Exhibit 10.1

 

CREDIT AGREEMENT

 

DATED AS OF JANUARY 13, 2005

 

AMONG

 

PETCO ANIMAL SUPPLIES STORES, INC.,

as Borrower,

 

THE LENDERS LISTED HEREIN,

as Lenders

 

BANK OF AMERICA, N.A.,

as Syndication Agent

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Sole Lead Arranger, Book-Runner and Administrative Agent

 

and

 

U.S. BANK NATIONAL ASSOCIATION and

UNION BANK OF CALIFORNIA, N.A.,

as Co-Documentation Agents

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PETCO ANIMAL SUPPLIES STORES, INC.

 

CREDIT AGREEMENT

 

TABLE OF CONTENTS

 

          Page

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SECTION 1.

       DEFINITIONS    2

1.1

   Certain Defined Terms    2

1.2

   Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement    28

1.3

   Other Definitional Provisions and Rules of Construction    28

SECTION 2.

       AMOUNTS AND TERMS OF COMMITMENTS AND LOANS    29

2.1

   Commitments; Making of Loans; the Register; Optional Notes    29

2.2

   Interest on the Loans    36

2.3

   Fees    40

2.4

   Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments after Event of Default    40

2.5

   Use of Proceeds    44

2.6

   Special Provisions Governing Eurodollar Rate Loans    45

2.7

   Increased Costs; Taxes; Capital Adequacy    47

2.8

   Obligation of Lenders and Issuing Lenders to Mitigate    51

2.9

   Substitute Lenders    51

SECTION 3.

       LETTERS OF CREDIT    52

3.1

   Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein
   52

3.2

   Letter of Credit Fees    55

3.3

   Drawings and Reimbursement of Amounts Paid Under Letters of Credit    55

3.4

   Obligations Absolute    58

3.5

   Indemnification; Nature of Issuing Lenders’ Duties    59

3.6

   Increased Costs and Taxes Relating to Letters of Credit    60

3.7

   Confirmation of Letters of Credit Issued Under Existing Credit Agreement   
61

SECTION 4.

       CONDITIONS TO LOANS AND LETTERS OF CREDIT AND EFFECTIVENESS OF AGREEMENT
   61

4.1

   Conditions to Initial Revolving Loans and Swing Line Loans    61

 

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4.2

   Conditions to All Loans    65

4.3

   Conditions to Letters of Credit    66

SECTION 5.

       COMPANY’S REPRESENTATIONS AND WARRANTIES    66

5.1

   Organization, Powers, Qualification, Good Standing, Business and Subsidiaries
   66

5.2

   Authorization of Borrowing, etc.    67

5.3

   Financial Condition    68

5.4

   No Material Adverse Change; No Restricted Junior Payments    69

5.5

   Title to Properties; Liens; Intellectual Property    69

5.6

   Litigation; Adverse Facts    69

5.7

   Payment of Taxes    70

5.8

   Material Contracts    70

5.9

   Governmental Regulation    70

5.10

   Securities Activities    70

5.11

   Employee Benefit Plans    71

5.12

   Certain Fees    71

5.13

   Environmental Protection    71

5.14

   Employee Matters    72

5.15

   Solvency    72

5.16

   Matters Relating to Collateral    73

5.17

   Disclosure    74

5.18

   Foreign Assets Control Regulations, etc.    74

SECTION 6.

       AFFIRMATIVE COVENANTS OF COMPANY    74

6.1

   Financial Statements and Other Reports    75

6.2

   Corporate Existence, etc.    78

6.3

   Payment of Taxes and Claims; Tax Consolidation    78

6.4

   Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds    78

6.5

   Inspection Rights    80

6.6

   Compliance with Laws, etc.    80

6.7

   Environmental Disclosure    81

6.8

   Execution of Subsidiary Guaranty and Personal Property Collateral Documents
After the Closing Date    82

 

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6.9

   Maintenance of Ratings; Notices Regarding Ratings; Reinstatement of Security
Interest and Guaranties    83

SECTION 7.

       NEGATIVE COVENANTS OF COMPANY    83

7.1

   Indebtedness    83

7.2

   Liens and Related Matters    85

7.3

   Investments; Joint Ventures    87

7.4

   Contingent Obligations    88

7.5

   Restricted Junior Payments    89

7.6

   Financial Covenants    90

7.7

   Restriction on Fundamental Changes; Asset Sales and Acquisitions    90

7.8

   Consolidated Capital Expenditures    92

7.9

   Sales and Lease-Backs    92

7.10

   Sale or Discount of Receivables    93

7.11

   Transactions with Affiliates    93

7.12

   Conduct of Business    94

7.13

   Amendments of Documents Relating to Certain Indebtedness; Limitation on
Restrictions on Amendments or Waivers of Loan Documents    94

7.14

   Fiscal Year    94

SECTION 8.

       EVENTS OF DEFAULT    95

8.1

   Failure to Make Payments When Due    95

8.2

   Default in Other Agreements    95

8.3

   Breach of Certain Covenants    95

8.4

   Breach of Warranty    95

8.5

   Other Defaults Under Loan Documents    95

8.6

   Involuntary Bankruptcy; Appointment of Receiver, etc.    96

8.7

   Voluntary Bankruptcy; Appointment of Receiver, etc.    96

8.8

   Judgments and Attachments    96

8.9

   Dissolution    97

8.10

   Employee Benefit Plans    97

8.11

   Invalidity of Guaranty; Failure of Security; Repudiation of Obligations    97

8.12

   Action Relating to Subordinated Indebtedness    97

SECTION 9.

       ADMINISTRATIVE AGENT    98

9.1

   Appointment    98

9.2

   Powers and Duties; General Immunity    100

 

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9.3

   Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness    101

9.4

   Right to Indemnity    101

9.5

   Resignation of Agents; Successor Administrative Agent and Swing Line Lender
   102

9.6

   Collateral Documents and Guaranties    103

9.7

   Duties of Other Agents    104

9.8

   Administrative Agent May File Proofs of Claim    104

SECTION 10.

       MISCELLANEOUS    105

10.1

   Successors and Assigns; Assignments and Participations in Loans and Letters
of Credit    105

10.2

   Expenses    108

10.3

   Indemnity    109

10.4

   Set-Off    110

10.5

   Ratable Sharing    110

10.6

   Amendments and Waivers    111

10.7

   Independence of Covenants    113

10.8

   Notices; Effectiveness of Signatures; Posting on Electronic Delivery Systems
   113

10.9

   Survival of Representations, Warranties and Agreements    115

10.10

   Failure or Indulgence Not Waiver; Remedies Cumulative    115

10.11

   Marshalling; Payments Set Aside    115

10.12

   Severability    115

10.13

   Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver   
115

10.14

   Release of Security Interest or Guaranty    116

10.15

   Applicable Law    117

10.16

   Construction of Agreement; Nature of Relationship    117

10.17

   Consent to Jurisdiction and Service of Process    117

10.18

   Waiver of Jury Trial    118

10.19

   Confidentiality    118

10.20

   USA Patriot Act    119

10.21

   Counterparts; Effectiveness    120

 

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EXHIBITS

 

I

   FORM OF NOTICE OF BORROWING

II

   FORM OF NOTICE OF CONVERSION/CONTINUATION

III

   FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT

IV

   RESERVED

V

   FORM OF REVOLVING NOTE

VI

   FORM OF SWING LINE NOTE

VII

   FORM OF COMPLIANCE CERTIFICATE

VIII

   FORM OF OPINION OF COMPANY COUNSEL

IX

   RESERVED

X

   FORM OF ASSIGNMENT AGREEMENT

XI

   FORM OF CERTIFICATE RE NON-BANK STATUS

XII

   RESERVED

XIII

   FORM OF SUBSIDIARY GUARANTY

XIV

   FORM OF SECURITY AGREEMENT

XV

   RESERVED

XVI

   FORM OF HOLDINGS GUARANTY

 

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SCHEDULES

 

2.1

   LENDERS’ REVOLVING COMMITMENTS AND PRO RATA SHARES

3.1

   EXISTING LETTERS OF CREDIT

4.1C

   CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP

4.1F

   CERTAIN IP COLLATERAL

5.1A

   SUBSIDIARIES OF HOLDINGS

5.2B

   CONFLICTS

5.5

   INTELLECTUAL PROPERTY

5.6

   LITIGATION

5.7

   TAXES NOT FILED

5.8

   MATERIAL CONTRACTS

5.11C

   CERTAIN EMPLOYEE BENEFIT PLANS

5.13

   ENVIRONMENTAL MATTERS

7.1

   CERTAIN EXISTING INDEBTEDNESS

7.2

   CERTAIN EXISTING LIENS

7.3

   CERTAIN EXISTING INVESTMENTS

7.4

   CERTAIN EXISTING CONTINGENT OBLIGATIONS

 

vi

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PETCO ANIMAL SUPPLIES STORES, INC.

CREDIT AGREEMENT

 

This CREDIT AGREEMENT is dated as of January 13, 2005, and entered into by and
among PETCO ANIMAL SUPPLIES STORES, INC., a Delaware corporation (formerly PETCO
Animal Supplies, Inc.) (“Company”), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a “Lender” and
collectively as “Lenders”), BANK OF AMERICA, N.A., as syndication agent
(“Syndication Agent”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Wells
Fargo”), as sole lead arranger, book-runner and administrative agent for Lenders
(in such capacity, “Administrative Agent”).

 

R E C I T A L S

 

WHEREAS, Company desires that Lenders extend certain credit facilities to
Company in order to (i) provide for the repayment in full of Indebtedness under
the Existing Credit Agreement, and (ii) provide financing for working capital
and other general corporate purposes of Holdings and its Subsidiaries (this and
other capitalized terms used in these recitals without definition being used as
defined in subsection 1.1);

 

WHEREAS, Company desires to secure all of the Obligations hereunder and under
the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its personal property,
including a pledge of all of the Capital Stock of its Domestic Subsidiaries and
such amount of the Capital Stock of its Foreign Subsidiaries as will not result
in materially adverse Tax or regulatory consequences to Company;

 

WHEREAS, Subsidiary Guarantors have agreed to guarantee the Obligations
hereunder and under the other Loan Documents and to secure their guaranties by
granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
substantially all of their personal property, including a pledge of all of the
Capital Stock of their Domestic Subsidiaries and such amount of the Capital
Stock of their Foreign Subsidiaries as will not result in materially adverse Tax
or regulatory consequences to Company;

 

WHEREAS, Company may, concurrently with the Closing or at any time thereafter,
effect a holding company reorganization under Section 251(g) of the Delaware
General Corporation Law, pursuant to which a holding company will be formed
which will own all of the capital stock of Company (“Holdings”), and in such
event Holdings will guarantee the Obligations hereunder and under the other Loan
Documents and secure its guaranty by granting to Administrative Agent, on behalf
of Lenders, a First Priority Lien on substantially all of its personal property,
including a pledge of all of the Capital Stock of its Domestic Subsidiaries and
such amount of the Capital Stock of its Foreign Subsidiaries as will not result
in materially adverse Tax or regulatory consequences to Holdings; and

 

WHEREAS, Company is party to the Senior Subordinated Note Indenture and in
connection therewith hereby (1) agrees that this Agreement constitutes the
Senior Credit Facility referenced in the Senior Subordinated Note Indenture and
(2) designates the Obligations as “Designated Senior Debt” as defined in Article
10 of the Senior Subordinated Note Indenture.

 

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NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Company, Lenders and Administrative Agent agree
as follows:

 

Section 1. DEFINITIONS

 

1.1 Certain Defined Terms.

 

The following terms used in this Agreement shall have the following meanings:

 

“Additional Commitment” has the meaning assigned to that term in subsection
2.1(A)(iii).

 

“Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with
respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) obtained by dividing
(i) the rate of interest equal to (a) the interest rate per annum for deposits
in Dollars in an amount approximately equal to the amount of Wells Fargo’s
Eurodollar Rate Loan and for a period approximately equal to such Interest
Period which appears on page 3750 of the Dow Jones Telerate Screen as of 11:00
A.M. (London time) two Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, or (b) if such a
rate does not appear on page 3750 of the Dow Jones Telerate Screen, the average
(rounded upwards, if necessary, to the nearest 1/100 of 1%) of the rates per
annum at which Dollar deposits in immediately available funds are offered to
Wells Fargo in the London interbank market at or about 9:00 A.M. (Los Angeles
time) two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of Wells Fargo’s Eurodollar Rate Loan and for
a period approximately equal to such Interest Period by (ii) a percentage equal
to 100% minus the stated maximum rate (expressed as a decimal) of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to any member bank
of the Federal Reserve System in respect of “Eurocurrency liabilities” as
defined in Regulation D (or any successor category of liabilities under
Regulation D).

 

“Administrative Agent” has the meaning assigned to that term in the introduction
to this Agreement and also means and includes any successor Administrative Agent
appointed pursuant to subsection 9.5A.

 

“Administrative Agent’s Office” means (i) the office of Administrative Agent and
Swing Line Lender located at 201 Third Street, 8th Floor, San Francisco,
California 94103 or (ii) such other office of Administrative Agent and Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.

 

“Affected Lender” has the meaning assigned to that term in subsection 2.6C.

 

“Affected Loans” has the meaning assigned to that term in subsection 2.6C.

 

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“Affiliate”, as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.

 

“Agents” means Administrative Agent and any other agents appointed under this
Agreement with the consent of Administrative Agent and Company.

 

“Aggregate Amounts Due” has the meaning assigned to that term in subsection
10.5.

 

“Agreement” means this Credit Agreement dated as of January 13, 2005.

 

“Applicable Base Rate Margin” means, as at any date of determination, the
percentage per annum set forth below opposite the applicable Consolidated Total
Leverage Ratio:

 

Consolidated Total
Leverage Ratio

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

   Applicable Base Rate Margin

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> 2.00:1.00

   0.750%

> 1.50:1.00 < 2.00:1.00

   0.500%

> 1.00:1.00 < 1.50:1.00

   0.250%

> 0.50:1.00 < 1.00:1.00

   0.000%

< 0.50:1.00

   0.000%

 

; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xii), the
Applicable Base Rate Margin shall be 0.250% per annum.

 

“Applicable Eurodollar Rate Margin” means, as at any date of determination, the
percentage per annum set forth below opposite the applicable Consolidated Total
Leverage Ratio:

 

Consolidated Total
Leverage Ratio

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

   Applicable Eurodollar Rate Margin

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> 2.00:1.00

   1.875%

> 1.50:1.00 < 2.00:1.00

   1.625%

> 1.00:1.00 < 1.50:1.00

   1.375%

> 0.50:1.00 < 1.00:1.00

   1.125%

< 0.50:1.00

   0.875%

 

3

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; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xii), the
Applicable Eurodollar Rate Margin shall be 1.375% per annum.

 

“Approved Fund” means a Fund that is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity
that administers or manages a Lender.

 

“Asset Sale” means the sale by Holdings or any of its Subsidiaries to any Person
other than Holdings or any of its wholly-owned Subsidiaries of (i) any of the
outstanding Capital Stock of any of Holdings’ Subsidiaries, (ii) substantially
all of the assets of any division or line of business of Holdings or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Holdings or any of its Subsidiaries (other than (a) Inventory or other assets
sold in the ordinary course of business, (b) in connection with an exchange of
equipment or Inventory for like equipment or Inventory of substantially
equivalent value, (c) obsolete, worn out or surplus property sold in the
ordinary course of business, (d) the license of intellectual property in the
ordinary course of business, (e) dispositions of Cash Equivalents and (f) any
other assets to the extent that the aggregate value of such assets sold in any
single transaction or related series of transactions is equal to $5,000,000 or
less during any Fiscal Year).

 

“Assignment Agreement” means an Assignment and Assumption Agreement in
substantially the form of Exhibit X annexed hereto.

 

“Assumed Indebtedness” means Indebtedness of a Person which (i) is in existence
at the time such Person becomes a Subsidiary of Holdings, or (ii) is assumed in
connection with an Investment in or acquisition of such Person or of the assets
of such Person, and has not been incurred or created by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Subsidiary of Holdings or such Investment or acquisition by Holdings.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as now and hereafter in effect, or any successor statute.

 

“Base Rate” means, at any time, the higher of (i) the Prime Rate or (ii) the
rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.

 

“Base Rate Loans” means Loans bearing interest at rates determined by reference
to the Base Rate as provided in subsection 2.2A.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Exchange Act. For the purposes of this definition, the term
“Beneficially Own” shall have a correlative meaning.

 

“Business Day” means (i) for all purposes other than as covered by clause (ii)
below, any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the States of California or New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted

 

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Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.

 

“Capital Lease”, as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.

 

“Capital Stock” means (i) in the case of a corporation, corporate stock, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership, partnership interests (whether
general or limited), (iv) in the case of a limited liability company, membership
interests and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distribution of
assets of, the issuing Person.

 

“Captive Insurance Company” means a wholly-owned Foreign Subsidiary of Holdings
created solely for providing self insurance for Holdings and its Subsidiaries
and engaging in activities reasonably related or ancillary thereto, in form and
substance reasonably satisfactory to the Administrative Agent.

 

“Cash” means money, currency or a credit balance in a Deposit Account.

 

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having, at
the time of the acquisition thereof, the highest rating obtainable from either
S&P or Moody’s; (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates
of deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof or the District of Columbia that
(a) is at least “adequately capitalized” (as defined in the regulations of its
primary Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; (v) repurchase obligations with
a term of not more than 90 days for, and secured by, underlying securities of
the type described in clauses (i) through (v) of this definition entered into
with a bank meeting the qualifications described in clause (iv) of this
definition; and (vi) shares of any money market mutual fund that (a) has at
least 80% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either S&P or
Moody’s.

 

“Casualty Insurance” means insurance that protects the insured against property
loss or damage.

 

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“Certificate re Non-Bank Status” means a certificate substantially in the form
of Exhibit XI annexed hereto delivered by a Lender to Administrative Agent
pursuant to subsection 2.7B(iii).

 

“Closing Date” means the date on which the initial Loans are made.

 

“Collateral” means, collectively, all of each Loan Party’s right, title and
interest in and to the personal property (including Capital Stock) in which
Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.

 

“Collateral Documents” means the Security Agreement and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of the
other Loan Documents in order to grant to Administrative Agent, on behalf of
Lenders, a Lien on any personal property of that Loan Party as security for the
Obligations.

 

“Commercial Letter of Credit” means any letter of credit or similar instrument
issued for the purpose of providing the primary payment mechanism in connection
with the purchase of any materials, goods or services by Holdings or any of its
Subsidiaries in the ordinary course of business of Holdings or such Subsidiary.

 

“Commitment Fee Percentage” means, as at any date of determination, the
percentage per annum set forth below opposite the applicable Consolidated Total
Leverage Ratio:

 

Consolidated Total Leverage Ratio

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

   Commitment Fee Percentage

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

> 2.00:1.00

   0.300%

> 1.50:1.00 < 2.00:1.00

   0.300%

> 1.00:1.00 < 1.50:1.00

   0.250%

> 0.50:1.00 < 1.00:1.00

   0.250%

< 0.50:1.00

   0.200%

 

; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xii), the
Commitment Fee Percentage shall be 0.250%.

 

“Commitments” means the commitments of Lenders to make Loans as set forth in
subsection 2.1A.

 

“Company” has the meaning assigned to that term in the introduction to this
Agreement.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit VII annexed hereto delivered to Administrative Agent by Company pursuant
to subsection 6.1(iii).

 

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of Capital Leases with respect to personal
property assets which is

 

6

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capitalized on the consolidated balance sheet of Holdings and its Subsidiaries)
by Holdings and its Subsidiaries during that period that, in conformity with
GAAP, are included in “additions to fixed assets” reflected in the statements of
cash flows of Holdings and its Subsidiaries; provided, however, that
Consolidated Capital Expenditures shall not include any Excluded Expenditures,
except that Consolidated Capital Expenditures shall include amounts required to
be included therein pursuant to clause (iii) of the definition of “Excluded
Expenditures.”

 

“Consolidated EBITDA” means, for any period, the sum of the amounts for such
period, without duplication, of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense plus any Excluded Non-Cash Accruals, (iii) provisions for taxes
based on income by Holdings and its Subsidiaries, (iv) total depreciation
expense for Holdings and its Subsidiaries, (v) total amortization expense for
Holdings and its Subsidiaries, (vi) non-cash charges relating to the exercise of
options, (vii) Transaction Costs; (viii) losses (or minus gains) from foreign
currency translation, (ix) customary fees and professional expenses incurred in
connection with the consummation of a Permitted Acquisition, (x) stock based
compensation awards made by Holdings and its Subsidiaries, (xi) any historical
extraordinary non-recurring costs or expenses or other verifiable costs or
expenses incurred in connection with Permitted Acquisitions that will not
continue after the integration of the business acquired not to exceed
$10,000,000 for such period and (xii) other extraordinary or non-recurring
non-cash items that do not require an accrual or reserve for future cash
expenses to the extent such items do not relate to items increasing Consolidated
Net Income for any prior period (in the case of clauses (ii) through (xii)
above, to the extent subtracted in calculating Consolidated Net Income) less (y)
other non-cash items increasing Consolidated Net Income and less (z) net
extraordinary gains increasing Consolidated Net Income, all of the foregoing as
determined on a consolidated basis for Holdings and its Subsidiaries in
conformity with GAAP.

 

“Consolidated Fixed Charge Coverage Ratio” means, as of the last day of any
Fiscal Quarter, the ratio of (i)(a) Consolidated EBITDA for the four-Fiscal
Quarter period ending on such date plus (b) the aggregate amount of all rents
paid or payable during that period under all Operating Leases to which Holdings
or its Subsidiaries is a party as lessee minus (c) Maintenance Capital
Expenditures for such four-Fiscal Quarter period to (ii) the sum of (a)
Consolidated Interest Expense for such four-Fiscal Quarter period, plus (b)
scheduled repayments of principal under all Indebtedness (including that portion
attributable to Capital Leases in accordance with GAAP but excluding payments of
principal made for such period under the Existing Credit Agreement) of Holdings
or any of its Subsidiaries for such four-Fiscal Quarter period, plus (c)
dividends paid during such four-Fiscal Quarter period (except dividends payable
solely in shares of stock to the holders of that class) plus (d) redemptions or
purchases of stock, stock equivalents or stock options issued by Holdings during
such four-Fiscal Quarter period (except in exchange for common stock of
Holdings) plus (e) the aggregate amount of all rents paid or payable during that
period under all Operating Leases to which Holdings or its Subsidiaries is a
party as lessee plus (f) provisions for taxes based on income, all of the
foregoing as determined on a consolidated basis for Holdings and its
Subsidiaries in conformity with GAAP; provided that for the period from the
Closing Date through the third Fiscal Quarter of Fiscal Year 2005, the
dividends, redemptions and repurchases referenced in items (c) and (d) of clause
(ii) above shall be limited to those made after the Closing Date.

 

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“Consolidated Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP)
of Holdings and its Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of Holdings and its Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Interest Rate
Agreements (and minus net amounts received under Interest Rate Agreements), but
excluding, however, any Excluded Non-Cash Accruals.

 

“Consolidated Net Income” means, for any period, the net earnings (or loss) of
Holdings and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP and before any
reduction in respect of preferred stock dividends paid through the issuance of
additional preferred stock (to the extent decreasing Consolidated Net Income);
provided that there shall be excluded (i) the earnings (or loss) of any Person
(other than a Subsidiary of Holdings) in which any other Person (other than
Holdings or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Holdings or
any of its Subsidiaries by such Person during such period, (ii) the earnings (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of
Holdings or is merged into or consolidated with Holdings or any of its
Subsidiaries or that Person’s assets are acquired by Holdings or any of its
Subsidiaries, (iii) the earnings of any Subsidiary of Holdings to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the terms
of its charter or any agreement or instrument applicable to that Subsidiary and
(iv) any after-tax gains or losses attributable to asset sales or returned
surplus assets of any Pension Plan.

 

“Consolidated Pro Forma EBITDA” means, for any consecutive four Fiscal Quarter
period, (a) Consolidated EBITDA for such four Fiscal Quarter period plus (b) for
any business acquired during such four Fiscal Quarter period, (i) Consolidated
EBITDA of such acquired business determined as though such business or
operations were acquired as of the first day of such period by Holdings and its
Subsidiaries, plus (ii) any historical extraordinary non-recurring costs or
expenses or other verifiable costs or expenses (to the extent not already
included pursuant to clause (xii) of the definition of Consolidated EBITDA) that
will not continue after the integration and other expenses and cost reductions
reflected on a basis consistent with Regulation S-X promulgated by the
Securities and Exchange Commission minus (c) Consolidated EBITDA of all business
or operations divested during such four Fiscal Quarter period as though such
business were divested as of the first day of such period by Holdings and its
Subsidiaries.

 

“Consolidated Pro Forma Fixed Charge Coverage Ratio” means, as at any date of
determination, the Consolidated Fixed Charge Coverage Ratio for the most
recently ended four Fiscal-Quarter period; provided, however, that for purposes
of calculating the Consolidated Pro Forma Fixed Charge Coverage Ratio, the
dividends, redemptions or repurchases referenced in items (c) and (d) in clause
(ii) of such definition will be calculated with respect to the twelve-month
period ending with the month in which the Consolidated Pro Forma Fixed Charge
Coverage Ratio is being determined (and will include any proposed dividends,
redemptions or repurchases with respect to which such determination is being
made), subject to the last proviso in the definition of Consolidated Fixed
Charge Coverage Ratio.

 

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“Consolidated Pro Forma Total Leverage Ratio” means, as at any date of
determination, the ratio of (i) Consolidated Total Funded Debt as at such date
to (ii) Consolidated Pro Forma EBITDA for the most recently ended four
Fiscal-Quarter period; provided, however, that for purposes of calculating the
Consolidated Pro Forma Total Leverage Ratio, Consolidated Total Funded Debt with
respect to Revolving Loans shall be deemed to be the daily average amount of
Revolving Loans outstanding during the most recently ended Fiscal Quarter plus,
without duplication in such averaging, Revolving Loans outstanding on the last
day of such Fiscal Quarter incurred to (X) make Permitted Acquisitions during
that Fiscal Quarter, (Y) redeem or repurchase stock, stock equivalents or stock
options in accordance with subsection 7.5(ii) and (Z) prepay Subordinated
Indebtedness in accordance with subsection 7.5(iv) .

 

“Consolidated Total Funded Debt” means, as at any date of determination, without
duplication, the sum of (i) the aggregate stated balance sheet amount of all
Indebtedness of Holdings and its Subsidiaries (including that portion
attributable to Capital Leases in accordance with GAAP) and (ii) the aggregate
amount of Contingent Obligations of Holdings and its Subsidiaries described in
clause (ii) of the definition of Contingent Obligations contained herein, all as
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Total Leverage Ratio” means, as at any date of determination, the
ratio of (i) Consolidated Total Funded Debt as at such date to (ii) Consolidated
EBITDA for the most recently ended four-Fiscal Quarter period; provided,
however, that for purposes of calculating the Consolidated Total Leverage Ratio,
Consolidated Total Funded Debt with respect to Revolving Loans shall be deemed
to be the daily average amount of Revolving Loans outstanding during the most
recently ended Fiscal Quarter.

 

“Contingent Obligation”, as applied to any Person, means any direct or indirect
liability, contingent or otherwise, of that Person (i) with respect to any
Indebtedness, lease or other obligation of another if the primary purpose or
intent thereof by the Person incurring the Contingent Obligation is to provide
assurance to the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof, (ii) with respect to any
letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements; provided, however, that residual obligations with respect to real
property leases that have been assigned or subleased shall not be treated as
Contingent Obligations of the Person that has assigned or subleased such real
property leases. Contingent Obligations shall include (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The

 

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amount of any Contingent Obligation shall be equal to the lower of (x) an amount
equal to the stated or determinable principal amount of the primary obligation
in respect of which such Contingent Obligation is made and (y) the maximum
amount for which such Person incurring the Contingent Obligation may be liable
pursuant to the terms of the instrument embodying such Contingent Obligation,
unless such primary obligation and the maximum amount for which the Person
incurring such Contingent Obligation may be liable are not stated or
determinable, in which case the amount of such Contingent Obligation shall be
such Person’s maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.

 

“Contractual Obligation”, as applied to any Person, means any provision of any
Security issued by that Person or of any material indenture, mortgage, deed of
trust, contract, 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.

 

“Control Agreement” means an agreement, reasonably satisfactory in form and
substance to Administrative Agent, entered into in connection with any Deposit
Account, securities account or commodity account maintained by Holdings or any
of its Subsidiaries, pursuant to which the financial institution at which such
account is maintained confirms and acknowledges Collateral Agent’s security
interest in, and after the occurrence and during the continuance of an Event of
Default and delivery of written notice, sole dominion and control over, such
account and limits its rights to set-off with respect to amounts in such
account.

 

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Holdings or any of its Subsidiaries is a
party.

 

“Deposit Account” means a demand, time, savings, passbook or like account with a
bank, savings and loan association, credit union or like organization, other
than an account evidenced by a negotiable certificate of deposit.

 

“Dollars” and the sign “$” mean the lawful money of the United States.

 

“Domestic Subsidiary” means a direct or indirect Subsidiary of Holdings that is
incorporated or organized under the laws of a state of the United States of
America.

