Exhibit 10.1

 

 

 

 

 

 

CREDIT AGREEMENT

dated as of October 27, 2011

among

COMPASS GROUP DIVERSIFIED HOLDINGS LLC

as Borrower,

THE FINANCIAL INSTITUTIONS PARTY HERETO,

as Lenders,

TD SECURITIES (USA) LLC,

BMO CAPITAL MARKETS

and

SUNTRUST ROBINSON HUMPHREY, INC.,

designated as Lead Arrangers,

TD SECURITIES (USA) LLC,

designated as Sole Bookrunner,

BANK OF MONTREAL

and

SUNTRUST BANK

designated as Co-Syndication Agents,

U.S. BANK NATIONAL ASSOCIATION

and

FIFTH THIRD BANK,

designated as Co-Documentation Agents

and

TORONTO DOMINION (TEXAS) LLC,

as Agent

 

 

 

 

 

 

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TABLE OF CONTENTS

 

                 Page  

Section 1.

    

Definitions; Interpretation

     1   

   1.1.

    

Definitions

     1   

   1.2.

    

Interpretation

     23   

Section 2.

    

Credit Facilities

     24   

   2.1.

    

Commitments

     24         2.1.1.   

Revolving Loan Commitments

     24         2.1.2.   

Term Loan Commitment

     24         2.1.3.   

Request for Incremental Revolving Loan Commitments / Term Loans

     24   

   2.2.

    

Loan Procedures

     26         2.2.1.   

Loan Types

     26         2.2.2.   

Borrowing

     26         2.2.3.   

Conversion; Continuation

     26         2.2.4.   

Market Disruption Respecting LIBOR Loans

     27   

   2.3.

    

Letters of Credit

     28         2.3.1.   

Commitment

     28         2.3.2.   

Application

     28         2.3.3.   

Reimbursement Obligations

     29         2.3.4.   

Participations in Letters of Credit

     29   

   2.4.

    

Commitments Several

     30   

   2.5.

    

Certain Conditions

     30   

   2.6.

    

Loan Accounting

     30         2.6.1.   

Recordkeeping

     30         2.6.2.   

Notes

     31   

   2.7.

    

Interest

     31         2.7.1.   

Interest Rates

     31         2.7.2.   

Interest Payment Dates

     31         2.7.3.   

Setting and Notice of LIBOR Rates

     31         2.7.4.   

Computation of Interest

     31   

   2.8.

    

Fees

     32         2.8.1.   

Commitment Fee

     32         2.8.2.   

Letter of Credit Fees

     32   

   2.9.

    

Commitment Reduction

     32         2.9.1.   

Voluntary Reduction or Termination of Revolving Loan Commitments

     32         2.9.2.   

Reduction of Revolving Loan Commitments in Connection with Mandatory Prepayment

     32         2.9.3.   

All Reductions of Revolving Loan Commitments

     33   

   2.10.

    

Prepayment

     33         2.10.1.   

Voluntary Prepayment

     33         2.10.2.   

Mandatory Prepayment

     33         2.10.3.   

All Prepayments

     34   

 

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   2.11.

    

Repayment

     35         2.11.1.   

Revolving Loans

     35         2.11.2.   

Term Loan

     35   

   2.12.

    

Payment

     35         2.12.1.   

Making and Settlement of Payments

     35         2.12.2.   

Application of Payments and Proceeds

     36         2.12.3.   

Payment Dates

     37         2.12.4.   

Set-off

     37         2.12.5.   

Proration of Payments

     37   

Section 3.

    

Yield Protection

     37   

   3.1.

    

Taxes

     37   

   3.2.

    

Increased Cost

     39   

   3.3.

    

Inadequate or Unfair Basis

     40   

   3.4.

    

Change in Law

     40   

   3.5.

    

Funding Losses

     41   

   3.6.

    

Manner of Funding; Alternate Funding Offices

     41   

   3.7.

    

Mitigation of Circumstances; Replacement of Lenders

     41   

   3.8.

    

Conclusiveness of Statements; Survival

     42   

Section 4.

    

Conditions Precedent

     42   

   4.1.

    

Initial Credit Extension

     42         4.1.1.   

Financial Statements; Total Debt to EBITDA Ratio

     42         4.1.2.   

Initial Loans; Availability

     43         4.1.3.   

Corporate Ratings

     43         4.1.4.   

Fees

     43         4.1.5.   

Delivery of Loan Documents

     43   

   4.2.

    

All Credit Extensions

     44   

Section 5.

    

Representations and Warranties

     45   

   5.1.

    

Organization

     45   

   5.2.

    

Authorization; No Conflict

     45   

   5.3.

    

Validity; Binding Nature

     45   

   5.4.

    

Financial Condition

     46   

   5.5.

    

No Material Adverse Effect

     46   

   5.6.

    

Litigation

     46   

   5.7.

    

Ownership of Properties; Liens

     46   

   5.8.

    

Capitalization

     47   

   5.9.

    

Pension Plans

     47   

   5.10.

    

Investment Company Act

     47   

 

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   5.11.

    

Use of Proceeds

     47   

   5.12.

    

Margin Stock

     47   

   5.13.

    

Taxes

     47   

   5.14.

    

Solvency

     48   

   5.15.

    

Environmental Matters

     48   

   5.16.

    

Insurance

     48   

   5.17.

    

Information

     48   

   5.18.

    

Intellectual Property

     49   

   5.19.

    

Restrictive Provisions

     49   

   5.20.

    

Labor Matters

     49   

   5.21.

    

No Default

     49   

   5.22.

    

Related Agreements

     49   

   5.23.

    

Anti-Terrorism Laws

     50   

Section 6.

    

Affirmative Covenants

     50   

   6.1.

    

Information

     50         6.1.1.   

Annual Report

     50         6.1.2.   

Interim Reports

     51         6.1.3.   

Compliance Certificate

     51         6.1.4.   

Reports to SEC and Shareholders

     51         6.1.5.   

Notice of Default; Litigation; ERISA Matters

     51         6.1.6.   

Availability Certificate

     52         6.1.7.   

Management Report

     52         6.1.8.   

Projections

     52         6.1.9.   

Notice of an Event of Default under Intercompany Debt Documents; Notice of
Disqualified Portfolio Company

     53         6.1.10.   

Other Information

     53   

   6.2.

    

Books; Records; Inspections

     53   

   6.3.

    

Maintenance of Property; Insurance

     53   

   6.4.

    

Compliance with Laws; Payment of Taxes and Liabilities

     54   

   6.5.

    

Maintenance of Existence

     54   

   6.6.

    

Employee Benefit Plans

     55   

   6.7.

    

Environmental Matters

     55   

   6.8.

    

Further Assurances

     55   

   6.9.

    

Interest Rate Protection

     55   

   6.10.

    

Use of Proceeds

     55   

Section 7.

    

Negative Covenants

     55   

   7.1.

    

Debt

     55   

 

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   7.2.

    

Liens

     56   

   7.3.

    

[Reserved]

     58   

   7.4.

    

Restricted Payments

     58   

   7.5.

    

Mergers; Consolidations; Asset Sales

     59   

   7.6.

    

Modification of Organizational Documents

     60   

   7.7.

    

[Reserved.]

     60   

   7.8.

    

Transactions with Affiliates

     60   

   7.9.

    

Inconsistent Agreements

     60   

   7.10.

    

Business Activities

     60   

   7.11.

    

Investments

     61   

   7.12.

    

Restriction of Amendments to Certain Documents

     61   

   7.13.

    

Fiscal Year; Accounting Methods

     62   

   7.14.

    

Financial Covenants

     62         7.14.1.   

Fixed Charge Coverage Ratio

     62         7.14.2.   

Total Debt to EBITDA Ratio

     62   

   7.15.

    

Bank Accounts

     62   

   7.16.

    

Subsidiaries

     62   

Section 8.

    

Events of Default; Remedies

     63   

   8.1.

    

Events of Default

     63         8.1.1.   

Non-Payment of Credit

     63         8.1.2.   

Default Under Other Debt

     63         8.1.3.   

Bankruptcy; Insolvency

     63         8.1.4.   

Non-Compliance with Loan Documents

     63         8.1.5.   

Representations; Warranties

     63         8.1.6.   

Pension Plans

     64         8.1.7.   

Judgments

     64         8.1.8.   

Invalidity of Collateral Documents

     64         8.1.9.   

Invalidity of Management Fee Subordination Agreement

     64         8.1.10.   

Change of Control

     64         8.1.11.   

Activities of the Trust or Borrower

     64   

   8.2.

    

Remedies

     65         8.2.1.   

Termination of Revolving Loan Commitments; Acceleration

     65         8.2.2.   

Remedial Action Against Collateral

     65   

   8.3.

    

Purchase Option for Term Lenders Upon Acceleration Event

     66         8.3.1.   

Purchase Notice

     66         8.3.2.   

Purchase Option Closing

     66         8.3.3.   

Purchase Price

     66         8.3.4.   

Nature of Sale

     66   

Section 9.

    

Agent

     67   

   9.1.

    

Appointment; Authorization

     67   

 

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   9.2.

    

Delegation of Duties

     67   

   9.3.

    

Limited Liability

     67   

   9.4.

    

Reliance

     68   

   9.5.

    

Notice of Default

     68   

   9.6.

    

Credit Decision

     68   

   9.7.

    

Indemnification

     69   

   9.8.

    

Agent Individually

     69   

   9.9.

    

Successor Agent

     69   

   9.10.

    

Collateral Matters

     70   

   9.11.

    

[Reserved.]

     70   

   9.12.

    

Lead Arrangers, Bookrunner, Syndication Agents and Documentation Agents

     70   

Section 10.

    

Miscellaneous

     70   

   10.1.

    

Waiver; Amendments

     70   

   10.2.

    

Notices

     72   

   10.3.

    

Computations

     72   

   10.4.

    

Costs; Expenses

     73   

   10.5.

    

Indemnification by Borrower

     73   

   10.6.

    

Marshaling; Payments Set Aside

     73   

   10.7.

    

Nonliability of Lenders

     74   

   10.8.

    

Assignments; Participations

     74         10.8.1.   

Assignments

     74         10.8.2.   

Participations

     75   

   10.9.

    

Confidentiality

     76   

   10.10.

    

Captions

     76   

   10.11.

    

Nature of Remedies

     76   

   10.12.

    

Counterparts

     76   

   10.13.

    

Severability

     77   

   10.14.

    

Entire Agreement

     77   

   10.15.

    

Successors; Assigns

     77   

   10.16.

    

Governing Law

     77   

   10.17.

    

Forum Selection; Consent to Jurisdiction

     77   

   10.18.

    

Waiver of Jury Trial

     78   

   10.19.

    

USA PATRIOT Act Notification

     78   

 

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Annexes   

Annex I

  

Commitments and Pro Rata Shares

Annex II

  

Addresses

Annex III

  

Conditions Precedent to Permitted Eligible Acquisition

Annex IV

  

Conditions Precedent to Permitted Ineligible Acquisition

Exhibits   

Exhibit A

  

Form of Assignment Agreement

Exhibit B

  

Form of Compliance Certificate

Exhibit C

  

Form of Availability Certificate

Exhibit D

  

Form of Note

Exhibit E

  

Form of Borrowing Notice

Exhibit F

  

Form of Conversion/Continuation Notice

Exhibit G

  

Form of Excess Cash Flow Certificate

Exhibit H

  

Form of Payment Notification

Schedules   

Schedule 1.1

  

Approved Professionals

Schedule 1.2

  

Existing US Bank Letters of Credit

Schedule 4.1.3

  

Prior Debt

Schedule 5.6

  

Litigation

Schedule 5.8

  

Capitalization

Schedule 5.15

  

Environmental Matters

Schedule 5.20

  

Labor Matters

Schedule 7.1

  

Existing Debt

Schedule 7.2

  

Existing Liens

Schedule 7.8

  

Affiliate Transactions

Schedule 7.11

  

Existing Investments

Schedule 7.15

  

Bank Accounts

 

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CREDIT AGREEMENT

Credit Agreement dated as of October 27, 2011 (as amended, restated or otherwise
modified from time to time, this “Agreement”) among Compass Group Diversified
Holdings LLC, a Delaware limited liability company (“Borrower”), the financial
institutions party hereto from time to time (“Lenders”), and Toronto Dominion
(Texas) LLC (in its individual capacity, “TD”), as Agent for all Lenders.

In consideration of the mutual agreements herein contained, the parties hereto
agree as follows:

Section 1. Definitions; Interpretation.

1.1. Definitions.

When used herein the following terms shall have the following meanings:

Acceleration Event means the occurrence of any of the following: (i) an Event of
Default under Section 8.1.3; (ii) an Event of Default under Section 8.1.1 and
the termination or suspension of the Revolving Loan Commitments pursuant to
Section 8.2; or (iii) any other Event of Default under Section 8.1 and the
election by (x) the Required Revolving Lenders to declare the Revolver Debt to
be due and payable or to terminate the Revolving Loan Commitments pursuant to
Section 8.2 or (y) the Required Term Lenders to declare the Term Debt to be due
and payable.

Account has the meaning set forth in the Collateral Agreement.

Account Debtor means any Person who is obligated to Borrower or any Subsidiary
with respect to any Account.

Acquisition means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or a substantial portion of the assets of a Person, or of all or a substantial
portion of any business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests, membership interests
or equity of any Person, or otherwise causing any Person to become a Subsidiary,
or (c) a merger or consolidation or any other combination with another Person
(other than a Person that is already a Subsidiary).

Acquisition Subsidiary has the meaning set forth in Section 7.16.

Advanced Circuits means Compass AC Holdings, Inc., a Delaware corporation.

Adjusted Working Capital means the remainder of (a) the consolidated current
assets of Borrower and the Subsidiaries minus, in each case to the extent
included in such consolidated current assets, (i) the amount of cash and cash
equivalents and (ii) assets from discontinued operations, minus (b) the
consolidated current liabilities of Borrower and the Subsidiaries minus, in each
case to the extent included in such consolidated current liabilities, (i) the
amount of consolidated short-term Debt (including current maturities of
long-term Debt), (ii) obligations in respect of discontinued operations and
(iii) obligations under the Supplemental Put Agreement.

Affiliate of any Person means (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (b) with respect to any Person other than a Lender, any officer or
director of such Person and (c) with respect to any Lender, any entity

 

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administered or managed by such Lender or an Affiliate or investment advisor
thereof which is engaged in making, purchasing, holding or otherwise investing
in commercial loans. A Person shall be deemed to be “controlled by” any other
Person if such Person possesses, directly or indirectly, power to vote 10% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors or managers or power to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise; provided, that the provisions of this sentence shall not apply to CGI
and its Subsidiaries unless and until CGI or any of its Subsidiaries possesses,
directly or indirectly, the power to vote 50% or more of the voting securities
(on a fully diluted basis) of the Trust or Borrower. Unless expressly stated
otherwise herein, neither Agent nor any Lender shall be deemed an Affiliate of
Borrower, the Trust or any Subsidiary.

Agent means TD in its capacity as agent for all Lenders hereunder and any
successor thereto in such capacity.

Agreement has the meaning set forth in the Preamble.

Allocation Interests has the meaning assigned to such term in the Borrower LLC
Agreement.

Allocation Member has the meaning assigned to such term in the Borrower LLC
Agreement.

Allocation Member Distributions means distributions payable to the Allocation
Member pursuant to and in accordance with the provisions of Section 5.2 of the
Borrower LLC Agreement upon either (i) a Disposition of a Subsidiary that is
permitted by Section 7.5(b) of this Agreement or (ii) with respect to each
Subsidiary, the election by the Allocation Member on or after the date that is
five (5) years after the date on which Borrower acquired a controlling interest
in such Subsidiary and at a time when no Event of Default has occurred and is
continuing to receive a distribution in respect thereof and, to the extent
incremental federal and state income taxes of the Allocation Member then due and
owing in respect of such distributions and other allocations of Borrower’s
income pursuant to the Borrower LLC Agreement exceed such distributions, the
amount of such excess.

American Furniture means AFM Holding Corporation, a Delaware corporation.

Annualized means, with respect to the determination of the Interest Expense
component of the Fixed Charge Coverage Ratio for any computation period ending
on or before September 30, 2012, the amount determined by multiplying the actual
amount of Interest Expense from the Closing Date to the date of such calculation
by 365 and dividing by the number of days from the Closing Date through the date
of such calculation.

Anti-Terrorism Laws means any laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the laws comprising or implementing the Bank Secrecy Act, and the
laws administered by OFAC.

