrower, together with activities directly related thereto, (B)
performance of its obligations under and in connection with the Loan Documents
(and Permitted Refinancing Indebtedness in respect thereof) and the other
agreements contemplated hereby and thereby, (C) performance of its obligations
under and in connection with the Term Loan Documents and the other agreements
contemplated thereby, (D) actions incidental to the consummation of the
Transactions (including the payment of Transaction Costs), (E) the incurrence of
and performance of its obligations related to Indebtedness and Guarantees
incurred by Holdings after the Closing Date and that are related to the other
activities referred to in, or otherwise permitted by, this Section 6.08(a)
including the payment by Holdings, directly or indirectly, of dividends or other
distributions (by reduction of capital or otherwise), including the Closing Date
Dividend, whether in cash, property, securities or a combination thereof, with
respect to any of its Equity Interests, or directly or indirectly redeeming,
purchasing, retiring or otherwise acquiring for value any of its Equity
Interests or setting aside any amount for any such purpose, (F) actions required
by law to maintain its existence, (G) the payment of taxes and other customary
obligations, (H) the issuance of Equity Interests, (I) any transaction
contemplated or referred to in this Article VI (including guaranteeing
Indebtedness or obligations of a Borrower and its Subsidiaries) and (J)
activities incidental to its maintenance and continuance and to the foregoing
activities, or

 

(b)     in the case of any Borrower and any Restricted Subsidiary, any business
or business activity conducted by any of them on the Closing Date and any
business or business activities incidental or related thereto, or any business
or activity that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.

 

Notwithstanding anything to the contrary contained in herein, Holdings shall not
sell, dispose of, grant a Lien on or otherwise transfer its Equity Interests in
a Borrower (other than (i) Liens created by the Collateral Documents, (ii)
subject to the Intercreditor Agreement, Liens created by the Term Loan
Documents, (iii) Liens arising by operation of law that would be permitted under
Section 6.02 or (iv) the sale, disposition or other transfer (whether by
purchase and sale, merger, consolidation, liquidation or otherwise) of the
Equity Interests of a Borrower to any Parent Entity that becomes a Loan Party
and agrees to be bound by this Section 6.08).

 

 
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SECTION 6.09.     Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.

 

(a)     Amend or modify in any manner materially adverse to the Lenders, or
grant any waiver or release under or terminate in any manner (if such granting
or termination shall be materially adverse to the Lenders), the articles or
certificate of incorporation or by-laws or limited liability company operating
agreement of Holdings, a Borrower or any of the Subsidiary Loan Parties; or

 

(b)     Make, or agree to make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Subordinated Indebtedness with an aggregate
outstanding principal amount in excess of $35.0 million in respect thereof, or
any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
such Subordinated Indebtedness (except for (i) Refinancings otherwise permitted
by Section 6.01, (ii) payments of regularly scheduled interest, fees, expenses
and indemnification obligations and, to the extent this Agreement is then in
effect, principal on the scheduled maturity date thereof, (iii) any AHYDO “catch
up” payments and (iv) the conversion of any Subordinated Indebtedness to Equity
Interests of Holdings or any Parent Entity (each such payment or distribution, a
“Restricted Debt Payment”)); provided, however, that any such Subordinated
Indebtedness may be repurchased, redeemed, retired, acquired, cancelled or
terminated so long as (x) immediately prior to and after giving effect to such
repurchase, no Event of Default shall have occurred or be continuing and (y) the
Payment Conditions are satisfied on a Pro Forma Basis immediately after giving
effect to such Restricted Debt Payment; or

 

(c)     Amend or modify, or permit the amendment or modification of, any
provision of any Permitted Debt Securities, unsecured Indebtedness or
Subordinated Indebtedness (or Permitted Refinancing Indebtednesss in respect
thereof) in each case with an aggregate outstanding principal amount in excess
of $20.0 million of the Borrower or any Restricted Subsidiary, or any agreement
relating thereto, other than amendments or modifications that are not materially
adverse to Lenders (it being understood that this Section 6.09(c) shall not
restrict Permitted Refinancing Indebtednesss permitted by Section 6.01); or

 

(d)     Permit any Borrower or any Restricted Subsidiary to enter into any
agreement or instrument that by its terms restricts (i) the payment of dividends
or distributions or the making of cash advances to (or the repayment of cash
advances from) a Borrower or any Restricted Subsidiary or (ii) the granting of
Liens on Collateral pursuant to the Security Documents, in each case other than
those arising under any Loan Document, except, in each case, restrictions
existing by reason of:

 

(i)     restrictions imposed by applicable law;

 

(ii)     contractual encumbrances or restrictions in effect on the Closing Date
or contained in any agreements related to any Permitted Refinancing Indebtedness
incurred to Refinance such Indebtedness, or any such encumbrances or
restrictions in any agreements relating to any Permitted Debt Securities issued
after the Closing Date or Permitted Refinancing Indebtedness in respect thereof,
in each case so long as the scope of such encumbrance or restriction is no more
expansive in any material respect than any such encumbrance or restriction in
effect on the Closing Date (or the date of issuance as the case may be), or any
agreement (regardless of whether such agreement is in effect on the Closing
Date) providing for the subordination of Subordinated Intercompany Debt;

 

 
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(iii)     any restriction on a Subsidiary imposed pursuant to an agreement
entered into for the Disposition of all or substantially all the Equity
Interests or assets of such Subsidiary pending the closing of such sale or
disposition;

 

(iv)     customary provisions in Joint Venture agreements and other similar
agreements applicable to Joint Ventures entered into in the ordinary course of
business;

 

(v)     any restrictions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement to the extent that such restrictions
apply only to the property or assets securing such Indebtedness;

 

(vi)     customary provisions contained in leases, subleases, licenses or
sublicenses of intellectual property and other similar agreements entered into
in the ordinary course of business;

 

(vii)     customary provisions restricting subletting or assignment of any lease
governing a leasehold interest;

 

(viii)     customary provisions restricting assignment of any agreement entered
into in the ordinary course of business;

 

(ix)     customary restrictions and conditions contained in any agreement
relating to any Disposition permitted under Section 6.05 pending the
consummation of such Disposition;

 

(x)     customary restrictions and conditions contained in the document relating
to any Lien, so long as (1) such Lien is permitted under Section 6.02 and such
restrictions or conditions relate only to the specific asset subject to such
Lien and the proceeds and products thereof, and (2) such restrictions and
conditions are not created for the purpose of avoiding the restrictions imposed
by this Section 6.09;

 

(xi)     customary net worth provisions contained in real property leases
entered into by Subsidiaries of the Borrowers, so long as such Borrower has
determined in good faith that such net worth provisions could not reasonably be
expected to impair the ability of such Borrower and its Subsidiaries to meet
their ongoing obligations;

 

(xii)     any agreement in effect at the time such person becomes a Restricted
Subsidiary, so long as such agreement was not entered into in contemplation of
such person becoming a Restricted Subsidiary;

 

(xiii)     restrictions contained in any documents documenting Indebtedness of
any Subsidiary that is not a Subsidiary Loan Party permitted hereunder; or

 

(xiv)     customary restrictions and conditions created in connection with any
Receivables Facility permitted by Section 6.01(z) that, in the good faith
determination of the Borrowers, are necessary or advisable to effect such
Receivables Facility.

 

 
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SECTION 6.10.     Financial Covenant.

 

(a)     The Borrowers and their Restricted Subsidiaries shall, on any date when
the sum of (x) Availability plus (y) the amount of Qualified Cash (up to
$5,000,000) on such date (but not to exceed Availability on such date) is less
than the greater of (a) 10% of the Line Cap, and (b) $10,000,000 (the “FCCR Test
Amount”), maintain an Consolidated Fixed Charge Coverage Ratio of at least 1.0
to 1.0, tested for the four fiscal quarter period ending on the last day of the
most recently ended fiscal quarter for which the Borrowers were required to
deliver financial statements to the Administrative Agent in accordance with
Section 5.04 of this Agreement, and at the end of each succeeding fiscal quarter
thereafter until the date on which (x) Availability plus (y) the amount of
Qualified Cash (up to $5,000,000) on such date (but not to exceed Availability
on such date) has exceeded the FCCR Test Amount for 30 consecutive days.

 

(b)     Notwithstanding anything to contrary in this Agreement (including
Article VII), upon an Event of Default as a result of the Borrowers’ failure to
comply with Section 6.10(a) above, such Event of Default shall, subject to the
limitations set forth below, be deemed cured ab initio and cease to exist in the
event that, within 10 Business Days after the date on which the Borrowers were
required to deliver financial statements in accordance with Section 6.10(a) for
the month in which such Event of Default occurs, a cash equity capital
contribution is made to the Lead Borrower (or otherwise receives an equity
contribution in respect of the equity issued for such Cure Actions in exchange
for Qualified Capital Stock). Each such equity contribution is referred to as
“Cure Action.” The proceeds of any Cure Action may be included solely in the
calculation of EBITDA (solely for purposes of calculating the ratio in Section
6.10(a) above, and not for any other purpose hereunder, and there shall be no
pro forma or other reduction in Debt with the proceeds of such Cure Action in
connection with determining such calculation during the period in which such
proceeds are included in EBITDA) at the request of the Lead Borrower as if such
proceeds were contributed on the last day of the applicable fiscal quarter, and
must be sufficient (but may not be in excess of the amount required) to cause
Loan Parties to be in pro forma compliance with the financial covenant set forth
in Section 6.10(a). No more than two Cure Actions may be taken in any 4 fiscal
quarter period and no more than four Cure Actions may be taken during the term
of this Agreement. If, after giving effect to the Cure Action, the Borrowers
shall be in compliance with the requirements of the Consolidated Fixed Charge
Coverage Ratio, the Borrowers shall be deemed to have satisfied the requirements
of Section 6.10(a) 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 Event of Default with respect to such Consolidated Fixed
Charge Coverage Ratio that had occurred shall be deemed cured for purposes of
this Agreement. To the extent a fiscal quarter for which such Fixed Charge
Coverage Ratio is initially recalculated as a result of such Cure Action is
included in the calculation of the Fixed Charge Coverage Ratio in a subsequent
fiscal period, the results of the Cure Action shall be included in the amount of
EBITDA for such fiscal quarter in such subsequent fiscal period. After the
occurrence of the breach, Default or Event of Default resulting from a failure
to comply with Section 6.10(a), if the Lead Borrower has given the
Administrative Agent notice that it intends to cure such breach, Default or
Event of Default pursuant to a Cure Action, neither the Lenders nor the
Administrative Agent shall exercise any rights or remedies under Article VII (or
under any Loan Document) available during the continuance of any breach, Default
or Event of Default on the basis of any actual or purported failure to comply
with Section 6.10(a) until such failure is not cured on or prior to the
expiration of the 10 Business Day cure period referenced above.