 

“Eligible Assignee” means (i) (a) a commercial bank organized under the laws of
the United States or any state thereof having a combined capital and surplus of
at least $100,000,000; (b) a savings and loan association or savings bank
organized under the laws of the United States or any state thereof having a
combined capital and surplus of at least $100,000,000; and (c) a commercial bank
organized under the laws of any other country or a political subdivision thereof
having a combined capital and surplus of at least $100,000,000; provided that
(1) such bank is acting through a branch or agency located in the United States
or (2) such bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (ii) any Lender and any Affiliate of any
Lender, provided that no Affiliate of Holdings shall be an Eligible Assignee.

 

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“Employee Benefit Plan” means any “employee benefit plan” as defined in Section
3(3) of ERISA which is or was maintained or contributed to by Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates.

 

“Environmental Claim” means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any Governmental Authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.

 

“Environmental Laws” means any and all current or future statutes, ordinances,
orders, rules, regulations, guidance documents, judgments, Governmental
Authorizations, or any other requirements of Governmental Authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity, or (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Holdings or any of its Subsidiaries or
any Facility, including the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. § 1251 et seq.), the Clean Air Act (42 U.S.C. § 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.), the Oil
Pollution Act (33 U.S.C. § 2701 et seq.) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), each as amended or
supplemented, any applicable analogous state or local statutes or laws.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor thereto.

 

“ERISA Affiliate” means, as applied to any Person, (i) any corporation that is a
member of a controlled group of corporations within the meaning of Section
414(b) of the Internal Revenue Code of which that Person is a member; (ii) any
trade or business (whether or not incorporated) that is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section 414(m) or
(o) of the Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii) above is a
member. Any former ERISA Affiliate of Holdings or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Holdings or such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of Holdings or such Subsidiary with respect to liabilities
arising after such period for which Holdings or such Subsidiary could be liable
under the Internal Revenue Code or ERISA.

 

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan

 

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(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation or administrative procedure); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such Pension Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors, or the termination of any such Pension Plan, resulting in material
liability to Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which would constitute grounds under ERISA for the PBGC’s
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA
or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of Sections
4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential
material liability to Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates therefor, or the receipt by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of material fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA
in respect of any Employee Benefit Plan; or (ix) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan on the assets of Holdings or
any of its Subsidiaries.

 

“Eurodollar Rate Loans” means Loans bearing interest at rates determined by
reference to the Adjusted Eurodollar Rate as provided in subsection 2.2A.

 

“Event of Default” means each of the events set forth in Section 8.

 

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

 

“Exchange Assets” has the meaning assigned to that term in subsection
2.4A(iii)(a).

 

“Exchange Rate” means, on any date when an amount expressed in a currency other
than Dollars is to be determined with respect to any Letter of Credit, the
nominal rate of exchange of the applicable Issuing Lender in the New York
foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at

 

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12:00 Noon (New York time) one Business Day prior to such date, expressed as a
number of units of such currency per one Dollar.

 

“Excluded Expenditures” means, (i) expenditures to the extent they are made with
the proceeds of the issuance of Capital Stock of any Loan Party or of any
capital contribution to any Loan Party after the Closing Date or with Net
Casualty/Condemnation Proceeds or Net Asset Sales Proceeds, (ii) expenditures
used for Permitted Acquisitions and (iii) expenditures used for acquisitions of
fee owned real estate, up to an aggregate amount of $25,000,000 per Fiscal Year,
so long as (a) the Company demonstrates to the satisfaction of the
Administrative Agent a viable plan to complete a sale-leaseback of such property
within one year of the acquisition thereof and (b) the Administrative Agent
approves of the exclusion of such expenditures in its reasonable discretion,
provided that if the applicable Loan Party fails to complete a sale-leaseback
with respect to such real property within such one-year period, expenditures
used for such acquisition of such real property shall be included as a
Consolidated Capital Expenditure in the Fiscal Year in which such one year
period expires.

 

“Excluded Non-Cash Accruals” means (i) accruals for any non-recurring financing
costs related to the transactions contemplated by the Loan Documents or any
non-recurring financing costs paid prior to the date hereof and, in either case,
any amortization thereof during such period and (ii) any interest expense not
required to be paid currently in cash, except to the extent actually paid in
cash.

 

“Existing Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of October 26, 2001, by and among Company, Administrative
Agent, Goldman Sachs Credit Partners L.P. and the lenders party thereto, as
amended to date.

 

“Existing Letters of Credit” means the letters of credit listed on Schedule 3.1.

 

“Facilities” means any and all real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

 

“Federal Funds Effective Rate” means, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.

 

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that (i) such Lien is perfected
and has priority over any other Lien on such Collateral (other than Permitted
Encumbrances and Liens permitted pursuant to subsections 7.2A(iii) and 7.2A(iv))
and (ii) such Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2) to which such Collateral is subject.

 

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“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on
the Fiscal Year End.

 

“Fiscal Year End” means, for any Fiscal Year, the Saturday closest to January 31
of the following calendar year.

 

“Foreign Subsidiary” means a direct or indirect Subsidiary of Holdings that is
not a Domestic Subsidiary.

 

“Funding Date” means the date of the funding of a Loan (but not a date on which
only continuations or conversions of existing Loans occur).

 

“Funding Office” means (i) the office of Wells Fargo Bank, 201 3rd Street, San
Francisco, California 94103, or (ii) such other office in the State of New York
as may from time to time hereafter be designated as such in a written notice
delivered by Company to Administrative Agent and Swing Line Lender.

 

“GAAP” means, subject to the limitations on the application thereof set forth in
subsection 1.2, generally accepted accounting principles set forth in opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board, in each case as the same are applicable to
the circumstances as of the date of determination.

 

“Government Acts” has the meaning assigned to that term in subsection 3.5A.

 

“Governmental Authority” means the government of the United States or any other
nation, or any state, regional or local political subdivision or department
thereof, and any other governmental or regulatory agency, authority, body,
commission, central bank, board, bureau, organ, court, instrumentality or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, in each case
whether federal, state, local or foreign (including supra-national bodies such
as the European Union or the European Central Bank).

 

“Governmental Authorization” means any permit, license, registration,
authorization, plan, directive, accreditation, consent order or consent decree
of or from, or notice to, any Governmental Authority.

 

“Guaranties” means the Subsidiary Guaranty and, if delivered pursuant to
subsection 7.7(iii), the Holdings Guaranty.

 

“Hazardous Materials” means (i) any chemical, material or substance at any time
defined as or included in the definition of “hazardous substances”, “hazardous
wastes”, “hazardous materials”, “extremely hazardous waste”, acutely hazardous
waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic
pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”,
“toxic substances”, or any other term or expression

 

14

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intended to define, list or classify substances by reason of properties harmful
to health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, “TCLP toxicity” or “EP toxicity” or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any radioactive materials; (v) any asbestos-containing materials; (vi) urea
formaldehyde foam insulation; (vii) electrical equipment which contains any oil
or dielectric fluid containing polychlorinated biphenyls; and (viii) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority.

 

“Hazardous Materials Activity” means any past or current activity, event or
occurrence involving any Hazardous Materials, including the use, manufacture,
possession, storage, Release, threatened Release, discharge, generation,
transportation, processing, treatment, abatement, removal, remediation, disposal
or handling of any Hazardous Materials, and any corrective action or response
action with respect to any of the foregoing.

 

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively.

 

“Holding Company Reorganization” means a holding company reorganization effected
as described in, and in compliance with, Section 7.7(viii).

 

“Holdings” shall have the meaning assigned to that term in the Recitals;
provided, however, that unless and until the Holding Company Reorganization,
references in this Agreement to Holdings shall be deemed to refer to Company.

 

“Holdings Guaranty” means the Holdings Guaranty executed and delivered by
Holdings pursuant to Section 7.7(viii), substantially in the form of Exhibit XVI
annexed hereto.

 

“Increasing Lenders” has the meaning assigned to that term in subsection
2.1(A)(iii).

 

“Indebtedness”, as applied to any Person, means (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital Leases
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money, (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, and
(v) all indebtedness secured by any Lien on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is nonrecourse to the credit of that Person to
the extent such indebtedness is included as a liability on the balance sheet of
such Person in accordance with GAAP. Obligations under Interest Rate Agreements
and

 

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Currency Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither case
constitute Indebtedness.

 

“Indemnified Liabilities” has the meaning assigned to that term in subsection
10.3.

 

“Indemnitee” has the meaning assigned to that term in subsection 10.3.

 

“Insurance Exchange Assets” has the meaning assigned to that term in subsection
2.4A(iii)(b).

 

“Intellectual Property” means all patents, trademarks, tradenames, copyrights,
technology, know-how and processes used in or necessary for the conduct of the
business of Holdings and its Subsidiaries.

 

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the last
Business Day of each of March, June, September and December of each year,
commencing on the first such date to occur after the first full calendar quarter
following the Closing Date, and the date of any prepayment thereof, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan and the date of any prepayment thereof; provided that in
the case of each Interest Period of six months, “Interest Payment Date” shall
also include the date that is three months after the commencement of such
Interest Period.

 

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement.

 

“Interest Rate Determination Date” means, with respect to any Interest Period,
the second Business Day prior to the first day of such Interest Period.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

 

“Inventory” means, with respect to any Person as of any date of determination,
all goods, merchandise and other personal property which are then held by such
Person for sale or lease, including raw materials and work in process used in
the production of goods held for sale or lease.

 

“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any
Securities of any other Person (including any Subsidiary of Holdings), (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Holdings from any Person other than Holdings or any
of its Subsidiaries, of any equity Securities of such Subsidiary, (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Holdings or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not

 

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arise from sales to that other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment minus any return of capital with respect to such
Investment.

 

“IP Collateral” means, collectively, the Intellectual Property that constitutes
Collateral under the Security Agreement.

 

“IP Filing Office” means the United States Patent and Trademark Office, the
United States Copyright Office or any successor or substitute office in which
filings are necessary or, in the opinion of Administrative Agent, desirable in
order to create or perfect Liens on any IP Collateral.

 

“Issuing Lender” means, with respect to any Letter of Credit, the Lender that
agrees or is otherwise obligated to issue such Letter of Credit, determined as
provided in subsection 3.1B(ii).

 

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form; provided that in no event
shall any corporate Subsidiary of any Person be considered to be a Joint Venture
to which such Person is a party.

 

“Lender” and “Lenders” means the persons identified as “Lenders” and listed on
the signature pages of this Agreement, together with their successors and
permitted assigns pursuant to subsection 10.1, and the term “Lenders” shall
include Swing Line Lender unless the context otherwise requires; provided that
the term “Lenders”, when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.

 

“Letter of Credit” or “Letters of Credit” means Commercial Letters of Credit and
Standby Letters of Credit issued or to be issued by Issuing Lenders for the
account of Holdings pursuant to subsection 3.1.

 

“Letter of Credit Usage” means, as at any date of determination, the sum of (i)
the maximum aggregate amount which is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by Issuing
Lenders and not theretofore reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to subsection
3.3B). For purposes of this definition, any amount described in clause (i) or
(ii) of the preceding sentence which is denominated in a currency other than
Dollars shall be valued based on the applicable Exchange Rate for such currency
as of the applicable date of determination.

 

“Lien” means any lien, mortgage, deed of trust, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.

 

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“Loan” or “Loans” means one or more of the Revolving Loans or Swing Line Loans
or any combination thereof.

 

“Loan Documents” means this Agreement, the Notes, the Letters of Credit (and any
applications for, or reimbursement agreements or other documents or certificates
executed by Company in favor of an Issuing Lender relating to, the Letters of
Credit), the Guaranties and the Collateral Documents, each as may be amended
from time to time.

 

“Loan Party” means each of Holdings, Company and any Subsidiary of Holdings from
time to time executing a Loan Document, and “Loan Parties” means all such
Persons, collectively.

 

“Maintenance Capital Expenditures” means (a) $25,000,000 for the Fiscal Year
ending on January 29, 2005, (b) $25,000,000 for the Fiscal Year ending on
January 28, 2006, (c) $26,000,000 for the Fiscal Year ending on February 3,
2007, (d) $27,000,000 for the Fiscal Year ending on February 2, 2008, (e)
$28,000,000 for the Fiscal Year ending on January 31, 2009 and (f) $29,000,000
for the Fiscal Year ending on January 30, 2010.

 

“Margin Determination Certificate” means a Margin Determination Certificate of
Holdings delivered pursuant to 6.1(xii) setting forth in reasonable detail the
calculation of the Consolidated Total Leverage Ratio for the four-Fiscal Quarter
period ending as of the last day of the Fiscal Quarter immediately preceding the
Fiscal Quarter in which such certificate is delivered.

 

“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” shall mean any event, circumstance, change, condition,
development or occurrence either individually or in the aggregate with all other
events, circumstances, changes, conditions, developments or occurrences,
resulting in or which would reasonably be expected to result in a material
adverse effect on (i) the business, results of operations or financial condition
of Holdings and its Subsidiaries, taken as a whole, or (ii) the ability of the
Loan Parties to perform, or the ability of Administrative Agent or Lenders to
enforce, the Obligations, taken as a whole; provided, however, that any adverse
change, effect, event, occurrence, state of facts or development after the date
hereof, attributable to conditions affecting any of the industries as a whole in
which Holdings and its Subsidiaries participate or the U.S. economy as a whole
shall not be deemed in and of itself to constitute, nor shall it be taken into
account in determining whether there has been or will be, a Material Adverse
Effect.

 

“Material Contract” means any contract or other arrangement to which Holdings or
any of its Subsidiaries is a party (other than the Loan Documents) for which
breach, nonperformance, cancellation or failure to renew would reasonably be
expected to have a Material Adverse Effect.

 

“Material Subsidiary” means each Subsidiary of Holdings now existing or
hereafter acquired or formed by Holdings or its Subsidiaries which, on a
consolidated basis for such Subsidiary and its Subsidiaries, (i) for the most
recent Fiscal Year accounted for more than 5% of the consolidated revenues of
Holdings and its Subsidiaries or (ii) as at the end of such

 

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Fiscal Year, was the owner of more than 5% of the consolidated assets of
Holdings and its Subsidiaries.

 

“Maximum Expenditure Amount” has the meaning assigned to that term in subsection
7.8.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) of ERISA.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset
Sale, (ii) payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, and (iii) reasonable
amounts to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such Asset Sale; provided, however, that Net Asset
Sale Proceeds shall not include any Cash payments received for real property and
improvements sold in a sale-leaseback transaction that is consummated in
accordance with clause (2) of the first proviso of Section 7.9.

 

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds
received by Holdings or any of its Subsidiaries and not payable to any third
party (other than Administrative Agent as loss payee) pursuant to any
Contractual Obligation (i) under any business interruption or Casualty Insurance
policy in respect of a covered loss thereunder or (ii) as a result of the taking
of any assets of Holdings or any of its Subsidiaries by any Person pursuant to
the power of eminent domain, condemnation or otherwise, or pursuant to a sale of
any such assets to a purchaser with such power under threat of such a taking, in
each case net of any actual and reasonable documented costs incurred by Holdings
or any of its Subsidiaries in connection with the adjustment or settlement of
any claims of Holdings or such Subsidiary in respect thereof.

 

“Net Proceeds Amount” has the meaning assigned to that term in subsection
2.4A(iii)(c).

 

“Non-Conforming Lender” has the meaning assigned to that term in subsection
10.6.

 

“Non-US Lender” has the meaning assigned to that term in subsection 2.7B(iii).

 

“Notes” means one or more of the Revolving Notes or the Swing Line Note or any
combination thereof.

 

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“Notice of Borrowing” means a notice substantially in the form of Exhibit I
annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B.

 

“Notice of Conversion/Continuation” means a notice substantially in the form of
Exhibit II annexed hereto delivered by Company to Administrative Agent pursuant
to subsection 2.2D.

 

“Notice of Issuance of Letter of Credit” means a notice substantially in the
form of Exhibit III annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 3.1B(i).

 

“Obligations” means all obligations of every nature of each Loan Party from time
to time owed to Administrative Agent, Lenders or any of them under the Loan
Documents, whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnification or otherwise.

 

“Officer’s Certificate” means, as applied to any corporation, a certificate
executed on behalf of such corporation by one of its chief executive officer,
chief financial officer, president, treasurer, secretary, controller or its vice
president-finance; provided that every Officer’s Certificate with respect to the
compliance with a condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer making or giving such Officer’s
Certificate has read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signer, such signer has made or has caused to be made such
examination or investigation as is necessary to enable such signer to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signer, such condition
has been complied with.

 

“Operating Lease” means, as applied to any Person, any lease under which such
Person is lessee or sublessee (including leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) that is
not a Capital Lease.

 

“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation and its bylaws, (ii) with respect to
any limited partnership, its certificate of limited partnership and its
partnership agreement, (iii) with respect to any general partnership, its
partnership agreement, (iv) with respect to any limited liability company, its
articles or certificate of organization and its operating agreement and (v) with
respect to any other entity, its equivalent organizational, governing documents.

 

“Participant” means a purchaser of a participation in the rights and obligations
under this Agreement pursuant to subsection 10.1C.

 

“Payment Office” means the office of Administrative Agent and Swing Line Lender
as may from time to time be designated as such in a written notice delivered by
Administrative Agent and Swing Line Lender to Company and each Lender.

 

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

 

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“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan,
which is subject to Section 412 of the Internal Revenue Code or Section 302 of
ERISA.

 

“Permitted Acquisition” means the acquisition of a business (whether through the
purchase of assets or of shares of Capital Stock) by Holdings or any of its
wholly-owned Subsidiaries which is in a line of business similar or related to
the lines of business of Holdings and its Subsidiaries; provided that (i) the
aggregate total consideration (including cash purchase price, deferred or
financed purchase price and the assumption of Indebtedness, including Assumed
Indebtedness, and other liabilities) for Permitted Acquisitions made after the
date of this Agreement shall not exceed $100,000,000; (ii) reasonably promptly
following the consummation of such Permitted Acquisition, Company shall have
complied with the provisions of subsection 6.8 with respect thereto to the
extent applicable, (iii) immediately prior to, and after giving effect thereto,
no Event of Default shall have occurred and be continuing or would result
therefrom, (iv) all transactions in connection therewith shall be consummated,
in all material respects, in accordance with all applicable laws and in
conformity with all applicable Governmental Authorizations, and (v) in the case
of the acquisition of capital stock, at least 85% of the Capital Stock (except
for any such Securities in the nature of director’s qualifying shares required
pursuant to applicable law) acquired or otherwise issued by such Person or any
newly formed Subsidiary of Holdings in connection with such acquisition shall be
owned by Holdings or a Subsidiary Guarantor thereof.

 

“Permitted Encumbrances” means the following types of Liens (excluding any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or by ERISA, any such Lien relating to or imposed in connection with any
Environmental Claim):

 

(i) Liens for taxes, assessments or governmental charges or claims the payment
of which is not, at the time, required by subsection 6.3;

 

(ii) statutory or contractual Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, designers, workmen and materialmen, and other Liens imposed by law,
in each case incurred in the ordinary course of business (a) for amounts not yet
overdue or (b) for amounts that are overdue and that (in the case of any such
amounts overdue for a period in excess of 15 days) are being contested in good
faith by appropriate proceedings, so long as (1) such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made for any such contested amounts, and (2) in the case of a Lien with respect
to any material portion of the Collateral, such contest proceedings or other
actions undertaken by any Loan Party conclusively operate to stay the sale of
such Collateral on account of such Lien or the sale of such Collateral on
account of such Lien cannot legally occur within 30 days;

 

(iii) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money), so long as no foreclosure,
sale or similar proceedings have

 

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been commenced with respect to any material portion of the Collateral on account
thereof;

 

(iv) any attachment or judgment Lien;

 

(v) leases or subleases granted to third parties in accordance with any
applicable terms of the Collateral Documents and not interfering in any material
respect with the ordinary conduct of the business of Holdings or any of its
Subsidiaries or resulting in a material diminution in the value of the
Collateral as security for the Obligations;

 

(vi) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Holdings or any of its Subsidiaries or result in a material diminution in the
value of the Collateral;

 

(vii) any (a) interest or title of a lessor or sublessor under any lease, (b)
Lien or restriction that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or sublessee
under such lease to any Lien or restriction referred to in the preceding clause
(b);

 

(viii) Liens arising from filing UCC financing statements relating solely to
leases permitted by this Agreement;

 

(ix) 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;

 

(x) any zoning, land use or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property;

 

(xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or similar
agreements entered into in the ordinary course of business of Holdings and its
Subsidiaries;

 

(xii) licenses of patents, trademarks and other intellectual property rights
granted by Holdings or any of its Subsidiaries in the ordinary course of
business and not interfering in any material respect with the ordinary conduct
of the business of Holdings or such Subsidiary;

 

(xiii) Liens securing Assumed Indebtedness:

 

(xiv) Liens in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are within
the general parameters customary in the banking industry; and

 

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(xv) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by Holdings or any of its
Subsidiaries in the ordinary course of business.

 

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.

 

“Pledged Collateral” means, collectively, the “Pledged Collateral” as defined in
the Security Agreement.

 

“Potential Event of Default” means a condition or event that would constitute an
Event of Default, except that any notice required under Section 8 with respect
to such condition or event has not been delivered by Administrative Agent to
Company or any time period that is required to pass under Section 8 with respect
to such condition or event has not passed.

 

“Prime Rate” means the rate most recently announced by Wells Fargo at its
principal office in San Francisco from time to time as its “Prime Rate.” The
Prime Rate is one of Wells Fargo’s base rates and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Wells Fargo may designate. Wells
Fargo or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate. Any change in the interest rate
resulting from a change in such Prime Rate shall become effective as of 12:01
A.M. (San Francisco time) of the Business Day on which each change in Prime Rate
is announced by Wells Fargo.

 

“Pro Rata Share” means, (i) with respect to all payments, computations and other
matters relating to the Revolving Loan Commitment or the Revolving Loans of any
Lender or any Letters of Credit issued or participations therein purchased by
any Lender or any participations in any Swing Line Loans purchased by any
Lender, the percentage obtained by dividing (a) the Revolving Loan Exposure of
that Lender by (b) the aggregate Revolving Loan Exposure of all Lenders, and
(ii) for all other purposes with respect to each Lender, the percentage obtained
by dividing (a) the Revolving Loan Exposure of that Lender by (b) the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection 10.1.
The initial Pro Rata Share of each Lender for purposes of each of clauses (i)
and (ii) of the preceding sentence is set forth opposite the name of that Lender
in Schedule 2.1 annexed hereto.

 

“Proceedings” has the meaning assigned to that term in subsection 6.1(vii).

 

“Refinancings” means, with respect to any Indebtedness, any Indebtedness of
Holdings or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to refinance, other Indebtedness of any such Persons;
provided, however, that the principal amount of such Refinancings does not
exceed the principal amount, plus accrued interest (if

 

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any), of the Indebtedness so refinanced (plus the amount of reasonable fees and
expenses incurred in connection therewith).

 

“Refunded Swing Line Loans” has the meaning assigned to that term in subsection
2.1A(ii).

 

“Register” has the meaning assigned to that term in subsection 2.1D.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

“Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

 

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.

 

“Requisite Lenders” means Lenders having or holding more than 50% of the
aggregate Revolving Loan Exposure of all Lenders.

 

“Restricted Junior Payment” means (i) any dividend or other distribution, direct
or indirect, on account of any shares of any class of stock of Holdings now or
hereafter outstanding, except a dividend payable solely in shares of stock to
the holders of that class, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any shares of any class of stock of Holdings now or hereafter outstanding,
except any such payment payable solely in shares of stock, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of Holdings now or
hereafter outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness, except any such payment payable
solely in shares of stock or pay-in-kind securities.

 

“Revolving Loan Commitment” means the commitment of a Lender to make Revolving
Loans to Company pursuant to subsection 2.1A(i), and “Revolving Loan
Commitments” means such commitments of all Lenders in the aggregate.

 

“Revolving Loan Commitment Termination Date” means January 31, 2010; provided
that the Revolving Loan Commitment Termination Date may be extended by one year
if Company delivers a written request for such extension to Administrative Agent
before January 31, 2009 and 100% of the Lenders consent in writing thereto.

 

“Revolving Loan Exposure” means, with respect to any Lender as of any date of
determination (i) prior to the termination of the Revolving Loan Commitments,
that Lender’s

 

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Revolving Loan Commitment and (ii) after the termination of the Revolving Loan
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder) plus
(c) the aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit plus (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any participations therein
purchased by other Lenders) plus (e) the aggregate amount of all participations
purchased by that Lender in any outstanding Swing Line Loans.

 

“Revolving Loans” means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i).

 

“Revolving Notes” means any promissory notes of Company issued pursuant to
subsection 2.1E to evidence the Revolving Loans of any Lenders, substantially in
the form of Exhibit V annexed hereto, as they may be amended, supplemented or
otherwise modified from time to time.

 

“S&P” means Standard & Poor’s.

 

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Security Agreement” means the Security Agreement executed and delivered by
Holdings and its Domestic Subsidiaries on the Closing Date granting a security
interest in substantially all of each Loan Party’s tangible and intangible
personal property assets and pledging 100% of the shares in such Loan Party’s
Domestic Subsidiaries and, subject to subsection 6.8A (with respect to the
Captive Insurance Company), 66% of the shares of such Loan Party’s first-tier
Foreign Subsidiaries or any Security Agreement to be executed and delivered by
any Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8 and 7.7(viii), respectively, in each case substantially in the
form of Exhibit XIV annexed hereto.

 

“Senior Subordinated Note Indenture” means that certain Indenture dated as of
October 26, 2001 among Company, the guarantors party thereto and U.S. Bank N.A.,
as trustee, pursuant to which the Senior Subordinated Notes are issued, as such
Senior Subordinated Note Indenture may be amended from time to time to the
extent permitted under subsection 7.13A.

 

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“Senior Subordinated Notes” means the $200,000,000 in original aggregate
principal amount of 10.75% Senior Subordinated Notes Due 2011 of Company issued
pursuant to the Senior Subordinated Note Indenture and any exchange notes issued
in replacement therefor.

 

“Solvent” means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities of such Person
(including its expected obligations in respect of contingent liabilities) and
(2) not less than the amount that will be required to pay the probable
liabilities on such Person’s then existing debts as they become absolute and
matured considering all financing alternatives, potential asset sales and rights
against co-obligors available to such Person; (b) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (c) such Person does not intend to incur, or believe that it
will incur, debts beyond its ability to pay such debts as they become due; and
(ii) such Person is “solvent” within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

 

“Standby Letter of Credit” means any standby letter of credit or similar
instrument; provided that Standby Letters of Credit may be issued for any
purpose other than to support trade payables.

 

“Subject Lender” has the meaning assigned to that term in subsection 10.6.

 

“Subordinated Indebtedness” means the Indebtedness evidenced by the Senior
Subordinated Notes and any other Indebtedness of Holdings or its Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Administrative Agent.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof, provided that for
purposes of subsection 2.4A(iii), Section 6 (except with respect to subsection
6.8A and except that the financial statements and other financial information to
be delivered pursuant to subsection 6.1 shall include the results of the Captive
Insurance Company) and Sections 7 and 8 (and, in each such case, the definitions
used therein), the Captive Insurance Company shall be deemed to be neither a
Loan Party nor a Subsidiary of Company or Holdings (but the Captive Insurance
Company will be deemed to constitute an Affiliate of Holdings and its
Subsidiaries).

 

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“Subsidiary Guarantor” means any Domestic Subsidiary of Holdings that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date or
from time to time after the Closing Date pursuant to subsection 6.8.

 

“Subsidiary Guaranty” means the Subsidiary Guaranty to be executed and delivered
by Domestic Subsidiaries of Holdings on the Closing Date or from time to time
after the Closing Date in accordance with subsection 6.8, substantially in the
form of Exhibit XIII annexed hereto.

 

“Supplemental Collateral Agent” has the meaning assigned to that term in
subsection 9.1B.

 

“Swing Line Lender” means Wells Fargo, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

 

“Swing Line Loan Commitment” means the commitment of Swing Line Lender to make
Swing Line Loans to Company pursuant to subsection 2.1A(ii).

 

“Swing Line Loans” means the Loans made by Swing Line Lender to Company pursuant
to subsection 2.1A(ii).

 

“Swing Line Note” means any promissory note of Company issued pursuant to
subsection 2.1E to evidence the Swing Line Loans of Swing Line Lenders,
substantially in the form of Exhibit VI annexed hereto.

 

“Syndication Agent” has the meaning assigned to that term in the introduction to
this Agreement.

 

“Tax” or “Taxes” means any present or future tax, levy, impost, duty, charge,
fee, deduction or withholdings of any nature imposed, levied, collected,
withheld or assessed in respect of any payment hereunder or under the Notes by
any Governmental Authority; provided that “Tax on the overall net income” of a
Person shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person’s principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its lending office).

 

“Total Utilization of Revolving Loan Commitments” means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of repaying any
Refunded Swing Line Loans or reimbursing the applicable Issuing Lender for any
amount drawn under any Letter of Credit but not yet so applied) plus (ii) the
aggregate principal amount of all outstanding Swing Line Loans plus (iii) the
Letter of Credit Usage.

 

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“Transaction Costs” means the fees, costs and expenses payable or reimbursable
by Holdings or any of its Subsidiaries in connection with the transactions
contemplated by the Loan Documents.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

 

“Voting Stock” of any Person as of any date means the Capital Stock of such
Person that is entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees of such Person.