Applicable Margin means the following:

With respect to the Term Loan, the Applicable Margin shall mean (i) 5.00%, in
the case of the portion of the Term Loan comprised of Base Rate Loans and
(ii) 6.00%, in the case of the portion of the Term Loan comprised of LIBOR
Loans.

 

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With respect to the Revolving Loans, the Applicable Margin shall mean the
applicable rate per annum corresponding to the applicable Total Debt to EBITDA
Ratio, as set forth in the following table:

 

Total Debt to EBITDA Ratio

   Revolving Loans      Base Rate     LIBOR Rate  

> 2.75

     3.00 %      4.00 % 

> 1.75, but £ 2.75

     2.50 %      3.50 % 

£ 1.75

     2.00 %      3.00 % 

The Applicable Margin in respect of the Revolving Loans shall be adjusted
quarterly, to the extent applicable, on the date financial statements are
received by the Agent after the end of each related Fiscal Quarter based on the
Total Debt to EBITDA Ratio as of the last day of such Fiscal Quarter.
Notwithstanding the foregoing, (a) if Borrower fails to deliver the financial
statements required by Section 6.1.1 or 6.1.2, as applicable, and the related
Compliance Certificate required by Section 6.1.3, by the respective date
required thereunder after the end of any related Fiscal Quarter, the Applicable
Margin in respect of the Revolving Loans shall be adjusted to the rates
corresponding to the highest tier in the foregoing table from the date such
financial statements and Compliance Certificate were required to have been
delivered until the date delivered, (b) no reduction to the Applicable Margin in
respect of the Revolving Loans shall become effective at any time when an Event
of Default has occurred and is continuing, and (c) from the Closing Date until
the Applicable Margin is adjusted pursuant to this paragraph on the date upon
which financial statements are delivered pursuant to Section 6.1.2 for the
Fiscal Quarter ending March 31, 2012 (provided, however, that if such financial
statements for the Fiscal Quarter ending March 31, 2012 are delivered prior to
the date that is 6 months following the Closing Date, no adjustment shall be
made to the Applicable Margin until the date that is 6 months following the
Closing Date), the Applicable Margin for Base Rate Revolving Loans shall be not
less than 2.50% and the Applicable Margin for LIBOR Rate Revolving Loans shall
be not less than 3.50%.

If, as a result of any restatement of or other adjustment to the financial
statements of Borrower or for any other reason, Agent determines (or Borrower
determines with the reasonable concurrence of Agent) that (a) the Total Debt to
EBITDA Ratio as calculated by Borrower as of any applicable date was inaccurate
and (b) a proper calculation of the Total Debt to EBITDA Ratio would have
resulted in different pricing for any period, then if the proper calculation of
the Total Debt to EBITDA Ratio would have resulted in higher or lower pricing
for such period, then, in the case of higher pricing, Borrower shall
automatically and retroactively be obligated to pay to Agent, for the benefit of
the applicable Lenders, promptly on demand by Agent, an amount equal to the
excess of the amount of interest and fees that should have been paid for such
period over the amount of interest and fees actually paid for such period, and,
in the case of lower pricing, Borrower shall be credited toward future payments
owing hereunder an amount equal to the amount of interest and fees actually paid
for such period over the amount of interest and fees that should have been paid
for such period.

Approval Fee means, with respect to any Target in a Permitted Eligible
Acquisition or New Portfolio Company, a fee payable by Borrower to Agent, for
the ratable benefit of the Revolving Lenders that have timely approved of the
classification of such Target in a Permitted Eligible Acquisition or the
reclassification of such New Portfolio Company as an Existing Portfolio Company
in accordance with their Pro Rata Shares, upon such classification or
reclassification in an amount equal to one-quarter of one percent (0.25%) of the
product of (i) (x) in the case of the classification of a Target in a Permitted
Eligible Acquisition as an Existing Portfolio Company, the Pro Forma EBITDA of
such Target, for the twelve month period ending on the last day of the month for
which financial statements regarding such Target have been delivered to Agent,
or (y) in the case of the reclassification of a New Portfolio Company as an
Existing Portfolio Company, the New Portfolio Company EBITDA of such New
Portfolio Company for the twelve month period ending on the last day of the
month for which financial statements regarding such New Portfolio Company have
been delivered to Agent in accordance with the terms of this Agreement, times
(ii) 2.75.

 

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Approved Fund means (a) any fund, trust or similar entity that invests in
commercial loans in the ordinary course of business and is advised or managed by
(i) a Lender, (ii) an Affiliate of a Lender, (iii) the same investment advisor
that manages a Lender or (iv) an Affiliate of an investment advisor that manages
a Lender or (b) any finance company, insurance company or other financial
institution which temporarily warehouses loans for any Lender or any Person
described in clause (a) above.

Approved Professional means any Person identified on Schedule 1.1 or otherwise
approved by Agent in writing.

Assignment Agreement means an agreement substantially in the form of Exhibit A.

Availability means (a) with respect to an Existing Portfolio Company, the least
of (i) the product of (x) the Existing Portfolio Company EBITDA of such Existing
Portfolio Company for the twelve month period ending on the last day of the
month for which financial statements regarding such Existing Portfolio Company
have been most recently delivered to Agent in accordance with the terms of this
Agreement times (y) 2.75; (ii) the sum of (x) the principal balance of the
Qualified Intercompany Debt owing by such Existing Portfolio Company to Borrower
plus (y) the positive sum (if any) of the product of (I) 2.75 minus a fraction,
the numerator of which shall be the principal balance of the Qualified
Intercompany Debt owing by such Existing Portfolio Company to Borrower and the
denominator of which shall be the Existing Portfolio Company EBITDA of such
Existing Portfolio Company for the twelve month period ending on the last day of
the month for which financial statements regarding such Existing Portfolio
Company have been most recently delivered to Agent in accordance with the terms
of this Agreement times (II) the amount of Compass-Owned EBITDA with respect to
such Existing Portfolio Company; and (iii) for any Existing Portfolio Company
that is a Disqualified Portfolio Company, zero; and (b) with respect to any New
Portfolio Company, the least of (i) the product of (x) the New Portfolio Company
EBITDA of such New Portfolio Company for the twelve month period ending on the
last day of the month for which financial statements regarding such New
Portfolio Company have been most recently delivered to Agent in accordance with
the terms of this Agreement times (y) 1.75; (ii) the sum of (x) the principal
balance of the Qualified Intercompany Debt owing by such New Portfolio Company
to Borrower plus (y) the positive sum (if any) of the product of (I) 1.75 minus
a fraction, the numerator of which shall be the principal balance of the
Qualified Intercompany Debt owing by such New Portfolio Company to Borrower and
the denominator of which shall be the New Portfolio Company EBITDA of such New
Portfolio Company for the twelve month period ending on the last day of the
month for which financial statements regarding such New Portfolio Company have
been most recently delivered to Agent in accordance with the terms of this
Agreement times (II) the amount of Compass-Owned EBITDA with respect to such New
Portfolio Company; and (iii) for any New Portfolio Company that is a
Disqualified Portfolio Company, zero. It is agreed and understood that the
Availability Amount for any Portfolio Company shall in no event be less than
zero.

Availability Certificate means a certificate substantially in the form of
Exhibit C.

Banking Services means any of the following bank services provided to Borrower
by any Lender or any of its Affiliates: (a) credit cards for commercial
customers (including, without limitation, “commercial credit cards” and
purchasing cards), (b) stored value cards and (c) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and depository network services).

Banking Services Obligations of Borrower means any and all obligations of
Borrower owing to a Lender or any of its Affiliates, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor) in connection with Banking Services, in each case to the extent such
obligations have been identified to Agent in writing.

 

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Base Rate means, for any day, the greatest of (a) the rate of interest quoted
from time to time by the Agent as its Prime Rate, (b) the sum of the Federal
Funds Rate plus 0.5%, (c) the sum of applicable LIBOR Rate (which rate shall be
calculated based upon an Interest Period of 1 month and shall be determined on a
daily basis) plus 1.0%, and (d) with respect to Base Rate Loans that are part of
the Term Loan, 2.50%. Any change in the Base Rate due to a change in such Prime
Rate or the Federal Funds Rate shall be effective on the effective date of such
change in such Prime Rate or the Federal Funds Rate.

Base Rate Loan means any Loan which bears interest at or by reference to the
Base Rate.

Blocked Person means any Person: (i) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (ii) owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (iii) with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law, (iv) that commits,
threatens or conspires to commit or supports “terrorism” as defined in Executive
Order No. 13224; or (v) that is named a “specially designated national” or
“blocked person” on the most current list published by OFAC or other similar
list.

Borrower has the meaning set forth in the Preamble.

Borrower Expenses means all cash expenses of Borrower, and all cash expenses of
the Trust reimbursed or otherwise funded by Borrower, in each case excluding
fees paid to Manager and permitted hereunder.

Borrower LLC Agreement means that certain Third Amended and Restated Operating
Agreement of Borrower dated as of November 1, 2010, as in effect on the date
hereof or as modified in compliance with the provisions hereof.

Borrowing Availability means, as of any date of determination, an amount equal
to the lesser of (a) the Revolving Loan Commitments and (b) the result of
(i) Combined Eligible Availability minus (ii) Total Debt (excluding Revolving
Outstandings and the Term Loan).

Borrowing Notice means a notice in substantially the form of Exhibit E.

Business Day means any day on which commercial banks are open for commercial
banking business in New York, New York, and, in the case of a Business Day which
relates to a LIBOR Loan, on which dealings are carried on in the London
interbank eurodollar market.

CamelBak means CamelBak Acquisition Corp., a Delaware corporation.

Capital Expenditures means all expenditures which, in accordance with GAAP,
would be required to be capitalized and shown on the consolidated balance sheet
of the Trust, but excluding (i) expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed
(a) from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored, (b) with cash awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced or (c) with cash proceeds of Dispositions that are
reinvested in accordance with this Agreement and (ii) expenditures made to fund
the purchase price for assets acquired in a Permitted Eligible Acquisition or a
Permitted Ineligible Acquisition.

Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.

 

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Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, or
corporate demand notes, in each case (unless issued by a Lender or its holding
company) rated at least A-l by Standard & Poor’s Ratings Group or P-l by Moody’s
Investors Service, Inc., (c) any certificate of deposit (or time deposit
represented by a certificate of deposit) or banker’s acceptance maturing not
more than one year after such time, or any overnight Federal Funds transaction
that is issued or sold by any Lender (or by a commercial banking institution
that is a member of the Federal Reserve System and has a combined capital and
surplus and undivided profits of not less than $500,000,000), (d) any repurchase
agreement entered into with any Lender (or commercial banking institution of the
nature referred to in clause (c) above) which (i) is secured by a fully
perfected security interest in any obligation of the type described in any of
clauses (a) through (c) above and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such Lender (or other commercial banking institution) thereunder,
(e) money market accounts or mutual funds which invest exclusively in assets
satisfying the foregoing requirements and (f) other short term liquid
investments approved in writing by Agent.

“CFC” means a controlled foreign corporation (as that term is defined in the
IRC).

CGI means Compass Group Investments, Inc., a Bahamian international business
company.

Clause I Excess Proceeds has the meaning set forth in Section 2.10.2(b).

Clause II Excess Proceeds has the meaning set forth in Section 2.10.2(b).

Clause I Revolver Application Date has the meaning set forth in
Section 2.10.2(b).

Clause II Revolver Application Date has the meaning set forth in
Section 2.10.2(b).

Closing Date means October 27, 2011.

Collateral has the meaning set forth in the Collateral Agreement.

Collateral Agreement means the Collateral Agreement dated as of the Closing Date
by Borrower in favor of Agent and Lenders, as amended, restated or otherwise
modified from time to time.

Collateral Assignment means each agreement in form and substance reasonably
satisfactory to Agent between Borrower and Agent pursuant to which Borrower has
collaterally assigned to Agent to secure the Obligations its rights under
Existing Portfolio Company Acquisition Documents, New Portfolio Company
Acquisition Documents, acquisition documents with respect to an Acquisition of
an Outside Company, or Intercompany Debt Documents (as applicable).

Collateral Documents means, collectively, the Collateral Agreement, each
Mortgage, each Collateral Assignment, the Management Fee Subordination
Agreement, and each other agreement or instrument pursuant to or in connection
with which Borrower, the Trust or any other Person grants a security interest in
any Collateral to Agent for the benefit of Lenders, each as amended, restated or
otherwise modified from time to time.

Combined Eligible Availability means, at any time, the lesser of (i) the sum of
(x) the combined total of the Availability for each Existing Portfolio Company
at such time plus (y) the combined total of the Availability for each New
Portfolio Company at such time and (ii) the aggregate principal balance of the
Qualified Intercompany Debt then outstanding; provided, that if the aggregate
amount of the Combined Eligible Availability attributable to any one Portfolio
Company, or any group of

 

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Portfolio Companies operating in the same business industry, exceeds 40% with
respect to Portfolio Companies other than American Furniture or Halo, or 35%
with respect to American Furniture or Halo, then any such excess amounts shall
be excluded from the amount of Combined Eligible Availability (provided, that
Required Revolving Lenders may, in their reasonable credit judgment, elect to
require that Portfolio Companies arising after the Closing Date be assigned a
concentration level of 35% percent instead of 40%, such election, if made, to
occur at the time of and in connection with such Portfolio Company first
attaining such status hereunder).

Commitment means as to any Lender, such Lender’s Pro Rata Share of the Revolving
Loan Commitment and such Lender’s Pro Rata Share of the Term Loan Commitment.

Commitment Fee means the fee payable by Borrower to Lenders pursuant to
Section 2.8.1.

Compass-Owned EBITDA means, with respect to any Portfolio Company, the product
of (i) the Existing Portfolio Company EBITDA or New Portfolio Company EBITDA (as
applicable) of such Portfolio Company for the twelve month period ending on the
last day of the month for which financial statements regarding such Portfolio
Company have been most recently delivered to Agent in accordance with the terms
of this Agreement times (ii) the percentage of the equity interests in such
Portfolio Company that are directly or indirectly owned and controlled by
Borrower (on a primary basis).

Compliance Certificate means a certificate substantially in the form of Exhibit
B.

Computation Period means each period of four consecutive Fiscal Quarters ending
on the last day of a Fiscal Quarter (commencing with the Four Fiscal Quarters
ending on or about December 31, 2011); provided, that through and including the
Computation Period ending on September 30, 2012, the Interest Expense component
of the Fixed Charge Coverage Ratio under Section 7.14.1 shall be Annualized.

Consolidated EBITDA means the remainder of (i) sum of (x) the combined total of
the Existing Portfolio Company EBITDA for each Existing Portfolio Company plus
(y) the combined total of the New Portfolio Company EBITDA for each New
Portfolio Company, minus (ii) for each Portfolio Company, the positive amount,
if any, of Net Income Attributable to Non-Controlling Interests.

Consolidated Net Income means, with respect to any Person for any period, the
consolidated net income (or loss) of such Person for such period, excluding any
gains or non-cash losses from Dispositions, any extraordinary gains or
extraordinary non-cash losses and any gains or non-cash losses from discontinued
operations.

Contingent Obligation means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to or otherwise to invest in a debtor, or otherwise
to assure a creditor against loss) any indebtedness, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of any Person’s
obligation in respect of any Contingent Obligation shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.

Controlled Group means all members of a controlled group of corporations and all
members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with Borrower, are treated as
a single employer under Section 414 of the IRC or Section 4001 of ERISA.

 

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Conversion/Continuation Notice means a notice in substantially the form of
Exhibit F.

Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all indebtedness of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person as lessee under Capital Leases which have been or should be recorded as
liabilities on a balance sheet of such Person in accordance with GAAP, (d) all
obligations of such Person to pay the deferred purchase price of property or
services (excluding trade accounts payable in the ordinary course of business),
(e) all indebtedness secured by a Lien on the property of such Person, whether
or not such indebtedness shall have been assumed by such Person (with the amount
thereof being measured as the fair market value of such property), (f) all
obligations, contingent or otherwise, with respect to letters of credit (whether
or not drawn), banker’s acceptances and surety bonds issued for the account of
such Person (including the Letters of Credit), (g) all Hedging Obligations of
such Person, (h) all Contingent Obligations of such Person, (i) all non-compete
payment obligations and earn-out and similar obligations of such Person, (j) all
indebtedness of any partnership of which such Person is a general partner and
(k) all obligations of such Person under any synthetic lease transaction, where
such obligations are considered borrowed money indebtedness for tax purposes but
the transaction is classified as an operating lease in accordance with GAAP.

Default means any event that, if it continues uncured, will, with the lapse of
time or the giving of notice or both, constitute an Event of Default.