 

 
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ARTICLE VII

Events of Default

 

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

 

(a)     any representation or warranty made or deemed made by Holdings, any
Borrower or any other Loan Party in any Loan Document, or in any certificate or
other instrument required to be given by any Loan Party in writing 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 pursuant to the
terms of the Loan Documents or so furnished by Holdings, any Borrower or any
other Loan Party;

 

(b)     default shall be made in the payment of any principal of any Loan 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;

 

(c)     default shall be made in the payment of any interest on any Loan or in
the payment of any Fee or any other amount (other than an amount referred to in
paragraph (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 five (5) Business Days;

 

(d)     default shall be made in the due observance or performance by Holdings,
any Borrower or any of the Restricted Subsidiaries of any covenant, condition or
agreement contained in Sections 5.05(a), 5.07, 5.12(c) or in Article VI;

 

(e)     default shall be made in the (i) failure to deliver a Borrowing Base
Certificate required to be delivered pursuant to Section 5.12(a) within five (5)
Business Days of the date such Borrowing Base Certificate is required to be
delivered or (ii ) due observance or performance by Holdings, any Borrower or
any of their Restricted Subsidiaries of any covenant, condition or agreement
contained in any Loan Document (other than those specified in paragraphs (b),
(c) and (d) above) and in the case of this subclause (ii) such default shall
continue unremedied for a period of thirty (30) days after written notice
thereof from the Administrative Agent or the Required Lenders to the Borrowers;

 

(f)     (i) any event or condition occurs that (A) results in any Indebtedness
in excess of $35.0 million becoming due prior to its scheduled maturity or (B)
enables or permits (with all applicable grace periods having expired) the holder
or holders any Indebtedness in excess of $35.0 million or any trustee or agent
on its or their behalf to cause any such Indebtedness in excess of $35.0 million
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity or (ii) Holdings, any
Borrower, or any of the Restricted Subsidiaries shall fail to pay the principal
of any Indebtedness in excess of $35.0 million at the stated final maturity
thereof; provided that this paragraph (f) 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 if such sale or transfer is
permitted hereunder; provided further that any such failure is unremedied and
not waived by the holders of such Indebtedness prior to the acceleration of the
Loans pursuant to this Section 7.01;

 

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

 

 
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(h)     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, any Borrower or any such Restricted Subsidiary (other than
any Immaterial Subsidiary), or of a substantial part of the property or assets
of Holdings, any Borrower or any material Restricted Subsidiary, under the
Bankruptcy Code, 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, any
Borrower or any such Restricted Subsidiary or for a substantial part of the
property or assets of Holdings, any Borrower or any such Restricted Subsidiary
or (iii) the winding-up or liquidation of Holdings, any Borrower or any such
Restricted Subsidiary (except, in the case of any such Restricted Subsidiary, in
a transaction permitted by Section 6.05); and such proceeding or petition shall
continue undismissed for sixty (60) days or an order or decree approving or
ordering any of the foregoing shall be entered;

 

(i)     Holdings, any Borrower or any Restricted Subsidiary (other than any
Immaterial Subsidiary), shall (i) voluntarily commence any proceeding or file
any petition seeking relief under the Bankruptcy Code, 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 paragraph (h)
above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, any
Borrower or any such Restricted Subsidiary or for a substantial part of the
property or assets of Holdings, any Borrower or any such Restricted 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 or (vi) become unable or admit in writing its inability or fail
generally to pay its debts as they become due;

 

(j)     the failure by Holdings, any Borrower or any Restricted Subsidiary to
pay one (1) or more final judgments aggregating in excess of $35.0 million (to
the extent not covered by third-party insurance as to which the insurer has been
notified of such judgment and does not deny coverage), which judgments are not
discharged or effectively waived or stayed for a period of sixty (60)
consecutive days, or any action shall be legally taken by a judgment creditor to
levy upon assets or properties of Holdings, any Borrower or any Restricted
Subsidiary to enforce any such judgment;

 

(k)     (i) an ERISA Event and/or a Foreign Plan Event shall have occurred, (ii)
a trustee shall be appointed by a United States district court to administer any
Plan(s) or (iii) any Loan Party or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred or will be assessed
Withdrawal Liability to such Multiemployer Plan and such person does not have
reasonable grounds for contesting such Withdrawal Liability or is not contesting
such Withdrawal Liability in a timely and appropriate manner; and in each case
in clauses (i) through (iii) above, such event or condition, together with all
other such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or

 

(l)     (i) any Loan Document shall for any reason cease to be, or shall be
asserted in writing by Holdings, any Borrower or any Restricted Subsidiary not
to be, a legal, valid and binding obligation of any party thereto, (ii) any
security interest purported to be created by any Security Document and to extend
to assets that are not immaterial to Holdings, a Borrower and the Restricted
Subsidiaries on a consolidated basis shall cease to be, or shall be asserted in
writing by Holdings, any Borrower or any other Loan Party not to be (other than
in a notice to the Administrative Agent to take requisite actions to perfect
such Lien), a valid and perfected security interest (perfected as and having the
priority required by the Intercreditor Agreement and this Agreement or the
relevant Security Document and subject to such limitations and restrictions as
are set forth herein and therein) in the securities, assets or properties
covered thereby, except to the extent (x) any such loss of perfection or
priority results from the failure of the Administrative Agent to maintain
possession of certificates actually delivered to it representing securities
pledged under the Collateral Agreement, (y) such loss is covered by a lender’s
title insurance policy as to which the insurer has been notified of such loss
and does not deny coverage and the Administrative Agent shall be reasonably
satisfied with the credit of such insurer or (z) such loss of perfected security
interest may be remedied by the filing of appropriate documentation without the
loss of priority, (iii) the Guarantees pursuant to the Security Documents by
Holdings, a Borrower or the Subsidiary Loan Parties of any of the Obligations
shall cease to be in full force and effect (other than in accordance with the
terms thereof), or shall be asserted in writing by Holdings or a Borrower or any
Subsidiary Loan Party not to be in effect or not to be legal, valid and binding
obligations or (iv) the Obligations of a Borrower or the Guarantees pursuant to
the Security Documents by Holdings, a Borrower or the Subsidiary Loan Parties
shall cease to constitute senior indebtedness under the subordination provisions
of any indenture or other instruments, agreements and documents evidencing or
governing any Permitted Debt Securities in excess of $35.0 million or such
subordination provisions shall be invalidated or otherwise cease (in each case
so long as such indenture, instrument, agreement or document is then in effect),
or shall be asserted in writing by Holdings, any Borrower or any Subsidiary Loan
Party to be invalid or to cease to be legal, valid and binding obligations of
the parties thereto, enforceable in accordance with their terms;

 

 
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then, and in every such event (other than an event with respect to a Borrower
described in paragraph (h) or (i)(i), (ii), (iii) or (iv) above), and at any
time thereafter during the continuance of such event, the Administrative Agent
may, and at the request of the Required Lenders shall, upon notice to the
Borrowers, take any or all of the following actions, at the same or different
times: (i) terminate, reduce or condition any Revolver Commitment, or make any
adjustment to the Borrowing Base, (ii) 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 Borrowers accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding, (iii)
require the Loan Parties to Cash Collateralize LC Obligations, and, if the Loan
Parties fail promptly to deposit such Cash Collateral, the Administrative Agent
may (and shall upon the direction of Required Lenders) advance the required Cash
Collateral as Revolver Loans (whether or not an Overadvance exists or is created
thereby, or the conditions in Section 4.02 are satisfied); and in any event with
respect to a Borrower described in paragraph (h) or (i)(i), (ii), (iii) or (iv)
above, the Revolver Commitments shall automatically terminate, the principal of
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrowers accrued hereunder
and under any other Loan Document, shall automatically become due and payable,
anything contained herein or in any other Loan Document to the contrary
notwithstanding.

 

SECTION 7.02.     Allocation. Notwithstanding anything herein to the contrary
and subject to the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, monies to be applied to the Secured
Obligations, whether arising from payments by the Loan Parties, realization on
Collateral, setoff or otherwise, shall be allocated as follows:

 

(a)     first, to all costs and expenses, including Extraordinary Expenses,
owing to the Administrative Agent pursuant to the terms of the Loan Documents;

 

(b)     second, to all amounts owing to the Administrative Agent on Swingline
Loans;

 

 
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(c)     third, to all amounts owing to the Issuing Bank;

 

(d)     fourth, to all Obligations constituting fees;

 

(e)     fifth, to all Obligations constituting interest;

 

(f)     sixth, to Cash Collateralization of LC Obligations;

 

(g)     seventh, to all other Revolver Loans and solely to the extent included
in the Bank Product Reserve, Noticed Hedges and other Secured Bank Product
Obligations; and

 

(h)     last, to all other Secured Obligations.

 

Amounts shall be applied to each category of Secured Obligations set forth above
until Full Payment thereof and then to the next category. If amounts are
insufficient to satisfy a category, they shall be applied on a pro rata basis
among the Secured Obligations in the category. Amounts distributed with respect
to any Secured Bank Product Obligations shall be the lesser of the maximum
Secured Bank Product Obligations last reported to the Administrative Agent or
the actual Secured Bank Product Obligations as calculated by the methodology
reported to the Administrative Agent for determining the amount due. The
Administrative Agent shall have no obligation to calculate the amount to be
distributed with respect to any Secured Bank Product Obligations, and may
request a reasonably detailed calculation of such amount from the applicable
Secured Party. If a Secured Party fails to deliver such calculation within five
days following request by the Administrative Agent, the Administrative Agent may
assume the amount to be distributed is zero. The allocations set forth in this
Section 7.02 are solely to determine the rights and priorities of the
Administrative Agent and the Secured Parties as among themselves, and may,
except as set forth in the next sentence, be changed by agreement among them
without the consent of any Loan Party. It is understood and agreed that (i) no
Secured Bank Product Obligations (other than Noticed Hedges) shall be paid
pursuant to this Section ahead of any other Obligations, and (ii) no Cash
Collateralization of LC Obligations shall be paid prior to any fees, interest,
or amounts due in respect of Swingline Loans, or to the Issuing Bank or the
Administrative Agent, in each case, unless consented to by the Lead Borrower. If
any monies remain after distribution to all of the categories above, such monies
shall be returned to the Borrowers.