 

“Wells Fargo” has the meaning assigned to that term in the introduction to this
Agreement.

 

1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.

 

Except as otherwise expressly provided in this Agreement, all accounting terms
not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii) and (xii) of
subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3.

 

1.3 Other Definitional Provisions and Rules of Construction.

 

A. Any of the terms defined herein may, unless the context otherwise requires,
be used in the singular or the plural, depending on the reference.

 

B. References to “Sections” and “subsections” shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.

 

C. Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.

 

D. The use in any of the Loan Documents of the word “include” or “including”,
when following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.

 

E. Unless otherwise expressly provided herein, references to Organizational
Documents, agreements (including the Loan Documents) and other contractual
instruments shall

 

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be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto.

 

Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1 Commitments; Making of Loans; the Register; Optional Notes.

 

A. Commitments. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company herein set forth,
each Lender hereby severally agrees to make or maintain the Loans described in
subsections 2.1A(i) and Swing Line Lender hereby agrees to make the Loans
described in subsection 2.1A(ii).

 

(i) Revolving Loans. Each Lender severally agrees, subject to the limitations
set forth below with respect to the maximum amount of Revolving Loans permitted
to be outstanding from time to time, to lend to Company from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5A. The original amount of the Revolving Loan
Commitments under this Agreement is $200,000,000 and each Lender’s Revolving
Loan Commitment as of the Closing Date is set forth opposite its name on
Schedule 2.1 annexed hereto; provided that the Revolving Loan Commitments of
Lenders shall be adjusted to give effect to any assignments of the Revolving
Loan Commitments pursuant to subsection 10.1B; and provided further that the
amount of the Revolving Loan Commitments shall be reduced from time to time by
the amount of any reductions thereto made pursuant to subsections 2.4A(ii) and
2.4A(iii). Each Lender’s Revolving Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date. Amounts borrowed
under this subsection 2.1A(i) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.

 

Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loan and the Revolving Loan Commitments shall be subject to the
limitation that in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in effect.

 

(ii) Swing Line Loans. Swing Line Lender hereby agrees, subject to the
limitations set forth below with respect to the maximum amount of Swing Line
Loans permitted to be outstanding from time to time, to make a portion of the
Revolving Loan Commitments available to Company from time to time during the
period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date by making Swing Line Loans to Company in an aggregate amount
not exceeding the amount of the Swing Line Loan Commitment to be used for the
purposes identified in subsection 2.5A, notwithstanding the fact that such Swing
Line Loans, when aggregated with Swing Line Lender’s outstanding Revolving Loans
and Swing Line Lender’s Pro Rata Share of the Letter of Credit Usage then in
effect, may exceed Swing Line Lender’s

 

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Revolving Loan Commitment. The original amount of the Swing Line Loan Commitment
as of the Closing Date is $20,000,000; provided that any reduction of the
Revolving Loan Commitments made pursuant to subsection 2.4A(ii) or 2.4A(iii)
which reduces the aggregate Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any further
action on the part of Company, Administrative Agent or Swing Line Lender. The
Swing Line Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Swing Line Loans and all other amounts owed hereunder
with respect to the Swing Line Loans shall be paid in full no later than that
date. Amounts borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination Date.

 

Anything contained in this Agreement to the contrary notwithstanding, the Swing
Line Loans and the Swing Line Loan Commitment shall be subject to the limitation
that in no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the Revolving Loan Commitments then in effect.

 

With respect to any Swing Line Loans that have not been voluntarily prepaid by
Company pursuant to subsection 2.4A(i), Swing Line Lender may deliver to
Administrative Agent (with a copy to Company), no later than 1:00 P.M. (New York
time) on any day that is at least five Business Days after the making of such
Swing Line Loan a notice (which shall be deemed to be a Notice of Borrowing
given by Company) requesting Lenders to make Revolving Loans that are Base Rate
Loans on such Funding Date in an amount equal to the amount of such Swing Line
Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is
given which Swing Line Lender requests Lenders to prepay; provided however, that
in the event that Swing Line Loans are outstanding in an aggregate principal
amount equal to or in excess of $1,000,000 as of the close of business on any
Thursday, Swing Line Lender shall deliver to Administrative Agent (with a copy
to Company), no later than 1:00 P.M. (New York time) on the following Business
Day the notice described above requesting Lenders to make Revolving Loans in
accordance with the procedures set forth above in an amount equal to the amount
of such Swing Line Loans (which shall constitute Refunded Swing Line Loans)
outstanding as of the close of business on such Thursday. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not to
Company) and applied to repay a corresponding portion of the Refunded Swing Line
Loans and (ii) on the day such Revolving Loans are made, Swing Line Lender’s Pro
Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the
proceeds of a Revolving Loan made by Swing Line Lender, and such portion of the
Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing
Line Loans and shall no longer be due under the Swing Line Note, if any, of
Swing Line Lender but shall instead constitute part of Swing Line Lender’s
outstanding Revolving Loans and shall be due under the Revolving Note, if any,
of Swing Line Lender. Company hereby authorizes Administrative Agent and Swing
Line Lender to charge Company’s accounts with Administrative Agent and Swing

 

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Line Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to
the extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient to
repay in full the Refunded Swing Line Loans. If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing Line Lender in bankruptcy, by assignment for the
benefit of creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all Lenders in the manner contemplated by subsection 10.5.

 

If for any reason (a) Revolving Loans are not made upon the request of Swing
Line Lender as provided in the immediately preceding paragraph in an amount
sufficient to repay any amounts owed to Swing Line Lender in respect of any
outstanding Swing Line Loans or (b) the Revolving Loan Commitments are
terminated at a time when any Swing Line Loans are outstanding, each Lender
shall be deemed to, and hereby agrees to, have purchased a participation in such
outstanding Swing Line Loans in an amount equal to its Pro Rata Share
(calculated, in the case of the foregoing clause (b), immediately prior to such
termination of the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon. Upon one Business Day’s
notice from Swing Line Lender, each Lender shall deliver to Swing Line Lender an
amount equal to its respective participation in same day funds at the
Administrative Agent’s Office. In order to further evidence such participation
(and without prejudice to the effectiveness of the participation provisions set
forth above), each Lender agrees to enter into a separate participation
agreement at the request of Swing Line Lender in form and substance reasonably
satisfactory to Swing Line Lender. In the event any Lender fails to make
available to Swing Line Lender the amount of such Lender’s participation as
provided in this paragraph, Swing Line Lender shall be entitled to recover such
amount on demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors among banks
for three Business Days and thereafter at the Base Rate. In the event Swing Line
Lender receives a payment of any amount in which other Lenders have purchased
participations as provided in this paragraph, Swing Line Lender shall promptly
distribute to each such other Lender its Pro Rata Share of such payment.

 

Anything contained herein to the contrary notwithstanding, each Lender’s
obligation to make Revolving Loans for the purpose of repaying any Refunded
Swing Line Loans pursuant to the second preceding paragraph and each Lender’s
obligation to purchase a participation in any unpaid Swing Line Loans pursuant
to the immediately preceding paragraph shall be absolute and unconditional and
shall not be affected by any circumstance, including (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of Default or a
Potential Event of Default; (c) the occurrence or existence of any Material
Adverse Effect; (d) any breach of this Agreement or any other Loan Document by
any party thereto; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such obligations
of each Lender are subject to the condition that (1) Swing Line Lender believed
in good faith that all conditions

 

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under Section 4 to the making of the applicable Refunded Swing Line Loans or
other unpaid Swing Line Loans, as the case may be, were satisfied at the time
such Refunded Swing Line Loans or unpaid Swing Line Loans were made or (2) the
satisfaction of any such condition not satisfied had been waived in accordance
with subsection 10.6 prior to or at the time such Refunded Swing Line Loans or
other unpaid Swing Line Loans were made.

 

(iii) Additional Commitments. Company may from time to time, by notice to
Administrative Agent, request that, on the terms and subject to the conditions
contained in this Agreement, Lenders and/or other financial institutions not
then a party to this Agreement, that are approved by Administrative Agent (such
approval not to be unreasonably withheld or delayed), provide up to an aggregate
amount of $125,000,000 in additional Revolving Loan Commitments (each such
additional Revolving Loan Commitment, an “Additional Commitment,” and
collectively, the “Additional Commitments”); provided that (i) no Event of
Default or Potential Event of Default shall have occurred and be continuing or
result from such Additional Commitments, (ii) Additional Commitments may be
added hereunder on no more than three occasions, and on each such occasion, the
aggregate amount of Additional Commitments added shall be in an aggregate
minimum amount of $25,000,000 and integral multiples of $1,000,000 in excess of
that amount, (iii) after giving pro forma effect to such Additional Commitments
and any borrowings contemplated to occur substantially concurrently with the
addition thereof, Company will be in compliance with all of its covenants under
this Agreement (including, without limitation, those set forth in Section 7.6),
(iv) the aggregate amount of Additional Commitments that may be added after
April 30, 2007 shall be limited to the lesser of (X) $50,000,000 and (Y)
$125,000,000 minus the aggregate amount of Additional Commitments added prior to
such date and (v) the aggregate amount of the Commitments, after giving effect
to the Additional Commitments, will not exceed the maximum principal amount
permitted for the “Senior Credit Facility” under clause (1) of Section 4.11 of
the Senior Subordinated Note Indenture. Nothing contained in this paragraph or
otherwise in this Agreement is intended to commit any Lender or any Agent to
provide any portion of any such Additional Commitments. If and to the extent
that any Lenders and/or other financial institutions agree, in their sole
discretion, to provide any such Additional Commitments on the terms and
conditions set forth herein (such Lenders, in such capacity, “Increasing
Lenders”), (i) the aggregate amount of the Revolving Loan Commitments shall be
increased by the amount of the Additional Commitments so provided, (ii) the Pro
Rata Shares of the Lenders shall be proportionally adjusted to reflect the
increase in the Revolving Loan as a result of the addition of such Additional
Commitments, (iii) each Increasing Lender shall purchase and assume from other
Lenders outstanding Loans and participations in outstanding Letters of Credit so
as to cause the amount of such Loans and participations in Letters of Credit
held by each Lender to conform to its Pro Rata Share of such Loans and Letters
of Credit (it being agreed Administrative Agent shall have the right to
unilaterally effect such purchases by collecting appropriate amounts from
Increasing Lenders and distributing appropriate amounts to other Lenders, in
each case in an amount sufficient to achieve such conformity) and (iv) Company
shall execute and deliver any additional Notes as any Lender may reasonably
request or other amendments or modifications to this Agreement or any other Loan
Document as are

 

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consistent with this subsection 2.1A(iii) as Administrative Agent may reasonably
request. In connection with the additional Revolving Loan Commitments provided
for in this subsection 2.1A(iii), conforming amendments shall be made by the
Administrative Agent and Company to this Agreement and the other Loan Documents
to reflect such Additional Commitments, without the consent of any Lender other
than those providing the Additional Commitments, including, without limitation,
if applicable, conforming amendments: (i) to provide for the Additional
Commitments to share ratably in the benefits of this Agreement and the other
Loan Documents (including the accrued interest in respect thereof) with the
other Loans made under this Agreement, (ii) to Sections 1 and 2 to provide,
among other things, for the Additional Commitments to share ratably with the
applicable Loans in the application of prepayments, and (iii) to include Lenders
of the additional Revolving Loan Commitments in any determination of Lenders,
Requisite Lenders and Pro Rata Share. Notwithstanding anything in this Agreement
expressed or implied to the contrary (including, without limitation in
subsection 10.6), nothing herein shall be construed to require consent from
Lenders that do not provide Additional Commitments to the incurrence of the
Additional Commitments in compliance with this subsection 2.1A(iii), and this
subsection 2.1A(iii) shall supersede any provisions in subsection 10.6 to the
contrary.

 

B. Borrowing Mechanics. Revolving Loans made on any Funding Date (other than
Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(ii) for the purpose of repaying any Refunded Swing Line Loans or
Revolving Loans made pursuant to subsection 3.3B for the purpose of reimbursing
any Issuing Lender for the amount of a drawing under a Letter of Credit issued
by it) shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount; provided that Revolving Loans
made on any Funding Date as Eurodollar Rate Loans with a particular Interest
Period shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount. Swing Line Loans made on any
Funding Date shall be in an aggregate minimum amount of $100,000 and integral
multiples of $25,000 in excess of that amount.

 

Whenever Company desires that Lenders make Revolving Loans it shall deliver to
Administrative Agent a Notice of Borrowing no later than 1:30 P.M. (New York
time) at least three Business Days in advance of the proposed Funding Date (in
the case of a Eurodollar Rate Loan) or at least one Business Day in advance of
the proposed Funding Date (in the case of a Base Rate Loan). Whenever Company
desires that Swing Line Lender make a Swing Line Loan, it shall deliver to
Administrative Agent a Notice of Borrowing no later than 3:00 P.M. (New York
time) on the proposed Funding Date. The Notice of Borrowing shall specify (i)
the proposed Funding Date (which shall be a Business Day), (ii) the amount and
type of Loans requested, (iii) in the case of Swing Line Loans that such Loans
shall be Base Rate Loans, (iv) whether such Loans shall be Base Rate Loans or
Eurodollar Rate Loans, and (v) in the case of any Loans requested to be made as
Eurodollar Rate Loans, the initial Interest Period requested therefor. Revolving
Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.

 

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Neither Administrative Agent nor any Lender shall incur any liability to Company
in acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Company or for otherwise acting in good
faith under this subsection 2.1B, and upon funding of Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected Loans hereunder.

 

Company shall notify Administrative Agent prior to the funding of any Loans in
the event that any of the matters to which Company is required to certify in the
applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.

 

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.

 

C. Disbursement of Funds. All Loans under this Agreement shall be made by
Lenders simultaneously and proportionately to their respective Pro Rata Shares,
it being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender’s obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender’s obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent
shall notify each Lender or Swing Line Lender, as the case may be, of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 3:30 P.M. (New York time) on the applicable
Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 3:30 P.M. (New York time) on
the applicable Funding Date, in each case in same day funds in Dollars, at the
Administrative Agent’s Office. Except as provided in subsection 2.1A(ii) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of the Loans made on the
Closing Date) and 4.2 (in the case of all Loans), Administrative Agent shall
make the proceeds of such Loans available to Company by 4:00 P.M. (New York
time) on the applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by Administrative Agent
from Lenders or Swing Line Lender, as the case may be, to be transferred to the
account of Company at the Funding Office.

 

Unless Administrative Agent shall have been notified by any Lender prior to the
Funding Date for any Loans that such Lender does not intend to make available to
Administrative Agent the amount of such Lender’s Loan requested on such Funding
Date, Administrative Agent may assume that such Lender has made such amount
available to Administrative Agent on such Funding Date and Administrative Agent
may, in its sole

 

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discretion, but shall not be obligated to, make available to Company a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Administrative Agent by such Lender, Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Funding Date until
the date such amount is paid to Administrative Agent, at the customary rate set
by Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent’s demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement applicable to
such Loans. Nothing in this subsection 2.1C shall be deemed to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that Company may have against any Lender as a result of any default
by such Lender hereunder.

 

D. The Register.

 

(i) Administrative Agent shall maintain, at its address referred to in
subsection 10.8, a register for the recordation of the names and addresses of
Lenders and the Commitments and Loans of each Lender from time to time (the
“Register”). The Register shall be available for inspection by Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

(ii) Administrative Agent shall record in the Register the Revolving Loan
Commitment and Revolving Loans from time to time of each Lender, the Swing Line
Loan Commitment and the Swing Line Loans from time to time of Swing Line Lender,
and each repayment or prepayment in respect of the principal amount of the
Revolving Loans of each Lender or the Swing Line Loans of Swing Line Lender. Any
such recordation shall be conclusive and binding on Company and each Lender,
absent manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect any Lender’s Commitments or
Company’s Obligations in respect of any applicable Loans.

 

(iii) Each Lender shall record on its internal records (including the Notes, if
any, held by such Lender) the amount of each Revolving Loan made by it and each
payment in respect thereof. Any such recordation shall be conclusive and binding
on Company, absent manifest error; provided that failure to make any such
recordation, or any error in such recordation, shall not affect any Lender’s
Commitments or Company’s Obligations in respect of any applicable Loans; 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.

 

(iv) Company, Administrative Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof, and no assignment
or transfer of any such Commitment or Loan shall be effective, in each case
unless and until an Assignment Agreement effecting the assignment or transfer
thereof shall have been

 

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accepted by Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with respect
to the applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.

 

(v) Company hereby affirms its designation of Wells Fargo to serve as Company’s
agent solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Wells Fargo
serves in such capacity, Wells Fargo and its officers, directors, employees,
agents and affiliates shall constitute Indemnitees for all purposes under
subsection 10.3.

 

E. Notes. If requested by any Lender by written notice to Company (with a copy
to Administrative Agent), Company shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to subsection 10.1) promptly after Company’s
receipt of such notice a promissory note or promissory notes to evidence such
Lender’s, Revolving Loans or Swing Line Loans, substantially in the form of
Exhibit V or Exhibit VI annexed hereto, respectively, with appropriate
insertions.

 

Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.

 

2.2 Interest on the Loans.

 

A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7, each
Revolving Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate.
Subject to the provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate. The applicable basis for determining the rate of
interest with respect to any Revolving Loan shall be selected by Company
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Revolving Loan may be changed from time to time pursuant to
subsection 2.2D. If on any day a Revolving Loan is outstanding with respect to
which notice has not been delivered to Administrative Agent in accordance with
the terms of this Agreement specifying the applicable basis for determining the
rate of interest, then for that day that Loan shall bear interest determined by
reference to the Base Rate.

 

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(i) Subject to the provisions of subsections 2.2E and 2.7, the Revolving Loans
shall bear interest on and after the Closing Date through maturity as follows:

 

(a) if a Base Rate Loan, then at the sum of the Base Rate plus the Applicable
Base Rate Margin; or

 

(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar Rate
plus the Applicable Eurodollar Rate Margin.

 

(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing Line Loans
shall bear interest through maturity at the sum of the Base Rate minus the
Commitment Fee Percentage plus the Applicable Base Rate Margin.

 

B. Interest Periods. In connection with each Eurodollar Rate Loan, Company may,
pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
“Interest Period”) to be applicable to such Loan, which Interest Period shall
be, at Company’s option, either a one, two, three or six month period; provided
that:

 

(i) the initial Interest Period for any Eurodollar Rate Loan shall commence on
the Funding Date in respect of such Loan, in the case of a Loan initially made
as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate
Loan;

 

(ii) in the case of immediately successive Interest Periods applicable to a
Eurodollar Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;

 

(iii) if an Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided that, if any Interest Period would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;

 

(iv) any Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;

 

(v) there shall be no more than twelve Interest Periods outstanding at any time;
and

 

(vi) in the event Company fails to specify an Interest Period for any Eurodollar
Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an Interest
Period of one month.

 

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C. Interest Payments. Subject to the provisions of subsection 2.2E, interest on
each Loan shall be payable in arrears on and to each Interest Payment Date
applicable to that Loan, upon any prepayment of that Loan (to the extent accrued
on the amount being prepaid) and at maturity (including final maturity);
provided that in the event any Swing Line Loans or any Revolving Loans that are
Base Rate Loans are prepaid pursuant to subsection 2.4A(i), interest accrued on
such Swing Line Loans or Revolving Loans through the date of such prepayment
shall be payable on the next succeeding Interest Payment Date applicable to Base
Rate Loans (or, if earlier, at final maturity).

 

D. Conversion or Continuation. Subject to the provisions of subsection 2.6,
Company shall have the option (i) to convert at any time all or any part of its
outstanding Revolving Loans equal to $1,000,000 and integral multiples of
$500,000 in excess of that amount from Base Rate Loans to Eurodollar Rate Loans,
(ii) to convert at any time all or any part of its outstanding Revolving Loans
equal to $1,000,000 and integral multiple of $100,000 in excess of that amount
from Eurodollar Rate Loans to Base Rate Loans or (iii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $500,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.

 

Company shall deliver a Notice of Conversion/Continuation to Administrative
Agent no later than 1:30 P.M. (New York time) at least one Business Day in
advance of the proposed conversion date (in the case of a conversion to a Base
Rate Loan) and at least three Business Days in advance of the proposed
conversion/continuation date (in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan). A Notice of Conversion/ Continuation shall specify
(i) the proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Loan to be converted/continued, (iii) the nature
of the proposed conversion/continuation, (iv) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.

 

Neither Administrative Agent nor any Lender shall incur any liability to Company
in acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized to act on behalf of Company or for otherwise acting in good
faith under this subsection 2.2D, and upon conversion or continuation of the
applicable basis for determining the interest rate with respect to any Loans in
accordance with this Agreement pursuant to any such telephonic notice Company
shall have effected a conversion or continuation, as the case may be, hereunder.

 

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Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and Company shall be bound to
effect a conversion or continuation in accordance therewith.

 

E. Default Rate. Upon the occurrence and during the continuation of any Event of
Default under subsection 8.1 or, upon demand by Administrative Agent at the
request of Requisite Lenders, upon the occurrence and during the continuation of
any other Event of Default, the outstanding principal amount of all Loans and,
to the extent permitted by applicable law, any interest payments thereon not
paid when due and any fees and other amounts then due and payable hereunder,
shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.

 

F. Computation of Interest. Interest on the Loans shall be computed (i) in the
case of Base Rate Loans, on the basis of a 365-day or 366-day year, as the case
may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day
year, in each case for the actual number of days elapsed in the period during
which it accrues; provided, however, that for each day that the Base Rate is
calculated by reference to the Federal Funds Effective Rate, interest on Base
Rate Loans shall be computed on the basis of a 360-day year and the actual
number of days elapsed. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day’s interest shall be paid on that Loan.

 

G. Maximum Rate. Notwithstanding the foregoing provisions of this subsection
2.2, in no event shall the rate of interest payable by Company with respect to
any Loan exceed the maximum rate of interest permitted to be charged under
applicable law.

 

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2.3 Fees.

 

A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender’s Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans (but not any
outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage multiplied by
the Commitment Fee Percentage. Such commitment fees to be calculated on the
basis of a 365-day year or 366-day year, as the case may be, and the actual
number of days elapsed and to be payable quarterly in arrears on the last
Business Day of each of March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date.

 

B. Other Fees. Company agrees to pay to Administrative Agent such other fees in
the amounts and at the times separately agreed upon between Company and
Administrative Agent.

 

2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments; Application of Proceeds of Collateral and
Payments after Event of Default.

 

A. Prepayments and Unscheduled Reductions in Revolving Loan Commitments.

 

(i) Voluntary Prepayments. Company may, upon written or telephonic notice to
Administrative Agent on or prior to 1:30 P.M. (New York time) on the date of
prepayment, which notice, if telephonic, shall be promptly confirmed in writing,
at any time and from time to time prepay any Swing Line Loan on any Business Day
in whole or in part. Company may, upon not less than one Business Day’s prior
written or telephonic notice, in the case of Base Rate Loans, and three Business
Days’ prior written or telephonic notice, in the case of Eurodollar Rate Loans,
in each case given to Administrative Agent by 1:30 P.M. (New York time) on the
date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice Administrative
Agent will promptly transmit by telefacsimile or telephone to each Lender), at
any time and from time to time prepay any Revolving Loans on any Business Day in
whole or in part in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount in the case of Base Rate Loans
and in an aggregate minimum amount of $1,000,000 and integral multiples of
$500,000 in excess of that amount in the case of Eurodollar Rate Loans. Notice
of prepayment having been given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be applied as specified
in subsection 2.4A(iv).

 

(ii) Voluntary Reductions of Revolving Loan Commitments. Company may, upon not
less than three Business Days’ prior written or telephonic notice confirmed in
writing to Administrative Agent (which original written or telephonic notice

 

40

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Administrative Agent will promptly transmit by telefacsimile or telephone to
each Lender), at any time and from time to time terminate in whole or
permanently reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments at the
time of such proposed termination or reduction; provided that any such partial
reduction of the Revolving Loan Commitments shall be in an aggregate minimum
amount of $1,000,000 and integral multiples of $1,000,000 in excess of that
amount. Company’s notice to Administrative Agent shall designate the date (which
shall be a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company’s notice and
shall reduce the Revolving Loan Commitment of each Lender proportionately to its
Pro Rata Share. A notice of termination of the Revolving Loan Commitments
delivered by the Company may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Company by notice to the Administrative Agent on or prior to the
specified date if such condition is not satisfied.

 

(iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
Commitments. The Loans shall be prepaid and/or the Revolving Loan Commitments
shall be permanently reduced in the amounts and under the circumstances set
forth below, all such prepayments and/or reductions to be applied as set forth
below or as more specifically provided in subsection 2.4A(iv):

 

(a) Reductions From Net Asset Sale Proceeds. No later than the fifteenth
Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Net Asset Sale Proceeds in excess of $20,000,000 in respect
of any Asset Sale, the Revolving Loan Commitments shall be permanently reduced
in an aggregate amount equal to such Net Asset Sale Proceeds; provided, however,
that in the event Company notifies Administrative Agent in writing on or before
the date of receipt of such Net Asset Sale Proceeds that Holdings or such
Subsidiary intends to replace any assets sold (“Exchange Assets”) with assets
which are to be used in a business engaged in by Holdings and its Subsidiaries
at the time of any such replacement or any business or activity substantially
similar or related thereto, the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to the excess of (1) the aggregate amount
of such Net Asset Sale Proceeds over (2) an amount equal to the amount of cash
expected to be expended by Holdings and its Subsidiaries to acquire such
Exchange Assets during the 270-day period following the date of receipt by
Holdings or any of its Subsidiaries of such Net Asset Sale Proceeds. Any amounts
not expended by Holdings and its Subsidiaries within such 270-day period shall
be applied pursuant to clause (c) below. Nothing contained in this clause (a)
shall be construed to permit any sale of assets prohibited by subsection 7.7.

 

(b) Reductions from Net Insurance/Condemnation Proceeds. No later than the third
Business Day following the date of receipt by Administrative Agent or by
Holdings or any of its Subsidiaries of any Net Insurance/Condemnation

 

41

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Proceeds that are required to be applied pursuant to the provisions of
subsection 6.4C, the Revolving Loan Commitments shall be permanently reduced in
an aggregate amount equal to the amount of such Net Insurance/Condemnation
Proceeds; provided, however, that in the event Company intends to replace any
assets in respect of which such Net Insurance/Condemnation Proceeds were
received (“Insurance Exchange Assets”) with assets which are to be used in a
business engaged in by Holdings and its Subsidiaries at the time of any such
replacement or any business or activity substantially similar or related
thereto, the Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to the excess of (1) such Net Insurance/Condemnation
Proceeds over (2) an amount equal to the amount of cash expected to be expended
by Holdings and its Subsidiaries to acquire such Insurance Exchange Assets
during the 270-day period following the date of receipt by Holdings or any of
its Subsidiaries of such Net Insurance/Condemnation Proceeds. Any amounts not
expended by Holdings and its Subsidiaries within such 270-day period shall be
prepaid pursuant to clause (d) below.

 

(c) Calculations of Net Proceeds Amounts; Additional Prepayments and Reductions
Based on Subsequent Calculations. Concurrently with any reduction of the
Revolving Loan Commitments pursuant to subsections 2.4A(iii)(a)-(b), Company
shall deliver to Administrative Agent an Officer’s Certificate demonstrating the
calculation of the amount (the “Net Proceeds Amount”) of the applicable Net
Asset Sale Proceeds or Net Insurance/Condemnation Proceeds, as the case may be,
that gave rise to such reduction. In the event that Company shall subsequently
determine that the actual Net Proceeds Amount was greater than the amount set
forth in such Officer’s Certificate, the Revolving Loan Commitments shall be
permanently reduced in an amount equal to the amount of such excess to the
extent required hereunder, and Company shall concurrently therewith deliver to
Administrative Agent an Officer’s Certificate demonstrating the derivation of
the additional Net Proceeds Amount resulting in such excess.

 

(d) Prepayments Due to Reductions or Restrictions of Revolving Loan Commitments.
Company shall from time to time prepay first the Swing Line Loans and second the
Revolving Loans to the extent necessary so that the Total Utilization of
Revolving Loan Commitments shall not at any time exceed the Revolving Loan
Commitments then in effect.

 

(iv) Application of Prepayments. Any prepayments pursuant to subsection 2.4A
shall be applied first to repay outstanding Swing Line Loans to the full extent
thereof, second to repay outstanding Revolving Loans to the full extent thereof,
and third to cash collateralized outstanding Letters of Credit (if any).

 

B. General Provisions Regarding Payments.

 

(i) Manner and Time of Payment. All payments by Company of principal, interest,
fees and other Obligations hereunder and under the Notes shall be made in

 

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Dollars in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to the account of Administrative Agent
not later than 2:00 P.M. (New York time) on the date due at the Payment Office
for the account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on the next
succeeding Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).

 

(ii) Application of Payments to Principal and Interest. Except as provided in
subsection 2.2C, all payments in respect of the principal amount of any Loan
shall include payment of accrued interest on the principal amount being repaid
or prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.

 

(iii) Apportionment of Payments. Aggregate principal and interest payments in
respect of Revolving Loans shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders’ respective
Pro Rata Shares. Administrative Agent shall promptly distribute to each Lender,
at its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its Pro Rata
Share of all such payments received by Administrative Agent and the commitment
fees of such Lender when received by Administrative Agent pursuant to subsection
2.3. Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.