Defaulting Lender means any Lender that (a) for so long as such failure shall
exist, has failed to make any Loan or other credit extension or payment that
such Lender is required to make pursuant to the terms of this Agreement and such
failure continues for two Business Days (except to the extent such failure
corresponds to an amount that is the subject of a good faith dispute being made
by the applicable Lender, as demonstrated in a written statement from such
Lender to Agent and Borrower providing a reasonable basis and reasonable detail
for such good faith dispute), or (b) (i) has admitted in writing that it is
insolvent or (ii) has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment (unless, in
the case of any Lender referred to in this clause (b), Borrower, Agent and
Issuing Lender are reasonably satisfied that such Lender intends, and has the
financial wherewithal and all approvals required to enable it, to continue to
perform its obligations hereunder as a Lender).

Default Rate means two percentage points (2%).

Disposition means, as to any asset or right of Borrower or any of the
Subsidiaries, (a) any sale, lease, assignment or other transfer by a Portfolio
Company or a Subsidiary Outside Company (other than (1) among entities that are
within the same Portfolio Company or within the same Subsidiary Outside Company
and (2) any sale, lease, assignment or other transfer involving substantially
all of the assets or equity interests of a Portfolio Company or Subsidiary
Outside Company), (b) any sale, lease assignment or other transfer of any assets
(including, without limitation, any equity interests) by Borrower or, without
duplication, any sale, lease, assignment or other transfer involving
substantially all of the assets or equity interests of a Portfolio Company or
Subsidiary Outside Company, (c) any loss, destruction or damage thereof or
(d) any condemnation, confiscation, requisition, seizure or taking thereof, in
each case excluding (i) Dispositions in any Fiscal Year, the Net Cash Proceeds
of which do not in the aggregate exceed (x) with respect to a Portfolio Company
or with respect to a Subsidiary Outside Company, the amount (exclusive of
amounts received in connection with transfers described in (ii) below) that is
equal to 15% of the net book value of the tangible assets of such Portfolio
Company or Subsidiary Outside Company (as applicable) as of the last day of the
most recently ended fiscal year of such Portfolio Company or Subsidiary Outside
Company (as applicable), and (y) with respect to Borrower, $100,000, and
(ii) the sale or other transfer of Inventory in the ordinary course of business.

 

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Disqualified Portfolio Company means, as of any date, a Portfolio Company
(a) that is not Solvent, (b) in respect of which an Insolvency Event has
occurred or (c) that is in payment default under an Intercompany Debt Document
where such payment default has continued unremedied for a period of at least 60
days.

Dollar and $ mean lawful money of the United States of America.

Domestic Subsidiary means any Subsidiary that is incorporated or organized under
the laws of a State within the United States of America or the District of
Columbia.

Enforcement Action means (a) any action by Agent or a Lender to enforce any Lien
in respect of any Collateral, including any foreclosure proceeding, any public
or private sale, or any other Disposition pursuant to Article 9 of the Uniform
Commercial Code as in effect from time to time in the State of New York, (b) the
exercise of any other right or remedy provided to Agent or a Lender under the
Loan Documents or applicable law with respect to the Collateral, including the
taking of control, retention or possession of, or the exercise of any right of
set-off with respect to the Collateral, (c) any action by Agent or a Lender to
retain or cause Borrower or any Subsidiary to retain a broker or investment
banker, to prepare for and consummate the sale of any material portion of
Collateral, so long as such actions are diligently pursued in good faith,
(d) the Disposition of Collateral by Borrower or any Subsidiary after the
occurrence and during the continuation of an Event of Default, with the consent
of Agent, (e) the commencement by Agent or any Lender of any legal proceedings
or actions against or with respect to Borrower or any Subsidiary or any of
Borrower’s or any Subsidiary’s property or assets or any Collateral to
facilitate any of the actions described in clause (a), or (f) the commencement
of, or the joinder with any creditor in commencing, any Insolvency Event against
Borrower or any Subsidiary or the Collateral.

Environmental Claims means all claims, however asserted, by any governmental,
regulatory or judicial authority or other Person alleging liability or
responsibility for a material violation of any Environmental Law, or for release
or injury to the environment or any Person or property.

Environmental Laws means all present or future federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to any matter arising out of or relating to health and
safety, or pollution or protection of the environment or workplace, including
any of the foregoing relating to the presence, use, production, generation,
handling, transport, treatment, storage, disposal, distribution, discharge,
release, control or cleanup of any Hazardous Substance.

Ergo Baby means Ergo Baby Intermediate Holding Corporation.

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

Event of Default means any of the events described in Section 8.1.

Excess Cash Flow means, for any period, the remainder of (a) the sum of
(i) Consolidated EBITDA for such period, plus (ii) any net decrease in Adjusted
Working Capital during such period, minus (b) the sum, without duplication, of
(i) scheduled repayments of principal of Term Loans and other Debt of Borrower
and the Subsidiaries (in respect of Debt permitted in accordance with
Section 7.1) made during such period, in each case excluding any repayments made
in respect of Intercompany Debt, plus (ii) voluntary prepayments of the Term
Loans pursuant to Section 2.10.1 during such period, plus (iii) cash payments
(not financed with the proceeds of Debt other than Revolving Loans or with the
proceeds of equity issuances) made in such period with respect to Capital
Expenditures, plus (iv) all federal, state, local and foreign income taxes paid
in cash by Borrower and the Subsidiaries, or paid in cash by Trust with the
proceeds of the tax distributions by Borrower permitted under Section 7.4,
during such period,

 

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plus (v) all Interest Expense in respect of Debt permitted in accordance with
Section 7.1 paid in cash by Borrower and the Subsidiaries during such period,
(vi) Management Fees paid in cash during such period to the extent permitted
under Section 7.4 and added back in the calculation of Consolidated EBITDA, plus
(vii) any net increase in Adjusted Working Capital during such period.

Excess Cash Flow Certificate means a certificate substantially in the form of
Exhibit G.

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

Existing Portfolio Companies means (i) Advanced Circuits, together with its
Wholly-Owned Subsidiaries as of the Closing Date, (ii) American Furniture,
together with its Wholly-Owned Subsidiaries as of the Closing Date,
(iii) Tridien, together with its Wholly-Owned Subsidiaries as of the Closing
Date, (iv) Halo, together with its Wholly-Owned Subsidiaries as of the Closing
Date, (v) Ergo Baby, together with its Wholly-Owned Subsidiaries as of the
Closing Date, (vi) Liberty Safe, together with its Wholly-Owned Subsidiaries as
of the Closing Date, (vii) Fox Factory, together with its Wholly-Owned
Subsidiaries as of the Closing Date, (viii) CamelBak, together with its
Wholly-Owned Subsidiaries as of the Closing Date, and (ix) any Target in a
Permitted Eligible Acquisition or any New Portfolio Company with respect to
which a classification or reclassification as an Existing Portfolio Company has
been approved by Required Revolving Lenders in their sole discretion (it being
agreed and understood that Lenders shall make reasonable efforts to indicate
their response within 15 days of receiving a request for a classification or
reclassification of a Target or New Portfolio Company as an Existing Portfolio
Company) and an Approval Fee for such Target in a Permitted Eligible Acquisition
or New Portfolio Company has been paid, in each case to the extent that any such
company has become a Subsidiary of Borrower pursuant to a Permitted Eligible
Acquisition and remains a Subsidiary of Borrower.

Existing Portfolio Company Acquisition Documents means the primary acquisition
documents governing the acquisition of any of the Existing Portfolio Companies.

Existing Portfolio Company EBITDA means, for any Existing Portfolio Company for
any period, Consolidated Net Income of such Existing Portfolio Company plus, to
the extent deducted in determining such Consolidated Net Income (and without
duplication), (i) the consolidated interest expense of such Existing Portfolio
Company (including all imputed interest on Capital Leases), (ii) income tax
expense of such Existing Portfolio Company, (iii) depreciation and amortization
of such Existing Portfolio Company, (iv) Management Fees paid that are permitted
under Section 7.4 and satisfied by or otherwise allocable to such Existing
Portfolio Company, (v) non-cash charges incurred to reflect any in-process
research and development acquired by Borrower at the time of its acquisition of
such Existing Portfolio Company, (vi) expense in respect of any forgiveness of
non-cash loans to management of such Existing Portfolio Company, (vii) other
non-cash expenses (or less gains or income) deducted in the determination of
such Consolidated Net Income and for which no cash outlay (or cash receipt) is
foreseeable prior to the Termination Date, (viii) one-time closing costs and
expenses, including Transaction Services Fees, incurred by such Existing
Portfolio Company in connection with consummating the acquisition of such
Existing Portfolio Company or of a Target acquired by such Existing Portfolio
Company pursuant to a Permitted Eligible Acquisition that is an add-on
Acquisition, and (ix) integration costs incurred by such Existing Portfolio
Company in connection with the integration of a Target acquired by such Existing
Portfolio Company pursuant to a Permitted Eligible Acquisition that is an add-on
Acquisition, in each case so long as (I) the aggregate amount of all such
integration costs with respect to such Target so added back to the Existing
Portfolio Company EBITDA of such Existing Portfolio Company pursuant to this
clause (ix) does not exceed the lesser of (A) fifteen percent (15%) of the
amount of the Existing Portfolio Company EBITDA of such Existing Portfolio
Company (after giving effect to the consummation of the Acquisition of the
applicable add-on Target and as of the date thereof) and (B) forty percent
(40%) of the Pro Forma EBITDA of the applicable add-on Target, (II) such
integration costs are incurred within the first twenty-four (24) months
following the consummation of the

 

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Acquisition of the applicable add-on Target, and (III) all such addback amounts
have been approved by Agent; provided, that (x) with respect to an Existing
Portfolio Company that is acquired pursuant to a Permitted Eligible Acquisition
after the date hereof, for periods prior to the acquisition of such Existing
Portfolio Company pursuant to such Permitted Eligible Acquisition, the amount of
such Existing Portfolio Company EBITDA shall be equal to the Pro Forma EBITDA of
such Existing Portfolio Company for such period, and (y) notwithstanding
anything to the contrary contained herein, for each of the calendar months
preceding the Closing Date set forth below, the Existing Portfolio Company
EBITDA for CamelBak and Ergo Baby shall be deemed to be the amount set forth
below opposite such month:

 

Month

   CamelBak Existing Portfolio Company EBITDA  

July 2010

   $ 1,929,000   

August 2010

   $ 2,374,000   

September 2010

   $ 2,411,000   

October 2010

   $ 2,049,000   

November 2010

   $ 2,228,000   

December 2010

   $ 1,255,000   

January 2011

   $ 2,325,000   

February 2011

   $ 3,425,000   

March 2011

   $ 1,722,000   

April 2011

   $ 3,142,000   

May 2011

   $ 3,444,000   

June 2011

   $ 3,681,000   

July 2011

   $ 3,902,000   

August 2011

   $ 2,941,000   

 

Month

   Ergo Baby Existing Portfolio Company EBITDA  

July 2010

   $ 1,101,000   

August 2010

   $ 1,101,000   

September 2010

   $ 1,266,000   

Existing US Bank Letters of Credit means the letters of credit that are
specified on the Schedule 1.2 attached hereto.

 

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FATCA means Sections 1471 through 1474 of the IRC and any regulations or
official interpretations thereof (including any Revenue Ruling, Revenue
Procedure, Notice or similar guidance issued by the Internal Revenue Service
thereunder as a precondition to relief or exemption from Taxes under such
provisions).

Federal Funds Rate means, for any day, a rate per annum (rounded upward to the
nearest 1/100th of 1%) equal to the rate published by the Federal Reserve Bank
of New York on the preceding Business Day or, if no such rate is so published,
the average rate per annum, as determined by Agent, quoted for overnight Federal
Funds transactions last arranged prior to such day.

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of Borrower, which period shall be the
12-month period ending on December 31 of each year.

Fixed Charge Coverage Ratio means, for any Computation Period, the ratio of
(a) the remainder for such period of (i) Consolidated EBITDA minus (ii) the sum
of all income taxes, and tax distributions described in Section 7.4, paid or
payable in cash by Borrower and the Subsidiaries, minus (iii) all Capital
Expenditures minus (iv) the aggregate amount of Management Fees paid in cash by
Borrower and/or the Portfolio Companies pursuant to the Management Fee Documents
minus (v) Borrower Expenses to (b) the sum for such period of (i) Interest
Expense accrued for such Computation Period and paid or payable in cash at
anytime (excluding in all instances any interest paid in kind), plus
(ii) required payments of principal of Debt (excluding the Revolving Loans and
excluding required payments of principal in respect of Qualified Intercompany
Debt).

Foreign Subsidiary means any Subsidiary that is not a Domestic Subsidiary.

Fox Factory means Fox Factory Holding Corp.

FRB means the Board of Governors of the Federal Reserve System or any successor
thereto.

GAAP means generally accepted accounting principles in effect in the United
States of America set forth from time to time in the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

Halo means Halo Holding Corporation, a Delaware corporation.

Halo Credit Card Agreement means, collectively, (i) that certain Account Terms
agreement between JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) and Halo Branded
Solutions, Inc. (“Halo Branded”) (ii) that certain Consolidated Services Terms
agreement between JPMorgan Chase and Halo Branded and (iii) that certain Master
Commercial Card Terms agreement between JPMorgan Chase and Halo Branded, each
dated December 7, 2010.

Halo Credit Card Arrangement means the credit card financing arrangement of Halo
and its Wholly-Owned Subsidiaries with JPMorgan Chase as evidenced by the Halo
Credit Card Agreement.

Hazardous Substances means hazardous waste, hazardous substance, pollutant,
contaminant, toxic substance, oil, hazardous material, chemical or other
substance regulated by any Environmental Law.

 

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Hedging Obligation means, with respect to any Person, any liability of such
Person under any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices. The amount of any Person’s obligation in respect of
any Hedging Obligation shall be deemed to be the incremental obligation that
would be reflected in the financial statements of such Person in accordance with
GAAP.

Increase Request has the meaning set forth in Section 2.1.3.

Insolvency Event means, in respect of any Portfolio Company, such Portfolio
Company becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or such Portfolio Company
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for such Portfolio Company or any property thereof,
or makes a general assignment for the benefit of creditors; or, in the absence
of such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for such Portfolio Company or for a substantial part of
the property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of such Portfolio Company, and if such case or
proceeding is not commenced by such Portfolio Company, it is consented to or
acquiesced in by such Portfolio Company, or remains for 60 days undismissed; or
such Portfolio Company takes any action to authorize, or in furtherance of, any
of the foregoing.

Intercompany Debt means any Debt owing by a Portfolio Company or a Subsidiary
Outside Company to Borrower.

Intercompany Debt Document means any agreement that governs, guarantees or
secures any Intercompany Debt.

Interest Expense means, for any period, the consolidated interest expense (net
of interest income of Borrower) of the Trust, Borrower and the Subsidiaries for
such period (including all imputed interest on Capital Leases, but excluding
interest expense of the Portfolio Companies in respect of Qualified Intercompany
Debt).

Interest Period means, as to any LIBOR Loan, the period commencing on the date
such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one, two, three or six months thereafter, as selected by
Borrower pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided, that:
(a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day; (b) any Interest Period that begins 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 the calendar month at the end of
such Interest Period; (c) Borrower may not select an Interest Period for a
Revolving Loan which would extend beyond the scheduled Termination Date and
(d) Borrower may not select any Interest Period for the Term Loan if, after
giving effect to such selection, the aggregate principal amount of the portion
of the Term Loan having Interest Periods ending after any date on which an
installment of the Term Loan is scheduled to be repaid would exceed the
aggregate principal amount of the Term Loan scheduled to be outstanding after
giving effect to such repayment.

Inventory has the meaning set forth in the Collateral Agreement.

Investment means, with respect to any Person, (a) the purchase by such Person of
any debt or equity security of any other Person, (b) the making of any loan or
advance by such Person to any other Person, (c) such Person becoming obligated
with respect to a Contingent Obligation in respect of obligations of any other
Person (other than travel and similar advances to employees in the ordinary
course of business) or (d) the making by such Person of an Acquisition.

 

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Investment Affiliate means, with respect to Manager, any fund or investment
vehicle that (a) is organized by Manager for the purpose of making equity or
debt investments in one or more companies and (b) is controlled by Manager. For
purposes of this definition “control” means the power to direct or cause the
direction of management and policies of a Person, whether by contract or
otherwise.

IRC means the Internal Revenue Code of 1986, as amended.

Issuing Lender means U.S. Bank National Association, or such other financial
institution approved by Agent and specified to Borrower by Agent.

Lead Arrangers means, collectively TD Securities (USA) LLC, BMO Capital Markets,
and SunTrust Robinson Humphrey, Inc.