 

ARTICLE VIII

The Agents

 

SECTION 8.01.     Appointment, Authority and Duties of the Administrative Agent.

 

(a)     Appointment and Authority. Each Secured Party hereby irrevocably
appoints and designates Bank of America as the Administrative Agent under all
Loan Documents and Bank of America hereby accepts such appointments. The
Administrative Agent may, and each Secured Party authorizes the Administrative
Agent to, enter into all Loan Documents to which the Administrative Agent is
intended to be a party and accept all Security Documents, for the benefit of
Secured Parties. Each Secured Party agrees that any action taken by the
Administrative Agent or Required Lenders in accordance with the provisions of
the Loan Documents, and the exercise by the Administrative Agent or Required
Lenders of any rights or remedies set forth therein, together with all other
powers reasonably incidental thereto, shall be authorized by and binding upon
all Secured Parties. Without limiting the generality of the foregoing, the
Administrative Agent shall have the sole and exclusive authority to (a) act as
the disbursing and collecting agent for the Lenders with respect to all payments
and collections arising in connection with the Loan Documents; (b) execute and
deliver as the Administrative Agent each Loan Document, including any
intercreditor or subordination agreement, and accept delivery of each Loan
Document from any Loan Party or other Person; (c) act as collateral agent for
Secured Parties for purposes of perfecting and administering Liens under the
Loan Documents, and for all other purposes stated therein; (d) manage, supervise
or otherwise deal with Collateral; and (e) take any Enforcement Action or
otherwise exercise any rights or remedies with respect to any Collateral under
the Loan Documents, Applicable Law or otherwise. No Secured Party shall have any
right individually to take any Enforcement Action or otherwise exercise any
rights or remedies with respect to any Collateral under the Loan Documents,
Applicable Law or otherwise. The duties of the Administrative Agent shall be
ministerial and administrative in nature, and the Administrative Agent shall not
have a fiduciary relationship with any Secured Party, Participant or other
Person, by reason of any Loan Document or any transaction relating thereto. The
Administrative Agent alone shall be authorized to determine whether any Accounts
or Inventory constitute Eligible Accounts, Eligible Inventory or Eligible
In-Transit Inventory, whether to impose or release any Availability Reserve, or
whether any conditions to funding or to issuance of a Letter of Credit have been
satisfied, which determinations and judgments, if exercised in good faith, shall
exonerate the Administrative Agent from liability to any Lender or other Person
for any error in judgment.

 

 
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(b)     Duties. The Administrative Agent shall not have any duties except those
expressly set forth in the Loan Documents. The conferral upon the Administrative
Agent of any right shall not imply a duty to exercise such right, unless
instructed to do so by Required Lenders in accordance with this Agreement.

 

(c)     Agent Professionals. The Administrative Agent may perform its duties
through agents and employees. The Administrative Agent may consult with and
employ Agent Professionals, and shall be entitled to act upon, and shall be
fully protected in any action taken in good faith reliance upon, any advice
given by an Administrative Agent Professional.

 

(d)     Instructions of Required Lenders. The rights and remedies conferred upon
the Administrative Agent under the Loan Documents may be exercised without the
necessity of joinder of any other party, unless required by Applicable Law. The
Administrative Agent may request instructions from Required Lenders or other
Secured Parties with respect to any act (including the failure to act) in
connection with any Loan Documents, and may seek assurances to its satisfaction
from Secured Parties of their indemnification obligations against all Claims
that could be incurred by the Administrative Agent in connection with any act.
The Administrative Agent shall be entitled to refrain from any act until it has
received such instructions or assurances, and the Administrative Agent shall not
incur liability to any Lender by reason of so refraining. Instructions of
Required Lenders shall be binding upon all Secured Parties, and no Secured Party
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting in
accordance with the instructions of Required Lenders. Notwithstanding the
foregoing, instructions by and consent of specific Lenders or Secured Parties
shall be required to the extent provided in Section 9.08(b). In no event shall
the Administrative Agent be required to take any action that, in its opinion, is
contrary to Applicable Law or any Loan Documents or could subject any Agent
Indemnitee to personal liability.

 

SECTION 8.02.     Agreements Regarding Collateral and Field Examination Reports.

 

(a)     Possession of Collateral. The Administrative Agent and Secured Parties
appoint each Lender as agent (for the benefit of Secured Parties) for the
purpose of perfecting Liens in any Collateral held or controlled by such Lender,
to the extent such Liens are perfected by possession or control. If any Lender
obtains possession or control of any Collateral, it shall notify the
Administrative Agent thereof and, promptly upon the Administrative Agent’s
request, deliver such Collateral to the Administrative Agent or otherwise deal
with it in accordance with the Administrative Agent’s instructions.

 

 
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(b)     Reports. The Administrative Agent shall promptly forward to each Lender,
when complete, copies of any field audit, examination or appraisal report
prepared by or for the Administrative Agent with respect to any Loan Party or
Collateral (“Report”). Each Lender agrees (a) that neither Bank of America nor
the Administrative Agent makes any representation or warranty as to the accuracy
or completeness of any Report, and shall not be liable for any information
contained in or omitted from any Report; (b) that the Reports are not intended
to be comprehensive audits or examinations, and that the Administrative Agent or
any other Person performing any audit or examination will inspect only specific
information regarding the Collateral and will rely significantly upon the
Borrowers’ books and records as well as upon representations of the Borrowers’
officers and employees; and (c) to keep all Reports confidential in accordance
with Section 9.16 and not to distribute or use any Report in any manner other
than administration of the Revolver Loans and other Obligations. Each Lender
shall indemnify and hold harmless the Administrative Agent and any other Person
preparing a Report from any action such Lender may take as a result of or any
conclusion it may draw from any Report, as well as from any Claims arising as a
direct or indirect result of the Administrative Agent furnishing a Report to
such Lender.

 

SECTION 8.03.     Reliance By the Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall not incur any liability in relying, upon
any certification, notice or other communication (including those by telephone,
telex, telegram, telecopy or e-mail) believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person, and upon the advice
and statements of Agent Professionals. The Administrative Agent shall have a
reasonable and practicable amount of time to act upon any instruction, notice or
other communication under any Loan Document, and shall not be liable for any
such delay in acting.

 

SECTION 8.04.     Action Upon Default. The Administrative Agent shall not be
deemed to have knowledge of any Default or Event of Default, or of any failure
to satisfy any conditions in Article IV, unless it has received written notice
from a Borrower or Required Lenders specifying the occurrence and nature
thereof. If any Lender acquires knowledge of a Default, Event of Default or
failure of such conditions, it shall promptly notify the Administrative Agent
and the other Lenders thereof in writing. Each Secured Party agrees that, except
with the written consent of the Required Lenders, it will not take any
Enforcement Action, accelerate Obligations, or exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC
sales or other similar dispositions of Collateral or to assert any rights
relating to any Collateral.

 

SECTION 8.05.     Payments Received by Defaulting Lender. If a Defaulting Lender
obtains a payment or reduction of any Obligation, it shall immediately turn over
the amount thereof to the Administrative Agent for application under Section
2.21 and it shall provide a written statement to the Administrative Agent
describing the Obligation affected by such payment or reduction. No Lender shall
set off against any Dominion Account without the prior consent of the
Administrative Agent.

 

SECTION 8.06.     Limitation on Responsibilities of the Agents. The
Administrative Agent shall not be liable to any Secured Party for any action
taken or omitted to be taken under the Loan Documents, except for losses to the
extent caused by the Administrative Agent’s gross negligence or willful
misconduct. The Agents do not assume any responsibility for any failure or delay
in performance or any breach by any Loan Party, Lender or other Secured Party of
any obligations under the Loan Documents. The Agents do not make any express or
implied representation, warranty or guarantee to Secured Parties with respect to
any Secured Obligations, Collateral, Loan Documents or Loan Party. No Agent
Indemnitee shall be responsible to Secured Parties for any recitals, statements,
information, representations or warranties contained in any Loan Documents; the
execution, validity, genuineness, effectiveness or enforceability of any Loan
Documents; the genuineness, enforceability, collectability, value, sufficiency,
location or existence of any Collateral, or the validity, extent, perfection or
priority of any Lien therein; the validity, enforceability or collectability of
any Secured Obligations; or the assets, liabilities, financial condition,
results of operations, business, creditworthiness or legal status of any Loan
Party or Account Debtor. No Agent Indemnitee shall have any obligation to any
Secured Party to ascertain or inquire into the existence of any Default or Event
of Default, the observance by any Loan Party of any terms of the Loan Documents,
or the satisfaction of any conditions precedent contained in any Loan Documents.

 

 
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SECTION 8.07.     Successor Administrative Agent and Co-Agents.

 

(a)     Resignation; Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving at least 30 days written
notice thereof to Lenders and the Lead Borrower. Upon receipt of such notice,
Required Lenders shall have the right, in consultation with (and with the
consent of) the Lead Borrower, to appoint a successor Administrative Agent which
shall be (a) a Lender or an Affiliate of a Lender; or (b) a commercial bank that
is organized under the laws of the United States or any state or district
thereof, has a combined capital surplus of at least $200,000,000 and (provided
no Event of Default exists under Sections 7.01(b), 7.01(h) and 7.01(i) (with
respect to the Lead Borrower only) is subject to the approval of the Borrowers.
If no successor agent is appointed prior to the effective date of the
resignation of the Administrative Agent, then the Administrative Agent may
appoint a successor agent from among the Lenders or, if no Lender accepts such
role, the Administrative Agent may appoint Required Lenders as successor
Administrative Agent. Upon acceptance by a successor Administrative Agent of an
appointment to serve as the Administrative Agent hereunder, or upon appointment
of Required Lenders as successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
powers and duties of the retiring Administrative Agent without further act, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder but shall continue to have the benefits of the
indemnification set forth in Section 8.15. Notwithstanding any Administrative
Agent’s resignation, the provisions of this Section 8.07 shall continue in
effect for its benefit with respect to any actions taken or omitted to be taken
by it while the Administrative Agent. Any successor to Bank of America by merger
or acquisition of stock or this loan shall continue to be the Administrative
Agent hereunder without further act on the part of the parties hereto, unless
such successor resigns as provided above.