 

(iv) Payments on Business Days. Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.

 

(v) Notation of Payment. Each Lender agrees that before disposing of any Note
held by it, or any part thereof (other than by granting participations therein),
that Lender will make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit or
otherwise affect the obligations of Company hereunder or under such Note with
respect to any Loan or any payments of principal or interest on such Note.

 

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C. Application of Proceeds of Collateral and Payments after Event of Default.
Upon the occurrence and during the continuation of an Event of Default, if
requested by Requisite Lenders, or upon acceleration of the Obligations pursuant
to Section 8, (a) all payments received by Administrative Agent, whether from
Company, Holdings or any Subsidiary Guarantor or otherwise, and (b) all proceeds
received by Administrative Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral under any Collateral
Document may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time thereafter)
applied in full or in part by Administrative Agent, in each case in the
following order of priority:

 

(i) to the payment of all costs and expenses of such sale, collection or other
realization, all other expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to compensation (including the fees described
in subsection 2.3), reimbursement and indemnification under any Loan Document
and all advances made by Administrative Agent thereunder for the account of the
applicable Loan Party, and to the payment of all costs and expenses paid or
incurred by Administrative Agent in connection with the Loan Documents, all in
accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this
Agreement and the Loan Documents;

 

(ii) thereafter, to the payment of all other Obligations and obligations of Loan
Parties under any Hedge Agreement between a Loan Party and a Lender for the
ratable benefit of the holders thereof (subject to the provisions of subsection
2.4B(ii) hereof); and

 

(iii) thereafter, to the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.

 

2.5 Use of Proceeds.

 

A. Revolving Loans; Swing Line Loans. The proceeds of Revolving Loans and any
Swing Line Loans shall be applied by Company to refinance Indebtedness under the
Existing Credit Agreement, to pay Transaction Costs, and for working capital and
general corporate purposes.

 

B. Margin Regulations. No portion of the proceeds of any borrowing under this
Agreement shall be used by Holdings or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.

 

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2.6 Special Provisions Governing Eurodollar Rate Loans.

 

Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:

 

A. Determination of Applicable Interest Rate. As soon as practicable after 9:00
A.M. (Los Angeles time) on each Interest Rate Determination Date, Administrative
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate that shall
apply to the Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Company and each
Lender.

 

B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be a request to make
such Loans as (or convert such Loan to, as the case may be) Base Rate Loans.

 

C. Illegality or Impracticability of Eurodollar Rate Loans. In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result
of compliance by such Lender in good faith with any law, treaty, governmental
rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially and
adversely affect the London interbank market or the position of such Lender in
that market, then, and in any such event, such Lender shall be an “Affected
Lender” and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination
(which notice Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as,
or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender’s
obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected
Loans”) shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of

 

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Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or
by telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.

 

D. Compensation For Breakage or Non-Commencement of Interest Periods. Company
shall compensate each Lender, upon written request by that Lender for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability (exclusive of any expected profit on
such Loans) sustained by that Lender in connection with the liquidation or
re-employment of such funds) which that Lender may sustain: (i) if for any
reason (other than a default by that Lender or a failure to make any Loan under
subsection 2.6C above) a borrowing of any Eurodollar Rate Loan does not occur on
a date specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4A(i)) or other principal
payment or any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan, (iii) if
any prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Company, or (iv) as a consequence
of any other default by Company in the repayment of its Eurodollar Rate Loans
when required by the terms of this Agreement. Such Lender shall deliver to
Company (with a copy to Administrative Agent) a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Lender under this subsection 2.6D, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.

 

E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or
the office of an Affiliate of that Lender.

 

F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided however, that each Lender may fund each of its Eurodollar Rate Loans in
any manner it sees fit and the foregoing assumptions shall be utilized only for
the purposes of calculating amounts payable under this subsection 2.6 and under
subsection 2.7A.

 

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G. Eurodollar Rate Loans After Default. After the occurrence of and during the
continuation of an Event of Default, (i) Company may not elect to have a Loan be
made or maintained as, or converted to, a Eurodollar Rate Loan after the
expiration of any Interest Period then in effect for that Loan and (ii) subject
to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to a requested borrowing
or conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.

 

2.7 Increased Costs; Taxes; Capital Adequacy.

 

A. Compensation for Increased Costs and Taxes. Subject to the provisions of
subsection 2.7B (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or Governmental Authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-Governmental Authority (whether or
not having the force of law):

 

(i) subjects such Lender (or its applicable lending office) to any additional
Tax (other than any Tax on the overall net income or net profits, or gross
income (in lieu of net income) of such Lender) not covered by subsection 2.7B
with respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder;

 

(ii) imposes, modifies or holds applicable any reserve (including any marginal,
emergency, supplemental, special or other reserve), special deposit, compulsory
loan, FDIC insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or

 

(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Lender (or its applicable lending office) or its obligations
hereunder or the London interbank market;

 

and the result of any of the foregoing is to increase the actual cost to such
Lender of agreeing to make, making or maintaining Loans hereunder or to reduce
any amount received or receivable by such Lender (or its applicable lending
office) with respect thereto; then, in any such case, Company shall promptly pay
to such Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as may be necessary to compensate such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder; provided, however, that Company shall

 

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not be obligated to pay such Lender any compensation attributable to any period
prior to the date that is 60 days prior to the date on which such Lender gave
notice to Company of the circumstances entitling such Lender to compensation.
Such Lender shall deliver to Company (with a copy to Administrative Agent) a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Lender under this subsection 2.7A, and
stating that such Lender is, if it is legally entitled to do so, generally
charging similar amounts to borrowers that are similarly situated, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.

 

B. Withholding of Taxes.

 

(i) Payments to Be Free and Clear. All sums payable by Company under this
Agreement and the other Loan Documents shall (except to the extent required by
law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of
Company or by any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of payment.

 

(ii) Grossing-up of Payments. If Company or any other Person is required by law
to make any deduction or withholding on account of any such Tax (other than a
Tax on the overall net income of any Lender) from any sum paid or payable by
Company to Administrative Agent or any Lender under any of the Loan Documents:

 

(a) Company shall notify Administrative Agent of any such requirement or any
change in any such requirement as soon as Company becomes aware of it;

 

(b) Company shall pay any such Tax before the date on which penalties attach
thereto, such payment to be made (if the liability to pay is imposed on Company)
for its own account or (if that liability is imposed on Administrative Agent or
such Lender, as the case may be) on behalf of and in the name of Administrative
Agent or such Lender;

 

(c) the sum payable by Company in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary to
ensure that, after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be, receives on the due
date a net sum equal to what it would have received had no such deduction,
withholding or payment been required or made; and

 

(d) within 30 days after paying any sum from which it is required by law to make
any deduction or withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to the other affected

 

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parties of such deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority;

 

provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date of this Agreement or at the date of such Assignment
Agreement, as the case may be, in respect of payments to such Lender.

 

(iii) Evidence of Exemption from U.S. Withholding Tax.

 

(a) Each Lender that is organized under the laws of any jurisdiction other than
the United States or any state or other political subdivision thereof (for
purposes of this subsection 2.7B(iii), a “Non-US Lender”) shall deliver to
Administrative Agent for transmission to Company, on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in the case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent (each in the
reasonable exercise of its discretion), (1) two original copies of Internal
Revenue Service Form W-9, W-8BEN or W-8ECI (as applicable to it), or any
successor forms, properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that such Lender
is not subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (2) if such Lender is
not a “bank” or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver Internal Revenue Service Form W-9, W-8BEN or
W-8ECI pursuant to clause (1) above, a Certificate re Non-Bank Status together
with any other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that such Lender
is not subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of interest payable under any of the
Loan Documents.

 

(b) Each Lender required to deliver any forms, certificates or other evidence
with respect to United States federal income tax withholding matters pursuant to
subsection 2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that such Lender
shall promptly (1) deliver to Administrative Agent for transmission to Company
two new original copies of Internal Revenue Service Form W-9, W-8BEN

 

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or W-8ECI, or successor applicable forms, or a Certificate re Non-Bank Status,
as the case may be, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required in order
to confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to payments to such
Lender under the Loan Documents or (2) notify Administrative Agent and Company
of its inability to deliver any such forms, certificates or other evidence.

 

(c) Company shall not be required to pay any additional amount to any Non-US
Lender under clause (b) or (c) of subsection 2.7B(ii) if such Lender shall have
failed to satisfy the requirements of clause (a) or (b)(1) of this subsection
2.7B(iii); provided that if such Lender shall have satisfied the requirements of
subsection 2.7B(iii)(a) on the Closing Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment Agreement
pursuant to which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its obligation to pay
any additional amounts pursuant to clause (b) or (c) of subsection 2.7B(ii) in
the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described in subsection 2.7B(iii)(a).

 

C. Capital Adequacy Adjustment. If any Lender shall have determined that the
adoption, effectiveness, phase-in or applicability after the date hereof of any
law, rule or regulation (or any provision thereof) regarding capital adequacy,
or any change therein or in the interpretation or administration thereof by any
Governmental Authority, central bank, the National Association of Insurance
Commissioners or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable lending
office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank, the National Association of Insurance Commissioners or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender’s Loans or Commitments or
Letters of Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, Company shall promptly
pay to such Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such actual reduction;
provided however, that Company shall not be obligated to pay such Lender any
compensation attributable to any period prior to the date that is 60 days prior
to the date on which such Lender gave notice to Company of the circumstances
entitling such Lender to compensation. Such Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to such
Lender under this subsection 2.7C and stating that such Lender is, if it is

 

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legally entitled to do so, generally charging similar amounts to borrowers that
are similarly situated, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

 

2.8 Obligation of Lenders and Issuing Lenders to Mitigate.

 

Each Lender and Issuing Lender agrees that, as promptly as practicable after the
officer of such Lender or Issuing Lender responsible for administering the Loans
or Letters of Credit of such Lender or Issuing Lender, as the case may be,
becomes aware of the occurrence of an event or the existence of a condition that
would cause such Lender to become an Affected Lender or that would entitle such
Lender or Issuing Lender to receive payments under subsection 2.7 or subsection
3.6, it will, to the extent not inconsistent with the internal policies of such
Lender or Issuing Lender and any applicable legal or regulatory restrictions,
use reasonable efforts (i) to make, issue, fund or maintain the Commitments of
such Lender or the affected Loans or Letters of Credit of such Lender or Issuing
Lender through another lending or letter of credit office of such Lender or
Issuing Lender, or (ii) take such other measures as such Lender or Issuing
Lender may deem reasonable, if as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Company pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.

 

2.9 Substitute Lenders.

 

In the event Company is required under the provisions of subsection 2.7 or 3.6
to make payments in a material amount to any Lender or in the event any Lender
fails to lend to Company in accordance with this Agreement, Company may, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing, elect to terminate such Lender as a party to this Agreement;
provided that, concurrently with such termination, (i) Company shall pay that
Lender all principal, interest and fees and other amounts (including without
limitation, amounts, if any, owed under subsection 2.7 and 3.6) owed to such
Lender through such date of termination, (ii) another financial institution
satisfactory to Company and Administrative Agent (or if Administrative Agent is
also the Lender to be terminated, the successor Administrative Agent) shall
agree, as of such date, to become a Lender for all purposes under this Agreement
(whether by assignment or amendment) and to assume all obligations of the Lender
to be terminated as of such date, and (iii) all documents and supporting
materials

 

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necessary, in the judgment of Administrative Agent (or if Administrative Agent
is also the Lender to be terminated, the successor Administrative Agent), to
evidence the substitution of such Lender shall have been received and approved
by Administrative Agent as of such date.

 

Section 3. LETTERS OF CREDIT

 

3.1 Issuance of Letters of Credit and Lenders’ Purchase of Participations
Therein.

 

A. Letters of Credit. In addition to Company requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A(i) and that Swing Line Lender make
Swing Line Loans pursuant to subsection 2.1A(ii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of Company for the purposes specified in the definitions of Commercial
Letters of Credit and Standby Letters of Credit. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
shall issue):

 

(i) any Letter of Credit if, after giving effect to such issuance, the Total
Utilization of Revolving Loan Commitments would exceed the Revolving Loan
Commitments then in effect;

 

(ii) any Letter of Credit if, after giving effect to such issuance, the Letter
of Credit Usage would exceed $75,000,000;

 

(iii) any Standby Letter of Credit having an expiration date later than the
earlier of (a) the Revolving Loan Commitment Termination Date and (b) the date
which is one year from the date of issuance of such Standby Letter of Credit;
provided that the immediately preceding clause (b) shall not prevent any Issuing
Lender from agreeing that a Standby Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each unless
such Issuing Lender elects not to extend for any such additional period; and
provided further that such Issuing Lender shall elect not to extend such Standby
Letter of Credit if it has knowledge that an Event of Default has occurred and
is continuing (and has not been waived in accordance with subsection 10.6) at
the time such Issuing Lender must elect whether or not to allow such extension;

 

(iv) any Commercial Letter of Credit having an expiration date (a) later than
the earlier of (1) the date which is 30 days prior to the Revolving Loan
Commitment Termination Date and (2) the date which is one year from the date of
issuance of such Commercial Letter of Credit or (b) that is otherwise
unacceptable to the applicable Issuing Lender in its reasonable discretion; or

 

(v) any Letter of Credit denominated in a foreign currency which in the judgment
of the applicable Issuing Lender is not readily and freely available.

 

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B. Mechanics of Issuance.

 

(i) Notice of Issuance. Whenever Company desires the issuance of a Letter of
Credit, it shall deliver to Administrative Agent a Notice of Issuance of Letter
of Credit substantially in the form of Exhibit III annexed hereto no later than
1:30 P.M. (New York time) at least three Business Days (in the case of Standby
Letters of Credit), at least one Business Day (in the case of Commercial Letters
of Credit), or in each case such shorter period as may be agreed to by the
Issuing Lender in any particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall specify (a) the
proposed date of issuance (which shall be a Business Day), (b) whether the
Letter of Credit is to be a Standby Letter of Credit or a Commercial Letter of
Credit, (c) the face amount of the Letter of Credit, (d) in the case of a Letter
of Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (f) either the verbatim text of the proposed
Letter of Credit or the proposed terms and conditions thereof, including a
precise description of any documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date of the Letter of
Credit, would require the Issuing Lender to make payment under the Letter of
Credit; provided that the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any such
documents; and provided further that no Letter of Credit shall require payment
against a conforming draft to be made thereunder on the same business day (under
the laws of the jurisdiction in which the office of the Issuing Lender to which
such draft is required to be presented is located) that such draft is presented
if such presentation is made after 10:30 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.

 

Company shall notify the applicable Issuing Lender (and Administrative Agent, if
Administrative Agent is not such Issuing Lender) prior to the issuance of any
Letter of Credit in the event that any of the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of Credit is
no longer true and correct as of the proposed date of issuance of such Letter of
Credit, and upon the issuance of any Letter of Credit Company shall be deemed to
have re-certified, as of the date of such issuance, as to the matters to which
Company is required to certify in the applicable Notice of Issuance of Letter of
Credit.

 

On the Closing, Date, and so long as the conditions precedent in subsections 4.1
and 4.2 have been fulfilled, each of the Existing Letters of Credit shall,
automatically and without any further action by any Person, be deemed to be a
duly issued “Letter of Credit” issued on the Closing Date and outstanding under
this Agreement (and Wells Fargo shall be the Issuing Lender with respect to such
Existing Letters of Credit).

 

(ii) Determination of Issuing Lender. Upon receipt by Administrative Agent of a
Notice of Issuance of Letter of Credit pursuant to subsection 3.1B(i) requesting
the issuance of a Letter of Credit, in the event Administrative Agent elects to
issue such Letter of Credit, Administrative Agent shall promptly so notify
Company, and Administrative Agent shall be the Issuing Lender with respect
thereto. In the event that

 

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Administrative Agent, in its sole discretion, elects not to issue such Letter of
Credit, Administrative Agent shall promptly so notify Company, whereupon Company
may request any other Lender to issue such Letter of Credit by delivering to
such Lender a copy of the applicable Notice of Issuance of Letter of Credit. Any
Lender so requested to issue such Letter of Credit shall promptly notify Company
and Administrative Agent whether or not, in its sole discretion, it has elected
to issue such Letter of Credit, and any such Lender that so elects to issue such
Letter of Credit shall be the Issuing Lender with respect thereto. In the event
that all other Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue such
Letter of Credit, Administrative Agent shall be obligated to issue such Letter
of Credit and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the Letter of Credit Usage with respect to such Letter of Credit
and with respect to all other Letters of Credit issued by Administrative Agent,
when aggregated with Administrative Agent’s outstanding Revolving Loans and
Swing Line Loans, may exceed Administrative Agent’s Revolving Loan Commitment
then in effect; provided that Administrative Agent shall not be obligated to
issue any Letter of Credit denominated in a foreign currency which in the
judgment of Administrative Agent is not readily and freely available.

 

(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in accordance
with subsection 10.6) of the conditions set forth in subsection 4.4, the Issuing
Lender shall issue the requested Letter of Credit in accordance with the Issuing
Lender’s standard operating procedures.

 

(iv) Notification to Lenders. Upon the issuance of any Letter of Credit the
applicable Issuing Lender shall promptly notify Administrative Agent and each
other Lender of such issuance, which notice shall be accompanied by a copy of
such Letter of Credit. Promptly after receipt of such notice (or, if
Administrative Agent is the Issuing Lender, together with such notice),
Administrative Agent shall notify each Lender of the amount of such Lender’s
respective participation in such Letter of Credit, determined in accordance with
subsection 3.1C.

 

(v) Reports to Lenders. Within 15 days after the end of each calendar quarter
ending after the Closing Date, so long as any Letter of Credit shall have been
outstanding during such calendar quarter, each Issuing Lender shall deliver to
each other Lender a report setting forth for such calendar quarter the daily
aggregate amount available to be drawn under the Letters of Credit issued by
such Issuing Lender that were outstanding during such calendar quarter.

 

C. Lenders’ Purchase of Participations in Letters of Credit. Immediately upon
the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and any drawings honored thereunder in an
amount equal to such Lender’s Pro Rata Share of the maximum amount that is or at
any time may become available to be drawn thereunder.

 

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3.2 Letter of Credit Fees.

 

Company agrees to pay the following amounts with respect to Letters of Credit
issued hereunder:

 

(i) with respect to each Standby Letter of Credit, (a) a fronting fee, payable
directly to the applicable Issuing Lender for its own account, in an amount
separately agreed in writing between Company and such Issuing Lender (not to
exceed the greater of (X) $500 (per annum) and (Y) 0.20% per annum of the daily
amount available to be drawn under such Standby Letter of Credit), and (b) a
letter of credit fee, payable to Administrative Agent for the account of
Lenders, equal to the daily amount available to be drawn under such Standby
Letter of Credit multiplied by the Applicable Eurodollar Rate Margin, each such
fronting fee or letter of credit fee to be payable in arrears on and to (but
excluding) the last Business Day of each of March, June, September and December
of each year and computed on the basis of a 360-day year for the actual number
of days elapsed;

 

(ii) with respect to each Commercial Letter of Credit, fronting and letter of
credit fees, payable directly to the applicable Issuing Lender for its own
account, at such times and in such amounts as are in accordance with such
Issuing Lender’s standard schedule for such charges in effect at the time of
such issuance; and

 

(iii) with respect to the issuance, amendment or transfer of each Letter of
Credit and each payment of a drawing made thereunder (without duplication of the
fees payable under clauses (i) and (ii) above), reasonable and customary
documentary and processing charges payable directly to the applicable Issuing
Lender for its own account in accordance with such Issuing Lender’s standard
schedule for such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.

 

For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) of this subsection 3.2, Administrative Agent shall distribute to each
Lender its Pro Rata Share of such amount.

 

3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.

 

A. Responsibility of Issuing Lender With Respect to Drawings. In determining
whether to honor any drawing under any Letter of Credit by the beneficiary
thereof, the Issuing Lender shall be responsible only to examine the documents
delivered under such Letter of Credit with reasonable care so as to ascertain
whether they appear on their face to be in accordance with the terms and
conditions of such Letter of Credit.

 

B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In the
event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and

 

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Company shall reimburse such Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored (the
“Reimbursement Date”) in an amount in Dollars (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a currency other than
Dollars, shall be calculated by reference to the applicable Exchange Rate) and
in same day funds equal to the amount of such honored drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, (i) unless
Company shall have notified Administrative Agent and such Issuing Lender prior
to 1:00 P.M. (New York time) on the date such drawing is honored that Company
intends to reimburse such Issuing Lender for the amount of such honored drawing
with funds other than the proceeds of Revolving Loans, Company shall be deemed
to have given a timely Notice of Borrowing to Administrative Agent requesting
Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement
Date in an amount in Dollars (which amount, in the case of a drawing under a
Letter of Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate) equal to the amount of
such honored drawing and (ii) Lenders shall, on the Reimbursement Date, make
Revolving Loans that are Base Rate Loans in the amount of such honored drawing,
the proceeds of which shall be applied directly by Administrative Agent to
reimburse such Issuing Lender for the amount of such honored drawing; and
provided, further that if for any reason proceeds of Revolving Loans are not
received by such Issuing Lender on the Reimbursement Date in an amount equal to
the amount of such honored drawing, Company shall reimburse such Issuing Lender,
on demand, in an amount in same day funds equal to the excess of the amount of
such honored drawing over the aggregate amount of such Revolving Loans, if any,
which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Company shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this subsection 3.3B.

 

C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

 

(i) Payment by Lenders. In the event that Company shall fail for any reason to
reimburse any Issuing Lender as provided in subsection 3.3B in an amount
(calculated, in the case of a drawing under a Letter of Credit denominated in a
currency other than Dollars, by reference to the applicable Exchange Rate) equal
to the amount of any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall promptly notify each other Lender
of the unreimbursed amount of such honored drawing and of such other Lender’s
respective participation therein based on such Lender’s Pro Rata Share. Each
Lender shall make available to such Issuing Lender an amount equal to its
respective participation, in Dollars and in same day funds, at the office of
such Issuing Lender specified in such notice, not later than 3:00 P.M. (New York
time) on the first business day (under the laws of the jurisdiction in which
such office of such Issuing Lender is located) after the date notified by such
Issuing Lender. In the event that any Lender fails to make available to such
Issuing Lender on such business day the amount of such Lender’s participation in
such Letter of Credit as provided in this subsection 3.3C, such Issuing Lender
shall be entitled to recover such amount on demand from such Lender together
with interest thereon at the rate customarily used by such Issuing Lender for
the correction of errors among banks for

 

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three Business Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Lender to recover from any
Issuing Lender any amounts made available by such Lender to such Issuing Lender
pursuant to this subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the part of
such Issuing Lender.

 

(ii) Distribution to Lenders of Reimbursements Received From Company. In the
event any Issuing Lender shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of any drawing honored by such Issuing
Lender under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Lender that has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other Lender’s Pro
Rata Share of all payments subsequently received by such Issuing Lender from
Company in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request.

 

D. Interest on Amounts Paid Under Letters of Credit.

 

(i) Payment of Interest by Company. Company agrees to pay to each Issuing
Lender, with respect to drawings honored under any Letters of Credit issued by
it, interest on the amount paid by such Issuing Lender in respect of each such
honored drawing from the date such drawing is honored to but excluding the date
such amount is reimbursed by Company (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to
(a) for the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with respect to
Revolving Loans that are Base Rate Loans and (b) thereafter, a rate which is 2%
per annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans. Interest
payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a
365-day year for the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is made, on the date on
which the related drawing under a Letter of Credit is reimbursed in full.

 

(ii) Distribution of Interest Payments by Issuing Lender. Promptly upon receipt
by any Issuing Lender of any payment of interest pursuant to subsection 3.3D(i)
with respect to a drawing honored under a Letter of Credit issued by it, (a)
such Issuing Lender shall distribute to each other Lender, out of the interest
received by such Issuing Lender in respect of the period from the date such
drawing is honored to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that
such other Lender would have been entitled to receive in respect of the letter
of credit fee that would have been payable in respect of such Letter of Credit
for such period pursuant to subsection 3.2 if no drawing had been honored under
such Letter of Credit, and (b) in the event such Issuing Lender shall have been

 

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reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to each
other Lender that has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Lender’s Pro Rata Share of any
interest received by such Issuing Lender in respect of that portion of such
honored drawing so reimbursed by other Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other Lenders to but excluding
the date on which such portion of such honored drawing is reimbursed by Company.
Any such distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such other address
as such Lender may request.

 

3.4 Obligations Absolute.

 

The obligation of Company to reimburse each Issuing Lender for drawings honored
under the Letters of Credit issued by it and to repay any Revolving Loans made
by Lenders pursuant to subsection 3.3B and the obligations of Lenders under
subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances
including any of the following circumstances:

 

(i) any lack of validity or enforceability of any Letter of Credit;

 

(ii) the existence of any claim, set-off, defense or other right which Company
or any Lender may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any such transferee may be
acting), any Issuing Lender or other Lender or any other Person or, in the case
of a Lender, against Company, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries and the
beneficiary for which any Letter of Credit was procured);

 

(iii) any draft or other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

 

(iv) payment by the applicable Issuing Lender under any Letter of Credit against
presentation of a draft or other document which does not substantially comply
with the terms of such Letter of Credit;

 

(v) the occurrence or existence of any Material Adverse Effect;

 

(vi) any breach of this Agreement or any other Loan Document by any party
thereto; or

 

(vii) the fact that an Event of Default or a Potential Event of Default shall
have occurred and be continuing;

 

provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing

 

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Lender under the circumstances in question (as determined by a final judgment of
a court of competent jurisdiction).

 

3.5 Indemnification; Nature of Issuing Lenders’ Duties.

 

A. Indemnification. In addition to amounts payable as provided in subsection
3.6, Company hereby agrees to protect, indemnify, pay and save harmless each
Issuing Lender from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel) which such Issuing Lender actually incurs
or is subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit by such Issuing Lender, other than as a result of (a) the
gross negligence or willful misconduct of such Issuing Lender as determined by a
final judgment of a court of competent jurisdiction or (b) subject to the
following clause (ii), the wrongful dishonor by such Issuing Lender of a proper
demand for payment made under any Letter of Credit issued by it or (ii) the
failure of such Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority (all
such acts or omissions herein called “Governmental Acts”).

 

B. Nature of Issuing Lenders’ Duties. As between Company and any Issuing Lender,
Company assumes all risks of the acts and omissions of, or misuse of the Letters
of Credit issued by such Issuing Lender by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in limitation of the foregoing, such
Issuing Lender shall not be responsible for: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any such Letter
of Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of such Issuing Lender,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender’s rights or powers
hereunder.

 

In furtherance and extension and not in limitation of the specific provisions
set forth in the first paragraph of this subsection 3.5B, any action taken or
omitted by any Issuing Lender under or in connection with the Letters of Credit
issued by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put such Issuing Lender under any resulting
liability to Company.

 

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Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.

 

3.6 Increased Costs and Taxes Relating to Letters of Credit.

 

Subject to the provisions of subsection 2.7B (which shall be controlling with
respect to the matters covered thereby), in the event that any Issuing Lender or
Lender shall determine (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto) that any law, treaty
or governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or Governmental Authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-Governmental Authority
(whether or not having the force of law):

 

(i) subjects such Issuing Lender or Lender (or its applicable lending or letter
of credit office) to any additional Tax (other than any Tax on the overall net
income of such Issuing Lender or Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or maintaining of any
participations therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any particular Issuing
Lender;

 

(ii) imposes, modifies or holds applicable any reserve (including any marginal,
emergency, supplemental, special or other reserve), special deposit, compulsory
loan, FDIC insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by any Lender;
or

 

(iii) imposes any other condition (other than with respect to a Tax matter) on
or affecting such Issuing Lender or Lender (or its applicable lending or letter
of credit office) regarding this Section 3 or any Letter of Credit or any
participation therein;

 

and the result of any of the foregoing is to increase the actual cost to such
Issuing Lender or Lender of agreeing to issue, issuing or maintaining any Letter
of Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder; provided, however, that Company shall not be obligated to
pay such Issuing Lender or Lender any compensation attributable to any period
prior to the date that is 60 days prior to the date on which such Issuing Lender
or Lender gave notice to Company of the circumstances entitling such Issuing
Lender or Lender to compensation. Such Issuing Lender or Lender shall deliver to
Company a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed

 

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to such Issuing Lender or Lender under this subsection 3.6, which statement
shall be conclusive and binding upon all parties hereto absent manifest error.

 

3.7 Confirmation of Letters of Credit Issued Under Existing Credit Agreement.

 

All Letters of Credit issued under the Existing Credit Agreement outstanding on
the Closing Date shall be deemed Letters of Credit issued hereunder.