Legal Costs means, with respect to any Person, (a) all reasonable fees and
charges of any counsel, accountants, auditors, appraisers, consultants and other
professionals to such Person, (b) the reasonable allocable cost of internal
legal services of such Person and all reasonable disbursements of such internal
counsel and (c) all court costs and similar legal expenses.

Lenders has the meaning set forth in the Preamble.

Letter of Credit has the meaning set forth in Section 2.3.1.

Letter of Credit Fee means the fee payable by Borrower to Lenders pursuant to
Section 2.8.2.

Liberty Safe means Liberty Safe Holding Corporation.

LIBOR Loan means any Loan which bears interest at a rate determined by reference
to the LIBOR Rate.

LIBOR Rate means, for any Interest Period with respect to any LIBOR Loan, the
rate per annum equal to (i) the British Bankers Association LIBOR Rate, as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Agent from time to time), at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period or (ii) if such published rate is not available at such time for any
reason, then the LIBOR Rate for such Interest Period shall be the rate per annum
determined by the Agent to be the rate at which deposits in Dollars for delivery
on the first day of such Interest Period in same day funds in the approximate
amount of the LIBOR Rate Loan being made, continued or converted by Agent and
with a term equivalent to such Interest Period would be offered by Agent’s
Eurodollar Lending Office to major banks in the London interbank Eurodollar
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period provided, that with
respect to LIBOR Loans that are part of the Term Loan, LIBOR Rate shall mean
1.50% at any time that the result of clause (i) above (or, if the LIBOR Rate
cannot be determined pursuant to clause (i) above, pursuant to clause
(ii) above) is less than 1.50%.

Lien means, with respect to any Person, any interest granted by such Person in
any real or personal property, asset or other right owned or being purchased or
acquired by such Person which secures payment or performance of any obligation
and shall include any mortgage, lien, encumbrance, charge or other security
interest of any kind, whether arising by contract, as a matter of law, by
judicial process or otherwise.

 

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Loan Documents means this Agreement, the Notes, the Letters of Credit, the
Collateral Documents, any fee letters executed by Borrower in favor of Lead
Arrangers, Agent or Lenders, and all documents, instruments and agreements
delivered in connection with the foregoing, all as amended, restated or
otherwise modified from time to time.

Loans means the Revolving Loans and the Term Loan.

Management Fee Agreement means that certain Amended and Restated Management
Services Agreement, dated as of December 15, 2009, by and between Borrower and
Manager, as may from time to time hereafter be amended as permitted hereby.

Management Fee Documents means collectively, the Management Fee Agreement and
each management services agreement entered into between a Portfolio Company and
the Manager or an Affiliate of the Manager having terms whereby payments made
under such management services agreement by such Portfolio Company reduce on a
dollar-for-dollar basis the total payment obligations of Borrower under the
Management Fee Agreement.

Management Fee Subordination Agreement means an agreement satisfactory to Agent
in form and substance among Agent and the parties to the Management Fee
Documents that subordinates the obligations of the Borrower under the Management
Fee Documents to the Obligations upon the occurrence and continuation of an
Acceleration Event and the commencement of an exercise of remedies against any
portion of the Collateral by Agent.

Management Fees means all fees paid to Manager pursuant to the Management Fee
Documents.

Manager means Compass Group Management LLC, a Delaware limited liability
company.

Margin Stock means any “margin stock” as defined in Regulation T, U or X of the
FRB.

Material Adverse Effect means (a) a material adverse change in, or a material
adverse effect upon, the financial condition, operations, assets, business or
properties of Borrower and the Portfolio Companies taken as a whole, (b) a
material impairment of the ability of Borrower to perform any of its Obligations
under any Loan Document or (c) a material adverse effect upon portions of the
Collateral under the Collateral Documents that are material in relation to the
Collateral when considered as a whole, or upon the legality, validity, binding
effect or enforceability against Borrower of any Loan Document.

Mortgage means each mortgage, deed of trust, leasehold mortgage or similar
instrument, if any, granting Agent a Lien on a real property interest of
Borrower, as amended, restated or otherwise modified from time to time.

Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which Borrower or any member of the Controlled
Group may have any liability.

Net Cash Proceeds means:

(a) with respect to any Disposition, the aggregate cash proceeds (including cash
proceeds received pursuant to policies of insurance and by way of deferred
payment of principal

 

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pursuant to a note, installment receivable or otherwise, but only as and when
received) received by the Trust, Borrower or any Subsidiary pursuant to such
Disposition net of (i) the reasonable direct costs relating to such Disposition
(including, without duplication, sales commissions and legal, accounting,
investment banking and other professional fees, commissions and expenses, any
Transaction Services Fee required to be paid to Manager as a result of such
Disposition and permitted under Section 7.4, and any Allocation Member
Distributions payable to the Allocation Member as a result of such Disposition),
(ii) any portion of such proceeds deposited in an escrow account pursuant to the
documentation relating to such Disposition (provided that such amounts shall be
treated as Net Cash Proceeds upon their release from such escrow account to
Borrower or the applicable Subsidiary), (iii) taxes paid or reasonably estimated
by Borrower to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements),
(iv) amounts required to be applied to the repayment of any Debt secured by a
Lien prior to (1) the Lien of Agent, in the case of assets of Borrower, or
(2) the Lien of Borrower pursuant to Qualified Intercompany Debt Documents, in
the case of assets of a Subsidiary, on the asset subject to such Disposition,
(v) in the case of a Disposition by a Subsidiary at a time when the balance of
the Intercompany Debt owed by such Subsidiary is zero, the portion of such
proceeds paid to equityholders of such Subsidiary other than Borrower or another
Subsidiary as a pro rata distribution at time of the distribution of the
proceeds of such Disposition by such Subsidiary to its equityholders, (vi) in
the case of a Disposition by a Subsidiary Outside Company, the portion of such
proceeds paid in satisfaction of Outside Debt owing by such Subsidiary Outside
Company, and (vii) so long as no Event of Default exists, (A) with respect to
any Disposition described in clause (a) of the definition thereof, all money
actually applied within the 180 day period commencing on the date of such
Disposition to replace such assets with assets that are useful to the business
of the applicable Portfolio Company or Subsidiary Outside Company, and (B) with
respect to any Disposition described in clause (c) or (d) of the definition
thereof, all money actually applied within 180 days to repair, replace or
reconstruct damaged property or property affected by loss, destruction, damage,
condemnation, confiscation, requisition, seizure or taking; and

(b) with respect to any issuance of equity securities, the aggregate cash
proceeds received by Borrower pursuant to such issuance, net of the reasonable
direct costs relating to such issuance (including reasonable sales and
underwriter’s commission).

Net Income Attributable to Non-Controlling Interests means, for any period,
(x) with respect to any Portfolio Company, the product of (i) the Consolidated
Net Income of such Portfolio Company for such period times (ii) the percentage
of the equity interests in such Portfolio Company on a primary basis that are
not directly or indirectly owned and controlled by Borrower and (y) with respect
to the Portfolio Companies collectively, the combined Net Income Attributable to
Non-Controlling Interests for each Portfolio Company for such period.

New Portfolio Company means (i) a Target acquired after the Closing Date by
Borrower or any Acquisition Subsidiary as a new portfolio company pursuant to a
Permitted Eligible Acquisition or (ii) a Target acquired after the Closing Date
by an Existing Portfolio Company or any Acquisition Subsidiary as an add-on
acquisition by such Existing Portfolio Company in a Permitted Eligible
Acquisition, in each case together with, if applicable, the Acquisition
Subsidiary and the Wholly-Owned Subsidiaries of such Target and to the extent
that any such Target remains a Subsidiary of Borrower and has not been
classified or reclassified as an Existing Portfolio Company. For the avoidance
of doubt, the New Portfolio Companies shall in all instances exclude any Outside
Companies.

New Portfolio Company Acquisition Documents means the primary acquisition
documents governing the acquisition of any of the New Portfolio Companies.

 

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New Portfolio Company EBITDA means, for any New Portfolio Company for any
period, (x) with respect to periods after the acquisition of such New Portfolio
Company pursuant to a Permitted Eligible Acquisition, Consolidated Net Income of
such New Portfolio Company plus, to the extent deducted in determining such
Consolidated Net Income, (i) the consolidated interest expense of such New
Portfolio Company (including all imputed interest on Capital Leases),
(ii) income tax expense of such New Portfolio Company, (iii) depreciation and
amortization of such New Portfolio Company, (iv) Management Fees paid that are
permitted under Section 7.4 and satisfied by or otherwise allocable to such New
Portfolio Company, (v) non-cash charges incurred to reflect any in-process
research and development acquired by Borrower at the time of its acquisition of
such New Portfolio Company, (vi) expense in respect of any forgiveness of
non-cash loans to management of such New Portfolio Company, (vii) other non-cash
expenses (or less gains or income) deducted in the determination of such
Consolidated Net Income and for which no cash outlay (or cash receipt) is
foreseeable prior to the Termination Date, (viii) one-time closing costs and
expenses, including Transaction Services Fees, incurred by such New Portfolio
Company in connection with consummating the acquisition of such New Portfolio
Company or of a Target acquired by such New Portfolio Company pursuant to a
Permitted Eligible Acquisition that is an add-on Acquisition, and
(ix) integration costs incurred by such New Portfolio Company in connection with
the integration of a Target acquired by such New Portfolio Company pursuant to a
Permitted Eligible Acquisition that is an add-on Acquisition, in each case so
long as (I) the aggregate amount of all such integration costs with respect to
such Target so added back to the New Portfolio Company EBITDA of such New
Portfolio Company pursuant to this clause (ix) does not exceed the lesser of
(A) fifteen percent (15%) of the amount of the New Portfolio Company EBITDA of
such New Portfolio Company (after giving effect to the consummation of the
Acquisition of the applicable add-on Target and as of the date thereof) and
(B) forty percent (40%) of the Pro Forma EBITDA of the applicable add-on Target,
(II) such integration costs are incurred within the first twenty-four
(24) months following the consummation of the Acquisition of the applicable
add-on Target, and (III) all such addback amounts have been approved by Agent;
and (y) with respect to periods prior to the acquisition of such New Portfolio
Company pursuant to a Permitted Eligible Acquisition, Pro Forma EBITDA for such
New Portfolio Company.

Non-Subsidiary Outside Company means an Outside Company that is not a Subsidiary
of Borrower.

Note means a promissory note substantially in the form of Exhibit D, as the same
may be amended, restated or otherwise modified from time to time.

Obligations means all liabilities, indebtedness and obligations (monetary
(including post-petition interest in any bankruptcy or insolvency proceeding,
whether or not allowed) or otherwise) of the Borrower under this Agreement, any
other Loan Document, any Collateral Document or any other document or instrument
executed in connection herewith or therewith, all Hedging Obligations permitted
hereunder which are owed to any Lender or its Affiliate and all Banking Services
Obligations, in each case howsoever created, arising or evidenced, whether
direct or indirect, absolute or contingent, now or hereafter existing, or due or
to become due. It is agreed and understood that the Obligations shall include
any reimbursement obligations of any Person that are owing to Issuing Lender in
respect of the Existing US Bank Letters of Credit.

OFAC means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

Outside Company means (i) a Subsidiary of Borrower (and not of any Portfolio
Company) acquired pursuant to a Permitted Ineligible Acquisition, together with
any Subsidiaries of such Subsidiary and any Acquisition Subsidiary formed to
consummate such Permitted Ineligible Acquisition, or (ii) a company in which
Borrower has an ownership interest that was previously a Portfolio Company and
has been reclassified as an Outside Company in connection with the consummation
of a transaction of the type described in subclause (iii) of Section 7.5(b).

 

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Outside Debt means (i) Indebtedness that does not constitute Qualified
Intercompany Indebtedness and is incurred or assumed by an Outside Company in
connection with the Acquisition of such Outside Company pursuant to a Permitted
Ineligible Acquisition and (ii) any Indebtedness incurred by an Outside Company
subsequent to the Acquisition of such Outside Company pursuant to a Permitted
Ineligible Acquisition (or, as applicable, subsequent to such Outside Company
having been reclassified as such in connection with the consummation of a
transaction of the type described in subclause (iii) of Section 7.5(b)).

Paid in Full, Pay in Full or Payment in Full means, with respect to any
Obligations, (a) the payment in full in cash of all such Obligations (other than
(i) contingent indemnification obligations to the extent no claim giving rise
thereto has been asserted and (ii) Hedging Obligations and Banking Services
Obligations that, at the time of determination, are allowed by the Person to
whom such Obligations are owing to remain outstanding or are not required to be
repaid or cash collateralized pursuant to the provisions of any document
governing the applicable Hedging Obligations or Banking Services Obligations),
(b) the termination or expiration of all of the Revolving Loan Commitments and
(c) in connection with the termination or expiration of the Revolving Loan
Commitments, either (i) the cancellation and return to Agent of all Letters of
Credit or (ii) the cash collateralization of all Letters of Credit (in an amount
equal to 105% of the Stated Amount of such Letters of Credit) in a manner
reasonably acceptable to Agent.

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to
any or all of its functions under ERISA.

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension
Plan), and to which Borrower or any member of the Controlled Group may have any
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.

Permitted Earn-Outs means, with respect to a Portfolio Company, obligations of
such Portfolio Company arising from a Permitted Eligible Acquisition which would
become payable based on the achievement of specified financial results over time
and are subject to subordination terms in favor of Borrower that subordinate
such obligations to the Intercompany Debt owing to Borrower by the applicable
Portfolio Company, which subordination terms must be acceptable to Agent in its
reasonable credit judgment. In respect of any Computation Period, the amount of
any Permitted Earn-Outs for purposes of the financial covenants set forth in
this Agreement shall be the amount, if any, that has become due and payable
during such Computation Period and remains outstanding as of the last day
thereof and for the avoidance of doubt, shall not include any amounts,
contingent or otherwise, that are not outstanding as of such date. The amount of
any Permitted Earn-Outs for purposes of the covenants set forth in
Section 7.1(j) shall include the maximum amount payable under any such earn-out
obligations.

Permitted Eligible Acquisition means any Acquisition by (i) an Acquisition
Subsidiary of Borrower of all or substantially all of the assets of a Person as
a New Portfolio Company or Existing Portfolio Company, or of all or
substantially all of any business or division of a Person as a New Portfolio
Company or Existing Portfolio Company, (ii) Borrower of no less than a voting
majority of the capital stock, partnership interests, membership interests or
equity of any Person as a New Portfolio Company or Existing Portfolio Company,
(iii) a Portfolio Company (or an Acquisition Subsidiary of such Portfolio
Company) of all or substantially all of the assets of a Person as an add-on
acquisition for such Portfolio

 

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Company, or of all or substantially all of any business or division of a Person
as an add-on acquisition for such Portfolio Company or (iv) a Portfolio Company
of no less than 100% of the capital stock, partnership interests, membership
interests or equity of any Person as an add-on acquisition for such Portfolio
Company, in each case to the extent that each of the conditions precedent set
forth in Annex III shall have been satisfied; provided, however, that if such
Acquisition is otherwise a Permitted Eligible Acquisition under clauses (iii) or
(iv) hereof and the aggregate consideration to be paid in such Acquisition is
$10,000,000 or less, then (x) the conditions set forth in clauses (1), (4),
(8) and (10) of Annex III shall not be required to be satisfied and the
condition set forth in clause (12) of Annex III shall not be required to be
satisfied until thirty (30) days after giving effect to such Acquisition; and
(y) the Target shall be assigned the same multiple for purposes of Availability
as the Portfolio Company consummating such Acquisition.

Permitted Ineligible Acquisition means any Acquisition that is funded in whole
or in part by Outside Debt incurred only after Required Revolving Lenders have
refused to allow for the treatment of the applicable Target in such Acquisition
as an Existing Portfolio Company in accordance with the provisions hereof and
where (i) an Acquisition Subsidiary of Borrower has acquired all or
substantially all of the assets of a Person as an Outside Company, or of all or
substantially all of any business or division of a Person as an Outside Company
or (ii) Borrower has acquired no less than a voting majority of the capital
stock, partnership interests, membership interests or equity of any Person as an
Outside Company, in each case to the extent that each of the conditions
precedent set forth in Annex IV shall have been satisfied.

Permitted Trust Merger means a merger of the Trust with and into Borrower, with
Borrower as the surviving company, which is consummated with prior written
notice to Agent and in compliance with the Trust Agreement and applicable law,
and otherwise on terms and conditions reasonably acceptable to Agent.

Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.

Portfolio Companies means the Existing Portfolio Companies and the New Portfolio
Companies, and shall in all instances exclude any Outside Companies.