 

(b)     Separate Collateral Administrative Agent. It is the intent of the
parties that there shall be no violation of any Applicable Law denying or
restricting the right of financial institutions to transact business in any
jurisdiction. If the Administrative Agent believes that it may be limited in the
exercise of any rights or remedies under the Loan Documents due to any
Applicable Law, the Administrative Agent may appoint, subject to the approval of
the Lead Borrower (such approval not to be unreasonably withheld or delayed), an
additional Person who is not so limited, as a separate collateral agent or
co-collateral agent. If the Administrative Agent so appoints a collateral agent
or co-collateral agent, each right and remedy intended to be available to the
Administrative Agent under the Loan Documents shall also be vested in such
separate agent. The parties acknowledge that the Term Agent may be acting as
collateral agent for the Administrative Agent and the Lenders with respect to
Real Estate, equipment and other Term Priority Collateral (as defined in the
Intercreditor Agreement) and the Administrative Agent hereby appoints the Term
Agent to act in such capacity. Secured Parties shall execute and deliver such
documents as the Administrative Agent deems appropriate to vest any rights or
remedies in such agent. If any collateral agent or co-collateral agent shall die
or dissolve, become incapable of acting, resign or be removed, then all the
rights and remedies of such agent, to the extent permitted by Applicable Law,
shall vest in and be exercised by the Administrative Agent until appointment of
a new agent.

 

 
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SECTION 8.08.     Due Diligence and Non-Reliance. Each Lender acknowledges and
agrees that it has, independently and without reliance upon the Agents or any
other Lenders, and based upon such documents, information and analyses as it has
deemed appropriate, made its own credit analysis of each Loan Party and its own
decision to enter into this Agreement and to fund Revolver Loans and participate
in LC Obligations hereunder. Each Secured Party has made such inquiries as it
feels necessary concerning the Loan Documents, Collateral and Loan Parties. Each
Secured Party acknowledges and agrees that the other Secured Parties have made
no representations or warranties concerning any Loan Party, any Collateral or
the legality, validity, sufficiency or enforceability of any Loan Documents or
Secured Obligations. Each Secured Party will, independently and without reliance
upon any other Secured Party, and based upon such financial statements,
documents and information as it deems appropriate at the time, continue to make
and rely upon its own credit decisions in making Revolver Loans and
participating in LC Obligations, and in taking or refraining from any action
under any Loan Documents. Except for notices, reports and other information
expressly required to be furnished to or expressly requested by a Lender, the
Administrative Agent shall have no duty or responsibility to provide any Secured
Party with any notices, reports or certificates furnished to the Administrative
Agent by any Loan Party or any credit or other information concerning the
affairs, financial condition, business or Properties of any Loan Party (or any
of its Affiliates) which may come into possession of the Agents and their
respective Affiliates.

 

SECTION 8.09.     Remittance of Payments and Collections.

 

(a)     Remittances Generally. All payments by any Lender to the Administrative
Agent shall be made by the time and on the day set forth in this Agreement, in
immediately available funds. If no time for payment is specified or if payment
is due on demand by the Administrative Agent and request for payment is made by
the Administrative Agent by 11:00 a.m. (New York City time) on a Business Day,
payment shall be made by Lender not later than 2:00 p.m. (New York City time) on
such day, and if request is made after 11:00 a.m. (New York City time), then
payment shall be made by 11:00 a.m. (New York City time) on the next Business
Day. Payment by the Administrative Agent to any Secured Party shall be made by
wire transfer, in the type of funds received by the Administrative Agent. Any
such payment shall be subject to the Administrative Agent’s right of offset for
any amounts due from such payee under the Loan Documents.

 

(b)     Failure to Pay. If any Secured Party fails to pay any amount when due by
it to the Administrative Agent pursuant to the terms hereof, such amount shall
bear interest from the due date until paid at the rate determined by the
Administrative Agent as customary in the banking industry for interbank
compensation. In no event shall Borrower be entitled to receive credit for any
interest paid by a Secured Party to the Administrative Agent, nor shall any
Defaulting Lender be entitled to interest on any amounts held by the
Administrative Agent pursuant to Section 2.21.

 

(c)     Recovery of Payments. If the Administrative Agent pays any amount to a
Secured Party in the expectation that a related payment will be received by the
Administrative Agent from a Loan Party and such related payment is not received,
then the Administrative Agent may recover such amount from each Secured Party
that received it. If the Administrative Agent determines at any time that an
amount received under any Loan Document must be returned to a Loan Party or paid
to any other Person pursuant to Applicable Law or otherwise, then,
notwithstanding any other term of any Loan Document, the Administrative Agent
shall not be required to distribute such amount to any Lender. If any amounts
received and applied by the Administrative Agent to any Secured Obligations are
later required to be returned by the Administrative Agent pursuant to Applicable
Law, each Lender shall pay to the Administrative Agent, on demand, such Lender’s
Pro Rata share of the amounts required to be returned.

 

 
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SECTION 8.10.     The Administrative Agent in its Individual Capacity. As a
Lender, Bank of America shall have the same rights and remedies under the other
Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders”
or any similar term shall include Bank of America in its capacity as a Lender.
Bank of America and its Affiliates may accept deposits from, lend money to,
provide Bank Products to, act as financial or other advisor to, and generally
engage in any kind of business with, Loan Parties and their Affiliates, as if
Bank of America were not the Administrative Agent hereunder, without any duty to
account therefor to the Lenders. In their individual capacities, Bank of America
and its Affiliates may receive information regarding Loan Parties, their
Affiliates and their Account Debtors (including information subject to
confidentiality obligations), and each Secured Party agrees that Bank of America
and its Affiliates shall be under no obligation to provide such information to
any Secured Party, if acquired in such individual capacity.

 

SECTION 8.11.     Administrative Agent Titles. Each Lender, other than Bank of
America, that is designated (on the cover page of this Agreement or otherwise)
by Bank of America as an “Agent” or “Arranger” of any type shall not have any
right, power, responsibility or duty under any Loan Documents other than those
applicable to all Lenders in their capacity as such, and shall in no event be
deemed to have any fiduciary relationship with any other Lender.

 

SECTION 8.12.     Bank Product Providers. Each Secured Bank Product Provider, by
delivery of a notice to the Administrative Agent of a Bank Product, agrees to be
bound by this Article VIII. Each Secured Bank Product Provider shall indemnify
and hold harmless the Agent Indemnitees, to the extent not reimbursed by Loan
Parties, against all Claims that may be incurred by or asserted against any
Agent Indemnitee in connection with such provider’s Secured Bank Product
Obligations.

 

SECTION 8.13.     Survival. This Article VIII shall survive Full Payment of the
Obligations. Other than Sections 8.01, 8.04 and 8.07, this Article VIII does not
confer any rights or benefits upon Borrowers or any other Person. As between
Borrowers and Administrative Agent, any action that Administrative Agent may
take under any Loan Documents or with respect to any Obligations shall be
conclusively presumed to have been authorized and directed by Secured Parties.

 

SECTION 8.14.     Withholding Tax. To the extent required by any Applicable Law,
the Administrative Agent may withhold from any payment to any Lender an amount
equivalent to any applicable withholding Tax. Without limiting or expanding the
provisions of Section 2.18, each Lender shall indemnify and hold harmless the
Administrative Agent against, within 10 days after written demand therefor, any
and all Taxes and any and all related losses, claims, liabilities and expenses
(including fees, charges and disbursements of any counsel Administrative Agent)
incurred by or asserted against the Administrative Agent by the IRS or any other
Governmental Authority as a result of the failure of the Administrative Agent to
properly withhold Tax from amounts paid to or for the account of any Lender for
any reason (including, without limitation, because the appropriate form was not
delivered or not properly executed, or because such Lender failed to notify the
Administrative Agent of a change in circumstance that rendered the exemption
from, or reduction of withholding Tax ineffective). A certificate as to the
amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender
hereby authorizes the Administrative Agent to set off and apply any and all
amounts at any time owing to such Lender under this Agreement or any other Loan
Document against any amount due the Administrative Agent under this Section
8.14. The agreements in this Section 8.14 shall survive the resignation and/or
replacement of the Administrative Agent, any assignment of rights by, or the
replacement of, a Lender, the termination of the Revolver Commitments and the
repayment, satisfaction or discharge of all other Obligations. For the avoidance
of doubt, for purposes of this Section 8.14, the term “Lender” includes any
Issuing Bank and any Swingline Lender.

 

 
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SECTION 8.15.     Indemnification. The Lenders agree to indemnify each Agent and
each Joint Lead Arranger in its capacity as such (to the extent not reimbursed
by Holdings or the Borrowers and without limiting the obligation of Holdings or
the Borrowers to do so), each in an amount equal to its pro rata share (based on
its Revolver Commitments hereunder (or if such Revolver Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of its applicable outstanding Loans or participations in L/C Disbursements, as
applicable)) thereof, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans) be imposed on, incurred by or asserted against
such Agent or Joint Lead Arranger in any way relating to or arising out of, the
Revolver Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent or
Joint Lead Arranger under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent’s
or Joint Lead Arranger’s gross negligence or willful misconduct. The agreements
in this Section shall survive the payment of the Loans and all other amounts
payable hereunder.

 

ARTICLE IX

Miscellaneous

 

SECTION 9.01.     Notices.

 

(a)     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 or other electronic transmission,
(including.”pdf” or.”tif”) pursuant to the terms of this Agreement, as follows:

 

(i)     if to any Loan Party, to Generac Power Systems, Inc., Highway 59 and
Hillside Road, P.O. Box 8, Waukesha Wisconsin, 53187, attention York Ragen and
Joseph Kavalary, Telecopier: (262) 968-9372, Electronic Addresses:
york.ragen@generac.com and joe.kavalary@generac.com, with a copy to Weil,
Gotshal & MangesSidley Austin LLP, 200 Crescent Court2001 Ross Avenue, Suite
300,3600, Dallas, Texas 75201-6950,75201, Attention Angela L. FontanaChristopher
C. Gleason, Telecopier: (214) 746-7777,981-3400, Electronic Address:
angela.fontana@weilcgleason@sidley.com;

 

(ii)     if to the Administrative Agent, to Bank of America, N.A., 20975 Swenson
Drive, Suite 200, Waukesha, WI, 53186,135 S. LaSalle, 9th Floor, Mail Code
IL4-135-09-43, Attention: Jason RileyBrad Breidenbach, Telecopier: (312)
453-3265,992-6101, Electronic Address: jason.rileybrad.h.breidenbach@baml.com,
with a copy to Bank of America, N.A., 135 South LaSalle St., Chicago, IL, 60603,
Attention: Loan Administration Manager, Telecopier: (312) 453-2128, Electronic
Address: Abl_chicago_structure_team@bankofamerica.com;

 

(iii)     if to an Issuing Bank, to it at the address, fax number or electronic
address set forth separately in writing; or

 

(iv)     if to a Lender, to it at the address, fax number or electronic address
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender becomes a party hereto.