 

Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT AND EFFECTIVENESS OF
AGREEMENT

 

The conditions to the making of the initial Loans, to the effectiveness of this
Agreement and to the making of subsequent Loans and the issuance of Letters of
Credit are set forth herein as follows:

 

4.1 Conditions to Initial Revolving Loans and Swing Line Loans.

 

The obligations of Lenders to make any Revolving Loans and Swing Line Loans to
be made on the Closing Date are, in addition to the conditions precedent
specified in subsection 4.2, subject to prior or concurrent satisfaction or
waiver of the following conditions:

 

A. Loan Party Documents. On or before the Closing Date, Company shall and shall
cause each other Loan Party to, deliver, to Lenders (or to Administrative Agent
for Lenders with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:

 

(i) Copies of the Organizational Documents of such Person, certified by the
Secretary of State of its jurisdiction of organization if such certification is
generally available and in each other case, by such Person’s secretary or
assistant secretary, in each case dated a recent date prior to the Closing Date;

 

(ii) To the extent generally available, a good standing certificate from the
Secretary of State of its jurisdiction of organization and a certificate or
other evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of such jurisdiction, each
dated a recent date prior to the Closing Date;

 

(iii) Resolutions of the Board of Directors of such Person approving and
authorizing the execution, delivery and performance of the Loan Documents to
which it is a party, certified as of the Closing Date by the corporate secretary
or an assistant secretary of such Person as being in full force and effect
without modification or amendment;

 

(iv) Signature and incumbency certificates of the officers of such Person
executing the Loan Documents to which it is a party;

 

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(v) Executed originals of the Notes and the other Loan Documents to which such
Person is a party; and

 

(vi) Such other documents as Administrative Agent may reasonably request.

 

B. No Material Adverse Effect. Since October 30, 2004 there has occurred no
Material Adverse Effect.

 

C. Corporate and Capital Structure, Ownership, Etc.

 

(i) Corporate Structure. The corporate organizational structure of Holdings and
its Subsidiaries is as set forth in Schedule 4.1C annexed hereto.

 

(ii) Capital Structure and Ownership. The capital structure and ownership of
Holdings and its Subsidiaries is as set forth in Schedule 4.1C annexed hereto.

 

D. Matters Relating to Existing Indebtedness. On the Closing Date, (i) Holdings
and its Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the then Existing Credit Agreement, (b) terminated any commitments to lend
or make other extensions of credit thereunder, and (c) delivered to
Administrative Agent all documents or instruments necessary to release all Liens
securing Indebtedness or other obligations of Holdings and its Subsidiaries
thereunder, other than Liens permitted pursuant to Section 7.2A, and (ii)
Holdings and its Subsidiaries shall have no existing Indebtedness outstanding
other than (a) the Senior Subordinated Notes, (b) existing Capital Leases and
(c) other existing Indebtedness in an aggregate amount not exceeding $2,500,000.

 

E. Necessary Governmental Authorizations and Third Party Consents; Expiration of
Waiting Periods, Etc. Each Loan Party shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Loan Documents, and each of the foregoing shall be in full force and effect, in
each case other than those the failure to obtain or maintain which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable Governmental Authority to take
action to set aside its consent on its own motion shall have expired.

 

F. Security Interests in Personal Property. Administrative Agent shall have
received evidence satisfactory to it that each Loan Party shall have taken or
caused to be taken all such actions, executed and delivered or caused to be
executed and delivered all such agreements, documents and instruments, and made
or caused to be made all such filings and recordings (other than the filing or
recording of items described in clauses (iii) below) that are necessary or, in
the opinion of Administrative Agent, desirable in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and (upon such filing
and recording) perfected First Priority security interest in the entire personal
property Collateral (other than Collateral that constitutes fixtures). Such
actions shall include the following:

 

(i) Stock Certificates and Instruments. Delivery to Administrative Agent of (a)
certificates (which certificates shall be accompanied by irrevocable undated
stock powers, duly endorsed in blank and otherwise satisfactory in form and
substance to Administrative Agent) representing all Capital Stock pledged
pursuant to the Security Agreement, and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Administrative Agent) evidencing any Collateral with a fair market value or a
face amount in excess of $500,000;

 

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(ii) Lien Searches and UCC Termination Statements. Delivery to Administrative
Agent of (a) the results of a recent search, by a Person satisfactory to
Administrative Agent, of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of any Loan Party, together with
copies of all such filings disclosed by such search, and (b) duly completed UCC
termination statements, and authorization of the filing thereof from the
applicable secured party, as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other than any
such financing statements or fixture filings in respect of Liens permitted to
remain outstanding pursuant to the terms of this Agreement); and

 

(iii) UCC Financing Statements. Delivery to Administrative Agent of duly
completed UCC financing statements (excluding fixture filings), with respect to
all personal property Collateral of such Loan Party, for filing in all
jurisdictions as may be necessary or, in the opinion of Administrative Agent,
desirable to perfect the security interests created in such Collateral pursuant
to the Collateral Documents.

 

(iv) Cover Sheets, Etc. Delivery to Administrative Agent of all cover sheets or
other documents or instruments required to be filed with any IP Filing Office in
order to create or perfect Liens in respect of the IP Collateral identified on
Schedule 4.1F annexed hereto, together with releases duly executed (if
necessary) of security interests by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective filings
in any IP Filing Office in respect of any IP Collateral (other than any such
filings in respect of Liens permitted to remain outstanding pursuant to the
terms of this Agreement); provided, however, that Administrative Agent may, in
its sole discretion, waive delivery and filing of such items with respect to IP
Collateral which Administrative Agent deems immaterial and of insufficient value
to justify the cost of preparing and filing such matters;

 

(v) Control Agreements. Delivery to Administrative Agent of Control Agreements
with financial institutions and other Persons in order to perfect Liens in
respect of Deposit Accounts, Securities Accounts and other Collateral pursuant
to the Collateral Documents, in each case, with a value in excess of $1,000,000;
provided, however, that Administrative Agent may, in its sole discretion, waive
delivery of Control Agreements with respect to Deposit Accounts and Securities
Accounts which Administrative Agent deems immaterial and of insufficient value
to justify the cost of preparing and negotiating such Control Agreements;

 

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G. Financial Statements; Pro Forma Balance Sheet. On or before the Closing Date,
Lenders shall have received from Company (i) audited financial statements for
Company and its Subsidiaries for the Fiscal Year ended January 31, 2004,
consisting of consolidated balance sheets and the related consolidated
statements of income, stockholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures for the
previous Fiscal Year, (ii) unaudited financial statements for Company and its
Subsidiaries for the Fiscal Quarter ended October 30, 2004 and any monthly
fiscal period ended subsequent to October 30, 2004 for which financial
statements can be prepared, in each case consisting of balance sheets and the
related consolidated statements of income and cash flows for such period,
setting forth in each case in comparative form the corresponding figures for the
corresponding period of the previous Fiscal Year, (iii) pro forma consolidated
balance sheets of Holdings and its Subsidiaries as at the Closing Date, prepared
in accordance with GAAP and reflecting the transactions contemplated by the Loan
Documents, and (iv) annual projected financial statements of Holdings and its
Subsidiaries for the five-year period immediately following the Closing Date,
consisting of balance sheets and the related statements of operations and cash
flows for such period, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent.

 

H. Evidence of Insurance. Administrative Agent shall have received certificates
of insurance in form reasonably satisfactory to the Administrative Agent
evidencing that all insurance required to be maintained pursuant to subsection
6.4 is in full force and effect and that Administrative Agent on behalf of
Lenders has been named as additional insured and/or loss payee thereunder to the
extent required under subsection 6.4.

 

I. Opinions of Counsel to Loan Parties. Lenders shall have received originally
executed copies of one or more favorable written opinions of Latham and Watkins
LLP, counsel for Loan Parties, in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated as of the Closing Date and setting
forth substantially the matters in the opinions designated in Exhibit VIII
annexed hereto.

 

J. Fees. Company shall have paid to Administrative Agent, for distribution (as
appropriate) to Administrative Agent and Lenders, the fees payable on the
Closing Date referred to in subsection 2.3.

 

K. Representations and Warranties; Performance of Agreements. Company shall have
delivered to Administrative Agent and Lenders an Officer’s Certificate, in form
and substance reasonably satisfactory to Administrative Agent, to the effect
that the representations and warranties in Section 5 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company has performed in all
material respects all agreements and satisfied all conditions which this
Agreement provides shall have been performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Lenders.

 

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L. Completion of Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incidental thereto not previously found acceptable by Administrative Agent,
acting on behalf of Lenders, and its counsel shall be reasonably satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

 

4.2 Conditions to All Loans.

 

The obligations of each Lender to make its Loans on each Funding Date are
subject to the following further conditions precedent:

 

A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, a duly executed Notice of
Borrowing, in each case signed by the chief financial officer, the
vice-president/controller or the treasurer of Company or by any executive
officer of Company designated by any of the above-described officers on behalf
of Company in a writing delivered to Administrative Agent.

 

B. As of that Funding Date:

 

(i) The representations and warranties contained herein and in the other Loan
Documents shall be true, correct and complete in all material respects on and as
of that Funding Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true, correct and complete in all material respects on and as of such
earlier date;

 

(ii) No event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by such Notice of Borrowing that
would constitute an Event of Default or a Potential Event of Default;

 

(iii) Each Loan Party shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by it on or before that Funding Date;

 

(iv) No order, judgment or decree of any court, arbitrator or Governmental
Authority shall purport to enjoin or restrain any Lender from making the Loans
to be made by it on that Funding Date; and

 

(v) The making of the Loans requested on such Funding Date shall not violate any
law applicable to the Loan Parties, including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.

 

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4.3 Conditions to Letters of Credit.

 

The issuance of any Letter of Credit hereunder (whether or not the applicable
Issuing Lender is obligated to issue such Letter of Credit) is subject to the
following conditions precedent:

 

A. On or before the date of issuance of the initial Letter of Credit pursuant to
this Agreement, the initial Loans shall have been made.

 

B. On or before the date of issuance of such Letter of Credit, Administrative
Agent shall have received, in accordance with the provisions of subsection
3.1B(i), a Notice of Issuance of Letter of Credit, in each case signed by the
chief financial officer, the vice-president/controller or the treasurer of
Company or by any executive officer of Company designated by any of the
above-described officers on behalf of Company in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.

 

C. On the date of issuance of such Letter of Credit, all conditions precedent
described in subsection 4.2B shall be satisfied to the same extent as if the
issuance of such Letter of Credit were the making of a Loan and the date of
issuance of such Letter of Credit were a Funding Date.

 

Section 5. COMPANY’S REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Agreement and to make the Loans,
to induce the Issuing Lender to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Company represents and warrants to
each Lender, on the date of this Agreement, on each Funding Date and on the date
of issuance of each Letter of Credit, that the following statements are true,
correct and complete in all material respects:

 

5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.

 

A. Organization and Powers. Each Loan Party is duly organized, and is validly
existing and in good standing under the laws of its jurisdiction of organization
as specified in Schedule 5.1A annexed hereto. Each Loan Party has all requisite
power and authority to own and operate its properties, to carry on its business
as now conducted and as proposed to be conducted, to enter into the Loan
Documents to which it is a party and to carry out the transactions contemplated
thereby.

 

B. Qualification and Good Standing. Each Loan Party is qualified to do business
and in good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and would not reasonably be expected to have a Material Adverse Effect.

 

C. Conduct of Business. Holdings and its Subsidiaries are engaged only in the
businesses permitted to be engaged in pursuant to subsection 7.12.

 

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D. Subsidiaries. All of the Subsidiaries of Holdings, as well as the ownership
interests of each in their respective Subsidiaries, are identified in Schedule
5.1A annexed hereto, as said Schedule 5.1A may be supplemented from time to time
pursuant to the provisions of subsection 6.1(xi). The Capital Stock of Holdings
and of each of the Subsidiaries of Holdings identified in Schedule 5.1A annexed
hereto (as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of the Capital Stock of such Subsidiaries constitutes
Margin Stock. Each of the Subsidiaries of Holdings identified in Schedule 5.1A
annexed hereto (as so supplemented) is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of organization set
forth therein, has all requisite power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such power and authority has not had
and would not reasonably be expected to have a Material Adverse Effect.

 

E. Options and Other Rights. As of the Closing Date, except with respect to
outstanding options and options reserved for issuance under Holdings’ option
plans, there are no outstanding subscriptions, warrants, calls, options, rights
(including unsatisfied preemptive rights), commitments or agreements to which
Holdings or any of its Subsidiaries is bound that permit or entitle any Person
to purchase or otherwise receive from or to be issued any shares of Capital
Stock of Holdings or any of its Subsidiaries or any security or obligation of
any kind convertible into any class of Capital Stock of Holdings or any of its
Subsidiaries. Neither Holdings nor any of its Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its Capital Stock.

 

5.2 Authorization of Borrowing, etc.

 

A. Authorization of Borrowing. The execution, delivery and performance of the
Loan Documents have been duly authorized by all necessary action on the part of
each Loan Party that is a party thereto.

 

B. No Conflict. The execution, delivery and performance by Loan Parties of the
Loan Documents to which they are parties and the consummation of the
transactions contemplated by the Loan Documents do not and will not (i) violate
any provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, the Organizational Documents of Holdings or
any of its Subsidiaries or any order, judgment or decree of any court or other
Governmental Authority binding on Holdings or any of its Subsidiaries, (ii)
except as set forth in Schedule 5.2B annexed hereto, conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Holdings or any of its Subsidiaries, which
breach or default would reasonably be expected to have a Material Adverse
Effect, (iii) result in or require the creation or imposition of any Lien upon
any of the properties or assets of Holdings or any of its Subsidiaries (other
than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) except as set forth in
Schedule 5.2B annexed hereto, require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries, except for such approvals or consents which will be
obtained

 

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on or before the Closing Date and disclosed in writing to Lenders or for which
the failure to obtain such approval or consent would not reasonably be expected
to result in a Material Adverse Effect.

 

C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents to which they are parties and the consummation of
the transactions contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other Governmental Authority or regulatory
body, except for those registrations, consents, approvals, notices or other
actions which have been obtained on or before the Closing Date.

 

D. Binding Obligation. Each of the Loan Documents has been duly executed and
delivered by each Loan Party that is a party thereto and is the legally valid
and binding obligation of such Loan Party, enforceable against such Loan Party
in accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles relating to
enforceability.

 

E. Valid Issuance of Company Stock. The Capital Stock of Holdings is duly and
validly issued, fully paid and nonassessable. The issuance and sale of such
Capital Stock either (a) has been registered or qualified under applicable
federal and state securities laws or (b) was exempt therefrom.

 

F. Subordination of Senior Subordinated Notes. This Agreement constitutes the
Senior Credit Facility referenced in the Senior Subordinated Note Indenture and
the Obligations are “Designated Senior Debt” as defined in Article 10 of the
Senior Subordinated Note Indenture, such that the Senior Subordinated Notes are
subordinated to the Obligations in the manner provided in Article 10 of the
Senior Subordinated Note Indenture.

 

5.3 Financial Condition.

 

Company has heretofore delivered to Lenders, at Lenders’ request, the following
financial statements and information: (i) the audited consolidated balance
sheets of Company and its Subsidiaries as at January 31, 2004, and the related
consolidated statements of income, and cash flows of Company and its
Subsidiaries for the Fiscal Year then ended; and (ii) the unaudited consolidated
balance sheets of Company and its Subsidiaries as at October 30, 2004, and the
related unaudited consolidated statements of income, and cash flows of Company
and its Subsidiaries for the nine months then ended. All such statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. Neither Holdings nor any of its Subsidiaries has (and will
not following the funding of the initial Loans have) any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual forward
or long-term commitment that is required in accordance with GAAP to be reflected
in the foregoing financial statements or the notes thereto and that is not so
reflected and which in

 

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any such case is material in relation to the business, operations, properties,
assets or financial condition of Holdings and its Subsidiaries, taken as a
whole.

 

5.4 No Material Adverse Change; No Restricted Junior Payments.

 

Since October 30, 2004, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Neither Holdings nor any of its Subsidiaries has directly or indirectly
declared, ordered, paid or made, or set apart any sum or property for, any
Restricted Junior Payment or agreed to do so except as permitted by subsection
7.5.

 

5.5 Title to Properties; Liens; Intellectual Property.

 

A. Holdings and its Subsidiaries have (i) good, sufficient and legal title to
(in the case of fee interests in real property), (ii) valid leasehold or
subleasehold, as applicable, interests in (in the case of leasehold or
subleasehold, as applicable, interests in material real or personal property),
subject to customary subordinations, if any, in favor of the lender of the fee
owner of such property, or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, except, in the case
of each of clauses (i), (ii) and (iii) above, (a) for assets disposed of since
the date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7 or (b) to the extent that the failure
to have such title would not reasonably be expected to have a Material Adverse
Effect. Except as permitted by this Agreement, all such properties and assets
are free and clear of Liens other than Liens which do not materially interfere
with the present use thereof.

 

B. Intellectual Property. As of the Closing Date, Holdings and its Subsidiaries
own or have the right to use, all Intellectual Property used in the conduct of
their business, except where the failure to own or have such right to use in the
aggregate would not reasonably be expected to result in a Material Adverse
Effect. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does Company know of any
valid basis for any such claim, except for such claims that in the aggregate
would not reasonably be expected to result in a Material Adverse Effect. To the
knowledge of Company, the use of such Intellectual Property by Holdings and its
Subsidiaries does not infringe on the rights of any Person, except for such
claims and infringements that, in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect. All federal, state and foreign
registrations of and applications for Intellectual Property, and all
unregistered Intellectual Property, that are owned or licensed by Holdings or
any of its Subsidiaries on the Closing Date are described on Schedule 5.5
annexed hereto.

 

5.6 Litigation; Adverse Facts.

 

Except as set forth in Schedule 5.6, there are no actions, suits, proceedings,
arbitrations or governmental investigations (whether or not purportedly on
behalf of any Loan Party) at law or in equity, or before or by any Governmental
Authority (including any

 

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Environmental Claims) that are pending or, to the knowledge of Company,
threatened against any Loan Party or any property of any Loan Party (i) as to
which there is a reasonable likelihood of success or (ii) that involves any of
the Loan Documents and that, if adversely determined, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Effect.
No Loan Party (a) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect, or (b) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or Governmental Authority that, individually or in
the aggregate, would reasonably be expected to result in a Material Adverse
Effect.

 

5.7 Payment of Taxes.

 

Except to the extent permitted by subsection 6.3 and except as set forth on
Schedule 5.7, all material tax returns and reports of Holdings and its
Subsidiaries required to be filed by any of them have been timely filed (taking
into account all available extensions), and all taxes shown on such tax returns
to be due and payable and all assessments, fees and other governmental charges
upon Holdings and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid
(other than any taxes the amount or validity of which is being contested in a
manner consistent with subsection 6.3A) except to the extent that the failure to
file such returns or pay such taxes would not reasonably be expected to have a
Material Adverse Effect.

 

5.8 Material Contracts.

 

Schedule 5.8 contains a true, correct and complete list of all the Material
Contracts in effect on the Closing Date. Except as set forth on Schedule 5.8,
all such Material Contracts are in full force and effect and no material
defaults currently exist thereunder.

 

5.9 Governmental Regulation.

 

Neither Holdings nor any of its Subsidiaries is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.

 

5.10 Securities Activities.

 

A. Neither Holdings nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.

 

B. Following application of the proceeds of each Loan, not more than 25% of the
value of the assets (either of Company only or of Holdings and its Subsidiaries
on a consolidated basis) subject to the provisions of subsection 7.2 or 7.7 or
subject to any restriction contained in any agreement or instrument, between
Holdings or any of its Subsidiaries and any Lender or any

 

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Affiliate of any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.

 

5.11 Employee Benefit Plans.

 

A. Holdings, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan except to the extent that any non-compliance or
failure to perform would not reasonably be expected to have a Material Adverse
Effect.

 

B. No ERISA Event that is reasonably likely to result in a Material Adverse
Effect has occurred or is reasonably expected to occur.

 

C. As of the most recent valuation date for any Pension Plan, the amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $5,000,000. Schedule 5.11C sets forth a
complete list of the Loan Parties’ Employee Benefit Plans as of the Closing
Date.

 

D. As of the most recent valuation date for each Multiemployer Plan for which
the actuarial report is available and based solely on information, if any,
provided to the Loan Parties by such Multiemployer Plan, the potential liability
of Holdings, each of its Subsidiaries, its Subsidiaries and their respective
ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within
the meaning of Section 4203 of ERISA), when aggregated with such potential
liability for a complete withdrawal from all Multiemployer Plans, based on
information available pursuant to Section 4221(e) of ERISA, does not exceed an
amount that would reasonably be expected to have a Material Adverse Effect.

 

5.12 Certain Fees.

 

Except for Transaction Costs, no broker’s or finder’s fee or commission will be
payable by Holdings or any of its Subsidiaries with respect to this Agreement or
any of the transactions contemplated hereby, and Company hereby indemnifies
Lenders against, and agrees that it will hold Lenders harmless from, any claim,
demand or liability for any such broker’s or finder’s fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.

 

5.13 Environmental Protection.

 

Except as set forth in Schedule 5.13 annexed hereto:

 

(i) neither Holdings nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order, consent
decree or settlement agreement with any Person relating to (a) any Environmental
Law, (b) any

 

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Environmental Claim, or (c) any Hazardous Materials Activity that, in the case
of each of clause (a), (b) or (c) above, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect;

 

(ii) neither Holdings nor any of its Subsidiaries has received any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable
state law;

 

(iii) there are and, to Company’s knowledge, have been no conditions,
occurrences, or Hazardous Materials Activities that would reasonably be expected
to form the basis of an Environmental Claim against Holdings or any of its
Subsidiaries that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect;

 

(iv) neither Holdings nor any of its Subsidiaries nor, to Company’s knowledge,
any predecessor of Holdings or any of its Subsidiaries has filed any notice
under any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and none of Holdings’ or any of its Subsidiaries’
operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent which individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect; and

 

(v) compliance with all current requirements pursuant to or under Environmental
Laws will not, individually or in the aggregate, have a reasonable likelihood of
giving rise to a Material Adverse Effect.

 

Notwithstanding anything in this subsection 5.13 to the contrary, no event or
condition is occurring, or to Company’s knowledge has occurred, with respect to
Holdings or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity, including
any matter disclosed on Schedule 5.13 annexed hereto, which individually or in
the aggregate would reasonably be expected to have a Material Adverse Effect.

 

5.14 Employee Matters.

 

There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that would reasonably be expected to result
in a Material Adverse Effect.

 

5.15 Solvency.

 

Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.

 

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5.16 Matters Relating to Collateral.

 

A. Creation, Perfection and Priority of Liens. The execution and delivery of the
Collateral Documents by Loan Parties, together with (i) the actions taken on or
prior to the date hereof pursuant to subsections 4.1 and 6.8 and (ii) the
delivery to Administrative Agent of any Pledged Collateral not delivered to
Administrative Agent at the time of execution and delivery of the applicable
Collateral Document (all of which Pledged Collateral has been so delivered) are
effective to create in favor of Administrative Agent for the benefit of Lenders,
as security for the respective Secured Obligations (as defined in the applicable
Collateral Document in respect of any Collateral), a valid and perfected First
Priority Lien on all of the Collateral (other than any portion of such
Collateral with respect to which the Lien in favor of Administrative Agent for
the benefit of Lenders is not required to be perfected as contemplated by
subsection 4.1F above), and all filings and other actions necessary or desirable
to perfect and maintain the perfection and First Priority status of such Liens
have been duly made or taken and remain in full force and effect, other than the
filing of any UCC financing statements delivered to Administrative Agent for
filing or recording, as applicable (but not yet filed or recorded) and the
periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.

 

B. Governmental Authorizations. No authorization, approval or other action by,
and no notice to or filing with, any Governmental Authority is required for
either (i) the pledge or grant by any Loan Party of the Liens purported to be
created in favor of Administrative Agent pursuant to any of the Collateral
Documents or (ii) the exercise by Administrative Agent of any rights or remedies
in respect of any Collateral (whether specifically granted or created pursuant
to any of the Collateral Documents or created or provided for by applicable
law), except for filings or recordings contemplated by subsection 5.16A and
except as may be required, in connection with the disposition of any Pledged
Collateral, by laws generally affecting the offering and sale of securities.

 

C. Absence of Third-Party Filings. Except such as may have been filed in favor
of Administrative Agent as contemplated by subsection 5.16A or as permitted by
subsection 7.2, (i) no effective UCC financing statement, fixture filing or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office and (ii) no effective filing covering
all or any part of the IP Collateral is on file in any IP Filing Office.

 

D. Margin Regulations. The pledge of the Pledged Collateral pursuant to the
Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.

 

E. Information Regarding Collateral. All information supplied to Administrative
Agent by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.

 

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5.17 Disclosure.

 

The information furnished to Lenders by or on behalf of Company in connection
with the transactions contemplated by this Agreement, together with the
representations and warranties of Holdings and its Subsidiaries contained in the
Loan Documents and in any other documents, certificates and written statements
furnished to Lenders by or on behalf of Holdings or any of its Subsidiaries or
for use in connection with the transactions contemplated by this Agreement,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state a material fact (known to Company, in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were made
(in each case taken as a whole). Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Company to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results.

 

5.18 Foreign Assets Control Regulations, etc.

 

Neither the making of the Loans to, or issuance of Letters of Credit on behalf
of, Company nor its use of the proceeds thereof will violate the Trading with
the Enemy Act, as amended, or any of the foreign assets control regulations of
the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto.
Without limiting the foregoing, none of the Loan Parties or their Affiliates (a)
is or will become a Person whose property or interests in property are blocked
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) or (b) knowingly
engages or will knowingly engage in any dealings or transactions, or be
otherwise associated, with any such Person. The Loan Parties and their
Affiliates are in compliance, in all material respects, with the Uniting And
Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of 2001).

 

Section 6. AFFIRMATIVE COVENANTS OF COMPANY

 

Company covenants and agrees that, so long as any of the Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other
Obligations and the cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform, and shall cause each of Holdings and its Subsidiaries to perform, all
covenants in this Section 6.

 

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6.1 Financial Statements and Other Reports.

 

Company will maintain, and cause Holdings and each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Administrative Agent:

 

(i) Quarterly Financials: as soon as available and in any event within 45 days
after the close of each of the first three Fiscal Quarters in each Fiscal Year
of Holdings, to the extent prepared to comply with the requirements of the
Securities and Exchange Commission, a copy of Holdings’ report on Form 10-Q
filed with the Securities and Exchange Commission for such Fiscal Quarter, or,
if no such Form 10-Q was filed by Holdings, (a) the consolidated balance sheets
of Holdings and its Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of earnings and cash flows of Holdings and its
Subsidiaries for such Fiscal Quarter and for the period from the beginning of
the then current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of Holdings that they fairly present, in all
material respects, the financial condition of Holdings and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments, and (b) a narrative report describing the operations of
Holdings and its Subsidiaries in a form reasonably satisfactory to
Administrative Agent.

 

(ii) Year-End Financials: as soon as available and in any event within 90 days
after the end of each Fiscal Year, to the extent prepared to comply with the
requirements of the Securities and Exchange Commission, a copy of Holdings’
report on Form 10-K filed with the Securities and Exchange Commission for such
Fiscal Year, or, if no such Form 10-K was filed by Holdings, (a) the
consolidated balance sheets of Holdings and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated statements of earnings,
stockholders’ equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of Holdings that they fairly present, in all
material respects, the financial condition of Holdings and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, (b) a narrative report describing the operations of
Holdings and its Subsidiaries in a form reasonably satisfactory to
Administrative Agent, and (c) in the case of such consolidated financial
statements, a report thereon of KPMG or other independent certified public
accountants of recognized national standing selected by Holdings and reasonably
satisfactory to Administrative Agent, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards;

 

(iii) Officer’s and Compliance Certificates: together with each delivery of
financial statements of Holdings and its Subsidiaries pursuant to subdivisions
(i) and (ii) above, (a) an Officer’s Certificate of Holdings stating that the
signer has reviewed the

 

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terms of this Agreement and has made, or caused to be made under such signer’s
supervision, a review in reasonable detail of the transactions and condition of
Holdings and its Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signer does not have
knowledge of the existence as at the date of such Officer’s Certificate, of any
condition or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Holdings has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at the end
of the applicable accounting periods with the restrictions contained in Section
7, in each case to the extent compliance with such restrictions is required to
be tested at the end of the applicable accounting period;

 

(iv) Accountants’ Certification: together with each delivery of consolidated
financial statements of Holdings and its Subsidiaries pursuant to subdivision
(ii) above, a written statement by the independent certified public accountants
giving the report thereon stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of Default under
Section 7 has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any failure to
obtain knowledge of any such Event of Default that would not be disclosed in the
course of their audit examination;

 

(v) SEC Filings and Press Releases: promptly upon their becoming available,
copies of (a) all annual reports and proxy statements sent or made available
generally by Holdings to its security holders or by any Subsidiary of Holdings
to its security holders other than Holdings or another Subsidiary of Holdings,
(b) all regular and periodic reports and all registration statements (other than
on Form S-8 or a similar form) and prospectuses, if any, filed by Holdings or
any of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority, and (c)
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 and its Subsidiaries, taken as a whole;

 

(vi) Events of Default, etc.: promptly upon any officer of Holdings obtaining
knowledge (a) of any condition or event that constitutes an Event of Default or
Potential Event of Default, (b) that any Person has given any notice to Holdings
or any of its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2, or (c)
of the occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officer’s
Certificate specifying the nature and period of existence of such condition,
event or change, or specifying the notice given or action taken by any such
Person and the nature of such claimed Event of Default, Potential Event of
Default, default, event or condition, and what action Holdings has taken, is
taking and proposes to take with respect thereto;

 

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(vii) Litigation or Other Proceedings: (a) promptly upon any officer of Holdings
obtaining knowledge of (X) the institution of, or non-frivolous threat of, any
action, suit, proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting Holdings or any
of its Subsidiaries or any property of Holdings or any of its Subsidiaries
(collectively, “Proceedings”) not previously disclosed in writing by Holdings to
Lenders or (Y) any material development in any Proceeding that, in any case:

 

(a) if adversely determined, would reasonably be expected to give rise to a
Material Adverse Effect; or

 

(b) seeks to enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated hereby;

 

written notice thereof together with such other information as may be reasonably
available to the Loan Parties to enable Lenders and their counsel to evaluate
such matters;

 

(viii) ERISA Events: promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;

 

(ix) ERISA Notices: with reasonable promptness, copies of (a) each Schedule B
(Actuarial Information) to the annual report (Form 5500 Series) filed by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
with the Internal Revenue Service with respect to each Pension Plan; (b) all
notices received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (c) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;

 

(x) Intellectual Property: annually provide written notice of any material
change in the Intellectual Property set forth in Schedule 5.5 (it being
understood that such written notice shall be deemed to supplement Schedule 5.5
annexed hereto for all purposes of this Agreement);

 

(xi) New Subsidiaries: promptly upon any Person becoming a Subsidiary of
Holdings (unless such Subsidiary will be promptly merged out of existence), a
written notice setting forth with respect to such Person (a) the date on which
such Person became a Subsidiary of Holdings and (b) all of the data required to
be set forth in Schedule 5.1A annexed hereto with respect to all Subsidiaries of
Holdings (it being understood that such written notice shall be deemed to
supplement Schedule 5.1A annexed hereto for all purposes of this Agreement);

 

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(xii) Margin Determination Certificate: together with each delivery of financial
statements pursuant to subdivisions (i) and (ii) above for the Fiscal Quarter
ending July 30, 2005 and each Fiscal Quarter thereafter, a Margin Determination
Certificate demonstrating in reasonable detail the calculation of the
Consolidated Total Leverage Ratio for the four consecutive Fiscal Quarters
ending on the day of the accounting period covered by such financial statements;
and

 

(xiii) Other Information: with reasonable promptness, such other information and
data with respect to Holdings or any of its Subsidiaries as from time to time
may be reasonably requested by the Administrative Agent.