Portfolio Company Leverage Ratio means, for any Portfolio Company as of any date
of determination, the ratio of (a) all Debt (other than Debt described in
clauses (h) and (i) of the definition thereof unless such Debt is reflected on
the balance sheet of such Portfolio Company as a liability in accordance with
GAAP) of such Portfolio Company, determined on a consolidated basis for such
Portfolio Company to (B) the Existing Portfolio Company EBITDA or New Portfolio
Company EBITDA (as applicable) of such Portfolio Company for the twelve month
period ending on the last day of the month for which financial statements
regarding such Portfolio Company have been most recently delivered to Agent in
accordance with the terms of this Agreement.

Prior Debt means the Debt listed on Schedule 4.1.3.

Pro Forma EBITDA means, for any Person, EBITDA for such Person as calculated in
accordance with clause (x) of the definition of New Portfolio Company EBITDA for
the most recent period for which financial statements are made available to
Agent at the time of determination, and as adjusted by extraordinary expenses,
increased costs, identifiable and verifiable expense reductions and excess
management compensation, if any, in each case calculated by Borrower in
accordance with the requirements of GAAP and Article XI of regulation S-X under
the Exchange Act and verified by an Approved Professional.

 

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Pro Rata Share means, with respect to any Lender, (i) with respect to the
Revolving Loan Commitment and the Revolving Loans, the applicable percentage (as
adjusted from time to time in accordance with the terms hereof) specified
opposite such Lender’s name on Annex I which corresponds to the Revolving Loan
Commitment, which percentage shall be with respect to Revolving Outstandings if
the Revolving Loan Commitments have terminated, (ii) with respect to the Term
Loan, the applicable percentage (as adjusted from time to time in accordance
with the terms hereof) specified opposite such Lender’s name on Annex I which
corresponds to the Term Loan, and (iii) with respect to the Loans and
Commitments collectively, the percentage obtained by dividing (a) the sum of the
Revolving Loan Commitment of such Lender (or, in the event the Revolving Loan
Commitment shall have been terminated, such Lender’s then existing Revolving
Outstandings), plus such Lender’s then outstanding principal amount of the Term
Loan by (b) the sum of the Revolving Loan Commitment (or, in the event the
Revolving Loan Commitment shall have been terminated, the then existing
Revolving Outstandings) of all Lenders, plus the then outstanding principal
amount of the Term Loan of all Lenders.

Public Market means a recognized public market for trading of securities on
which shares of all or substantially all of the issued and outstanding equity
interests in the Trust have been distributed by means of an effective
registration statement under the Securities Act of 1933, as amended.

Purchase Notice has the meaning set forth in Section 8.3.1.

Qualified Intercompany Debt means, without duplication, Intercompany Debt that
is owing by a Portfolio Company pursuant to Qualified Intercompany Debt
Documents and that has a maturity date, an interest rate, an amortization
schedule for principal, mandatory prepayment provisions and interest payment
dates that are reasonably acceptable to Agent (it being agreed and understood
that such terms as in effect on the Closing Date under the Intercompany Debt
Documents for the Existing Portfolio Companies are acceptable to Agent).

Qualified Intercompany Debt Documents means, in respect of any Portfolio
Company, (i) a reasonable and customary senior secured loan agreement (that is
inclusive of reasonable and customary representations and warranties,
affirmative, negative and financial covenants and events of default) between
Borrower, as the sole lender, and the borrower or co-borrowers thereunder, as
such Intercompany Loan Agreement may be amended from time to time in compliance
with the provisions of this Agreement, (ii) guaranty documentation pursuant to
which any Subsidiaries of the borrower, or co-borrowers, as applicable, under
such Intercompany Loan Agreement guaranty (together with any parent companies of
such borrower or co-borrowers that are Subsidiaries of Borrower) all of
obligations under such Intercompany Loan Agreement, and (iii) collateral
documents pursuant to which Borrower is provided with a perfected,
first-priority Lien in substantially all of the real and personal property of
the borrower, or co-borrowers, as applicable, under such Intercompany Loan
Agreement, and the guarantors under such guaranty documentation to secure all of
the obligations under such Intercompany Loan Agreement and related Intercompany
Debt Documents, including without limitation a security agreement applicable to
all of the equity interests in and substantially all of the assets of such
borrowers and guarantors, UCC financing statements covering all of the assets of
such borrowers and guarantors that are properly filed in the respective
jurisdictions of organization for such companies, real estate mortgages for any
real estate of such borrowers and guarantors, control agreements with respect to
the deposit accounts of such borrowers and guarantors and insurance
documentation whereby Borrower has been named as loss payee in respect of all
policies of property and casualty insurance of such borrowers and guarantors;
provided, that notwithstanding the foregoing, it is agreed that the Qualified
Intercompany Debt Document criteria in relation to CFC entities within a
Portfolio Company shall be as follows: (x) if such CFC entities collectively
contribute 15% or less of the aggregate amount of Existing Portfolio Company
EBITDA or New Portfolio Company EBITDA (as applicable) of such Portfolio
Company, such CFC entities shall not be required to deliver guarantees in
respect of such Portfolio Company’s Qualified Intercompany Debt and the
collateral delivery requirements in respect of such CFC entities shall be
limited to customary pledge documentation pursuant to which 65% of the total
outstanding voting equity interests of such CFC

 

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entities are pledged to secure such Portfolio Company’s Qualified Intercompany
Debt (excluding equity interests in a CFC entity owned by another CFC entity)
and (y) if such CFC entities collectively contribute more than 15% of the
aggregate amount of Existing Portfolio Company EBITDA or New Portfolio Company
EBITDA (as applicable) of such Portfolio Company, to the extent required by
Agent in its discretion or Required Lenders in their discretion such CFC
entities shall be required to deliver customary guarantees in respect of such
Portfolio Company’s Qualified Intercompany Debt and such CFC entities and their
immediate parent companies shall be required to deliver customary pledge and
collateral documentation providing for liens in all of the equity interests and
substantially all of the assets of such CFC entities securing such Portfolio
Company’s Qualified Intercompany Debt.

Related Agreements means the Intercompany Debt Documents, the Management Fee
Documents, the Existing Portfolio Company Acquisition Documents, the New
Portfolio Company Acquisition Documents, the agreements governing payment of the
Transaction Services Fees, the Borrower LLC Agreement, the Trust Agreement, the
Supplemental Put Agreement, and any contracts listed on Schedule 7.8.

Related Transactions means the transactions contemplated by the Related
Agreements.

Repricing Transaction means the incurrence by the Borrower of any new or
additional term loans (whether pursuant to an amendment to this Agreement,
pursuant to the provisions of Section 2.1.3 of this Agreement or pursuant to a
separate financing) that is broadly marketed or syndicated to institutional
investors in financings similar to the Term Loan (i) having total pricing
(including interest rate margins, up-front fees, original issue discounts
(assuming, for purposes of up-front fees and original issue discounts, a 4-year
average life) or interest rate floors, but excluding for this determination the
effect of any arrangement, structuring, syndication or other fees payable in
connection therewith that are not shared with all lenders or holders thereof)
that is less than the Applicable Margin plus the Base Rate or LIBOR Rate for, or
weighted average yield (to be determined by the Agent consistent with generally
accepted financial practice) of, the Term Loan, and (ii) the proceeds of which
are used to repay, in whole or in part, principal of the outstanding Term Loan.

Required Lenders means Required Revolving Lenders plus Required Term Lenders.

Required Revolving Lenders means Revolving Lenders having Pro Rata Shares the
aggregate Dollar equivalent amount of which equals or exceeds 50.1% of the
Revolving Loan Commitments (or, if the Revolving Loan Commitments have been
terminated, Revolving Outstandings).

Required Term Lenders means Term Lenders holding Pro Rata Shares of the Term
Loan the aggregate Dollar equivalent amount of which equals or exceeds 50.1% of
the aggregate outstanding principal balance of the Term Loan.

Revolver Debt means any and all Obligations owing to Revolving Lenders in
respect of the Revolving Loan Commitments and the Revolving Loans.

Revolving Lender means each Lender holding a portion of the Revolving Loan
Commitment (or, in the event the Revolving Loan Commitment shall have been
terminated, a portion of the Revolving Outstandings).

Revolving Loan Commitments means an aggregate amount of $290,000,000, as reduced
from time to time pursuant to the terms hereof or as increased pursuant to the
terms of Section 2.1.3 hereof.

Revolving Loans has the meaning set forth in Section 2.1.1.

 

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Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all Revolving Loans then outstanding, plus (b) the Stated
Amount of all Letters of Credit then outstanding.

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

Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances, plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.

Subsidiary means, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person owns, directly or
indirectly, such number of outstanding shares or other equity interests as to
have more than 50% of the ordinary voting power for the election of directors or
other managers of such corporation, partnership, limited liability company or
other entity. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of Borrower.

Subsidiary Outside Company means an Outside Company that is a Subsidiary of
Borrower.

Supplemental Put Agreement has the meaning assigned to such term in the Borrower
LLC Agreement.

Target means the Person, or business or substantially all of the assets of a
Person, acquired in an Acquisition.

TD has the meaning set forth in the Preamble.

Term Debt means any and all Obligations owing to Term Lenders in respect of the
Term Loan.

Term Lender means each Lender holding a portion of the Term Loan Commitment.

Term Loan means the loans made pursuant to Section 2.1.2, as the same may be
increased pursuant to the terms of Section 2.1.3 hereof.

Term Loan Commitment means $225,000,000.

Term Loan Maturity Date means October 27, 2017.

Termination Date means October 27, 2016 or such earlier date on which the
Revolving Loan Commitments terminate pursuant to Section 2.9 or 8.

 

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Total Debt means all Debt (other than Qualified Intercompany Debt, Outside Debt
and Debt described in clauses (h) and (i) of the definition thereof unless such
Debt is reflected on the balance sheet of the Trust or Borrower as a liability
in accordance with GAAP or, in the case of a Permitted Earn-Out, if such
Permitted Earn-Out has become due and payable) of Borrower and the Subsidiaries,
determined on a consolidated basis, net of all cash and cash equivalents of
Borrower on deposit in an account that is subject to a tri-party agreement in
favor of Agent that complies with the requirements of Section 7.15 (it being
agreed and understood that under no circumstances shall such netting of cash and
cash equivalents of Borrower pursuant to this definition result in the
calculation of Total Debt being deemed to equal an amount less than $0 for any
purpose under this Agreement).

Total Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the
ratio of (a) Total Debt as of such day to (b) Consolidated EBITDA for the
Computation Period ending on such day.

Total Loan Commitment means at any date of determination, the sum of (i) the
Revolving Loan Commitments at such date (or if the Revolving Loan Commitments
have terminated, the Revolving Outstandings) plus (ii) the outstanding principal
balance of the Term Loan at such date.

Transaction Services Fee means a transaction fee payable by a Portfolio Company
or an Outside Company to Manager (or an Affiliate of Manager) in connection with
an acquisition or sale of such Portfolio Company or Outside Company that is
permitted hereunder, or in connection with the consummation of an add-on
acquisition by such Portfolio Company or Outside Company that is permitted
hereunder.

Tridien means Anodyne Medical Device, Inc., a Delaware corporation doing
business as Tridien Medical.

Trust means Compass Diversified Holdings, a Delaware statutory trust, together
with any other statutory or other trust that hereafter holds Trust Interests (as
defined in the Borrower LLC Agreement).

Trust Agreement means that certain Amended and Restated Trust Agreement of the
Trust dated as of April 25, 2006 and amended as of each of May 25,
2007, September 14, 2007, December 21, 2007 and November 1, 2010, among
Borrower, as Sponsor, The Bank of New York (Delaware), as Delaware Trustee, and
the other trustees named therein, as in effect as of the date hereof or as
modified in compliance with the provisions hereof.

Wholly-Owned Subsidiary means, as to any Person, another Person all of the
equity interests of which (except directors’ qualifying shares) are at the time
directly or indirectly owned by such Person and/or another Wholly-Owned
Subsidiary of such Person.

1.2. Interpretation.

In the case of this Agreement and each other Loan Document, (a) the meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms; (b) Annex, Exhibit, Schedule and Section references are to such
Loan Document unless otherwise specified; (c) the term “including” is not
limiting and means “including but not limited to”; (d) in the computation of
periods of time from a specified date to a later specified date, the word “from”
means “from and including”; the words “to” and “until” each mean “to but
excluding”, and the word “through” means “to and including”; (e) unless
otherwise expressly provided in such Loan Document, (i) references to agreements
and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation shall be

 

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construed as including all statutory and regulatory provisions amending,
replacing, supplementing or interpreting such statute or regulation; (f) this
Agreement and the other Loan Documents may use several different limitations,
tests or measurements to regulate the same or similar matters, all of which are
cumulative and each shall be performed in accordance with its terms; and
(g) this Agreement and the other Loan Documents are the result of negotiations
among and have been reviewed by counsel to Agent, Borrower, Lenders and the
other parties hereto and thereto and are the products of all parties;
accordingly, they shall not be construed against Agent or Lenders merely because
of Agent’s or Lenders’ involvement in their preparation.

Section 2. Credit Facilities.

2.1. Commitments.

On and subject to the terms and conditions of this Agreement, each Lender,
severally and for itself alone, agrees as follows:

2.1.1. Revolving Loan Commitments.

Each Revolving Lender will make loans to Borrower on a revolving basis
(“Revolving Loans”) from time to time and Borrower may repay such loans from
time to time until the Termination Date in such Revolving Lender’s Pro Rata
Share of such aggregate amounts as Borrower may request from all Lenders;
provided, that after giving effect to such Revolving Loans, the Revolving
Outstandings will not at any time exceed Borrowing Availability.

2.1.2. Term Loan Commitment.

Each Term Lender agrees to make a loan to Borrower on the Closing Date in such
Lender’s applicable Pro Rata Share of the Term Loan Commitment, on a net funding
basis in relation to the original issue discount applicable to such amount under
the Term Loan Commitment. The Commitments of Lenders to fund their Pro Rata
Share of the Term Loan shall terminate concurrently with the making of the Term
Loan on the Closing Date. Any portion of the Term Loan repaid or prepaid by
Borrower may not be reborrowed.

2.1.3. Request for Incremental Revolving Loan Commitments / Term Loans.

(a) Request for Incremental Loan. Provided (i) no Default or Event of Default
exists, (ii) after giving effect to the making of the additional loans referred
to below (each an “Incremental Facility”), Borrower would be in compliance on a
pro forma basis with the covenants set forth in Section 7.14 as of the most
recently ended Fiscal Quarter of Borrower for which financial statements are
available as if the Incremental Facility had been made on the first day of such
Fiscal Quarter, as demonstrated by calculations delivered by Borrower to Agent
concurrently with any request described below in the form of such calculations
attached to the Compliance Certificate, and (iii) the combined amount thereof
does not exceed $135,000,000 in the aggregate, Borrower may, by notice to the
Agent at any time following the Closing Date, request (i) additional term loans
(the “Incremental Term Loans” and the related commitments, the “Incremental Term
Loan Commitments”) and/or (ii) one or more increases in the amount of the
Revolving Loan Commitments to be made available to Borrower (each such increase
a “Revolving Loan Commitment Increase”). Each Incremental Facility shall be in
an integral multiple of $1,000,000 and in an aggregate principal amount not less
than $10,000,000. Borrower may not request more than 5 Incremental Facilities
during the term of this Agreement pursuant to this Section 2.1.3.

(b) Additional Lenders. At the time of such notice, Borrower (in consultation
with Agent) shall specify the time period within which each Lender is requested
to respond (which shall, in no event, be less than ten (10) Business Days from
the date of delivery of such notice to Lenders). Each

 

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Lender shall have the right to participate in an Incremental Facility, but no
Lender shall be obligated to participate in any Incremental Facility unless it
so agrees (and as of the Closing Date no Lender has agreed to participate in any
Incremental Facility). To the extent any Lender declines to make available its
pro rata share of such Incremental Term Loan Commitments or Revolving Loan
Commitment Increase, as the case may be, Borrower or Agent may invite additional
financial institutions acceptable to Agent and Borrower to become Lenders. Any
additional financial institution (each an “Additional Lender”) electing to make
available an Incremental Facility shall become a Lender hereunder. A commitment
in respect of a Revolving Loan Commitment Increase shall become a Revolving Loan
Commitment (or in the case of a Revolving Loan Commitment Increase to be
provided by an existing Revolving Lender, an increase in such Revolving Lender’s
Revolving Loan Commitment) under this Agreement.