 

 
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(b)     Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. Each of the Administrative Agent
and the Borrowers may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided, further, that approval of such procedures
may be limited to particular notices or communications.

 

(c)     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,
sent by fax or (to the extent permitted by paragraph (b) above) electronic means
or on the date five (5) 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.

 

(d)     Any party hereto may change its address or fax number for notices and
other communications hereunder by notice to the other parties hereto.

 

SECTION 9.02.     Survival of Agreement. All representations and warranties made
by the Loan Parties herein and in the other Loan Documents shall be considered
to have been relied upon by the Lenders and each Issuing Bank and shall survive
the making of the Loans, the execution and delivery of the Loan Documents and
the issuance of the Letters of Credit, and shall continue in full force and
effect until the Revolver Termination Date. Without prejudice to the survival of
any other agreements contained herein, obligations for taxes, costs,
indemnifications, reimbursements, damages and other contingent liabilities
contained herein (including pursuant to Sections 2.15, 2.17 and 9.05) shall
survive the payment in full of the principal and interest hereunder, the
expiration of the Letters of Credit, and the termination of the Revolver
Commitments or this Agreement, limited in the manner set forth herein.

 

SECTION 9.03.     Binding Effect. This Agreement shall become effective when it
shall have been executed by Holdings, the Borrower and the Administrative Agent
and when the Administrative Agent shall have received copies hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of Holdings, the
Borrowers, each Issuing Bank, the Administrative Agent and each Lender and their
respective permitted successors and assigns.

 

SECTION 9.04.     Successors and Assigns.

 

(a)     The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), except that (i) except as otherwise permitted by Section 6.05
the Borrowers may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section 9.04. Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section 9.04), and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agents, the Issuing Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

 
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(b)     (i) Subject to the conditions set forth in clause (ii) below, any Lender
may assign to one (1) or more Eligible Assignees (other than to any Disqualified
Institution or any natural person) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Revolver
Commitments and the Revolver Loans at the time owing to it) (provided, however,
that pro rata assignments shall not be required and each assignment shall be of
a uniform, and not varying, percentage of all rights and obligations under and
in respect of any applicable Loan and any related Revolver Commitment) with the
prior written consent (such consent not to be unreasonably withheld or delayed)
of:

 

(A)     the Lead Borrower, provided that no consent of the Lead Borrower shall
be required (i) if an Event of Default under Section 7.01(b) or (c), or (with
respect to the Lead Borrower only) Section 7.01(h) or (i)(i), (ii), (iii) or
(iv) has occurred and is continuing and (ii) if such assignment is to a Lender,
an Affiliate of a Lender or a Related Fund in respect of a Lender (for purposes
of clarity, it is understood that no assignment may be made to a Disqualified
Institution);

 

(B)     the Administrative Agent; and

 

(C)     the Issuing Bank and the Swingline Lender.

 

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

 

(A)     except in the case of an assignment to a Lender, an affiliate of a
Lender or Related Fund or an assignment of the entire remaining amount of the
assigning Lender’s Revolver Commitments or Revolver Loans, the amount of the
Revolver Commitments or Revolver Loans 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 $5.0 million, unless each of the Lead Borrower and the
Administrative Agent otherwise consent, provided that such amounts shall be
aggregated in respect of each Lender and its Affiliates or Related Funds, if
any;

 

(B)     the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance together with a processing and
recordation fee of $3,500; and

 

(C)     the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and all applicable tax
forms.

 

(iii)     Subject to acceptance and recording thereof pursuant to clause (b)(v)
below and subject to clause (f) below, from and after the effective date
specified in each Assignment and Acceptance the Eligible 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 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 of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.05 as well as
any Fees accrued for its account and not yet paid). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this Section 9.04 shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with paragraph (c) of this Section 9.04.

 

 
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(iv)     The Administrative Agent, acting for this purpose as an agent of the
Borrowers, shall maintain at one of its offices 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 Revolver Commitments of, and principal amount
of the Revolver Loans and the LC Obligations owing to, each Lender or Issuing
Bank, as applicable, pursuant to the terms hereof from time to time (the
“Register”). The entries in the Register shall be conclusive absent manifest
error, and the Borrowers, the Administrative Agent, the Issuing Bank and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrowers, the Issuing Bank and any Lender (with respect to
any entry related to such Lender’s Loans), at any reasonable time and from time
to time upon reasonable prior notice.

 

(v)     Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an Eligible Assignee (subject to clause (f)), the
Eligible Assignee’s completed Administrative Questionnaire (unless the Eligible
Assignee shall already be a Lender hereunder) and any applicable tax forms, and
any written consent to such assignment required by clause (i) above, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment, whether or not
evidenced by a promissory note, shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this clause
(v).

 

(c)     (i) Any Lender may, without the consent of the Borrowers, the Swingline
Lender, the Issuing Bank or the Administrative Agent, sell participations to one
(1) or more banks or other entities (other than to any Disqualified Institution)
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Revolver Commitments and
the Revolver Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement and the other Loan Documents; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that requires the
consent of each Lender directly affected thereby pursuant to Section 9.04(a)(i)
or clauses (i) through (vi) of the first proviso to Section 9.08(b). Subject to
paragraph (c)(ii) of this Section 9.04, each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17
(subject to the requirements and limitations with respect thereto) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 9.04. To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 9.06 as
though it were a Lender, provided such Participant shall be subject to Section
2.18(c) as though it were a Lender. Each Lender that sells a participation
shall, acting solely for this purpose as an agent of the Borrowers, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Revolver Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register to any Person (including the identity of
any Participant or any information relating to a Participant’s interest in any
Revolver Commitments, Revolver Loans, Letters of Credit or its other obligations
under any Loan Document) except to the extent that such disclosure is necessary
to establish that such Revolver Commitment, Revolver Loan, Letter of Credit or
other obligation is in registered form under Section 5f.103-1(c) of the United
States Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

 

 
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(ii)     A Participant shall not be entitled to receive any greater payment
under Section 2.15, 2.16 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers’ prior written consent expressly acknowledging such Participant may
receive a greater benefit. A Participant shall not be entitled to the benefits
of Section 2.17 to the extent such Participant fails to comply with Section
2.17(e) as though it were a Lender.

 

(d)     Any Lender may at any time, without the consent of or notice to the
Administrative Agent or the Borrower, pledge or assign a security interest in
all or any portion of its rights under this Agreement (other than to a
Disqualified Institution or a natural person) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section 9.04 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee (including any Eligible Assignee) for such Lender
as a party hereto.

 

(e)     The Borrowers, upon receipt of written notice from the relevant Lender,
agrees to issue Notes to any Lender requiring Notes to facilitate transactions
of the type described in paragraph (d) above.

 

(f)     If any assignment or participation under this Section 9.04 is made (or
attempted to be made) (i) to a Disqualified Institution or any Affiliate of a
Disqualified Institution, in each case without the Borrowers’ prior written
consent or (ii) to the extent the Borrowers’ consent is required under the terms
of this Section 9.04, to any other person without the Borrowers’ consent, then
the Borrowers may, at their sole expense and effort, upon notice to such Lender
and the Administrative Agent, (A) terminate the Revolver Commitments of such
Lender and repay all obligations of the Borrowers owing to such Lender relating
to the Revolver Loans and participations held by such Lender or participant as
of such termination date (in the case of any participation in any Revolver Loan,
to be applied to such participation), or (B) require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in this Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
such Lender shall have received payment of an amount equal to the lesser of par
or the amount such Lender paid for such Revolver Loans and participations in L/C
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts), (ii) the Borrowers shall be liable to such
Lender under Section 2.16 if any Eurodollar Loan owing to such Lender is repaid
or purchased other than on the last day of the Interest Period relating thereto,
and (iii) such assignment shall otherwise comply with this Section 9.04
(provided that no registration and processing fee referred to in this Section
9.04 shall be owing in connection with any assignment pursuant to this
paragraph). Each Lender hereby grants to the Administrative Agent an irrevocable
power of attorney (which power is coupled with an interest) to execute and
deliver, on behalf of such Lender, as assignor, any Assignment and Acceptance
necessary to effectuate any assignment of such Lender’s interests hereunder to
an assignee as contemplated hereby in the circumstances contemplated by this
Section 9.04(f). Nothing in this Section 9.04(f) shall be deemed to prejudice
any rights or remedies the Borrowers may otherwise have at law or equity. Each
Lender acknowledges and agrees that the Borrowers would suffer irreparable harm
if such Lender breaches any of its obligations under Sections 9.04(a) or 9.04(d)
insofar as such Sections relate to any assignment, participation or pledge to a
Disqualified Institution or an Affiliate of a Disqualified Institution without
the Borrowers’ prior written consent. Additionally, each Lender agrees that the
Borrowers may seek to obtain specific performance or other equitable or
injunctive relief to enforce this Section 9.04(f) against such Lender with
respect to such breach without posting a bond or presenting evidence of
irreparable harm.