 

6.2 Corporate Existence, etc.

 

Except as permitted under subsection 7.7, Company will, and will cause Holdings
and each of its Subsidiaries to, at all times preserve and keep in full force
and effect its corporate existence and all rights and franchises material to its
business; provided, however, that no Loan Party shall be required to preserve
any such right or franchise if the Board of Directors of any Loan Party shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of such Loan Party, as the case may be, and that the loss thereof
is not disadvantageous in any material respect to Holdings and its Subsidiaries,
taken as a whole, or Lenders.

 

6.3 Payment of Taxes and Claims; Tax Consolidation.

 

A. Company will, and will cause Holdings and each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; provided that no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (i) a reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made
therefor and (ii) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.

 

B. Company will not, nor will it permit Holdings or any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Holdings or any of its Subsidiaries).

 

6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.

 

A. Maintenance of Properties. Company will, and will cause Holdings and each of
its Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear and loss or damage from casualty
excepted, all material properties used or useful in the business of Holdings and
its Subsidiaries (including all

 

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Intellectual Property) and from time to time will make or use its reasonable
efforts to cause to be made all appropriate repairs, renewals and replacements
thereof.

 

B. Insurance. Company will maintain or cause to be maintained, with financially
sound and reputable insurers or the Captive Insurance Company, such public
liability insurance, third party property damage insurance, business
interruption insurance and Casualty Insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Holdings
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for corporations similarly situated in the industry. Each
such policy of insurance shall (a) name Administrative Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (b)
in the case of each business interruption and Casualty Insurance policy, contain
a loss payable clause or endorsement, reasonably satisfactory in form and
substance to Administrative Agent, in the case of losses over $1,000,000, that
names Administrative Agent for the benefit of Lenders as a loss payee thereunder
and provides for at least 30 days prior written notice to Administrative Agent
of any significant modification or cancellation of such policy. The Captive
Insurance Company will be capitalized in accordance with applicable law(s) and
will maintain, with financially sound and reputable reinsurers, such reinsurance
as may customarily be carried or maintained under similar circumstances by
insurers of established reputation engaged in similar businesses with similar
capitalization, in each case in such amounts, at such levels, covering such
risks and otherwise on such terms and conditions as shall be customary and
commercially practicable for insurers similarly situated in the industry.

 

C. Application of Net Insurance/Condemnation Proceeds.

 

(i) Business Interruption Insurance. Upon receipt by Holdings or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds from business
interruption insurance, (a) so long as no Event of Default shall have occurred
and be continuing, Holdings or such Subsidiary may retain and apply such Net
Insurance/Condemnation Proceeds for working capital or general corporate
purposes, and (b) if an Event of Default shall have occurred and be continuing,
Company shall, upon demand made therefor by Administrative Agent, apply an
amount equal to such Net Insurance/Condemnation Proceeds to reduce the Revolving
Loan Commitments as provided in subsection 2.4A(iii)(b);

 

(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by Holdings or any
of its Subsidiaries of any Net Insurance/Condemnation Proceeds other than from
business interruption insurance, (a) so long as no Event of Default shall have
occurred and be continuing, Holdings shall, or shall cause one or more of its
Subsidiaries to, promptly and diligently (and in any event within 18 months of
the date of receipt of such Net Insurance/Condemnation Proceeds) apply all such
Net Insurance/Condemnation Proceeds in excess of $1,000,000 to pay or reimburse
the costs of repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received or, to the extent not so
applied within such 18-month period (other than as a result of the costs of
repairing, restoring or replacing such assets being less than the

 

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amount of such excess Net Insurance Condemnation Proceeds, so long as Company
has applied Net Insurance/Condemnation Proceeds adequate to pay or reimburse
such costs) as provided in subsection 2.4A(iii)(b), and (b) if an Event of
Default shall have occurred and be continuing, Company shall, upon demand made
therefor by Administrative Agent, apply an amount equal to such Net
Insurance/Condemnation Proceeds to reduce the Revolving Loan Commitments as
provided in subsection 2.4A(iii)(b).

 

(iii) Net Insurance/Condemnation Proceeds Received by Administrative Agent. Upon
receipt by Administrative Agent of any Net Insurance/Condemnation Proceeds as
loss payee, (a) if and to the extent Company would have been required to apply
such Net Insurance/Condemnation Proceeds (if it had received them directly) to
reduce the Revolving Loan Commitments, Administrative Agent shall, and Company
hereby authorizes Administrative Agent to, apply such Net Insurance/Condemnation
Proceeds to reduce the Revolving Loan Commitments as provided in subsection
2.4A(iii)(b), and (b) to the extent the foregoing clause (a) does not apply,
Administrative Agent shall deliver such Net Insurance/Condemnation Proceeds to
Company, and Company shall, or shall cause one or more of its Subsidiaries to,
promptly and diligently apply all such Net Insurance/Condemnation Proceeds in
excess of $1,000,000 to pay or reimburse the costs of repairing, restoring or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received or, to the extent not so applied (other than as a result
of the costs of repairing, restoring or replacing such assets being less than
the amount of such excess Net Insurance Condemnation Proceeds, so long as
Company has applied Net Insurance/Condemnation Proceeds adequate to pay or
reimburse such costs), as provided in subsection 2.4A(iii)(b).

 

6.5 Inspection Rights.

 

Company shall, and shall cause Holdings and each of its Subsidiaries to, permit
any authorized representatives designated by any Lender to visit and inspect any
of the properties of Company or of any of its Subsidiaries subject to the rights
of any lessor or lessee of such property and provided that such visit and
inspection does not unreasonably interfere with (i) the business of the Company
at such property and (ii) any customers or other third parties at such
properties, to inspect, copy and take extracts from its and their financial and
accounting records, and to discuss its and their affairs, finances and accounts
with its and their officers and independent public accountants (provided that
Holdings or any of its Subsidiaries may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.

 

6.6 Compliance with Laws, etc.

 

Company shall comply, and shall cause Holdings and each of its Subsidiaries to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority (including all Environmental Laws),
noncompliance with which would reasonably be expected to result in, individually
or in the aggregate, a Material Adverse Effect.

 

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6.7 Environmental Disclosure.

 

Company will deliver to Administrative Agent:

 

(i) Environmental Audits and Reports. As soon as practicable following receipt
thereof, copies of all environmental audits, investigations, analyses and
reports of any kind or character, whether prepared by personnel of Holdings or
any of its Subsidiaries or by independent consultants, Government Authorities or
any other Persons, with respect to significant environmental matters at any
Facility that, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect or with respect to any Environmental Claims
that, individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect.

 

(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon the
occurrence thereof, written notice describing in reasonable detail (a) any
emergency Release required to be reported to any federal, state or local
governmental or regulatory agency, or other Release that is reasonably likely to
require investigation or remedial action, under any applicable Environmental
Laws that, individually or in the aggregate, have a reasonable likelihood of
resulting in a Material Adverse Effect and (b) any remedial action taken by
Company or any other Person in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable likelihood of resulting in
one or more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that, individually or
in the aggregate, have a reasonable likelihood of resulting in a Material
Adverse Effect.

 

(iii) Written Communications Regarding Environmental Claims, Releases, Etc. As
soon as practicable following the sending or receipt thereof by Holdings or any
of its Subsidiaries, a copy of any and all written communications with respect
to (a) any Environmental Claims that, individually or in the aggregate, have a
reasonable likelihood of giving rise to a Material Adverse Effect, (b) any
emergency Release required to be reported to any federal, state or local
governmental or regulatory agency, or other Release that is reasonably likely to
require investigation or remedial action that, individually or in the aggregate,
have a reasonable likelihood of giving rise to a Material Adverse Effect, and
(c) any request for information from any governmental agency that suggests such
agency is investigating whether Holdings or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity that, individually
or in the aggregate, have a reasonable likelihood of giving rise to a Material
Adverse Effect.

 

(iv) Notice of Certain Proposed Actions Having Environmental Impact. Prompt
written notice describing in reasonable detail (a) any proposed acquisition of
Capital Stock, assets, or property by Holdings or any of its Subsidiaries that
would reasonably be expected to (1) expose Holdings or any of its Subsidiaries
to, or result in, Environmental Claims that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or (2) affect
the ability of Holdings or any of its Subsidiaries to maintain in full force and
effect all material Governmental Authorizations required under any Environmental
Laws for their respective operations and (b) any proposed action to be taken by
Holdings or any of its Subsidiaries to commence

 

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manufacturing or other industrial operations or to modify current operations in
a manner that would reasonably be expected to subject Holdings or any of its
Subsidiaries to any additional obligations or requirements under any
Environmental Laws that would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

 

(v) Other Information. With reasonable promptness, such other documents and
information as from time to time may be reasonably requested by Administrative
Agent in relation to any matters disclosed pursuant to this subsection 6.7.

 

6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
After the Closing Date.

 

A. Execution of Subsidiary Guaranty and Personal Property Collateral Documents.
In the event that any Person becomes a Subsidiary of Holdings after the date
hereof and such Subsidiary has assets or revenues in excess of $1,000,000,
Company will promptly notify Administrative Agent of that fact and (i) deliver,
or cause the appropriate Loan Party to deliver, a Pledge Amendment (as defined
in the Security Agreement), together with the certificates or instruments, if
any, representing (A) all of the Capital Stock of such Subsidiary if such
Subsidiary is a Domestic Subsidiary and (B) 66% of the Capital Stock of such
Subsidiary if such Subsidiary is a first-tier Foreign Subsidiary, in each case
accompanied by irrevocable undated instruments of transfer, duly endorsed in
blank and otherwise in form and substance reasonably satisfactory to
Administrative Agent, (ii) cause any such Domestic Subsidiary to execute and
deliver to Administrative Agent a counterpart of the Subsidiary Guaranty and the
Security Agreement, and (iii) take, or cause any such Domestic Subsidiary to
take, all such further actions and execute all such further documents and
instruments (including actions, documents and instruments comparable to those
described in subsection 4.1F) as may be necessary or, in the opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all or 66%,
as the case may be, of the Capital Stock of such Subsidiary, and on all personal
property assets of such Domestic Subsidiary described in the applicable
Collateral Documents. Notwithstanding anything in this Agreement or any other
Loan Document to the contrary, (X) Company or Holdings, as applicable, will not
be obligated to deliver a pledge of the Capital Stock of the Captive Insurance
Company if such pledge would violate laws or regulations applicable to the
Captive Insurance Company or otherwise have an adverse effect on the operations
of the Captive Insurance Company and (Y) Company shall not be obligated to
comply with this Section 6.8 if Administrative Agent is obligated to release
Liens pursuant to Section 10.14(B) and no ratings downgrade triggering Company’s
obligations under Section 6.9(iii) has occurred.

 

B. Subsidiary Organizational Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i) copies
of the Organizational Documents of each Subsidiary of Holdings referred to in
subsection 6.8A certified by the Secretary of State of its jurisdiction of
organization, if such certification is generally available, and in each other
case by its secretary or assistant secretary, together with a good standing
certificate from the Secretary of State of the jurisdiction of its incorporation
and, to the extent generally available, a certificate or other evidence of good
standing as to payment

 

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of any applicable franchise or similar taxes from the appropriate taxing
authority of such jurisdiction, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a certificate executed by the secretary
or an assistant secretary of such Subsidiary as to (a) the fact that the
attached resolutions of the Board of Directors of such Subsidiary approving and
authorizing the execution, delivery and performance of such Loan Documents are
in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents.

 

6.9 Maintenance of Ratings; Notices Regarding Ratings; Reinstatement of Security
Interest and Guaranties.

 

If Administrative Agent has released its security interest in Collateral or
released a Guaranty pursuant to subsection 10.14(B), then:

 

(i) Company shall take all such actions as are necessary (including, without
limitation, the payment of required fees) to cause Moody’s and S&P to maintain a
senior credit rating for Holdings or the Company;

 

(ii) Company will deliver to Administrative Agent, within five days of receipt,
any notices from Moody’s or S&P relating to Company’s or Holdings’ credit
rating; and

 

(iii) if the senior credit ratings of Company or Holdings are downgraded by
Moody’s to a rating below Baa3 or by S&P to a rating below BBB-, Company shall,
at the request of Administrative Agent or Requisite Lenders, take or cause to be
taken all such actions, execute and deliver or cause to be executed and
delivered all such agreements, documents and instruments, and make or cause to
be made all such filings and recordings that are necessary or, in the opinion of
Administrative Agent, desirable in order to create in favor of Administrative
Agent, for the benefit of Lenders, a valid and (upon filing and recording)
perfected First Priority security interest in the entire personal property
Collateral including the actions described in subsection 4.1F and the execution
and delivery of a Security Agreement.

 

Section 7. NEGATIVE COVENANTS OF COMPANY

 

Company covenants and agrees that, so long as any of the Commitments hereunder
shall remain in effect and until payment in full of all of the Loans and other
Obligations and the cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform, and shall cause each of Holdings and its Subsidiaries to perform, all
covenants in this Section 7.

 

7.1 Indebtedness.

 

Company shall not, and shall not permit any of Holdings or its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

 

(i) Company may become and remain liable with respect to the Obligations;

 

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(ii) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations permitted by subsection 7.4 and, upon any matured
obligations actually arising pursuant thereto, the Indebtedness corresponding to
the Contingent Obligations so extinguished;

 

(iii) Holdings and its Subsidiaries may become and remain liable with respect to
Indebtedness in respect of Capital Leases and Indebtedness secured by Liens
permitted under subsection 7.2A(iv) and any Refinancings thereof; provided that
the aggregate principal amount of all such Indebtedness in respect of Capital
Leases (other than Capital Leases with respect to interests in real property,
which shall not be subject to any maximum dollar amount thereof) and
Indebtedness secured by Liens permitted under subsection 7.2A(iv) and any
Refinancings thereof shall not exceed $20,000,000 at any time outstanding;

 

(iv) Holdings may become and remain liable with respect to Indebtedness to any
of its Subsidiaries, and any Subsidiary of Holdings may become and remain liable
with respect to Indebtedness to Holdings or any wholly-owned Subsidiary of
Holdings; provided that (a) all such intercompany Indebtedness owed by Company
or Holdings to any of its Subsidiaries that are not Subsidiary Guarantors shall
be subordinated in right of payment to the payment in full of the Obligations
pursuant to documentation in form and substance reasonably satisfactory to
Administrative Agent and (b) upon demand by Administrative Agent, all such
intercompany Indebtedness owed by Company or Holdings to any Subsidiary
Guarantor shall be subordinated in right of payment to the payment in full of
the Obligations pursuant to documentation in form and substance reasonably
satisfactory to Administrative Agent; and provided further that such
intercompany Indebtedness owed by all Foreign Subsidiaries to Company and all
other Subsidiaries shall be subject to the limitations imposed by subsection
7.3(ii);

 

(v) Holdings and its Subsidiaries, as applicable, may remain liable with respect
to Indebtedness described in Schedule 7.1 annexed hereto and any Refinancings
thereof;

 

(vi) Company may become and remain liable with respect to Indebtedness evidenced
by the Senior Subordinated Notes and the agreements entered into in connection
therewith.

 

(vii) so long as no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall be caused thereby, Holdings and its
Subsidiaries may become liable with respect to Assumed Indebtedness in
connection with a Permitted Acquisition and any Refinancings thereof and Company
and such Subsidiaries may thereafter remain liable with respect to such Assumed
Indebtedness; provided that Holdings and its Subsidiaries shall be in compliance
on a consolidated basis with each of the financial covenants set forth in
subsection 7.6 after giving effect to the incurrence or assumption of such
Assumed Indebtedness as stated on the consolidated balance sheet of Holdings and
its Subsidiaries;

 

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(viii) Indebtedness of Holdings or its Subsidiaries in respect of performance
bonds, bid bonds, appeal bonds, surety bonds, bankers’ acceptances, workers
compensation claims and similar obligations and trade-related letters of credit
issued under this Agreement, in each case provided in the ordinary course of
business, and any extension, renewal or refinancing thereof to the extent not
provided to secure the repayment of other Indebtedness and to the extent that
the amount of refinancing Indebtedness is not greater than the amount of
Indebtedness being refinanced;

 

(ix) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against sufficient
funds in the ordinary course of business, provided that such Indebtedness is
extinguished within five Business Days of its incurrence;

 

(x) unsecured and Subordinated Indebtedness of Holdings or its Subsidiaries in
an aggregate principal amount not to exceed $200,000,000 at any time
outstanding, provided that Company shall deliver an Officer’s Certificate to
Administrative Agent prior to the incurrence of such Indebtedness certifying
that the Consolidated Pro Forma Total Leverage Ratio, after giving pro forma
effect to the incurrence of such Indebtedness, is 25 basis points or more below
the maximum amount permitted by Section 7.6B for the end of the Fiscal Quarter
in which such incurrence occurs; and

 

(xi) Holdings and its Subsidiaries may become and remain liable with respect to
other Indebtedness in an aggregate principal amount not to exceed $20,000,000 at
any time outstanding and any Refinancings thereof.

 

7.2 Liens and Related Matters.

 

A. Prohibition on Liens. Company shall not, and shall not permit Holdings or any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on any Indebtedness on or with respect to any property or
asset of any kind (including any document or instrument in respect of goods or
accounts receivable) of Holdings or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:

 

(i) Permitted Encumbrances;

 

(ii) Liens granted pursuant to the Collateral Documents;

 

(iii) Liens described in Schedule 7.2 annexed hereto;

 

(iv) Liens created to secure the purchase price of property or assets; provided
that (a) any such Lien shall attach only to the property or assets purchased,
(b) the Indebtedness secured by any such Lien shall not exceed 100% of the
purchase price of the property or assets purchased, (c) any such Lien shall be
created within 12 months following the acquisition of such property or assets
and (d) the principal amount of

 

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Indebtedness secured by such Liens does not exceed $20,000,000 in the aggregate
at any time; and

 

(v) Liens in connection with Indebtedness permitted under subsections 7.1(iii),
(v) and (xi) and Liens in connection with Indebtedness permitted under
subsection 7.1(vii) (a) to the extent Liens are on property that was collateral
for Assumed Indebtedness immediately prior to the relevant Permitted
Acquisition, or (b) if such Assumed Indebtedness was secured by a Lien on all
assets or all assets of a particular class, then to the extent such Liens are on
property that would have been collateral subject to such Lien.

 

B. Equitable Lien in Favor of Lenders. If Holdings or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Liens permitted by the provisions of
subsection 7.2A, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided that, notwithstanding the foregoing, this covenant shall
not be construed as a consent by Requisite Lenders to the creation or assumption
of any such Lien not permitted by the provisions of subsection 7.2A.

 

C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, Neither Holdings nor any
of its Subsidiaries shall enter into any agreement, prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, to secure Company’s principal bank credit agreement
outstanding at any time.

 

D. No Restrictions on Subsidiary Distributions to Holdings or its Subsidiaries.
Except as provided herein, Company will not, and will not permit any Subsidiary
of Holdings to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any such
Subsidiary to (i) pay dividends or make any other distributions on any of such
Subsidiary’s Capital Stock owned by Holdings or any of its Subsidiaries, (ii)
repay or prepay any Indebtedness owed by such Subsidiary to Holdings or any of
its Subsidiaries, (iii) make loans or advances to Holdings or any of its
Subsidiaries, or (iv) transfer any of its property or assets to Holdings or any
of its Subsidiaries (other than (a) customary restrictions on the assignment of
real or personal property leases, (b) customary restrictions on the transfer of
property or assets included in any instrument or agreement relating to
Indebtedness permitted under subsection 7.1A(iii), (c) restrictions under
applicable law, (d) restrictions contained in the Senior Subordinated Note
Indenture, (e) restrictions contained in joint venture arrangements applicable
to assets of the joint venture, (f) restrictions contained in Assumed
Indebtedness or Capital Stock of Persons acquired pursuant to Permitted
Acquisitions relating to assets acquired and (g) restrictions in contracts for
sales or dispositions permitted hereby; provided that such restrictions relate
only to the assets being disposed of).

 

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7.3 Investments; Joint Ventures.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:

 

(i) Holdings and its Subsidiaries may make and own Investments in Cash
Equivalents;

 

(ii) Holdings and its Subsidiaries may make and own Investments in any
Subsidiaries of Holdings (other than the Captive Insurance Company); provided
that (a) any such new Subsidiary is wholly-owned by Holdings or one of its
Subsidiaries and the provisions of subsection 6.8 have been complied with or (b)
in the case of any Subsidiary of Holdings that is not a wholly-owned Subsidiary
Guarantor, such creation or acquisition is permitted pursuant to clause (vi) of
this subsection 7.3; and provided further that the aggregate new Investments in
all Foreign Subsidiaries (including Investments made through one or more
Subsidiaries) shall not exceed $50,000,000 in the aggregate (excluding for such
purposes any Investments made by Holdings or Company in the Captive Insurance
Company permitted under subsection 7.3(xii) below);

 

(iii) Holdings and its Subsidiaries may make intercompany loans to the extent
permitted under subsection 7.1(iv);

 

(iv) Holdings and its Subsidiaries may make loans and advances to employees and
officers of Holdings and any of its Subsidiaries in an aggregate amount not to
exceed (a) $500,000 at any one time outstanding, which shall be used for the
purpose of acquiring Holdings Stock, and (b) $2,000,000 at any one time
outstanding, which may be used for any other purpose;

 

(v) Holdings and its Subsidiaries may continue to own the Investments owned by
them and described in Schedule 7.3 annexed hereto;

 

(vi) Investments made by Holdings or any of its Subsidiaries in Permitted
Acquisitions;

 

(vii) Investments received in settlement of debts, liabilities or other
obligations owing to Holdings or any of its Subsidiaries;

 

(viii) Investments received as consideration in Asset Sales;

 

(ix) Investments of a Person that becomes a Subsidiary or is merged,
consolidated or amalgamated with or into or transfers all or substantially all
of its assets to, or is liquidated into, Holdings or any of its other
Subsidiaries, or is otherwise acquired pursuant to a Permitted Acquisition;

 

(x) Holdings and its Subsidiaries may make and own Investments representing
amounts held for employees of Holdings and its Subsidiaries under Holdings’ or
Company’s non-qualified deferred compensation plan, provided the amount

 

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of such Investments (excluding income earned thereon) shall not exceed the
amount otherwise payable to such employees the payment of which was deferred
under such plan and any amounts matched by Holdings or Company under such plan;

 

(xi) Letters of Credit received by any Loan Party from any supplier as security
for such supplier’s obligations to the Loan Parties;

 

(xii) Holdings or Company may make Investments in the Captive Insurance Company
in an aggregate amount not exceeding (a) $30,000,000 through the end of Fiscal
Year 2006, and (b) an additional $5,000,000 per Fiscal Year thereafter (it being
agreed, however, that no transfer of IP Collateral to the Captive Insurance
Company shall be made without the Administrative Agent’s prior written consent,
which may be granted or denied in its sole discretion); and

 

(xiii) Holdings and its Subsidiaries may make and own other Investments in an
aggregate amount not to exceed at any time $10,000,000.

 

7.4 Contingent Obligations.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:

 

(i) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of the Guaranties;

 

(ii) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;

 

(iii) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations under Hedge Agreements with respect to Indebtedness in
the ordinary course of business;

 

(iv) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of customary indemnification and purchase
price adjustment obligations incurred in connection with sales of assets;

 

(v) Holdings and its Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of any Indebtedness of Holdings and any of its
Subsidiaries permitted by subsection 7.1;

 

(vi) Holdings and its Subsidiaries, as applicable, may remain liable with
respect to Contingent Obligations described in Schedule 7.4 annexed hereto;

 

(vii) Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under their subordinated guaranties of the Senior
Subordinated Notes as set forth in the Senior Subordinated Note Indenture;

 

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(viii) Holdings and its Subsidiaries may become and remain liable with respect
to Contingent Obligations under guarantees in the ordinary course of business of
the obligations of suppliers, customers, franchisees and licensees of Holdings
and its Subsidiaries in an aggregate amount not to exceed at any time
$10,000,000; and

 

(ix) Holdings and its Subsidiaries may become and remain liable with respect to
other Contingent Obligations; provided that the maximum aggregate liability,
contingent or otherwise, of Holdings and its Subsidiaries in respect of all such
Contingent Obligations shall at no time exceed $20,000,000.

 

7.5 Restricted Junior Payments.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that (i) Company may make regularly
scheduled payments of interest in respect of Subordinated Indebtedness in
accordance with the terms of, and subject to the subordination provisions
contained in, the Senior Subordinated Note Indenture or other applicable
documentation pursuant to which such Subordinated Indebtedness is issued, (ii)
so long as no Event of Default or Potential Event of Default has occurred and is
continuing or would result therefrom, Company or Holdings may redeem or
otherwise repurchase stock, stock equivalents or stock options issued by Company
or Holdings owned by former employees, former directors or former officers of
Holdings and its Subsidiaries, provided that Company shall deliver an Officer’s
Certificate to Administrative Agent prior to such redemption or repurchase
certifying that the Company will be in pro forma compliance with Section 7.6A
(Minimum Consolidated Fixed Charge Coverage Ratio) for the period in which such
redemption or repurchase occurs, calculated using Consolidated Pro Forma Fixed
Charge Coverage Ratio as of such date in lieu of Consolidated Fixed Charge
Coverage Ratio, (iii) Company or any Subsidiary of Holdings or Company may
declare and pay dividends to Holdings or Company or to a wholly owned Subsidiary
of Holdings or Company (as applicable), (iv) Holdings and its Subsidiaries may
prepay Subordinated Indebtedness incurred pursuant to subsection 7.1, (v) so
long as no Event of Default or Potential Event of Default has occurred and is
continuing or would result therefrom, Company may from time to time redeem or
repurchase its Senior Subordinated Notes and (including, without limitation, in
connection with a change of control offer made pursuant to the Senior
Subordinated Note Indenture) (vi) so long as no Event of Default or Potential
Event of Default has occurred and is continuing or would result therefrom,
Company or Holdings (as applicable) may declare and pay quarterly dividends,
provided that Company shall deliver an Officer’s Certificate to Administrative
Agent prior to the declaration of each such dividend certifying that the Company
will be in pro forma compliance with Section 7.6A (Minimum Consolidated Fixed
Charge Coverage Ratio) for the period in which such dividend occurs, calculated
using Consolidated Pro Forma Fixed Charge Coverage Ratio as of such date in lieu
of Consolidated Fixed Charge Coverage Ratio. Each Officer’s Certificate
delivered pursuant to this Section 7.5 shall include reasonably detailed
calculations substantiating the statements made therein.

 

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7.6 Financial Covenants.