(c) Terms of Revolving Loan Commitment Increase. Each Incremental Facility
consisting of a Revolving Loan Commitment Increase shall become part of, and
have all of the terms and conditions applicable to (including, without
limitation, in respect of pricing, repayments and maturity), the Revolving Loan
Commitments for all purposes hereunder and under the Collateral Documents and
shall be secured by the Collateral in all respects. Any up-front fees payable to
Lenders participating in any Revolving Loan Commitment Increase shall be no more
than 50 basis points higher than the average of the up-front fees paid to
Lenders on the Closing Date with respect to Revolving Loan Commitments.

(d) Terms of Incremental Term Loans. Each Incremental Facility consisting of
Incremental Term Loans and Incremental Term Loan Commitments shall rank pari
passu with the Term Loan funded on the Closing Date in right of payment and in
respect of the Collateral. In addition thereto (i) Incremental Term Loans shall
not have a final maturity date earlier than the latest maturity date applicable
to any Term Loan, (ii) the amortization schedule (if any) of Incremental Term
Loans shall not have a weighted average life to maturity that is shorter than
the then weighted average life to maturity of the remaining Term Loans, and
(iii) and the total pricing (including interest rate margins, up-front fees,
original issue discounts (assuming, for purposes of up-front fees and original
issue discounts, a 4-year average life) or interest rate floors) applicable to
any Incremental Term Loans shall not exceed the total pricing (including
interest rate margins, up-front fees, original issue discounts (assuming, for
purposes of up-front fees and original issue discounts, a 4-year average life)
or interest rate floors) applicable to the then-existing Term Loan by more than
50 basis points.

(e) Modifications to Agreement. Agent and Borrower shall determine the effective
date (the “Incremental Facility Effective Date”) of each Incremental Facility
and the final allocation thereof. Each Lender and Additional Lender (as
applicable) shall make its share of the Incremental Facility available under
this Agreement pursuant to an amendment (an “Incremental Facility Amendment”) to
this Agreement and the other Financing Documents, as applicable, giving effect
to the modifications permitted by this Section 2.1.3, executed by Borrower, each
Lender participating in such Incremental Facility, each Additional Lender
participating in such Incremental Facility and Agent. An Incremental Facility
Amendment may, without the consent of any other Lender, amend such provisions of
this Agreement and the other Financing Documents as may be necessary or
appropriate, in the opinion of Agent, to effect the provisions of this
Section 2.1.3, (including appropriate amendments to the definitions) required to
afford the same treatment to such Incremental Term Loan and Revolving Loan
Commitment Increase as is applicable to the Term Loans and Revolving Loan
Commitments under the Agreement.

(f) Other Documents. As a condition precedent to any Incremental Facility,
Borrower shall deliver to Agent such documents, opinions and certifications as
Agent may reasonably request.

(g) Adjustment of Revolving Loans. To the extent the Commitment being increased
on the relevant Incremental Facility Effective Date comprises Revolving Loans,
then each Revolving Lender having a Revolving Loan Commitment prior to such
Incremental Facility Effective Date shall, on such date, assign to each
Revolving Lender and Additional Lender participating in such Incremental

 

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Facility, in consideration of the principal amount thereof, such interests in
the Revolving Loans and Letters of Credit outstanding on such date as shall be
necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans and participation interests in Letters of Credit
will be held by all Revolving Lenders (inclusive of Additional Lenders) ratably
in accordance with their Revolving Loan Commitments after giving effect to such
Revolving Loan Commitment Increase.

2.2. Loan Procedures.

2.2.1. Loan Types.

Each Loan shall be either a Base Rate Loan or a LIBOR Loan, as Borrower shall
specify in the related notice of borrowing or conversion pursuant to
Section 2.2.2 or 2.2.3. Base Rate Loans and LIBOR Loans may be outstanding at
the same time, provided that not more than five different Interest Periods shall
exist among outstanding LIBOR Loans at any one time. All borrowings, conversions
and repayments of Revolving Loans shall be effected so that each Lender will
have a ratable share (according to its Pro Rata Share) of all Revolving Loans
and all Interest Periods of LIBOR Loans. Notwithstanding the foregoing or any
other provision of this Agreement, Borrower may not select any Interest Period
for a LIBOR Loan which is longer than one month prior to 30 days after the
Closing Date.

2.2.2. Borrowing.

Borrower shall give written notice or telephonic notice (followed immediately by
written confirmation thereof) to Agent of each proposed borrowing of a Revolving
Loan not later than (a) in the case of a Base Rate borrowing, 11:00 a.m. New
York time on the proposed date of such borrowing, and (b) in the case of a LIBOR
borrowing, 12:00 noon New York time at least three Business Days prior to the
proposed date of such borrowing. Each such notice shall be effective upon
receipt by Agent, shall be irrevocable, and shall specify, in the form of a
Borrowing Notice, the date, amount and type of borrowing and, in the case of a
LIBOR borrowing, the initial Interest Period therefor. Promptly upon receipt of
such notice, Agent shall advise each Lender with a Revolving Loan Commitment
thereof in writing. Not later than 1:00 p.m. New York time on the date of a
proposed Revolving Loan borrowing, each Lender with a Revolving Loan Commitment
shall provide Agent at the office specified by Agent with immediately available
funds covering such Lender’s applicable Pro Rata Share of such borrowing and, so
long as Agent has not received written notice that the conditions precedent set
forth in Section 4 with respect to such borrowing have not been satisfied, Agent
shall pay over the funds received by Agent to Borrower on the requested
borrowing date. The failure of a Defaulting Lender to fund its Pro Rata Share of
a Revolving Loan (or its ratable share of any other credit extension or payment)
required hereunder shall not relieve any other Lender of its obligation to fund
its Pro Rata Share of such Revolving Loan (or, as applicable, its ratable share
of such other credit extension or payment), but neither any other Lender nor
Agent shall be responsible for the failure of any Defaulting Lender to fund its
Pro Rata Share of any Revolving Loan (or its ratable share of any other credit
extension or payment) required hereunder. Each borrowing shall be on a Business
Day. Each Base Rate borrowing shall be in an aggregate amount of at least
$1,000,000 and an integral multiple of $100,000, and each LIBOR borrowing shall
be in an aggregate amount of at least $1,000,000 and an integral multiple of at
least $100,000.

2.2.3. Conversion; Continuation.

(a) Subject to Section 2.2.1, Borrower may, upon irrevocable written notice to
Agent in accordance with clause (b) below, elect (i) as of any Business Day, to
convert any Loans (or any part thereof in an aggregate amount of not less than
$100,000 or a higher integral multiple of $50,000) into Loans of the other type
or (ii) as of the last day of the applicable Interest Period, to continue any
LIBOR Loans having Interest Periods expiring on such day (or any part thereof in
an aggregate amount not less than $100,000 or a higher integral multiple of
$50,000) for a new Interest Period; provided, that any conversion of a LIBOR
Loan on a day other than the last day of an Interest Period therefor shall be
subject to Section 3.5.

 

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(b) Borrower shall give written or telephonic notice (followed in the case of
any such telephonic notice immediately by written confirmation thereof) to Agent
of each proposed conversion or continuation of LIBOR Loans not later than 12:00
noon New York time at least three Business Days prior to the proposed date of
such conversion or continuation, specifying in each case in the form of a
Conversion/Continuation Notice: (i) the proposed date of conversion or
continuation; (ii) the aggregate amount of Loans to be converted or continued;
(iii) the type of Loans resulting from the proposed conversion or continuation;
and (iv) in the case of conversion into, or continuation of, LIBOR Loans, the
duration of the requested Interest Period therefor.

(c) If upon the expiration of any Interest Period applicable to LIBOR Loans,
Borrower has failed to select timely a new Interest Period to be applicable to
such LIBOR Loans, Borrower shall be deemed to have elected to convert such LIBOR
Loans into Base Rate Loans effective on the last day of such Interest Period.

(d) Agent will promptly notify each applicable Lender of its receipt of a notice
of conversion or continuation pursuant to this Section 2.2.3 or, if no timely
notice is provided by Borrower, of the details of any automatic conversion.

2.2.4. Market Disruption Respecting LIBOR Loans.

If, at any time subsequent to the giving of a Borrowing Notice or
Conversion/Continuation Notice to the Agent by the Borrower with respect to any
requested LIBOR Loan:

(a) the Agent (acting reasonably) determines that by reason of circumstances
affecting the London interbank market, adequate and fair means do not exist for
ascertaining the rate of interest with respect to, or deposits are not available
in sufficient amounts in the ordinary course of business at the rate determined
hereunder to fund, a requested LIBOR Loan during the Interest Period selected;

(b) the Agent (acting reasonably) determines that the making or continuation of
the requested LIBOR Loan by the applicable Lenders has been make impracticable
by the occurrence of an event which materially adversely affects the London
interbank market generally; or

(c) Agent is advised by Required Lenders by written notice (each, a “LIBOR
Suspension Notice”), such notice to be received by Agent no later than 12:00
noon (New York time) on the third Business day prior to the date of the
requested borrowing, conversion or continuation, as the case may be, that such
Lenders have determined (acting reasonably) that the LIBOR Rate plus the
Applicable Margin with respect to LIBOR Loans will not or does not represent the
adequate cost to such Lenders or making or maintaining such LIBOR loan,

then (i) Agent shall give notice thereof to the Lenders and the Borrower as soon
as possible after such determination or receipt of such LIBOR Suspension Notice,
as the case may be, (ii) Borrower shall, within one Business Day after receipt
of such notice and in replacement of the Borrowing Notice or
Conversion/Continuation Notice, as applicable, previously given by Borrower,
give the Agent a Borrowing Notice or Conversion/Continuation Notice, as
applicable, which specifies borrowing of any other Loan or the conversion of the
relevant LIBOR Loan on the last day of the applicable Interest Period into any
other Loan which would not be affected by the notice from the Agent pursuant to
this Section 2.2.4 and (iii) the right of the Borrower to select LIBOR Loans for
the applicable request and for all subsequent requests shall be suspended until
Agent shall notify Borrower and the Lenders that the circumstances causing such
suspension no longer exist.

 

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In the event that Borrower fails to give, if applicable, a valid replacement
Conversion/Continuation Notice with respect to the maturing LIBOR Loans which
were the subject of a Conversion/Continuation Notice, such maturing LIBOR Loans
shall be converted on the last day of the applicable Interest Period into Base
Rate Loans as if a valid replacement Conversion/Continuation Notice had been
given to Agent by Borrower pursuant to the provisions hereof. In the event
Borrower fails to give, if applicable, a valid replacement Borrowing Notice with
respect to a borrowing originally requested by way of a LIBOR Loan, then
Borrower shall be deemed to have requested such borrowing as a Base Rate Loan in
the amount specified in the original Borrowing Notice and, on the originally
requested borrowing date, the applicable Lenders (subject to the other
provisions of this Agreement) shall make available the requested amount by way
of a Base Rate Loan).

2.3. Letters of Credit.

2.3.1. Commitment.

At the request of Borrower, Issuing Lender will issue from time to time before
the date which is 30 days prior to the Termination Date standby or commercial
letters of credit for the account of Borrower or any Subsidiary and containing
terms and conditions which are consistent with this Agreement and reasonably
satisfactory to Issuing Lender (each such letter of credit, a “Letter of
Credit”). After giving effect to each such issuance, (i) the aggregate Stated
Amount of all Letters of Credit shall not at any time exceed $100,000,000 and
(ii) Revolving Outstandings will not at any time exceed Borrowing Availability.
In addition, it is agreed and understood (x) that the Existing US Bank Letters
of Credit shall be considered “Letters of Credit” for all purposes hereunder and
under the other Loan Documents, (y) that U.S. Bank National Association shall be
the Issuing Lender in respect of the Existing US Bank Letters of Credit for all
purposes hereunder and under the other Loan Documents and (z) that Borrower will
cause any Letters of Credit that are issued at Borrower’s request for the
benefit of a Portfolio Company to also constitute a “Letter of Credit” under and
as defined in the Intercompany Debt Documents between Borrower and such
Portfolio Company.

2.3.2. Application.

Borrower shall give notice to Agent and Issuing Lender of the proposed issuance
of each Letter of Credit on a Business Day which is at least ten Business Days
(or such lesser number of days as Agent and Issuing Lender shall agree) prior to
the proposed date of issuance of such Letter of Credit. Each such notice shall
be accompanied by a Letter of Credit application in Issuing Lender’s form (or,
as the case may be, in the form of application of the underlying letter of
credit), duly executed by Borrower and in all respects satisfactory to Agent and
Issuing Lender, together with such other documentation as Agent or Issuing
Lender may request in support thereof, it being understood that each Letter of
Credit application (or, as the case may be, form of application of underlying
letter of credit) shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, and the expiration date of such
Letter of Credit (which shall not be later than 30 days prior to the scheduled
Termination Date). So long as Issuing Lender has not received written notice
that the conditions precedent set forth in Section 4 with respect to the
issuance of such Letter of Credit have not been satisfied, Issuing Lender shall
issue such Letter of Credit on the requested issuance date. Issuing Lender shall
promptly advise Agent of the issuance of each Letter of Credit and of any
amendment thereto, extension thereof or event or circumstance changing the
amount available for drawing thereunder. In the event of any inconsistency
between the terms of any Letter of Credit application and the terms of this
Agreement, the terms of this Agreement shall control. Issuing Lender shall
deliver to Agent upon its request a list of all outstanding Letters of Credit
issued by Issuing Lender, together with such information related thereto as
Agent may reasonably request.

 

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2.3.3. Reimbursement Obligations.

(a) Borrower hereby unconditionally and irrevocably agrees to reimburse Issuing
Lender for each payment or disbursement made by Issuing Lender under any Letter
of Credit honoring any demand for payment made thereunder, in each case on the
date that such payment or disbursement is made. Issuing Lender shall promptly
notify Borrower and Agent whenever any demand for payment is made under any
Letter of Credit; provided, that the failure of Issuing Lender to so notify
Borrower shall not affect the rights of Issuing Lender or Lenders in any manner
whatsoever. Any amount not reimbursed on the date of such payment or
disbursement (whether or not through the making of a Loan pursuant to
Section 2.3.4) shall bear interest from the date of such payment or disbursement
to the date that Issuing Lender is reimbursed by Borrower therefor, payable on
demand, at the interest rate per annum from time to time in effect for Revolving
Loans which are Base Rate Loans.

(b) Borrower’s reimbursement obligations hereunder shall be irrevocable and
unconditional under all circumstances, including (i) any lack of validity or
enforceability of any Letter of Credit, this Agreement or any other Loan
Document, (ii) the existence of any claim, set-off, defense or other right which
Borrower or any other Person may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), Agent, Issuing Lender, any Lender or
any other Person, whether in connection with any Letter of Credit, this
Agreement, any other Loan Document, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between Borrower or
any other Person and the beneficiary named in any Letter of Credit), (iii) the
validity, sufficiency or genuineness of any document which Issuing Lender (or,
as applicable, the issuer of any underlying letter of credit) has determined
complies on its face with the terms of the applicable Letter of Credit (or, if
applicable, underlying letter of credit), even if such document should later
prove to have been forged, fraudulent, invalid or insufficient in any respect or
any statement therein shall have been untrue or inaccurate in any respect, or
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms hereof.

2.3.4. Participations in Letters of Credit.

(a) Concurrently with the issuance of each Letter of Credit, Issuing Lender
shall be deemed to have sold and transferred to each other Lender with a
Revolving Loan Commitment, and each other Lender with a Revolving Loan
Commitment shall be deemed irrevocably and unconditionally to have purchased and
received from Issuing Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender’s Pro Rata Share, in
such Letter of Credit and Borrower’s reimbursement obligations with respect
thereto. If Borrower does not pay any reimbursement obligation when due, then
Borrower shall be deemed to have immediately requested that Lenders with a
Revolving Loan Commitment make a Revolving Loan which is a Base Rate Loan in a
principal amount equal to such reimbursement obligation. Agent shall promptly
notify Lenders that have a Revolving Loan Commitment of such deemed request and,
without the necessity of compliance with the requirements of Section 2.2.2 or
4.2, each such Lender shall make available to Agent its Pro Rata Share of such
Loan. The proceeds of such Loan shall be paid over by Agent to Issuing Lender
for the account of Borrower in satisfaction of such reimbursement obligations.