 

 
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(g)     If the Borrower wishes to replace all of the Revolver Loans or Revolver
Commitments with ones having different terms, it shall have the option, with the
consent of the Administrative Agent and subject to at least three (3) Business
Days’ advance notice to the Lenders, instead of prepaying the Revolver Loans or
reducing or terminating the Revolver Commitments to be replaced to (i) require
the Lenders to assign the Revolver Loans or Revolver Commitments to the
Administrative Agent or its designees and (ii) amend the terms thereof in
accordance with Section 9.08 (with such replacement, if applicable, being deemed
to have been made pursuant to Section 9.08(d)). Pursuant to any such assignment,
all Revolver Loans or Revolver Commitments to be replaced shall be purchased at
par (allocated among the Lenders in the same manner as would be required if such
Revolver were being optionally prepaid or such Revolver Commitments were being
optionally reduced or terminated by the Borrowers), accompanied by payment of
any accrued interest and fees thereon and any amounts owing pursuant to Section
9.05(b). By receiving such purchase price, the Lenders shall automatically be
deemed to have assigned the Revolver Loans or Revolver Commitments pursuant to
the terms of the form of Assignment and Acceptance attached hereto as Exhibit A,
and accordingly no other action by such Lenders shall be required in connection
therewith. The provisions of this paragraph (g) are intended to facilitate the
maintenance of the perfection and priority of existing security interests in the
Collateral during any such replacement.

 

SECTION 9.05.     Expenses; Indemnity.

 

(a)     The Borrowers agree to pay within thirty (30) days of demand thereof
(together with backup documentation supporting such request) (i) all reasonable
out-of-pocket expenses (including Other Taxes) incurred by the Agents and Joint
Lead Arrangers in connection with the preparation of this Agreement and the
other Loan Documents, or by the Agents and Joint Lead Arrangers in connection
with the syndication of the Revolver Commitments or the administration of this
Agreement (including expenses incurred in connection with due diligence and
initial and ongoing Collateral examination to the extent incurred with the
reasonable prior approval of the Borrowers and the reasonable out-of-pocket
fees, disbursements and charges for no more than one (1) outside counsel and, if
necessary one (1) local counsel in each material jurisdiction where Collateral
is located for such persons, taken as a whole) or in connection with the
administration of this Agreement and any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the Transactions hereby
contemplated shall be consummated) and (ii) all reasonable out-of-pocket
expenses incurred by the Agents or Joint Lead Arrangers or any Lender in
connection with the enforcement or protection of their rights in connection with
this Agreement and the other Loan Documents, in connection with the Revolver
Loans made or the Letters of Credit issued hereunder (including the reasonable
out-of-pocket fees, charges and disbursements of Cahill Gordon & Reindel llp,
counsel for the Agents and the Joint Lead Arrangers, and, if necessary (x) the
reasonable out-of-pocket fees, charges and disbursements of one (1) local
counsel per relevant material jurisdiction and (y) in the case of an actual or
potential conflict of interest, the reasonable out-of-pocket fees, charges and
disbursements of one (1) additional counsel to all affected persons, taken as a
whole).

 

 
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(b)     The Borrowers agree to indemnify, on a joint and several basis, the
Administrative Agent, the Joint Lead Arrangers, each Issuing Bank, each Lender
and each of their respective Affiliates, successors and assigns and the
directors, trustees, officers, employees, advisors, controlling persons and
agents of each of the foregoing (each such person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and reasonable out-of-pocket costs and related expenses
(including reasonable out-of-pocket documented fees, charges and disbursements
of Cahill Gordon & Reindel LLP and, if necessary, one (1) local counsel in each
relevant material jurisdiction to the Agents or Joint Lead Arrangers, taken as a
whole, in each relevant jurisdiction and, in the case of an actual or potential
conflict of interest, one (1) additional counsel to all affected Indemnitees,
taken as a whole) incurred by or asserted against any Indemnitee arising out of,
relating to, 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 hereto and thereto of their respective
obligations thereunder or the consummation of the Transactions (including the
payment of the Transaction Costs) and the other transactions contemplated
hereby, (ii) the use of the proceeds of the Loans or the use of any Letter of
Credit or (iii) any claim, litigation, investigation or proceeding relating to
any of the foregoing, whether or not any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or costs or related expenses (x)
are determined by a judgment of a court of competent jurisdiction to have
resulted by reason of the gross negligence, bad faith or willful misconduct of,
or material breach by, such Indemnitee, (y) arise out of any claim, litigation,
investigation or proceeding brought by such Indemnitee (or its Related Parties)
against another Indemnitee (or its Related Parties) (other than any claim,
litigation, investigation or proceeding brought by or against the Administrative
Agent, acting in its capacity as Administrative Agent) that does not involve any
act or omission of the Sponsor, any Borrower or any of their Subsidiaries and
arises out of disputes among the Lenders and/or their transferees. The Borrowers
shall not be liable for any settlement of any proceeding referred to in this
Section 9.05 effected without the Borrowers’ written consent (such consent not
to be unreasonably withheld or delayed); provided, however, that a Borrower
shall indemnify the Indemnitees from and against any loss or liability by reason
of such settlement if such Borrower was offered the right to assume the defense
of such proceeding and did not assume such defense or such proceeding was
settled with the written consent of such Borrower, subject to, in each case, a
Borrower’s right in this Section 9.05 to claim an exemption from such indemnity
obligations. A Borrower shall indemnify the Indemnitees from and against any
final judgment for the plaintiff in any proceeding referred to in this Section
9.05, subject to a Borrower’s right in this Section 9.05 to claim an exemption
from such indemnity obligations. A Borrower shall not, without the prior written
consent of any Indemnitee, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnitee is a party and indemnity could
have been sought hereunder by such Indemnitee unless such settlement (i)
includes an unconditional release of such Indemnitee (and its Related Parties)
from all liability or claims that are the subject matter of such proceeding and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any Indemnitee (or its Related Parties). To
the extent permitted by applicable law, each party hereto hereby waives for
itself (and, in the case of a Borrower, for each other Loan Party) any claim
against any Loan Party, any Lender, any Administrative Agent, any Lender Party,
any Joint Lead Arrangers, and their respective affiliates, directors, employees,
attorneys, agents or sub-agents, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) (whether or not the claim therefor is based on contract, tort or duty
imposed by any applicable legal requirement) arising out of, in connection with,
as a result of, or in any way related to, this Agreement or any Loan Document or
any agreement or instrument contemplated hereby or thereby or referred to herein
or therein, the transactions contemplated hereby or thereby, any Loan or the use
of the proceeds thereof or any act or omission or event occurring in connection
therewith, and each party hereto (and in the case of a Borrower on behalf of
each other Loan Party) hereby waive, release and agree not to sue upon any such
claim or any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor; provided that nothing contained in this
sentence shall limit such Borrower’s indemnity obligations to the extent such
special, indirect, consequential or punitive damages are included in any third
party claim in connection with which such indemnified person is entitled to
indemnification hereunder. 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 contemplated hereby, the
repayment of any of the Obligations, the termination of the Revolver
Commitments, the expiration of any Letters 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,
any Issuing Bank or any Lender. All amounts due under this Section 9.05 shall be
payable on written demand therefor accompanied by reasonable documentation with
respect to any reimbursement, indemnification or other amount requested.

 

 
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(c)     Except as expressly provided in Section 9.05(a) with respect to Other
Taxes, which shall not be duplicative with any amounts paid pursuant to Section
2.17, this Section 9.05 shall not apply to Taxes other than Taxes arising from a
non-Tax claim.

 

(d)     Notwithstanding the foregoing paragraphs in this Section, if it is found
by a final, non-appealable judgment of a court of competent jurisdiction in any
such action, proceeding or investigation that any loss, claim, damage, liability
or cost or related expense of any Indemnitee has resulted from the gross
negligence, bad faith or willful misconduct of such Indemnitee (or any of its
Related Parties) or a material breach of the Loan Documents by such Indemnitee
(or any of its Related Parties), such Indemnitee will repay such portion of the
reimbursed amounts previously paid to such Indemnitee under this Section that is
attributable to expenses incurred in relation to the set or omission of such
Indemnitee which is the subject of such finding.

 

SECTION 9.06.     Right of Set-off. If an Event of Default shall have occurred
and be continuing, upon the written consent of the Administrative Agent or the
Required Lenders, each Lender and each Issuing Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted 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 or such Issuing Bank to or for the credit or the account of Holdings, any
Borrower or any Subsidiary Loan Party (and such Lender or Issuing Bank will
provide prompt notice to such Loan Party) against any of and all the obligations
of Holdings or the Borrowers now or hereafter existing under this Agreement or
any other Loan Document held by such Lender or such Issuing Bank, irrespective
of whether or not such Lender or such Issuing Bank shall have made any demand
under this Agreement or such other Loan Document and although the obligations
may be unmatured. The rights of each Lender and each Issuing Bank under this
Section 9.06 are in addition to other rights and remedies (including other
rights of set-off) that such Lender or such Issuing Bank may have.
Notwithstanding the foregoing, no amounts set off from any Loan Party shall be
applied to Excluded Swap Obligations of such Loan Party.

 

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 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, any Issuing Bank or any
Lender in exercising any right or power hereunder or under any 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, each 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 Holdings,
any 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, any Borrower or any other Loan
Party in any case shall entitle such person to any other or further notice or
demand in similar or other circumstances.

 

 
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(b)     Except as provided in Section 2.22 with respect to any Revolver
Commitment Increase, Section 2.23 with respect to any Extension and Section
9.08(d) with respect to any Replacement Revolver Facility, neither this
Agreement nor any other Loan Document nor any provision hereof or thereof may be
waived, amended or modified except (x) in the case of this Agreement, pursuant
to an agreement or agreements in writing entered into by Holdings, the Borrowers
and the Required Lenders and (y) in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by each party
thereto and the Administrative Agent and consented to by the Required Lenders;
provided, however, that no such agreement shall:

 

(i)     decrease or forgive the principal amount of, or extend the final
maturity date of, or decrease the rate of interest on, any Revolver Loan or any
L/C Disbursement, or extend the stated expiration of any Letter of Credit beyond
the MaturityRevolver Termination Date, without the prior written consent of each
Lender directly and adversely affected thereby; provided, that (x) consent of
Required Lenders shall not be required for any waiver, amendment or modification
contemplated by this clause (i), (y) any amendment to the Consolidated Fixed
Charge Coverage Ratio or the component definitions thereof shall not constitute
a reduction in the rate of interest for purposes of this clause (i) and (z) that
waiver or reduction of a post-default increase in interest shall be effective
with the consent of the Required Lenders (and shall not require the consent of
each directly and adversely affected Lender),

 

(ii)     increase the Revolver Commitment of any Lender (other than with respect
to any Revolver Commitment Increase to which such Lender has agreed) without the
prior written consent of such affected Lender (it being understood that waivers
or modifications of conditions precedent, covenants, Defaults or Events of
Default or of a mandatory reduction in the aggregate Revolver Commitments shall
not constitute an increase of the Revolver Commitments of any Lender),