 

A. Minimum Consolidated Fixed Charge Coverage Ratio. Company shall not permit,
as of the end of any Fiscal Quarter commencing with the fourth Fiscal Quarter of
2004, the Consolidated Fixed Charge Coverage Ratio for the four-Fiscal Quarter
period ending on such date during any of the periods set forth below to be less
than the correlative ratio indicated:

 

Period Ending on the Last Day of the

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

   Minimum Fixed
Charge Coverage Ratio

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

Fourth Fiscal Quarter of 2004 through First Fiscal Quarter of 2006

   1.300:1.000

Second Fiscal Quarter of 2006 through First Fiscal Quarter of 2007

   1.325:1.000

Second Fiscal Quarter of 2007 through First Fiscal Quarter of 2008

   1.350:1.000

Second Fiscal Quarter of 2008 through First Fiscal Quarter of 2009

   1.375:1.000

Second Fiscal Quarter of 2009 and thereafter

   1.400:1.000

 

B. Maximum Consolidated Pro Forma Total Leverage Ratio. Company shall not permit
Consolidated Pro Forma Total Leverage Ratio at the end of the Fiscal Quarters
set forth below to exceed the correlative ratio indicated:

 

Period Ending on the Last Day of the

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

   Maximum Consolidated Pro Forma
Total Leverage Ratio

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

Fourth Fiscal Quarter of 2004 through First Fiscal Quarter of 2006

   2.50:1.00

Second Fiscal Quarter of 2006 through First Fiscal Quarter of 2008

   2.25:1.00

Second Fiscal Quarter of 2008 and thereafter

   2.00:1.00

 

7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,
in one transaction or a series of transactions, all or substantially all of its
business, property or assets, whether now owned or hereafter acquired, or
acquire by purchase or otherwise all or substantially all the business, property
or fixed assets of, or stock or

 

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other evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:

 

(i) any Subsidiary of Holdings (other than Company) may be merged with or into
Company or Holdings or any Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to Company, Holdings or any Subsidiary Guarantor;
provided that, in the case of such a merger involving Company, Company shall be
the continuing or surviving entity, and in the case of any other such merger,
Holdings or a Subsidiary Guarantor shall be the continuing or surviving entity;

 

(ii) Holdings and its Subsidiaries may make Consolidated Capital Expenditures
permitted under subsection 7.8;

 

(iii) Holdings and its Subsidiaries may make Investments permitted under
subsection 7.3;

 

(iv) Holdings and its Subsidiaries may dispose of obsolete, worn out or surplus
property, and may close stores and distribution centers, in the ordinary course
of business;

 

(v) Holdings and its Subsidiaries may sell or otherwise dispose of assets in
transactions that do not constitute Asset Sales; provided that the consideration
received for such assets shall be in an amount at least equal to the fair market
value thereof;

 

(vi) Holdings or its direct or indirect wholly-owned Subsidiaries may make
Permitted Acquisitions;

 

(vii) subject to subsection 7.12, Holdings and its Subsidiaries may make Asset
Sales (a) of assets having a fair market value not in excess of $20,000,000 per
Fiscal Year; provided that (x) the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof; and (y) at
least 80% of the consideration received shall be cash; and (b) of assets
comprising Company’s corporate headquarters, so long as the proceeds of such
Asset Sales are applied in accordance with subsection 2.4A(iii)(a), provided
that any Exchange Assets acquired by Company in connection therewith shall
comprise a new corporate headquarters facility; and

 

(viii) Company may effect a holding company reorganization under Section 251(g)
of the Delaware General Corporation Law, provided that (a) the terms and
documentation thereof are approved by Administrative Agent in advance (such
approval not to be unreasonably withheld or delayed), (b) concurrently with such
reorganization, Holdings shall execute a counterpart of this Agreement in which
it shall agree to be a party to and be bound by this Agreement, Holdings shall
execute and deliver to Administrative Agent the Holdings Guaranty and a
counterpart of the Security Agreement, and Holdings shall take all such further
actions and execute all such further documents and instruments (including
actions, documents and instruments comparable to those described in subsection
4.1F) as may be necessary or, in the opinion of

 

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Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal property assets of Holdings, including, without limitation, all Capital
Stock of Company and any other Subsidiaries of Holdings to the extent required
by subsection 6.8A, and (c) Administrative Agent shall have received signature
and incumbency certificates of the officers of Holdings executing the
above-referenced documents and evidence (which may be a legal opinion),
reasonably satisfactory in form and substance to Administrative Agent, of the
due authorization, execution and delivery by Holdings of the Holdings Guaranty
and the Security Agreement and of the enforceability of this Agreement, the
Holdings Guaranty and the Security Agreement against Holdings.

 

7.8 Consolidated Capital Expenditures.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
make or incur Consolidated Capital Expenditures in an aggregate amount in excess
of (a) $110,000,000 for the Fiscal Year ending on January 29, 2005, (b)
$135,000,000 for the Fiscal Year ending on January 28, 2006, (c) $145,000,000
for the Fiscal Year ending on February 3, 2007, (d) $155,000,000 for the Fiscal
Year ending on February 2, 2008, (e) $165,000,000, for the Fiscal Year ending on
January 31, 2009 and (f) $175,000,000 for the Fiscal Year ending on January 30,
2010 (such amount, for each Fiscal Year, the “Maximum Expenditure Amount”);
provided that the Maximum Expenditure Amount for any Fiscal Year, beginning with
the Fiscal Year ending on February 3, 2007, shall be increased by an amount
equal to the excess, if any, of the Maximum Expenditure Amount for the previous
year (without giving effect to any previous adjustment made in accordance with
this proviso) over the actual amount of Consolidated Capital Expenditures for
such previous Fiscal Year, but in no event shall such increase exceed 10% of the
Maximum Expenditure Amount for such previous Fiscal Year, provided, further that
notwithstanding the limitations set forth in clauses (a) through (f) herein,
Company may make or incur additional Consolidated Capital Expenditures in an
aggregate amount not to exceed $40 million for the purpose of purchasing the
land and improvements comprising Company’s corporate headquarters (or a portion
thereof) and provided further that for purposes of determining compliance with
this covenant, any Consolidated Capital Expenditures made by Holdings or any of
its Subsidiaries in connection with the acquisition and improvement of real
property during any period shall be deemed to be decreased by the net proceeds
(consisting of Cash payments received from the sale net of any direct sales
costs incurred in connection with the sale) of any sale-leaseback transaction
covering such real property and improvements (not exceeding the amount of such
Consolidated Capital Expenditures) consummated in accordance with clause (2) of
the first proviso of Section 7.9 in the period in which such sale-leaseback
transaction is consummated.

 

7.9 Sales and Lease-Backs.

 

Except as otherwise provided in this Section 7.9, Company shall not, and shall
not permit Holdings or any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Holdings or any of its Subsidiaries has sold or transferred or is to sell
or transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (ii) which

 

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Holdings or any of its Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
Holdings or any of its Subsidiaries to any Person (other than Holdings or any of
its Subsidiaries) in connection with such lease; provided, however, that Company
may engage in such sale-leaseback transactions (1) to the extent that all
non-real estate leases entered into by Holdings and its Subsidiaries in
connection therewith are Capital Leases permitted pursuant to subsection
7.1(iii) of this Agreement or (2) if such sale-leaseback transaction covers real
property and improvements and such sale-leaseback transaction is consummated
within one year following the substantial completion of improvements on such
real property; and provided further that, with respect to Company’s corporate
headquarters, Company may engage in sale-leaseback transactions (x) to the
extent that all leases entered into in connection therewith are (A) operating
leases or (B) Capital Leases permitted pursuant to subsection 7.1(iii), or (y)
if such transactions are Asset Sales, so long as the proceeds of such Asset
Sales are applied in accordance with subsection 2.4A(iii)(a), without giving
effect to Company’s right otherwise to acquire Exchange Assets in connection
therewith.

 

7.10 Sale or Discount of Receivables.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable other
than (i) in connection with trade discounts in the ordinary course of business
and consistent with past practice, and (ii) in aid of collection.

 

7.11 Transactions with Affiliates.

 

Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 10% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to such Person than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
restriction shall not apply to (i) any transaction between Holdings and any of
its Subsidiaries or between any of its Subsidiaries and (ii) reasonable and
customary fees and expenses paid to members of the Boards of Directors of
Holdings and its Subsidiaries, and customary indemnification arrangements with
such officers and directors. For the avoidance of doubt, Holdings and its
Subsidiaries may (i) make Investments in the Captive Insurance Company permitted
pursuant to subsection 7.3(xii) and (ii) pay premiums (in cash or in the form of
other assets, it being agreed, however, that no transfer of IP Collateral to the
Captive Insurance Company shall be made without the Administrative Agent’s prior
written consent, which may be granted or denied in its sole discretion) to the
Captive Insurance Company for insurance coverage provided thereby, so long as
such premiums are reasonably equivalent to those which would be paid to a
reputable and creditworthy third-party insurer for equivalent coverage or, to
the extent the coverage is not available from third-party insurers, then the
premium paid shall be fair and reasonable in relation to the insured risk.

 

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7.12 Conduct of Business.

 

From and after the Closing Date, Company shall not, and shall not permit
Holdings or any of its Subsidiaries to, engage in any business other than (i)
the businesses engaged in by Company and its Subsidiaries on the Closing Date
and any business reasonably related, complementary or ancillary thereto or any
reasonable expansion of any of the foregoing and (ii) such other lines of
business as may be consented to by Requisite Lenders.

 

7.13 Amendments of Documents Relating to Certain Indebtedness; Limitation on
Restrictions on Amendments or Waivers of Loan Documents.

 

A. Amendments of Documents Relating to Certain Indebtedness. Company shall not,
and shall not permit Holdings or any of its Subsidiaries to, amend or otherwise
change the terms of the Senior Subordinated Notes, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on the Senior Subordinated
Notes, change (to earlier dates) any dates upon which payments of principal or
interest are due thereon, change any event of default or condition to an event
of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto), change the prepayment
provisions thereof, change the subordination provisions thereof (or any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of the
Senior Subordinated Notes (or a trustee or other representative on their behalf)
which would be materially adverse to Company or Lenders. For the avoidance of
doubt, nothing in this paragraph prohibits or shall be deemed to prohibit
Company from making a change of control offer under the terms of the Senior
Subordinated Note Indenture in connection with the Holding Company
Reorganization (it being understood, however, that any repurchase or redemption
of Senior Subordinated Notes made pursuant to such offer shall be subject to
subsection 7.5).

 

B. Limitation on Restrictions on Amendments or Waivers of Loan Documents.
Company shall not, and shall not permit Holdings or any of its Subsidiaries to,
directly or indirectly, enter into, suffer to exist or become or remain subject
to any agreement or instrument, except for the Loan Documents, that would
prohibit or restrict (including by way of a covenant, representation or warranty
or event of default), or require the consent of any Person to, any amendment to,
or waiver or consent to departure from the terms of, any of the Loan Documents.

 

7.14 Fiscal Year.

 

Neither Holdings nor Company shall change its Fiscal Year End.

 

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Section 8. EVENTS OF DEFAULT

 

If any of the following conditions or events (“Events of Default”) shall occur:

 

8.1 Failure to Make Payments When Due.

 

Failure by Company to pay any installment of principal of any Loan when due,
whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise; failure by Company to pay when due any amount payable to an Issuing
Lender in reimbursement of any drawing under a Letter of Credit; or failure by
Company to pay any interest on any Loan or any fee or any other amount due under
this Agreement within five days after the date due; or

 

8.2 Default in Other Agreements.

 

(i) Failure of Company, Holdings or any Material Subsidiary to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be; or

 

8.3 Breach of Certain Covenants.

 

Failure of Company to perform or comply with any term or condition contained in
Section 7 of this Agreement; or

 

8.4 Breach of Warranty.

 

Any representation, warranty, certification or other statement made by any Loan
Party in any Loan Document or in any certificate at any time given by any Loan
Party in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or

 

8.5 Other Defaults Under Loan Documents.

 

Any Loan Party shall default in the performance of or compliance with any term
contained in this Agreement or any of the other Loan Documents, other than any
such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) the date a senior executive officer of Holdings or Company knew or, in
the orderly conduct of his or her business, should have known of such failure
and (ii) the receipt by Company of notice from Administrative Agent of such
default; or

 

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8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.

 

(i) A court having jurisdiction in the premises shall enter a decree or order
for relief in respect of Company, Holdings or any Material Subsidiary in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or

 

(ii) an involuntary case shall be commenced against Company, Holdings or any
Material Subsidiary under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company, Holdings or any Material Subsidiary, or over all or
a substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of Company, Holdings or any Material Subsidiary for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company, Holdings or any Material Subsidiary, and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or

 

8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.

 

(i) Company, Holdings or any Material Subsidiary shall have an order for relief
entered with respect to it or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Company, Holdings or any Material Subsidiary shall make
any assignment for the benefit of creditors; or

 

(ii) Company, Holdings or any Material Subsidiary shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Company, Holdings or any Material
Subsidiary (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or

 

8.8 Judgments and Attachments.

 

Any money judgment involving in the aggregate at any time an amount in excess of
$50,000,000 (in any case net of insurance) shall be entered or filed against
Company, Holdings or any Material Subsidiary or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
90 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or

 

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8.9 Dissolution.

 

Any order, judgment or decree shall be entered against Company, Holdings or any
Material Subsidiary decreeing the dissolution or split up of Company, Holdings
or that Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or

 

8.10 Employee Benefit Plans.

 

There shall occur one or more ERISA Events which individually or in the
aggregate results in or would reasonably be expected to result in a Material
Adverse Effect during the term of this Agreement; or

 

8.11 Invalidity of Guaranty; Failure of Security; Repudiation of Obligations.

 

At any time after the execution and delivery thereof, (i) the Holdings Guaranty
(if delivered pursuant to Section 7.7(viii)) or the Subsidiary Guaranty of any
Material Subsidiary for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered thereby having a fair market value, individually or in
the aggregate, exceeding $10,000,000, in each case for any reason other than the
failure of Administrative Agent or any Lender to take any action within its
control (unless the Administrative Agent has determined that it is not
economical to maintain a First Priority Lien on such Collateral), or (iii) any
Loan Party shall contest the validity or enforceability of any Loan Document in
writing or deny in writing that it has any further liability, including with
respect to future advances by Lenders, under any Loan Document to which it is a
party, and, in the case of any such default under clause (i) or (ii) above, such
default shall not have been remedied or waived within five days after the
earlier of (a) the date a senior executive officer of Company knew or, in the
orderly conduct of his or her business, should have known of such failure and
(b) the receipt by Company of notice from Administrative Agent of such default;
or

 

8.12 Action Relating to Subordinated Indebtedness.

 

Any event shall occur which, under the terms of the Senior Subordinated Note
Indenture or any other agreement pursuant to which Subordinated Indebtedness is
issued, shall require Holdings or any of its Subsidiaries to prepay or otherwise
acquire, or offer to prepay or otherwise acquire, all or any portion of any
Subordinated Indebtedness or Holdings or any of its Subsidiaries shall for any
other reason prepay or otherwise acquire, or offer to prepay or otherwise
acquire, or make any other payments in respect of, all or any portion of any
Subordinated Indebtedness except to the extent expressly permitted by subsection
7.5;

 

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to

 

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the maximum amount that may at any time be drawn under all Letters of Credit
then outstanding (whether or not any beneficiary under any such Letter of Credit
shall have presented, or shall be entitled at such time to present, the drafts
or other documents or certificates required to draw under such Letter of
Credit), and (c) all other Obligations shall automatically become immediately
due and payable, without presentment, demand, protest or other requirements of
any kind, all of which are hereby expressly waived by Company, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate, and (ii) upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company, declare all or any portion
of the amounts described in clauses (a) through (c) above to be, and the same
shall forthwith become, immediately due and payable, and the obligation of each
Lender to make any Loan, the obligation of Administrative Agent to issue any
Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders under subsection 3.3C(i) or the
obligations of Lenders to purchase participations in any unpaid Swing Line Loans
as provided in subsection 2.1A(ii).

 

Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent as cash collateral pursuant to the
terms of Section 17(c) of the Security Agreement and shall be applied as therein
provided.

 

Notwithstanding anything contained in the second preceding paragraph, if at any
time within 90 days after an acceleration of the Loans pursuant to clause (ii)
of such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be made at the
election of Requisite Lenders and are not intended, directly or indirectly, to
benefit Company, and such provisions shall not at any time be construed so as to
grant Company the right to require Lenders to rescind or annul any acceleration
hereunder or to preclude Administrative Agent or Lenders from exercising any of
the rights or remedies available to them under any of the Loan Documents, even
if the conditions set forth in this paragraph are met.

 

Section 9. ADMINISTRATIVE AGENT

 

9.1 Appointment.

 

A. Appointment of Administrative Agent. Wells Fargo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes Administrative Agent to act as its agent in accordance with
the terms of this

 

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Agreement and the other Loan Documents. Administrative Agent agrees to act upon
the express conditions contained in this Agreement and the other Loan Documents,
as applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and no Loan Party shall have rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, Administrative Agent (other than as provided in
subsection 2.1D) shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation towards or relationship of
agency or trust with or for Company or any other Loan Party.

 

B. Appointment of Supplemental Collateral Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative Agent appoint an additional individual or
institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a “Supplemental Collateral Agent” and collectively as
“Supplemental Collateral Agents”).

 

In the event that Administrative Agent appoints a Supplemental Collateral Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty expressed or intended by this Agreement or any of the other Loan Documents
to be exercised by or vested in or conveyed to Administrative Agent with respect
to such Collateral shall be exercisable by and vest in such Supplemental
Collateral Agent to the extent, and only to the extent, necessary to enable such
Supplemental Collateral Agent to exercise such rights, powers and privileges
with respect to such Collateral and to perform such duties with respect to such
Collateral, and every covenant and obligation contained in the Loan Documents
and necessary to the exercise or performance thereof by such Supplemental
Collateral Agent shall run to and be enforceable by either Administrative Agent
or such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of subsections 10.2 and 10.3 that refer to Administrative Agent shall inure
to the benefit of such Supplemental Collateral Agent and all references therein
to Administrative Agent shall be deemed to be references to Administrative Agent
and/or such Supplemental Collateral Agent, as the context may require.

 

Should any instrument in writing from Company or any other Loan Party be
required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.

 

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C. Control. Each Lender and Administrative Agent hereby appoint each other
Lender as agent for the purpose of perfecting Administrative Agent’s security
interest in assets that, in accordance with the UCC, can be perfected by
possession or control.

 

9.2 Powers and Duties; General Immunity.

 

A. Powers; Duties Specified. Each Lender irrevocably authorizes Administrative
Agent to take such action on such Lender’s behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to Administrative Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are reasonably
incidental thereto. Administrative Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender or
Company; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.

 

B. No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
for any representations, warranties, recitals or statements made herein or
therein or made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by such Agent to Lenders or by or on behalf of Company to such
Agent or any Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
such Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.

 

C. Exculpatory Provisions. No Agent nor any of its officers, directors,
employees or agents shall be liable to Lenders for any action taken or omitted
by such Agent under or in connection with any of the Loan Documents except to
the extent caused by such Agent’s gross negligence or willful misconduct. An
Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or
any of the other Loan Documents or from the exercise of any power, discretion or
authority vested in it hereunder or thereunder unless and until such Agent shall
have received instructions in respect thereof from Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6) and, upon receipt of such instructions from Requisite Lenders (or such
other Lenders, as the case may be), such Agent shall be entitled to act or
(where so

 

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instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions; provided that no Agent shall be
required to take any action that, in its opinion or the opinion of its counsel,
may expose such Agent to liability or that is contrary to any Loan Document or
applicable law. Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication (including any electronic message, Internet or intranet
website posting or other distribution), instrument or document believed by it to
be genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for Holdings and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against an
Agent as a result of such Agent acting or (where so instructed) refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6).

 

D. Agents Entitled to Act as Lender. The agency hereby created shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, an Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, an
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” or “Lenders” or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. An Agent and its Affiliates may accept deposits
from, lend money to, acquire equity interests in and generally engage in any
kind of commercial banking, investment banking, trust, financial advisory or
other business with Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.

 

9.3 Independent Investigation by Lenders; No Responsibility For Appraisal of
Creditworthiness.

 

Each Lender agrees that it has made its own independent investigation of the
financial condition and affairs of Holdings and its Subsidiaries in connection
with the making of the Loans and the issuance of Letters of Credit hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of Holdings and its Subsidiaries. No Agent shall have any duty
or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.

 

9.4 Right to Indemnity.

 

Each Lender, in proportion to its Pro Rata Share, severally agrees to indemnify
each Agent and its officers, directors, employees, agents, attorneys,
professional advisors and Affiliates to the extent that any such Person shall
not have been reimbursed by Company, for and

 

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against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements and fees and disbursements of any financial advisor engaged by
Agents) or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against an Agent or such other Person in exercising
the powers, rights and remedies of an Agent or performing the duties of an Agent
hereunder or under the other Loan Documents or otherwise in its capacity as
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of an Agent resulting solely from such Agent’s
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction. If any indemnity furnished to an Agent or any
other such Person for any purpose shall, in the opinion of such Agent, be
insufficient or become impaired, such Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished.

 

9.5 Resignation of Agents; Successor Administrative Agent and Swing Line Lender.

 

A. Resignation; Successor Administrative Agent. Any Agent may resign at any time
by giving 30 days’ prior written notice thereof to Lenders and Company. Upon any
such notice of resignation by Administrative Agent, Requisite Lenders shall have
the right, upon five Business Days’ notice to Company, to appoint a successor
Administrative Agent reasonably acceptable to Company, the consent of Company
not to be unreasonably withheld; provided, however, that if an Event of Default
has occurred and is continuing, then Company’s consent shall not be required. If
no such successor shall have been so appointed by Requisite Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, the retiring Administrative Agent may, on
behalf of Lenders, appoint a successor Administrative Agent reasonably
acceptable to Company, the consent of Company not to be unreasonably withheld;
provided, however, that if an Event of Default has occurred and is continuing,
then Company’s consent shall not be required. If Administrative Agent shall
notify Lenders and Company that no Person has accepted such appointment as
successor Administrative Agent, such resignation shall nonetheless become
effective in accordance with Administrative Agent’s notice and (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents, except that any Collateral held by Administrative Agent will
continue to be held by it until a Person shall have accepted the appointment of
successor Administrative Agent, and (ii) all payments, communications and
determinations provided to be made by, to or through Administrative Agent shall
instead be made by, to or through each Lender directly, until such time as
Requisite Lenders appoint a successor Administrative Agent in accordance with
this subsection 9.5A. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement (if not already discharged as set forth above).
After any retiring Agent’s resignation hereunder, the provisions of this Section
9 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was an Agent under this Agreement.

 

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B. Successor Swing Line Lender. Any resignation of Administrative Agent pursuant
to subsection 9.5A shall also constitute the resignation of Wells Fargo or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 9.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made by the retiring
Administrative Agent in its capacity as Swing Line Lender, (ii) upon such
prepayment, the retiring Administrative Agent and Swing Line Lender shall
surrender any Swing Line Note held by it to Company for cancellation, and (iii)
if so requested by the successor Administrative Agent and Swing Line Lender in
accordance with subsection 2.1E, Company shall issue a Swing Line Note to the
successor Administrative Agent and Swing Line Lender substantially in the form
of Exhibit VI annexed hereto, in the amount of the Swing Line Loan Commitment
then in effect and with other appropriate insertions.

 

9.6 Collateral Documents and Guaranties.

 

Each Lender hereby further authorizes Administrative Agent, on behalf of and for
the benefit of Lenders, to enter into each Collateral Document as secured party
and to be the agent for and representative of Lenders under each Guaranty, and
each Lender agrees to be bound by the terms of each Collateral Document and the
Guaranties; provided that Administrative Agent shall not (i) enter into or
consent to any material amendment, modification, termination or waiver of any
provision contained in any Collateral Document or the Guaranties or (ii) release
any Collateral (except as otherwise expressly permitted or required pursuant to
the terms of this Agreement or the applicable Collateral Document), in each case
without the prior consent of Requisite Lenders (or, if required pursuant to
subsection 10.6, all Lenders); provided further, however, that, without further
written consent or authorization from Lenders, Administrative Agent may execute
any documents or instruments necessary to (a) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or to which Requisite Lenders have otherwise
consented, (b) release any Subsidiary Guarantor from the Subsidiary Guaranty if
all of the Capital Stock of such Subsidiary Guarantor is sold to any Person
(other than an Affiliate of Company) pursuant to a sale or other disposition
permitted hereunder or to which Requisite Lenders have otherwise consented or
(c) subordinate the Liens of Administrative Agent, on behalf of Lenders, to any
Liens permitted by subsection 7.2; provided that, in the case of a sale of such
item of Collateral or stock referred to in subdivision (a) or (b), the
requirements of subsection 10.14 are satisfied. Anything contained in any of the
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (1) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce any Guaranty, it being understood and agreed that all powers,
rights and remedies under the Collateral Documents and the Guaranties may be
exercised solely by Administrative Agent for the benefit of Lenders in
accordance with the terms thereof, and (2) in the event of a foreclosure by
Administrative Agent on any of the Collateral pursuant to a public or private
sale, Administrative Agent or any Lender may be the purchaser of any or all of
such Collateral at any such sale and Administrative Agent, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite 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

 

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sold at 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
Administrative Agent at such sale.

 

9.7 Duties of Other Agents.

 

To the extent that any Lender is identified in this Agreement as a co-agent,
documentation agent or syndication agent, such Lender shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender.

 

9.8 Administrative Agent May File Proofs of Claim.

 

In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Company or any other Loan Party, Administrative
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether Administrative Agent shall have made any demand on Company) shall be
entitled and empowered, by intervention in such proceeding or otherwise

 

(i) to file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Loans and any other Obligations that are
owing and unpaid and to file such other papers or documents as may be necessary
or advisable in order to have the claims of Lenders and Agents (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Agents and their agents and counsel and all other amounts due
Lenders and Agents under subsections 2.3 and 10.2) allowed in such judicial
proceeding, and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Agents and their agents
and counsel, and any other amounts due Agents under subsections 2.3 and 10.2.

 

Nothing herein contained shall be deemed to authorize Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lenders or to authorize Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

 

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Section 10. MISCELLANEOUS

 

10.1 Successors and Assigns; Assignments and Participations in Loans and Letters
of Credit.

 

A. General. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders’ rights of assignment are subject to the further provisions of this
subsection 10.1). Neither Company’s rights or obligations hereunder nor any
interest therein may be assigned or delegated by Company without the prior
written consent of all Lenders (and any attempted assignment or transfer by
Company without such consent shall be null and void). No sale, assignment or
transfer or participation of any Letter of Credit or any participation therein
may be made separately from a sale, assignment, transfer or participation of a
corresponding interest in the Revolving Loan Commitment and the Revolving Loans
of the Revolving Lender effecting such sale, assignment, transfer or
participation. Anything contained herein to the contrary notwithstanding, except
as provided in subsection 2.1A(ii) and subsection 10.5, the Swing Line Loan
Commitment and the Swing Line Loans of Swing Line Lender may not be sold,
assigned or transferred as described below to any Person other than a successor
Administrative Agent and Swing Line Lender to the extent contemplated by
subsection 9.5. 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 and, to the extent expressly
contemplated hereby, the Affiliates of each of Administrative Agent and Lenders
and Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

B. Assignments.

 

(i) Amounts and Terms of Assignments. Any Lender may assign to one or more
Eligible Assignees all or any portion of its rights and obligations under this
Agreement; provided that (a), except (1) in the case of an assignment of the
entire remaining amount of the assigning Lender’s rights and obligations under
this Agreement or (2) in the case of an assignment to a Lender or an Affiliate
of a Lender or an Approved Fund of a Lender, the aggregate amount of the
Revolving Loan Exposure of the assigning Lender and the assignee subject to each
such assignment shall not be less than $5,000,000, unless each of Administrative
Agent and, so long as no Event of Default has occurred and is continuing,
Company otherwise consents, (b) each partial assignment shall be made as an
assignment of a proportionate part of all of the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, and any assignment of all or any portion of a Revolving Loan
Commitment, Revolving Loan or Letter of Credit participation shall be made only
as an assignment of the same proportionate part of the assigning Lender’s
Revolving Loan Commitment, Revolving Loans and Letter of Credit participations,
(c) the parties to each assignment shall execute and deliver to Administrative
Agent an Assignment Agreement, together with a processing and recordation fee of
$3,500 (unless the assignee is an Affiliate or an Approved Fund of the assignor,
in which case no fee shall be required), and the Eligible Assignee, if it shall
not be a Lender, shall deliver to Administrative Agent information reasonably
requested by Administrative Agent, including such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii) and (d), except
in the case of an

 

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assignment to another Lender, Administrative Agent and, if no Event of Default
has occurred and is continuing, Company, shall have consented thereto (which
consent shall not be unreasonably withheld). Administrative Agent agrees that it
will, as a courtesy to the Company, make reasonable efforts to notify the
Company if Administrative Agent becomes aware of any Lender’s intent to make an
assignment of any portion of its Commitments hereunder which would require the
consent of Company, it being agreed, however, that the failure of Administrative
Agent to provide such notice shall not constitute grounds for the Company’s
refusal of consent to any assignment, and shall not expose Administrative Agent
to liability.

 

Upon such execution, delivery and consent, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (z) the assigning Lender thereunder shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection 10.9B)
and be released from its obligations under this Agreement (and, in the case of
an Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto; provided that, anything contained in any of the Loan
Documents to the contrary notwithstanding, if such Lender is an Issuing Lender
such Lender shall continue to have all rights and obligations of an Issuing
Lender until the cancellation or expiration of any Letters of Credit issued by
it and the reimbursement of any amounts drawn thereunder). The assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its Notes, if any, to Administrative Agent for
cancellation, and thereupon new Notes shall, if so requested by the assignee
and/or the assigning Lender in accordance with subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of Exhibit V
or Exhibit VI annexed hereto, as the case may be, with appropriate insertions,
to reflect the amounts of the new Commitments and/or outstanding Revolving
Loans, as the case may be, of the assignee and/or the assigning Lender. Other
than as provided in subsection 2.1A(ii) and subsection 10.5, any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection 10.1B 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 subsection 10.1C.