(b) If Issuing Lender makes any payment or disbursement under any Letter of
Credit and (i) Borrower has not reimbursed Issuing Lender in full for such
payment or disbursement in accordance with Section 2.3.3, (ii) a Revolving Loan
may not be made pursuant to Section 2.3.4(a) or (iii) any reimbursement received
by Issuing Lender from Borrower is or must be returned or rescinded upon or
during any bankruptcy or reorganization of Borrower or otherwise, each other
Lender with a Revolving Loan Commitment shall be irrevocably and unconditionally
obligated to pay to Agent for the account of Issuing Lender its Pro Rata Share
of such payment or disbursement (but no such payment shall diminish the
Obligations of Borrower under Section 2.3.3). Upon notice from Issuing Lender to
Agent

 

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that it has not received any such amount, Agent shall promptly notify each such
other Lender thereof. To the extent any such Lender shall not have made such
amount available to Agent by 2:00 p.m. New York time on the Business Day on
which such Lender receives notice from Agent of such payment or disbursement (it
being understood that any such notice received after 12:00 noon New York time on
any Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to Agent for
Issuing Lender’s account forthwith on demand, for each day from the date such
amount was to have been delivered to Agent to the date such amount is paid, at a
rate per annum equal to (x) for the first 3 days after demand, the Federal Funds
Rate from time to time in effect and (y) thereafter, the Base Rate from time to
time in effect for Revolving Loans. Any such Lender’s failure to make available
to Agent its Pro Rata Share of any such payment or disbursement shall not
relieve any other Lender of its obligation hereunder to make available to Agent
such other Lender’s Pro Rata Share of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to Agent such
other Lender’s Pro Rata Share of any such payment or disbursement.

(c) Notwithstanding anything to the contrary contained in this Agreement, in the
event that there is a Defaulting Lender having any portion of the Revolving Loan
Commitment, Issuing Lender shall not be required to issue any Letter of Credit,
or increase or extend or otherwise amend any Letter of Credit, unless Issuing
Lender has entered into arrangements reasonably satisfactory to it and to Agent
with respect to the participation in such Defaulting Lender’s Pro Rata Revolving
Share of such Letter of Credit by such Defaulting Lender. To the extent that
Borrower provides cash collateral to Agent in support of and in an amount equal
to such Defaulting Lender’s Pro Rata Revolving Share in any Letter of Credit, it
is agreed and understood that such provision of cash collateral shall constitute
an arrangement satisfactory to Issuing Lender and Agent as contemplated by the
preceding sentence.

2.4. Commitments Several.

The failure of any Lender to make a requested Loan on any date shall not relieve
any other Lender of its obligation (if any) to make a Loan on such date, but no
Lender shall be responsible for the failure of any other Lender to make any Loan
to be made by such other Lender.

2.5. Certain Conditions.

Notwithstanding any other provision of this Agreement, Issuing Lender shall not
have any obligation to issue any Letter of Credit, if an Event of Default or
Default exists. In addition, if an Event of Default or Default exists, at the
written election of Agent or Required Lenders Borrower shall not have the right
to borrow any LIBOR Loans, to continue any existing Loans as LIBOR Loans at the
end of the Interest Period therefor, or to convert any existing Loans into LIBOR
Loans.

2.6. Loan Accounting.

2.6.1. Recordkeeping.

Agent, on behalf of each Lender, shall record in its records the date and amount
of each Loan made by each Lender, each repayment or conversion thereof and, in
the case of each LIBOR Loan, the dates on which each Interest Period for such
Loan shall begin and end. The aggregate unpaid principal amount so recorded
shall be rebuttably presumptive evidence of the principal amount of the Loans
owing and unpaid. The failure to so record any such amount or any error in so
recording any such amount shall not, however, limit or otherwise affect the
Obligations of Borrower hereunder or under any Note to repay the principal
amount of the Loans hereunder, together with all interest accruing thereon.

 

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2.6.2. Notes.

At the written request of any Lender, the Loans of such Lender shall be
evidenced by a Note, with appropriate insertions, payable to the order of such
Lender in a face principal amount equal to the sum of such Lender’s Pro Rata
Share of the Total Loan Commitment and payable in such amounts and on such dates
as are set forth herein.

2.7. Interest.

2.7.1. Interest Rates.

Borrower promises to pay interest on the unpaid principal amount of each Loan
for the period commencing on the date of such Loan until such Loan is paid in
full as follows: (a) at all times while such Loan is a Base Rate Loan, at a rate
per annum equal to the sum of the Base Rate from time to time in effect plus the
Applicable Margin corresponding to such Loan from time to time in effect; and
(b) at all times while such Loan is a LIBOR Loan, at a rate per annum equal to
the sum of the LIBOR Rate applicable to each Interest Period for such Loan plus
the Applicable Margin for such Loan from time to time in effect; provided, that
(i) at any time an Event of Default exists, the Applicable Margin shall be
increased by the Default Rate (and, in the case of Obligations, other than
Hedging Obligations and Banking Services Obligations, not subject to an
Applicable Margin, such Obligations shall bear interest at the Base Rate with
respect to Revolving Loans plus the Applicable Margin plus the Default Rate),
and (ii) any such increases may thereafter be rescinded by Required Term Lenders
or Required Revolving Lenders (as applicable), notwithstanding Section 10.1. In
no event shall interest payable by Borrower to Agent and Lenders hereunder
exceed the maximum rate permitted under applicable law, and if any such
provision of this Agreement is in contravention of any such law, such provision
shall be deemed modified to limit such interest to the maximum rate permitted
under such law.

2.7.2. Interest Payment Dates.

Accrued interest on each Base Rate Loan shall be payable in arrears on the last
day of each calendar month and at maturity. Accrued interest on each LIBOR Loan
shall be payable on the last day of each Interest Period relating to such Loan
(and, in the case of a LIBOR Loan with an Interest Period in excess of 3 months,
on the last day of each 3-month interval of such Interest Period), upon a
prepayment of such Loan in accordance with Section 2.10, and at maturity. After
maturity and at any time an Event of Default exists, all accrued interest on all
Loans shall be payable on demand at the rates specified in Section 2.7.1.

2.7.3. Setting and Notice of LIBOR Rates.

The applicable LIBOR Rate for each Interest Period shall be determined by Agent,
and notice thereof shall be given by Agent promptly to Borrower and each Lender.
Each determination of the applicable LIBOR Rate by Agent shall be conclusive and
binding upon the parties hereto, in the absence of demonstrable error. Agent
shall, upon written request of Borrower or any Lender, deliver to Borrower or
such Lender a statement showing the computations used by Agent in determining
any applicable LIBOR Rate hereunder.

2.7.4. Computation of Interest.

Interest shall be computed for the actual number of days elapsed on the basis of
a year of (a) 360 days for interest calculated at the LIBOR Rate and (b) 365/366
days for interest calculated at the Base Rate. The applicable interest rate for
each Base Rate Loan shall change simultaneously with each change in the Base
Rate.

 

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2.8. Fees.

2.8.1. Commitment Fee.

For the period from the Closing Date to the Termination Date, Borrower agrees to
pay to Agent, for the account of each Revolving Lender according to such
Lender’s Pro Rata Share (as adjusted from time to time), a Commitment Fee equal
to 1.00% per annum of the amount by which the Revolving Loan Commitments exceed
the average daily Revolving Outstandings. The Commitment Fee shall be payable in
arrears on the last day of each calendar quarter and on the Termination Date for
any period then ending for which the Commitment Fee shall not have previously
been paid. The Commitment Fee shall be computed for the actual number of days
elapsed on the basis of a year of 360 days.

2.8.2. Letter of Credit Fees.

(a) Borrower agrees to pay to Agent, for the account of each Revolving Lender
according to such Lender’s Pro Rata Share (as adjusted from time to time), a
Letter of Credit Fee equal to the Applicable Margin in effect from time to time
for Revolving Loans which are LIBOR Loans multiplied by the Stated Amount of
each Letter of Credit. Each Letter of Credit Fee shall be payable in arrears on
the last day of each calendar quarter and on the Termination Date (or such later
date on which such Letter of Credit expires or is terminated) for the period
from the date of the issuance (with the date of issuance for the Existing US
Bank Letters of Credit being deemed to be the date hereof) of each Letter of
Credit (or the last day on which the Letter of Credit Fee was paid with respect
thereto) to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated. Each Letter of Credit Fee shall be
computed for the actual number of days elapsed on the basis of a year of 360
days.

(b) In addition, with respect to each Letter of Credit, Borrower agrees to pay
to Issuing Lender, for its own account, (i) such fees and expenses as Issuing
Lender customarily requires (or, as the case may be, is required to pay to the
issuer of the letter of credit) in connection with the issuance, negotiation,
processing and/or administration of letters of credit in similar situations and
(ii) a letter of credit fronting fee in the amount and at the times agreed to by
Borrower and Issuing Lender (with each Issuing Lender that is a signatory hereto
agreeing that no fronting fee charged by any such Issuing Lender signatory
hereto shall exceed 0.25% per annum for any applicable Letter of Credit).

2.9. Commitment Reduction.

2.9.1. Voluntary Reduction or Termination of Revolving Loan Commitments.

Borrower may from time to time on at least five Business Days’ prior written
notice received by Agent (which shall promptly advise each Lender thereof)
permanently reduce the Revolving Loan Commitments to an amount not less than the
Revolving Outstandings. Any such reduction shall be in an amount not less than
$1,000,000 or a higher integral multiple of $500,000. Concurrently with any
reduction of the Revolving Loan Commitments to zero, Borrower shall pay all
interest on the Revolving Loans, all Commitment Fees and all Letter of Credit
Fees and shall cash collateralize in full all Obligations arising with respect
to the Letters of Credit in a manner acceptable to Agent.

2.9.2. Reduction of Revolving Loan Commitments in Connection with Mandatory
Prepayment.

On the date of any mandatory prepayment pursuant to Section 2.10.2(a), the
Revolving Loan Commitments shall, to the extent elected by Borrower (or, if an
Event of Default has occurred and is continuing, to the extent elected by Agent
or Required Revolving Lenders), be permanently reduced by the amount of such
mandatory prepayment applied to prepay the Revolving Loans pursuant to
Section 2.10.2(a).

 

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2.9.3. All Reductions of Revolving Loan Commitments.

All reductions of the Revolving Loan Commitments shall reduce the Revolving Loan
Commitments pro rata among Lenders according to their respective Pro Rata
Shares.

2.10. Prepayment.

2.10.1. Voluntary Prepayment.

Borrower may from time to time, on at least one Business Day’s written notice in
the form of Exhibit H or telephonic notice (followed immediately by written
confirmation thereof in the form of Exhibit H) to Agent (which shall promptly
advise each Lender thereof) not later than 12:00 noon New York time on such day,
prepay the Term Loan in whole or in part, in each case so long as (i) no Event
of Default then exists, and (ii) there are no Revolving Loans outstanding at the
time of such prepayment. Such notice to Agent shall specify the portion of the
Term Loan to be prepaid and the date and amount of prepayment and the
application of such prepayment shall be subject to Section 2.10.3. Any such
partial prepayment shall be in an amount equal to $1,000,000 or a higher
integral multiple of $500,000. All voluntary prepayments of the Term Loan made
on or prior to October 27, 2012 in connection with a Repricing Transaction shall
be accompanied by a prepayment premium equal to one percent (1%) of the amount
of such voluntary prepayment of the Term Loan.

2.10.2. Mandatory Prepayment.

(a) Borrower shall repay the Revolving Loans, until the balance thereof has been
reduced to zero at the following times and in the following amounts:

(i) upon there being Net Cash Proceeds from any Disposition, in an amount equal
to such Net Cash Proceeds; and

(ii) concurrently with the receipt by Borrower of any Net Cash Proceeds from any
issuance of its equity securities (excluding (x) Net Cash Proceeds from equity
issuances to the extent obtained in connection with, and applied toward the
funding of, a Permitted Eligible Acquisition or a Permitted Ineligible
Acquisition, and (y) Net Cash Proceeds from other equity issuances in an
aggregate amount of up to $250,000 for each Fiscal Year), in an amount equal to
such Net Cash Proceeds.

(b) Borrower shall repay the Term Loan (with application to be made as set forth
in Section 2.10.3) at the following times and in the following amounts:

(i) in the case of excess Net Cash Proceeds from a Disposition described in any
of clause (a), (c) and (d) of the definition thereof that remain after
application having first been made to the outstanding principal balance of the
Revolving Loans (if any) pursuant to Section 2.10.2(a)(i) above (the date of
such application being a “Clause I Revolver Application Date” and the amount of
Net Cash Proceeds remaining after such application being “Clause I Excess
Proceeds”), to the extent such Clause I Excess Proceeds have not been reinvested
by the applicable Portfolio Company or Subsidiary Outside Company (x) in assets
that are useful to the business of the applicable Portfolio Company or
Subsidiary Outside Company (in the case of a Disposition described in clause
(a) of the definition thereof) or (y) to repair, replace or reconstruct the
assets that were the subject of such Disposition (in the case of a Disposition
described in clause (c) or (d) of the definition thereof), in each case within
180 days of such Clause I Revolver Application Date, in an amount equal to the
balance of such remaining Clause I Excess Proceeds after the expiration of such
180-day reinvestment period;

 

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(ii) in the case of excess Net Cash Proceeds from a Disposition described in
clause (b) of the definition thereof that remain after application having first
been made to the outstanding principal balance of the Revolving Loans (if any)
pursuant to Section 2.10.2(a)(i) above (the date of such application being a
“Clause II Revolver Application Date” and the amount of Net Cash Proceeds
remaining after such application being “Clause II Excess Proceeds”), to the
extent such Clause II Excess Proceeds have not been either reinvested by
Borrower pursuant to Investments permitted to be made by Borrower pursuant to
any of clauses (a), (b), (c) and (i) of Section 7.11 or used to repay the Term
Loan within 360 days of such Clause II Revolver Application Date, in an amount
equal to the balance of such remaining Clause II Excess Proceeds after the
expiration of such 360-day reinvestment period; and

(iii) in the case of excess Net Cash Proceeds from an issuance of equity
securities that remain after application having first been made to the
outstanding principal balance of the Revolving Loans pursuant to
Section 2.10.2(a)(ii) above, immediately following such prior application to the
Revolving Loans and in an amount equal to the balance of such Net Cash Proceeds
(provided, that the prepayment of the Term Loan provided for in this
Section 2.10.2(b)(iii) shall not apply at a time when no Event of Default
exists).

(c) Within 120 days after the end of each Fiscal Year (commencing with the
Fiscal Year ending December 31, 2012), Borrower shall prepay the Loans in an
amount equal to 50% of Excess Cash Flow for such Fiscal Year; provided, that
such prepayment shall not apply to a Fiscal Year for which the Total Debt to
EBITDA Ratio is less than 3.25:1.00 as of the last day of such Fiscal Year. Any
such prepayment pursuant to this Section 2.10.2(c) shall be applied first, to
the outstanding principal balance of the Revolving Loans (without a
corresponding reduction of the Revolving Loan Commitments) and second, to the
outstanding principal balance of the Term Loan.

(d) If on any day the Revolving Outstandings exceed Borrowing Availability,
whether pursuant to a reduction of the Revolving Loan Commitments pursuant to
Section 2.9.2 or otherwise, Borrower shall immediately prepay Revolving Loans
and/or cash collateralize the outstanding Letters of Credit in a manner
acceptable to Agent, or do a combination of the foregoing, in an amount
sufficient to eliminate such excess.

Borrower shall give written notice in the form of Exhibit H or telephonic notice
(followed immediately by written confirmation thereof in the form of Exhibit H)
to Agent not later than 12:00 noon New York time at least one Business Day prior
to each mandatory prepayment pursuant to this Section 2.10.2, and Agent shall
promptly notify each Lender of such notice.

2.10.3. All Prepayments.

(a) Any prepayment of a LIBOR Loan on a day other than the last day of an
Interest Period therefor shall include interest on the principal amount being
repaid and shall be subject to Section 3.5. All prepayments of a Loan shall be
applied first to that portion of such Loan comprised of Base Rate Loans and then
to that portion of such Loan comprised of LIBOR Loans, in direct order of
Interest Period maturities. All prepayments of the Term Loan shall (subject to
the following two sentences) be applied ratably among the Term Lenders in
accordance with their respective Pro Rata Shares thereof and, with respect to
remaining installments of the Term Loan, in the inverse order of maturity. Each
party to this Agreement acknowledges that while on the Closing Date TD is
funding $181,000,000 of the Term Loan, TD is fronting all but $1,000,000 of such
amount on behalf of other Persons that have committed to TD to become Term
Lenders and TD intends to assign all but $1,000,000 of the Term Loan to such
Persons that have committed to TD to become Term Lenders shortly following the
Closing Date such that the remaining aggregate collective amount of the Term
Loan held by TD and its Affiliates following such assignments shall not exceed
$1,000,000. In the event that the aggregate collective amount of the Term Loan
held by TD and its Affiliates shall exceed $1,000,000 on the date that is 30
days following the

 

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Closing Date (any such amount of the Term Loan in excess of $1,000,000 held by
TD or its Affiliates 30 days following the Closing Date, the “Excess TD Term
Loan”), Borrower may (subject to (i) TD’s agreement, (ii) the satisfaction of
the conditions for voluntary prepayments of Term Loans in Section 2.10.1 and
(iii) such voluntary prepayment being made within 60 days following the Closing
Date) elect to make a voluntary prepayment in cash of up to $25,000,000 of the
Excess TD Term Loan, with the entire amount of such voluntary prepayment of up
to $25,000,000 to be applied to the Term Loan held by TD and its Affiliates at
the time of such voluntary prepayment, rather than applied ratably among the
Term Lenders in accordance with their pro rata shares of the Term Loan.