 

(iii)     extend the Revolver Commitment of any Lender or decrease the Unused
Line Fees or Issuing Bank Fees without the prior written consent of such Lender
or Issuing Bank, as applicable (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default,
mandatory prepayments or of a mandatory reduction in the aggregate Revolver
Commitments shall not constitute an increase or extension of maturity);
provided, that (x) consent of Required Lenders shall not be required for any
waiver, amendment or modification contemplated by this clause (iii) and (y) any
amendment to the Consolidated Fixed Charge Coverage Ratio or the component
definitions thereof shall not constitute a reduction in the Unused Line Fees for
purposes of this clause (iii),

 

(iv)     except to the extent necessary to give effect to the express intentions
of this Agreement (including Sections 2.22, 2.23, 9.04 and 9.08(d)), which, in
respect of any amendment or modification to effect such express intentions,
shall be effective with the consent of the Required Lenders, amend or modify the
provisions of Section 2.18(b) or (c) of this Agreement in a manner that would by
its terms alter the pro rata sharing of payments required thereby, without the
prior written consent of each Lender,

 

 
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(v)     amend or modify the provisions of Section 7.02, Sections 9.08(a), (b) or
(c) or reduce the voting percentage set forth in the definition of “Required
Lenders” or “Supermajority Lenders,” without the prior written consent of each
Lender directly and adversely affected thereby (it being understood that any
Revolver Commitment Increase, Extended Revolver Commitments (and the related
credit exposure), any Replacement Revolver Facility and additional extensions of
credit pursuant to this Agreement may be included in the determination of the
Required Lenders on substantially the same basis as the Revolver Loans and
Revolver Commitments are included on the Closing Date),

 

(vi)     release all or substantially all the Collateral (it being understood
that a transaction permitted under Section 6.05 shall not constitute a release
of all or substantially all of the Collateral), or release all or substantially
all of the value of the Guarantees (except as otherwise permitted herein
(including in connection with a transaction permitted under Section 6.05) or in
the other Loan Documents) under the Collateral Agreement, unless, in the case of
a Subsidiary Loan Party, all or substantially all the Equity Interests of such
Subsidiary Loan Party is sold or otherwise disposed of in a transaction
permitted by this Agreement, without the prior written consent of each Lender,

 

(vii)     without the prior written consent of the Supermajority Lenders, change
the definition of the terms “Availability” or “Borrowing Base” or any component
definition used therein (including, without limitation, the definitions of
“Eligible Account,” “Eligible Inventory” and “Eligible In-Transit Inventory”)
if, as a result thereof, the amounts available to be borrowed by the Borrowers
would be increased; provided that the foregoing shall not limit the discretion
of the Administrative Agent to change, establish or eliminate any Availability
Reserves or to add Accounts and Inventory acquired in a Permitted Business
Acquisition to the Borrowing Base as provided herein,

 

(viii)     without the prior written consent of the Supermajority Lenders,
increase the percentages set forth in the term “Borrowing Base” or add any new
classes of eligible assets thereto, or

 

(ix)     amend the definition of “Alternative LC Currency” without the prior
written consent of each Lender,

 

provided, further, that no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, an Issuing Bank or the
Swingline Lender hereunder without the prior written consent of the
Administrative Agent, such Issuing Bank acting as such at the effective date of
such agreement or the Swingline Lender, as applicable. Each Lender shall be
bound by any waiver, amendment or modification authorized by this Section 9.08
and any consent by any Lender pursuant to this Section 9.08 shall bind any
successor or assignee of such Lender. Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that (x) the Revolver Commitments
of such Lender may not be increased or extended without the consent of such
Lender and (y) the principal and accrued and unpaid interest of such Lender’s
Loans shall not be reduced or forgiven without the consent of such Lender.

 

 
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(c)     Without the consent of the Syndication Agents or any Joint Lead Arranger
or Lender or Issuing Bank, the Loan Parties and the Administrative Agent may (in
their respective sole discretion, or shall, to the extent required by any Loan
Document) enter into any amendment, modification or waiver of any Loan Document,
or enter into any new agreement or instrument, to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any
Collateral or additional property to become Collateral for the benefit of the
Secured Parties, or as required by local law to give effect to, or protect any
security interest for the benefit of the Secured Parties, in any property or so
that the security interests therein comply with applicable law.

 

(d)     Notwithstanding the foregoing, this Agreement may be amended with the
written consent of the Administrative Agent, the Borrowers and the Lenders
providing the relevant Replacement Revolver Facility (as defined below) to
permit the refinancing, replacement or modification of all of the Revolving
Facility or Revolver Commitment Increase (such Loans, the “Replaced Revolver
Facility”) with a replacement revolving facility hereunder (“Replacement
Revolver Facility”); provided, that (i) the aggregate amount of such Replacement
Revolver Facility shall not exceed the aggregate principal amount of such
Replaced Revolver Facility (plus (x) the amount permitted under any basket
hereunder and plus (y) the amount of accrued interest and premium thereon, any
committed or undrawn amounts and underwriting discounts, fees, commissions and
expenses, associated therewith), (ii) the terms of any Replacement Revolver
Facility are, as of the date of incurrence of such Replacement Revolver
Facility, not (excluding pricing, fees, rate floors, premiums and optional
prepayment or redemption terms), taken as a whole, materially more favorable to
the lenders providing such Replacement Revolver Facility than those applicable
to the Replaced Revolver Facility (other than any covenants or other provisions
applicable only to periods after the Revolver Termination Date) and (iii) any
Lender or, with the consent of the Borrowers and, to the extent such consent
would be required under Section 9.04 with respect to an assignment of Revolver
Loans or Revolver Commitment to such person, the consent of the Administrative
Agent, the Issuing Bank and the Swingline Lender (which consent shall not be
unreasonably withheld), any additional bank, financial institution or other
entity may provide such Replacement Revolver Facility.

 

(e)     Notwithstanding anything to the contrary contained in this Section 9.08
or any Loan Document, (i) the Borrowers and the Administrative Agent may,
without the input or consent of any other Lender, effect amendments to this
Agreement and the other Loan Documents as may be necessary in the reasonable
opinion of the Borrowers and the Administrative Agent to effect the provisions
of Sections 2.21, 2.22, 2.23, 9.04(f) or 9.08(d), (ii) if the Administrative
Agent and the Borrowers have jointly identified an obvious error or any error or
omission of a technical nature, in each case, in any provision of the Loan
Documents, then the Administrative Agent and the Borrowers shall be permitted to
amend such provision and (iii) guarantees, collateral security documents and
related documents executed by Parent, Holdings or Subsidiaries in connection
with this Agreement may be in a form reasonably determined by the Administrative
Agent and may be amended, supplemented or waived without the consent of any
Lender if such amendment, supplement or waiver is delivered in order to (x)
comply with local law or advice of local counsel, (y) cure ambiguities,
omissions, mistakes or defects or (z) cause such guarantee, collateral security
document or other document to be consistent with this Agreement and the other
Loan Documents.

 

SECTION 9.09.     Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the applicable interest rate on any Revolver Loan
or participation in any L/C Disbursement, together with all fees and charges
that are treated as interest under applicable law (collectively, the “Charges”),
as provided for herein or in any other document executed in connection herewith,
or otherwise contracted for, charged, received, taken or reserved by any Lender
or any Issuing Bank shall exceed the maximum lawful rate (the “Maximum Rate”)
that may be contracted for, charged, taken, received or reserved by such Lender
in accordance with applicable law, the rate of interest payable hereunder,
together with all Charges payable to such Lender or such Issuing Bank shall be
limited to the Maximum Rate, provided that such excess amount shall be paid to
such Lender or such Issuing Bank on subsequent payment dates to the extent not
exceeding the legal limitation.

 

 
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SECTION 9.10.     Entire Agreement. This Agreement and the other Loan Documents
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among or representations from the parties
or their Affiliates with respect to the subject matter hereof is superseded by
this Agreement and the other Loan Documents. Notwithstanding the foregoing, the
Fee Letter shall survive the execution and delivery of this Agreement and remain
in full force and effect. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto, and their respective successors and assigns
permitted hereunder, 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 OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY
HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 9.11 AND EXECUTED BY EACH
OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

SECTION 9.12.     Severability. In the event any one (1) 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 contained herein and therein
shall not in any way be affected or impaired thereby. 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 two (2) or
more counterparts, each of which shall constitute an original but all of which,
when taken together, shall constitute but one (1) contract, and shall become
effective as provided in Section 9.03. Delivery of an executed counterpart to
this Agreement by facsimile transmission or other electronic transmission
(including by.”pdf” or.”tif”) shall be as effective as delivery of a manually
signed original.

 

 
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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 the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive 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 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 any Lender, the Administrative Agent or any Issuing Bank may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against Holdings, any Borrower or any Loan Party or
their properties in the courts of any jurisdiction.

 

(b)     Each of the parties hereto 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 of the parties hereto agrees that service of all process in any
such proceeding in any such court may be made by registered or certified mail,
return receipt requested at its address provided in Section 9.01 agrees that
service as so provided in is sufficient to confer personal jurisdiction over the
applicable credit party in any such proceeding in any such court, and otherwise
constitutes effective and binding service in every respect; and agrees that
agents and lenders retain the right to serve process in any other manner
permitted by law or to bring proceedings against any credit party in the courts
of any other jurisdiction.