 

(ii) Acceptance by Administrative Agent; Recordation in Register. Upon its
receipt of an Assignment Agreement executed by an assigning Lender and an
assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii), Administrative Agent
shall, if Administrative Agent and Company have consented to the assignment
evidenced thereby (in each case to the extent such consent is required pursuant
to subsection 10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall evidence any
required

 

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consent of Administrative Agent to such assignment), (b) record the information
contained therein in the Register, and (c) give prompt notice thereof to
Company. Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).

 

(iii) Deemed Consent by Company. If the consent of Company to an assignment or
to an Eligible Assignee is required hereunder (including a consent to an
assignment which does not meet the minimum assignment thresholds specified in
subsection 10.1B(i)), Company shall be deemed to have given its consent ten
Business Days after the date notice thereof has been delivered by the assigning
Lender (through Administrative Agent) unless such consent is expressly refused
by Company prior to such tenth Business Day.

 

C. Participations. Any Lender may, without the consent of, or notice to, Company
or Administrative Agent, sell participations to one or more Persons (other than
a natural Person or Company or any of its Affiliates) in all or a portion of
such Lender’s rights and/or obligations under this Agreement; provided that (i)
such Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Company, Administrative Agent and
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 or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver directly affecting (i) the extension of the
scheduled final maturity date of any Loan allocated to such participation or
(ii) a reduction of the principal amount of or the rate of interest payable on
any Loan allocated to such participation. Subject to the further provisions of
this subsection 10.1C, Company agrees that each Participant shall be entitled to
the benefits of subsections 2.6D and 2.7 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection 10.1B.
A Participant shall not be entitled to receive any greater payment under
subsections 2.6D and 2.7 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 Company’s prior
written consent. No Participant shall be entitled to the benefits of subsection
2.7 unless Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of Company, to comply with subsection
2.7B(iii) as though it were a Lender.

 

D. Pledges and Assignments. Any Lender may at any time pledge or assign a
security interest in all or any portion of its Loans, and the other Obligations
owed to such Lender, to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to any Federal Reserve
Bank; provided that (i) no Lender shall be relieved of any of its obligations
hereunder as a result of any such assignment or pledge and (ii) in no event
shall any assignee or pledgee be considered to be a “Lender” or be entitled to
require the assigning Lender to take or omit to take any action hereunder.

 

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E. Information. Each Lender may furnish any information concerning any Loan
Party in the possession of that Lender from time to time to assignees and
participants (including prospective assignees and participants), subject to
subsection 10.19.

 

F. Agreements of Lenders. Each Lender listed on the signature pages hereof
hereby agrees, and each Lender that becomes a party hereto pursuant to an
Assignment Agreement shall be deemed to agree, (i) that it is an Eligible
Assignee described in clause (ii) of the definition thereof; (ii) that it has
experience and expertise in the making of or purchasing loans such as the Loans;
and (iii) that it will make or purchase Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 10.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control).

 

10.2 Expenses.

 

Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (i) all actual and reasonable out-of-pocket costs
and expenses of negotiation, preparation and execution of the Loan Documents and
any consents, amendments, waivers or other modifications thereto; (ii) all costs
and expenses of furnishing all opinions by counsel for Company (including any
opinions reasonably requested by Agents or Lenders as to any legal matters
arising hereunder) and of Company’s performance of and compliance with all
agreements and conditions on its part to be performed or complied with under
this Agreement and the other Loan Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements; (iii) all
reasonable fees, expenses and disbursements of counsel to Administrative Agent
in connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all the
actual costs and reasonable out-of-pocket expenses of creating and perfecting
Liens in favor of Administrative Agent on behalf of Lenders pursuant to any
Collateral Document, including filing and recording fees, expenses and taxes,
stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and of counsel providing any opinions that Administrative Agent or Requisite
Lenders may reasonably request in respect of the Collateral Documents or the
Liens created pursuant thereto; (v) all the actual costs and reasonable
out-of-pocket expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any environmental audits or
reports provided for under subsection 4.1F; (vi) all costs and expenses incurred
by Administrative Agent in connection with the custody or preservation of any of
the Collateral; (vii) all other actual and reasonable costs and expenses
incurred by Administrative Agent in connection with the syndication of the
Commitments; (viii) all actual and reasonable costs and expenses, including
reasonable attorneys’ fees, and fees, costs and expenses of accountants,
advisors and consultants, incurred by Administrative Agent and its counsel
relating to efforts to (a) evaluate or assess any Loan Party, its business or
financial condition and (b) protect, evaluate, assess or dispose of any of the
Collateral; and (ix) all costs and expenses, including reasonable attorneys’
fees, fees, costs and expenses of accountants, advisors and

 

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consultants and costs of settlement, reasonably incurred by Administrative Agent
and Lenders in enforcing any Obligations of or in collecting any payments due
from any Loan Party hereunder or under the other Loan Documents (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Loan Documents) or in connection with
any refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a “work-out” or pursuant to any insolvency or
bankruptcy proceedings. Administrative Agent shall provide to Company a written
statement setting forth in reasonable detail the basis for requesting Company to
pay amounts under this subsection 10.2.

 

10.3 Indemnity.

 

In addition to the payment of expenses pursuant to subsection 10.2, whether or
not the transactions contemplated hereby shall be consummated, Company agrees to
defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold
harmless Agents and Lenders (including Issuing Lenders), and the officers,
directors, trustees, employees, agents, advisors and Affiliates of Agents and
Lenders (collectively called the “Indemnitees”), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise from
the gross negligence, willful misconduct or breach of contract of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction.

 

As used herein, “Indemnified Liabilities” means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or abate any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
(including Lenders’ agreement to make the Loans hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit hereunder or
the use or intended use of any thereof, the failure of an Issuing Lender to
honor a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
Governmental Authority, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranties)), (ii) the representations and
warranties made by Company in the commitment letter, or (iii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly
or indirectly, any past or present activity, operation, land ownership, or
practice of Holdings or any of its Subsidiaries.

 

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To the extent that the undertakings to defend, indemnify, pay and hold harmless
set forth in this subsection 10.3 may be unenforceable in whole or in part
because they are violative of any law or public policy, Company shall contribute
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.

 

10.4 Set-Off.

 

In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence and during the
continuation of any Event of Default each Lender and its Affiliates is hereby
authorized by Company at any time or from time to time, without notice to
Company or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, provisional or final, including Indebtedness evidenced
by certificates of deposit, whether matured or unmatured, but not including
trust accounts) and any other Indebtedness at any time held or owing by that
Lender or any Affiliate of that Lender to or for the credit or the account of
Company and each other Loan Party against and on account of the Obligations of
Company or any other Loan Party to that Lender (or any Affiliate of that Lender)
or to any other Lender (or any Affiliate of any other Lender) under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not (i) that Lender shall
have made any demand hereunder or (ii) the principal of or the interest on the
Loans or any amounts in respect of the Letters of Credit or any other amounts
due hereunder shall have become due and payable pursuant to Section 8 and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.

 

10.5 Ratable Sharing.

 

Lenders hereby agree among themselves that if any of them shall, whether by
voluntary or mandatory payment (other than a payment or prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the “Aggregate
Amounts Due” to such Lender) that is greater than the proportion received by any
other Lender in respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall, unless such
proportionately greater payment is required by the terms of this Agreement, (i)
notify Administrative Agent and each other Lender of the receipt of such payment
and (ii) apply a portion of such payment to purchase assignments (which it shall
be deemed to have purchased from each seller of an assignment simultaneously
upon the receipt by such seller of its portion of such payment) of the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that (A) if all or part of such proportionately
greater payment received by

 

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such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such assignments shall be returned to
such purchasing Lender ratably to the extent of such recovery, but without
interest and (B) the foregoing provisions shall not apply to (1) any payment
made by Company pursuant to and in accordance with the express terms of this
Agreement or (2) any payment obtained by a Lender as consideration for the
assignment (other than an assignment pursuant to this subsection 10.5) of or the
sale of a participation in any of its Obligations to any Eligible Assignee or
Participant pursuant to subsection 10.1B. Company expressly consents to the
foregoing arrangement and agrees that any purchaser of an assignment so
purchased may exercise any and all rights of a Lender as to such assignment as
fully as if that Lender had complied with the provisions of subsection 10.1B
with respect to such assignment. In order to further evidence such assignment
(and without prejudice to the effectiveness of the assignment provisions set
forth above), each purchasing Lender and each selling Lender agree to enter into
an Assignment Agreement at the request of a selling Lender or a purchasing
Lender, as the case may be, in form and substance reasonably satisfactory to
each such Lender.

 

10.6 Amendments and Waivers.

 

No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by Company therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders; provided that no such amendment, modification, termination, waiver or
consent shall, without the consent of:

 

(a) each Lender with Obligations directly affected (whose consent shall be
required for any such amendment, modification, termination or waiver in addition
to that of Requisite Lenders) (1) reduce the principal amount of any Loan, (2)
postpone the scheduled final maturity date or postpone the date or reduce the
amount of any scheduled payment (but not prepayment) of principal of any Loan,
(3) postpone the date on which any interest or any fees are payable, (4)
decrease the interest rate borne by any Loan (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or the amount of any fees payable hereunder (other than any
waiver of any increase in the fees applicable to Letters of Credit pursuant to
subsection 3.2 following an Event of Default) (including any change in the
manner in which any financial ratio used in determining any interest rate or fee
is calculated that would result in a reduction of any such rate or fee), (5)
reduce the amount or postpone the due date of any amount payable in respect of
any Letter of Credit, (6) extend the expiration date of any Letter of Credit
beyond the Revolving Loan Commitment Termination Date, (7) extend the Revolving
Loan Commitment Termination Date or (8) change in any manner the obligations of
Revolving Lenders relating to the purchase of participations in Letters of
Credit;

 

(b) each Lender, (1) change in any manner the definition of “Pro Rata Share” or
the definition of “Requisite Lenders” (except for any changes resulting solely
from an increase in the aggregate amount of the Commitments approved by
Requisite Lenders), (2) change in any manner any provision of this Agreement
that, by its terms, expressly requires the approval or concurrence of all

 

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Lenders, (3) increase the maximum duration of Interest Periods permitted
hereunder, (4) release any Lien granted in favor of Administrative Agent with
respect to all or substantially all of the Collateral or release Holdings from
its obligations under the Holdings Guaranty or release all or substantially all
of the Subsidiary Guarantors from their obligations under the Subsidiary
Guaranty, in each case other than in accordance with the terms of the Loan
Documents, or (5) change in any manner or waive the provisions contained in
subsection 2.4C, subsection 8.1, subsection 10.5 or this subsection 10.6.

 

In addition, no amendment, modification, termination or waiver of any provision
(i) of any Note shall be effective without the written concurrence of the Lender
which is the holder of that Note, (ii) of subsection 2.1A(ii) or of any other
provision of this Agreement relating to the Swing Line Loan Commitment or the
Swing Line Loans shall be effective without the written concurrence of Swing
Line Lender, (iii) of Section 3 shall be effective without the written
concurrence of Administrative Agent and, with respect to the purchase of
participations in Letters of Credit, without the written concurrence of each
Issuing Lender that has issued an outstanding Letter of Credit or has not been
reimbursed for a payment under a Letter of Credit, (iv) of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without the
written concurrence of Administrative Agent, (v) that increases the amount of a
Commitment of a Lender shall be effective without the consent of such Lender,
and (vi) that increases the maximum amount of Letters of Credit shall be
effective without the consent of Revolving Lenders constituting Requisite
Lenders.

 

Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.

 

If a Lender (a “Non-Consenting Lender”) (i) refuses to consent to an amendment,
modification or waiver of this Agreement that, pursuant to subsection 10.6,
requires the consent of 100% of the Lenders or 100% of the Lenders with
Obligations directly affected, (ii) a Lender becomes an Affected Lender under
subsection 2.6C, (iii) delivers to Company a fee statement under subsection 2.7A
or subsection 2.7C hereof or (iv) has a Participant who is entitled to
compensation under subsection 10.1C (any such Lender, a “Subject Lender”), so
long as (a) no Potential Event of Default or Event of Default shall have
occurred and be continuing and Company has obtained a commitment from another
Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and
assume the Subject Lender’s Commitments and all other obligations of the Subject
Lender hereunder, (b) such Lender is not an Issuing Lender with respect to any
Letters of Credit outstanding (unless all such Letters of Credit are terminated
or arrangements acceptable to such Issuing Lender in its reasonable discretion
(such as a “back-to-back” letter of credit) are made) and (c), if applicable,
the Subject Lender is unwilling to withdraw the notice delivered to Company
pursuant to subsection 2.6 or

 

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subsection 2.7 and/or is unwilling to remedy its default, upon 10 days prior
written notice to the Subject Lender and Administrative Agent, Company may
require the Subject Lender to assign all of its Loans and Commitments to such
other Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the
provisions of subsection 10.1B; provided that, prior to or concurrently with
such replacement, (1) Company has paid to the Lender giving such notice all
amounts under subsections 2.6D, 2.7 and/or 2.8 (if applicable) through such date
of replacement, (2) the processing fee required to be paid by subsection
10.1B(i)(c) shall have been paid to Administrative Agent, (3) all of the
requirements for such assignment contained in subsection 10.1B, including,
without limitation, the consent of Administrative Agent and Company (if
required) and the receipt by Administrative Agent of an executed Assignment
Agreement and other supporting documents, have been fulfilled and (4) in the
event such Subject Lender is a Non-Consenting Lender, each assignee shall
consent, at the time of such assignment, to each matter in respect of which such
Subject Lender was a Non-Consenting Lender and Company requires each other
Subject Lender that is a Non-Consenting Lender to assign its Loans and
Commitments.

 

10.7 Independence of Covenants.

 

All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.

 

10.8 Notices; Effectiveness of Signatures; Posting on Electronic Delivery
Systems.

 

A. Notices. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile in complete and legible
form, or three Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to Administrative
Agent, Swing Line Lender and any Issuing Lender shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
set forth under such party’s name on the signature pages hereof or (i) as to
Company and Administrative Agent, such other address as shall be designated by
such Person in a written notice delivered to the other parties hereto and (ii)
as to each other party, such other address as shall be designated by such party
in a written notice delivered to Administrative Agent. Electronic mail and
Internet and intranet websites may be used to distribute routine communications,
such as financial statements and other information as provided in subsection
6.1. Administrative Agent or Company may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

 

B. Effectiveness of Signatures. Loan Documents and notices under the Loan
Documents may be transmitted and/or signed by telefacsimile and by signatures
delivered in ‘PDF’ format by electronic mail; provided, however, that after the
Closing Date no signature

 

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with respect to any notice, request, agreement, waiver, amendment or other
document that is intended to have binding effect may be sent by electronic mail.
The effectiveness of any such documents and signatures shall, subject to
applicable law, have the same force and effect as an original copy with manual
signatures and shall be binding on all Loan Parties, Agents and Lenders.
Administrative Agent may also require that any such documents and signature be
confirmed by a manually-signed copy thereof; provided, however, that the failure
to request or deliver any such manually-signed copy shall not affect the
effectiveness of any facsimile document or signature.

 

C. Posting on Electronic Delivery Systems. Each Loan Party agrees that the Agent
may make any material delivered by the Loan Parties to the Agent, as well as any
amendments, waivers, consents, and other written information, documents,
instruments and other materials relating to Holdings, any of its Subsidiaries,
or any other materials or matters relating to this Agreement, the Notes or any
of the transactions contemplated hereby (collectively, the “Communications”),
available to the Lenders by posting such notices on an electronic delivery
system (which may be provided by the Agent, an Affiliate of the Agent, or any
Person that is not an Affiliate of the Agent), such as IntraLinks, or a
substantially similar electronic system (the “Platform”). Each Loan Party
acknowledges that (i) the distribution of material through an electronic medium
is not necessarily secure and that there are confidentiality and other risks
associated with such distribution, (ii) the Platform is provided “as is” and “as
available” and (iii) neither the Agent nor any of its Affiliates warrants the
accuracy, completeness, timeliness, sufficiency, or sequencing of the
Communications posted on the Platform. The Agent and its Affiliates expressly
disclaim with respect to the Platform any liability for errors in transmission,
incorrect or incomplete downloading, delays in posting or delivery, or problems
accessing the Communications posted on the Platform and any liability for any
losses, costs, expenses or liabilities that may be suffered or incurred in
connection with the Platform. No warranty of any kind, express, implied or
statutory, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects, is made by the Agent or any of its
Affiliates in connection with the Platform.

 

Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communication has been posted to the Platform
shall for purposes of this Agreement constitute effective delivery to such
Lender of such information, documents or other materials comprising such
Communication. Each Lender agrees (i) to notify, on or before the date such
Lender becomes a party to this Agreement, the Agent in writing of such Lender’s
e-mail address to which a Notice may be sent (and from time to time thereafter
to ensure that the Agent has on record an effective e-mail address for such
Lender) and (ii) that any Notice may be sent to such e-mail address.
Notwithstanding the foregoing, no Loan Party shall be responsible for any
failure of the Platform or for the inability of any Lender to access any
Communication made available by any Loan Party to the Administrative Agent in
connection with the Platform and in no event shall any such failure constitute
an Event of Default hereunder.

 

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10.9 Survival of Representations, Warranties and Agreements.

 

A. All representations, warranties and agreements made herein shall survive the
execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit hereunder.

 

B. Notwithstanding anything in this Agreement or implied by law to the contrary,
the agreements of Company set forth in subsections 2.6D, 2.7, 10.2, 10.3, 10.17
and 10.18 and the agreements of Lenders set forth in subsections 9.2C, 9.4, 10.5
and 10.18 shall survive the payment of the Loans, the cancellation or expiration
of the Letters of Credit and the reimbursement of any amounts drawn thereunder,
and the termination of this Agreement.

 

10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.

 

No failure or delay on the part of an Agent or any Lender in the exercise of any
power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.

 

10.11 Marshalling; Payments Set Aside.

 

Neither any Agent nor any Lender shall be under any obligation to marshal any
assets in favor of Company or any other party or against or in payment of any or
all of the Obligations. To the extent that Company makes a payment or payments
to Administrative Agent or Lenders (or to Administrative Agent for the benefit
of Lenders), or Agents or 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.

 

10.12 Severability.

 

In case any provision in or obligation under this Agreement or the Notes shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

 

10.13 Obligations Several; Independent Nature of Lenders’ Rights; Damage Waiver.

 

The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing

 

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contained herein or in any other Loan Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders, or Lenders
and Company, 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, subject to subsection 9.6, each Lender shall
be entitled to protect and enforce its rights arising out of this Agreement and
it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.

 

To the extent permitted by law, Company shall not assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with or as a result of this Agreement (including,
without limitation, subsection 2.1C hereof), any other Loan Document, any
transaction contemplated by the Loan Documents, any Loan or the use of proceeds
thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with the Loan Documents or the transactions contemplated thereby.

 

10.14 Release of Security Interest or Guaranty.

 

A. Upon Sale or Disposition of Collateral. Upon the proposed sale or other
disposition of any Collateral to any Person (other than an Affiliate of Company)
that is permitted by this Agreement or to which Requisite Lenders have otherwise
consented, or the sale or other disposition of all of the Capital Stock of a
Subsidiary Guarantor to any Person (other than an Affiliate of Company) that is
permitted by this agreement or to which requisite lenders have otherwise
consented, for which a Loan Party desires to obtain a security interest release
or a release of the Subsidiary Guaranty from Administrative Agent, such Loan
Party shall deliver an Officer’s Certificate (i) stating that the Collateral or
the Capital Stock subject to such disposition is being sold or otherwise
disposed of in compliance with the terms hereof and (ii) specifying the
Collateral or Capital Stock being sold or otherwise disposed of in the proposed
transaction. Upon the receipt of such Officer’s Certificate, Administrative
Agent shall, at such Loan Party’s expense, so long as Administrative Agent (a)
has no reason to believe that the facts stated in such Officer’s Certificate are
not true and correct and (b) if the sale or other disposition of such item of
Collateral or Capital Stock constitutes an Asset Sale, shall have received
evidence satisfactory to it that arrangements satisfactory to it have been made
for delivery of the Net Asset Sale Proceeds if and as required by subsection
2.4, execute and deliver such releases of its security interest in such
Collateral or such Subsidiary Guaranty, as may be reasonably requested by such
Loan Party.

 

B. Upon Ratings Upgrade. In the event that Company’s senior credit ratings are
upgraded by Moody’s to Baa3 or better and by S&P to BBB- or better, the Company
may deliver a written request for release of all (or any portion of) the Liens
securing the Obligations to Administrative Agent, which request shall be
accompanied by an Officer’s Certificate (i) attaching the ratings letters from
Moody’s and S&P evidencing such ratings upgrade and certifying the same to be
true and correct copies of such letters, and (ii) certifying that no Event of
Default or Potential Event of Default exists under this Agreement. Upon the
receipt of such

 

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written request and Officer’s Certificate, Administrative Agent shall, at
Company’s expense, execute and deliver such releases of its Liens, as may be
reasonably requested by Company.

 

10.15 Applicable Law.

 

THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN ANY SUCH LOAN DOCUMENT), AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE
APPLICATION OF ANOTHER LAW.

 

10.16 Construction of Agreement; Nature of Relationship.

 

Each of the parties hereto acknowledges that (i) it has been represented by
counsel in the negotiation and documentation of the terms of this Agreement,
(ii) it has had full and fair opportunity to review and revise the terms of this
Agreement, (iii) this Agreement has been drafted jointly by all of the parties
hereto, and (iv) neither Administrative Agent nor any Lender or other Agent has
any fiduciary relationship with or duty to Company arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent, the other Agents and Lenders, on one
hand, and Company, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor. Accordingly, each of the parties hereto
acknowledges and agrees that the terms of this Agreement shall not be construed
against or in favor of another party.

 

10.17 Consent to Jurisdiction and Service of Process.

 

ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS HEREUNDER AND
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY.

 

(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;

 

(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

 

(III) 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, TO
COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;

 

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(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;

 

(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY
OTHER JURISDICTION; AND

 

(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

 

10.18 Waiver of Jury Trial.

 

EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR 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 their 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 SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT 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.

 

10.19 Confidentiality.

 

Each Lender shall hold all non-public information of a confidential nature
obtained pursuant to the requirements of this Agreement in accordance with such
Lender’s customary procedures for handling confidential information of this
nature and shall not use such

 

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information for any purpose other than in connection with the Loan Documents, it
being understood and agreed by Company that in any event a Lender may make
disclosures (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential), (b) to the extent requested by any Governmental
Authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this subsection 10.19, to (i) any Eligible Assignee of or
Participant in, or any prospective Eligible Assignee of or Participant in, any
of its rights or obligations under this Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty’s or prospective counterparty’s professional advisor) to any credit
derivative transaction relating to obligations of Company, (g) with the consent
of Company, (h) to the extent such information (i) becomes publicly available
other than as a result of a breach of this subsection 10.19 or (ii) becomes
available to Administrative Agent or any Lender on a nonconfidential basis from
a source other than Company or (i) to the National Association of Insurance
Commissioners or any other similar organization or any nationally recognized
rating agency that requires access to information about a Lender’s or its
Affiliates’ investment portfolio in connection with ratings issued with respect
to such Lender or its Affiliates; provided that, no written or oral
communications from counsel to an Agent and no information that is or is
designated as privileged or as attorney work product may be disclosed to any
Person unless such Person is a Lender or a Participant hereunder; provided,
further that unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any Governmental Authority or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such Governmental
Authority) for disclosure of any such non-public information prior to disclosure
of such information; and provided, further that in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries. In addition, Administrative Agent and Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to Administrative Agent and Lenders, and Administrative Agent or any
of its Affiliates may place customary “tombstone” advertisements relating hereto
in publications (including publications circulated in electronic form) of its
choice at its own expense, provided that in each case such disclosure,
information or advertisement does not include any information with respect to
the fees paid by Company to the Administrative Agent and the Lenders in
connection with the Agreement and the Loan Documents.

 

10.20 USA Patriot Act.

 

Each Lender hereby notifies Company that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it may be required to obtain, verify and record information that
identifies Loan Parties, which information includes the name and address of each
Loan Party and other information that will allow such Lender to identify such
Loan Party in accordance with the Act.

 

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10.21 Counterparts; Effectiveness.

 

This Agreement and any amendments, waivers, consents or supplements hereto or in
connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

 

[Remainder of page intentionally left blank]

 

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

 

COMPANY:

 

PETCO ANIMAL SUPPLIES STORES, INC. By:  

/s/ Rodney Carter

Name:

 

Rodney Carter

Title:

 

Senior Vice President and Chief Financial Officer

Notice Address:

PETCO ANIMAL SUPPLIES STORES, INC.

9125 Rehco Road

San Diego, California 92121-2270

Telephone: 858/202-7848

Facsimile: 858/677-3033

Attention: Rodney Carter

 

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

 

IN WITNESS WHEREOF, the undersigned has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of January
13, 2005 and hereby agrees (i) that it is the entity referred to as “Holdings”
in this Agreement, and (ii) it is legally bound by the terms of this Agreement.

 

HOLDINGS:

 

PETCO ANIMAL SUPPLIES, INC. By:  

/s/ Rodney Carter

Name:

 

Rodney Carter

Title:

 

Senior Vice President and Chief Financial Officer

Notice Address:

PETCO ANIMAL SUPPLIES, INC.

9125 Rehco Road

San Diego, California 92121-2270

Telephone: 858/202-7848

Facsimile: 858/677-3033

 

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LENDERS:

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

individually and as Administrative Agent

By:  

/s/ Alex Y. Kim

Name:

 

Alex Y. Kim

Title:

 

Vice President

Notice Address:

Wells Fargo Bank, National Association

333 South Grand Avenue, 9th Floor

Los Angeles, California 90071

Telephone: 213/253-6884

Facsimile: 213/628-1188

Attention: Alex Y. Kim

 

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LENDERS:

 

BANK OF AMERICA, N.A. By:  

/s/ Matthew Koenig

Name:

 

Matthew Koenig

Title:

 

Senior Vice President

Notice Address:

CA9-193-13-01

333 S. Hope St., 13th Floor

Los Angeles, CA 90071

Telephone: (213) 621-7190

Facsimile: (213) 621-3612

Attention: Matthew Koenig

 

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

 

LENDERS:

 

U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Guy Shinagawa

Name:

 

Guy Shinagawa

Title:

 

Assistant Vice President

Notice Address:

555 S.W. Oak Street, Suite 400

Mail Code: PD-OR-P4CB

Portland, Oregon 97204

Telephone: (503) 275-5101

Facsimile: (503) 275-5428

Attention: Guy Shinagawa

 

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

 

LENDERS:

 

UNION BANK OF CALIFORNIA, N.A. By:  

/s/ L. D. Hart

Name:

 

L.D. Hart

Title:

 

Vice President

Notice Address:

Union Bank of California, N.A.

530 B Street S-420

San Diego, CA 92101

Telephone: 619 230-3380

Facsimile: 619 230-3766

Attention: L.D. Hart

 

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

 

LENDERS:

 

NATIONAL CITY BANK By:  

/s/ Ralph A. Kaparos

Name:

 

Ralph A. Kaparos

Title:

 

Senior Vice President

Notice Address:

National City Bank

155 East Broad Street

Columbus, OH 43215-0077

Telephone: 216-488-7087

Facsimile: 216-488-7110

Attention: Dave Gregory

 

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LENDERS:

 

HSBC Bank USA, National Association By:  

/s/ Blake Seaton

Name:

 

Blake Seaton

Title:

 

Vice President

Notice Address:

HSBC Bank USA, National Association

445 N. Bedford Drive

Beverly Hills, CA 90210

Telephone: 310/281-4205

Facsimile: 310/281-4280

Attention: Blake Seaton

 

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LENDERS:

 

JPMorgan Chase Bank, N.A. By:  

/s/ Lisa A. Whatley

Name:

 

Lisa A. Whatley

Title:

 

Managing Director

Notice Address:

1 Bank One Plaza

Mail Code IL1-0364

Chicago, IL 60670

Telephone: 312-325-3235

Facsimile: 312-325-3239

Attention: Jason A. Rastovski

 

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SCHEDULE 2.1

 

LENDERS’ REVOLVING COMMITMENTS AND PRO RATA SHARES

 

Lender

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

   Commitment

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

   Pro Rata Share

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

 

Wells Fargo Bank, National Association

   $ 47,500,000    23.750 %

Bank of America N.A.

   $ 40,000,000    20.000 %

U.S. Bank National Association

   $ 30,000,000    15.000 %

Union Bank of California, N.A.

   $ 30,000,000    15.000 %

National City Bank

   $ 17,500,000    8.750 %

HSBC Bank USA, National Association

   $ 17,500,000    8.750 %

JPMorgan Chase Bank, N.A.

   $ 17,500,000    8.750 %

Total

   $ 200,000,000    100.000 %

 

2.1-1