 

SECTION 9.16.     Confidentiality. Each of the Lenders, each Issuing Bank and
each of the Agents agrees that it shall maintain in confidence any information
relating to Holdings, the Borrowers and the other Loan Parties furnished to it
by or on behalf of Holdings, the Borrowers or the other Loan Parties (other than
information that (a) has become generally available to the public other than as
a result of a disclosure by any such party, (b) has been independently developed
by such Lender, such Issuing Bank or such Agent without violating this Section
9.16 or relying on any such information, (c) was available to such Lender, such
Issuing Bank or such Agent from a third party having, to such person’s
knowledge, no obligations of confidentiality to Holdings, any Borrower or any
other Loan Party) and shall not reveal the same other than to its directors,
trustees, officers, employees and advisors with a need to know or to any person
that approves or administers the Revolver Loans on behalf of such Lender (so
long as each such person shall have been instructed to keep the same
confidential in accordance with this Section 9.16 and such Lender, such Issuing
Bank and such Agent shall be responsible for its Affiliates’ compliance with
this Section except to the extent such Affiliate shall sign a written
confidentiality agreement in favor of the Borrowers), except: (A) to the extent
necessary to comply with law or any legal process or the requirements of any
Governmental Authority, self-regulatory authorities (including the National
Association of Insurance Commissioners) or of any securities exchange on which
securities of the disclosing party or any affiliate of the disclosing party are
listed or traded (in which case such Lender, such Issuing Bank or such Agent
will promptly notify the Borrowers, in advance, to the extent permitted by
applicable law or the rules governing the process requiring such disclosure
(except with respect to any routine or ordinary course audit or examination
conducted by bank accountants or any governmental bank regulatory authority
exercising examination or regulatory authority) and shall use its commercially
reasonable efforts to ensure that any such information so disclosed is accorded
confidential treatment), (B) as part of the reporting or review procedures to,
or examinations by, Governmental Authorities or self-regulatory authorities,
including the National Association of Insurance Commissioners or the National
Association of Securities Dealers, Inc., (C) to its parent companies,
affiliates, auditors, assignees, transferees and participants (so long as each
such person shall have been instructed to keep the same confidential in
accordance with provisions not less restrictive than this Section 9.16 and such
Lender, such Issuing Bank and such Agent shall be responsible for its
Affiliates’ compliance with this Section; provided that no such disclosure shall
be made by such Lender, such Issuing Bank or such Agent or any of their
respective Affiliates to any such person that is a Disqualified Institution),
(D) in order to enforce its rights under any Loan Document in a legal proceeding
(in which case it shall use commercially reasonable efforts to ensure that any
such information so disclosed is accorded confidential treatment), (E) to any
pledgee under Section 9.04(d) or any other existing or prospective assignee of,
or existing or prospective Participant in, any of its rights under this
Agreement (so long as such person shall have been instructed to keep the same
confidential in accordance with this Section 9.16 or other provisions at least
as restrictive as this Section 9.16), in each case other than a Disqualified
Institution, (F) to any direct or indirect contractual counterparty in Swap
Agreements or such contractual counterparty’s professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 9.16), and (G)
with the consent of the Borrowers. In addition, each Agent and each Lender may
disclose the existence of this Agreement and the information about this
Agreement to market data collectors, similar services providers to the lending
industry, and service providers to the Agents and the Lenders in connection with
the administration and management of this Agreement, the other Loan Documents
and any Swap Agreement to which a Lender Counterparty is a party.

 

 
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SECTION 9.17.     Release of Liens and Guarantees. In the event that any Loan
Party conveys, sells, leases, assigns, transfers or otherwise disposes of any
assets or all or any portion of any of the Equity Interests or assets of any
Subsidiary Loan Party to a person that is not (and is not required to become) a
Loan Party in each case in a transaction not prohibited by Section 6.05 or in
connection with an Unrestricted Subsidiary Designation or in connection with a
pledge of the Equity Interests of joint ventures permitted by Section 6.02, the
Administrative Agent shall promptly (and the Lenders hereby authorize the
Administrative Agent to) take such action and execute any such documents as may
be reasonably requested by Holdings or the Borrowers and at the Borrowers’
expense to release any Liens created by any Loan Document in respect of such
Equity Interests or assets, and, in the case of a disposition of the Equity
Interests of any Subsidiary Loan Party in a transaction permitted by Section
6.05 or in connection with an Unrestricted Subsidiary Designation and as a
result of which such Subsidiary Loan Party would cease to be a Restricted
Subsidiary, terminate such Subsidiary Loan Party’s obligations under its
Guarantee. Any representation, warranty or covenant contained in any Loan
Document relating to any such Equity Interests, asset or subsidiary of Holdings
shall no longer be deemed to be made once such Equity Interests or asset is so
conveyed, sold, leased, assigned, transferred or disposed of. At the request of
the Borrowers, the Administrative Agent shall promptly (and the Lenders hereby
authorize the Administrative Agent to) (i) subordinate any Lien granted to the
Administrative Agent (or any sub-agent or collateral agent) under any Loan
Document to the holder of any Lien on such property that is permitted by
Sections 6.02(a), (c)(i), (i), (v), (z), (aa), (ff) and (gg) and (ii) enter into
intercreditor arrangements contemplated by Sections 6.01(g) and (o), Sections
6.02(b), (c), (v) and (z) and the definition of “Permitted Refinancing
Indebtedness.”

 

 
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SECTION 9.18.     USA PATRIOT Act. Each Lender hereby notifies the Borrowers
that pursuant to the requirements of the USA PATRIOT Act, it is required to
obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of the Borrowers and other information
that will allow such Lender to identify the Borrowers in accordance with the USA
PATRIOT Act.

 

SECTION 9.19.     Marshalling; Payments Set Aside. Neither any Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any Loan
Party or any other person or against or in payment of any or all of the
Obligations. To the extent that any Loan Party makes a payment or payments to
the Administrative Agent or the Lenders (or to the Administrative Agent, on
behalf of the Lenders), or any Agent or the Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.

 

SECTION 9.20.     Obligations Several; Independent Nature of Lenders’ Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Revolver Commitment of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out hereof and it shall not be necessary for any
other Lender to be joined as an additional party in any proceeding for such
purpose.

 

SECTION 9.21.     Electronic Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any Assignment Agreement
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

SECTION 9.22.     Acknowledgements . Each of Holdings and each Borrower hereby
acknowledges and agrees that (a) no fiduciary, advisory or agency relationship
between the Loan Parties and the Lender Parties is intended to be or has been
created in respect of any of the transactions contemplated by this Agreement or
the other Loan Documents, irrespective of whether the Lender Parties have
advised or are advising the Loan Parties on other matters, and the relationship
between the Lender Parties, on the one hand, and the Loan Parties, on the other
hand, in connection herewith and therewith is solely that of creditor and
debtor, (b) the Lender Parties, on the one hand, and the Loan Parties, on the
other hand, have an arm’s length business relationship that does not directly or
indirectly give rise to, nor do the Loan Parties rely on, any fiduciary duty to
the Loan Parties or their affiliates on the part of the Lender Parties, (c) the
Loan Parties are capable of evaluating and understanding, and the Loan Parties
understand and accept, the terms, risks and conditions of the transactions
contemplated by this Agreement and the other Loan Documents, (d) the Loan
Parties have been advised that the Lender Parties are engaged in a broad range
of transactions that may involve interests that differ from the Loan Parties’
interests and that the Lender Parties have no obligation to disclose such
interests and transactions to the Loan Parties, (e) the Loan Parties have
consulted their own legal, accounting, regulatory and tax advisors to the extent
the Loan Parties have deemed appropriate in the negotiation, execution and
delivery of this Agreement and the other Loan Documents, (f) each Lender Party
has been, is, and will be acting solely as a principal and, except as otherwise
expressly agreed in writing by it and the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary for the Loan
Parties, any of their affiliates or any other Person, (g) none of the Lender
Parties has any obligation to the Loan Parties or their affiliates with respect
to the transactions contemplated by this Agreement or the other Loan Documents
except those obligations expressly set forth herein or therein or in any other
express writing executed and delivered by such Lender Party and the Loan Parties
or any such affiliate and (h) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lender Parties or among the Loan Parties and the Lender
Parties.

 

 
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SECTION 9.23.     Lender Action. Notwithstanding anything to the contrary
contained herein or in any other Loan Document, (i) the authority to enforce
rights and remedies hereunder and under the other Security Documents against the
Loan Parties or any of them shall be vested exclusively in, and all actions and
proceedings at law in connection with such enforcement shall be instituted and
maintained exclusively by, the Administrative Agent for the benefit of the
Lenders and the Issuing Bank, (ii) no Secured Party shall have any right
individually to realize upon any of the Collateral under any Security Document
or to enforce the Guarantee, it being understood and agreed that all powers,
rights and remedies under the Security Documents may be exercised solely by the
Administrative Agent for the benefit of the Secured Parties in accordance with
the terms thereof and (iii) in the event of a foreclosure by the Administrative
Agent on any of the Collateral pursuant to a public or private sale, the
Administrative Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and the Administrative Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless the Required Lenders shall otherwise
agree in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold in any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any Collateral payable by the
Administrative Agent at such sale.

 

SECTION 9.24.     Judgment Currency. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative
Agent could purchase the first currency with such other currency on the Business
Day preceding that on which final judgment is given. The obligation of each
Borrower in respect of any such sum due from it to the Administrative Agent or
any Lender hereunder or under the other Loan Documents shall, notwithstanding
any judgment in a currency (the “Judgment Currency”) other than that in which
such sum is denominated in accordance with the applicable provisions of this
Agreement (the “Agreement Currency”), be discharged only to the extent that on
the Business Day following receipt by the Administrative Agent or such Lender,
as the case may be, of any sum adjudged to be so due in the Judgment Currency,
the Administrative Agent or such Lender, as the case may be, may in accordance
with normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent or any Lender from any Borrower
in the Agreement Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Administrative Agent or such
Lender, as the case may be, against such loss. If the amount of the Agreement
Currency so purchased is greater than the sum originally due to the
Administrative Agent or any Lender in such currency, the Administrative Agent or
such Lender, as the case may be, agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under
applicable law).

 

 

 
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[Signature Pages Follow]

 

 
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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
written above.

 

GENERAC ACQUISITION CORP.

 

By:                                                      
     Name:     
     Title:     

 

GENERAC POWER SYSTEMS, INC.

 

By:                                                      
     Name:     

     Title:     

 

[OTHER BORROWERS]

 

 

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

 

 

BANK OF AMERICA, N.A., as Lender and as Administrative Agent

 

By:                                                      
     Name:     
     Title:     

 

 

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

 

 

JPMORGAN CHASE BANK, N.A., as a Lender and as Syndication Agent

 

By:                                                      
     Name:     
     Title:     

 

 

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

 

  

WELLS FARGO BANK, N.A., as a Lender and as Documentation Agent

 

By:                                                      
     Name:     
     Title:     

 

 

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SCHEDULE 2.01

 

Revolver Commitments

 

 

 

Lender

Revolver Commitments

       

Bank of America, N.A.

 $100,000,000

JPMorgan Chase Bank, N.A.

$52,500,000

Wells Fargo Bank, N.A.

$52,500,000

Goldman Sachs Bank USA

$22,500,000

Keybank National Association

$22,500,000

Total

     $250,000,000