(b) Notwithstanding anything to the contrary contained in this Section 2.10,
with respect to any mandatory prepayment, each Term Lender may elect not to have
such Term Lender’s Pro Rata Share of the Term Loan prepaid in the case of a
mandatory prepayment pursuant hereto by notice to Agent received not later 3:00
p.m. New York time one Business Day prior to the date of such prepayment. The
amount of any such prepayment which would have been applied to the portions of
the Term Loan held by Term Lenders making the election pursuant to this clause
(b) but for such elections shall be applied to the portions of the Term Loan
held by Term Lenders not making such elections until such portions are paid in
full, all otherwise in accordance with clause (a) above.

2.11. Repayment.

2.11.1. Revolving Loans.

The Revolving Loans shall be paid, for the account of each Lender according to
its Pro Rata Share, in full on the Termination Date.

2.11.2. Term Loan.

The Term Loan shall be paid, for the account of each Lender according to its Pro
Rata Share thereof, in equal installments of $562,500 each on the last day of
each Fiscal Quarter, commencing March 31, 2012.

Notwithstanding the foregoing, the outstanding principal balance of the Term
Loan shall be paid in full on the Term Loan Maturity Date.

2.12. Payment.

2.12.1. Making and Settlement of Payments.

All payments of principal of or interest on the Notes, and of all fees, shall be
made by Borrower to Agent without setoff, recoupment or counterclaim and in
immediately available funds at the office specified by Agent not later than
12:00 noon New York time on the date due, and funds received after that hour
shall be deemed to have been received by Agent on the following Business Day.
Agent shall promptly remit to each Lender its share of all principal payments
received in collected funds by Agent for the account of such Lender. On the
first Business Day of each month (each, an “Interest Settlement Date”), Agent
will notify each Lender in writing of the amount of such Lender’s applicable Pro
Rata Share of interest and fees on the Revolving Outstandings and Revolving Loan
Commitments as of the end of the last day of the immediately preceding month.
Provided that such Lender is not a Defaulting Lender, Agent will pay to such
Lender, by wire transfer to such Lender’s account not later than 2:00 p.m. New
York time on the next Business Day following the Interest Settlement Date, such
Lender’s Pro Rata Share of interest and fees, in each instance, received by
Agent for the immediately preceding month. It is agreed and understood that, in
the case of a Defaulting Lender, Agent shall be entitled to set off the funding
shortfall of such Defaulting Lender against such Defaulting Lender’s respective
share of any payments received from Borrower. Subject to the immediately
preceding sentence, all payments under Section 3.2 shall be made by Borrower
directly to the Lender entitled thereto.

 

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2.12.2. Application of Payments and Proceeds.

(a) Except as set forth in Section 2.10.1, Section 2.10.2 and Section 2.10.3,
and subject to the provisions of Section 2.12.2(b) below, each payment of
principal shall be applied to such Loans as Borrower shall direct by notice to
be received by Agent on or before the date of such payment or, in the absence of
such notice, as Agent shall determine in its discretion. Concurrently with each
remittance to any Lender of its share of any such payment, Agent shall advise
such Lender as to the application of such payment.

(b) If an Acceleration Event or an Event of Default described in Section 8.1.1
shall have occurred and be continuing, notwithstanding anything herein or in any
other Loan Document to the contrary, Agent shall apply all or any part of
payments in respect of the Obligations and proceeds of Collateral (including,
without limitation, any distributions in a bankruptcy or insolvency proceeding),
in each case as received by Agent, to the payment of the Obligations in the
following order:

(i) FIRST, to the payment of all fees, costs, expenses and indemnities due and
owing to Agent under this Agreement or any other Loan Document, and any other
Obligations owing to Agent in respect of sums advanced by Agent (such sums not
to exceed an amount equal to 10% of the Revolving Loan Commitments then in
effect, or, if the Revolving Loan Commitments have been suspended or terminated,
as in effect immediately prior to such suspension or termination and such sums
not to be advanced by Agent after the Business Day, if any, upon which Required
Lenders have directed Agent in writing not to make any further advances under
this Section 2.12.2(b)(i)) to preserve or protect the Collateral or to preserve
or protect its security interest in the Collateral (whether or not such
Obligations are then due and owing to Agent), until Paid in Full;

(ii) SECOND, to the payment of all fees, costs, expenses and indemnities due and
owing to Lenders, pro rata based on each Lender’s Pro Rata Share thereof, until
Paid in Full;

(iii) THIRD, to the payment of all accrued and unpaid interest due and owing to
Revolving Lenders, pro rata based on each Revolving Lender’s Pro Rata Share
thereof, until Paid in Full;

(iv) FOURTH, pro rata (A) to the payment of the principal balance of the
Revolving Loans, pro rata based on each Revolving Lender’s Pro Rata Share
thereof, until Paid in Full and (B) to cash collateralize Obligations in respect
of outstanding Letters of Credit in a manner consistent with the provisions of
Section 8.2, pro rata based on each Revolving Lender’s Pro Rata Share thereof,
until Paid in Full;

(v) FIFTH, to the payment of all accrued and unpaid interest due and owing to
Term Lenders in respect of the Term Loans, pro rata based on each Term Lender’s
Pro Rata Share thereof, until Paid in Full;

(vi) SIXTH, pro rata (A) to the payment of the principal balance of the Term
Loan, pro rata based on each Term Lender’s Pro Rata Share thereof, until Paid in
Full and (B) to the payment of all Hedging Obligations due and owing to any
Lender or its Affiliates, pro rata in accordance with each Lender’s (or one of
its Affiliate’s) share thereof, until Paid in Full;

 

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(vii) SEVENTH, to the payment of all Banking Services Obligations due any owing
to a Lender or its Affiliates, pro rata in accordance with each Lender’s (or one
of its Affiliate’s) share thereof, until Paid in Full; and

(viii) EIGHTH, to the payment of all other Obligations owing to each Lender, pro
rata based on each Lender’s Pro Rata Share thereof, until Paid in Full.

Any amounts received by any Lender in conflict with this Section 2.12.2 shall be
promptly turned over to Agent for application in a manner that is consistent
with the provisions of this Section 2.12.2.

2.12.3. Payment Dates.

If any payment of principal or interest with respect to any of the Loans, or of
any fees, falls due on a day which is not a Business Day, then such due date
shall be extended to the immediately following Business Day (unless, in the case
of a LIBOR Loan, such immediately following Business Day is the first Business
Day of a calendar month, in which case such due date shall be the immediately
preceding Business Day) and, in the case of principal, additional interest shall
accrue and be payable for the period of any such extension.

2.12.4. Set-off.

Borrower agrees that Agent and each Lender and its Affiliates have all rights of
set-off and bankers’ lien provided by applicable law, and in addition thereto,
Borrower agrees that at any time an Event of Default has occurred and is
continuing, Agent and each Lender may apply to the payment of any Obligations of
Borrower hereunder, whether or not then due, any and all balances, credits,
deposits, accounts or moneys of Borrower then or thereafter with Agent or such
Lender. Notwithstanding the foregoing, no Lender shall exercise any rights
described in the preceding sentence without the prior written consent of Agent.

2.12.5. Proration of Payments.

If any Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of set-off or otherwise, on account of (a) principal
of or interest on an Loan, but excluding (i) any payment pursuant to
Section 3.1, 3.2, 3.7 or 10.8 and (ii) payments of interest on any Base Rate
Loan referred to in the last sentence of Section 3.4, or (b) its participation
in any Letter of Credit) in excess of its applicable Pro Rata Share of payments
and other recoveries obtained by all Lenders on account of principal of and
interest on such Loans (or such participation) then held by them, then such
Lender shall purchase from the other Lenders such participations in the Loans or
sub-participations in Letters of Credit held by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Lender,
the purchase shall be rescinded and the purchase price restored to the extent of
such recovery.

Section 3. Yield Protection.

3.1. Taxes.

(a) All payments of principal and interest on the Loans and all other amounts
payable hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any present or future income, excise, stamp,
documentary, property or franchise taxes and other taxes, fees, duties, levies,
withholdings, fines, penalties, interest, additions to tax or other charges of
any nature whatsoever imposed by any taxing authority, excluding (i) taxes
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any Lender’s overall net income or overall net profits (including franchise
taxes imposed on any Lender in lieu of income taxes), in each case by the
jurisdiction (or any political subdivision thereof) under which such Lender is
organized, is otherwise resident for tax purposes or has a present or former
connection (other than residency or a connection that would not have arisen but
for entering into the Loan Documents, receiving any payments under or with
respect to the Loan Documents, or enforcing any rights and remedies under the
Loan Documents), (ii) any branch profit taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which a Lender
is resident for tax purposes (other than residency that would not have arisen
but for entering into the Loan Documents, receiving any payments under or with
respect to the Loan Documents, or enforcing any rights and remedies under the
Loan Documents), (iii) in the case of any Lender that is organized under the
laws of a jurisdiction other than the United States of America (a “non-U.S.
Lender”), any United States federal withholding tax that is imposed on amounts
payable to such non-U.S. Lender at the time such non-U.S. Lender becomes a party
to this Agreement (or designates a new lending office, other than a designation
made at the request of Borrower) or is attributable to such non-U.S. Lender’s
failure or inability to comply with its obligations under Sections 3(c) or (d),
(iv) in the case of any Lender that is a “United States person” (as such term is
defined in Section 7701(a)(30) of the IRC) (a “U.S. Lender”), any United States
federal backup withholding taxes imposed on such Lender as a result of payments
under this Agreement (other than any backup withholding taxes imposed as a
result of a change in law) and (v) taxes imposed under FATCA (all such
non-excluded items referred to herein as “Taxes”). If any withholding or
deduction from any payment to be made by Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
Borrower will: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to Agent an
official receipt or other documentation satisfactory to Agent evidencing such
payment to such authority; and (iii) pay to Agent for the account of Lenders
such additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required. If any Taxes
are directly asserted against Agent or any Lender with respect to any payment
received by Agent or such Lender hereunder, Agent or such Lender may pay such
Taxes and Borrower will, upon written demand therefor (together with a statement
setting forth in reasonable detail the basis and calculation of such amounts),
promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is 180
days prior to the date on which Agent or such Lender first made demand therefor;
provided, that if the event giving rise to such costs or reductions has
retroactive effect, such 180 day period shall be extended to include the period
of retroactive effect.

(b) If Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent, for the account of the respective Lenders,
the required receipts or other required documentary evidence, Borrower shall
indemnify Lenders for any incremental Taxes, interest or penalties that may
become payable by any Lender as a result of any such failure. For purposes of
this Section 3.1, a distribution hereunder or under any Loan Document by Agent
or any Lender to or for the account of any Lender shall be deemed a payment by
Borrower.

(c) Each Lender that (i) is a non-U.S. Lender and (ii) (A) is a party hereto on
the Closing Date or (B) becomes an assignee of an interest under this Agreement
under Section 10.8.1 after the Closing Date (unless such Lender was already a
Lender hereunder immediately prior to such assignment) shall execute and deliver
to Borrower and Agent one or more (as Borrower or Agent may reasonably request)
complete and accurate original copies of Forms W-8ECI, W-8BEN, W-8IMY (as
applicable) or other applicable form, certificate or document prescribed by the
United States Internal Revenue Service certifying as to such Lender’s
entitlement to exemption from withholding or deduction of Taxes. Each non-U.S.
Lender shall (to the extent legally entitled to do so) provide updated forms to
Borrower and Agent on or prior to the date any prior form provided under this
Section 3.1 becomes

 

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obsolete or expires, after the occurrence of an event requiring a change in the
most recent form or certification previously delivered by it pursuant to this
Section 3.1, or from time to time if requested by Borrower or Agent. Borrower
shall not be required to pay additional amounts to any Lender pursuant to this
Section 3.1 to the extent that the obligation to pay such additional amounts
would not have arisen but for the failure of such Lender to comply with this
paragraph (any such taxes, together with such amounts described in clauses
(i) through (v) of Section 3.1(a), the “Excluded Taxes”). Each U.S. Lender shall
deliver to Borrower and Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
request of Borrower or Agent), executed originals of Internal Revenue Service
Form W-9 to enable Borrower or Agent, as the case may be, to determine whether
or not such Lender is subject to backup withholding or information reporting
requirements.

(d) Without limiting the foregoing, each non-U.S. Lender shall comply with any
certification, documentation, information or other reporting necessary to
establish an exemption from withholding under FATCA and shall provide any other
documentation reasonably requested by Borrower or Agent sufficient for Borrower
and Agent to comply with their obligations under FATCA and to determine that
such non-U.S. Lender has complied with such applicable reporting requirements.

(e) Each Lender shall indemnify Agent, within 10 days after demand therefor, for
the full amount of any Excluded Taxes attributable to such Lender that are
payable or paid by Agent and reasonable expenses arising therefrom or with
respect thereto, whether or not such Excluded Taxes were correctly or legally
imposed or asserted by the relevant governmental authority. A certificate as to
the amount of such payment or liability delivered to any Lender by Agent shall
be conclusive absent demonstrable error. The agreements in this Section 3.1(e)
shall survive the resignation and/or replacement of Agent.

(f) So long as no Event of Default then exists, if Agent or any Lender
determines, in its sole discretion, that it has received a refund of a Tax for
which an additional payment has been made by Borrower pursuant to this
Section 3.1, then Agent or such Lender, as the case may be, shall promptly
reimburse Borrower for such amount (but only to the extent of indemnity payments
made, or additional amounts paid, by Borrower under this Section 3.1 with
respect to the Tax giving rise to such refund), net of all out-of-pocket
expenses incurred by Agent or such Lender in collecting such refund and without
interest (other than any interest paid by the relevant governmental authority
with respect to such refund); provided, that Borrower, upon the written request
of Agent or such Lender, agrees to repay the amount paid over to Borrower (plus
any penalties, interest or other charges imposed by the relevant governmental
authority) to Agent or such Lender in the event Agent or such Lender is required
to repay such refund to such governmental authority. This Section 3.1(f) shall
not be construed to require Agent or any Lender to make available its tax
returns (or any other information relating to its Taxes which it deems
confidential) to Borrower or any other Person or to alter its ordinary and
customary practices with respect to the administration of Taxes.

3.2. Increased Cost.

(a) If, after the Closing Date, the adoption of, or any change in, any
applicable law, rule or regulation, or any change in the interpretation or
administration of any applicable law, rule or regulation by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency: (i) shall impose, modify or deem applicable
any reserve (including any reserve imposed by the FRB, but excluding any reserve
included in the determination of the LIBOR Rate pursuant to Section 2.7),
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Lender; or (ii) shall impose on any
Lender any other condition affecting its LIBOR Loans, its Note or its obligation
to make LIBOR Loans; and the result of anything described in clauses (i) above
and (ii) is to increase the cost to (or to impose a cost on) such Lender of
making or maintaining any LIBOR Loan,

 

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or to reduce the amount of any sum received or receivable by such Lender under
this Agreement or under its Note with respect thereto, then upon demand by such
Lender (which demand shall be accompanied by a statement setting forth the basis
for such demand and a calculation of the amount thereof in reasonable detail, a
copy of which shall be furnished to Agent), Borrower shall pay directly to such
Lender such additional amount as will compensate such Lender for such increased
cost or such reduction, so long as such amounts have accrued on or after the day
which is 180 days prior to the date on which such Lender first made demand
therefor; provided, that if the event giving rise to such costs or reductions
has retroactive effect, such 180 day period shall be extended to include the
period of retroactive effect.

(b) If any Lender shall reasonably determine that any change in, or the adoption
or phase-in of, any applicable law, rule or regulation regarding capital
adequacy, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or the compliance by any Lender or any
Person controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender’s or such controlling Person’s capital as a consequence of
such Lender’s obligations hereunder or under any Letter of Credit to a level
below that which such Lender or such controlling Person could have achieved but
for such change, adoption, phase-in or compliance (taking into consideration
such Lender’s or such controlling Person’s policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, upon demand by such Lender (which demand shall
be accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to Agent), Borrower shall pay to such Lender such additional amount as
will compensate such Lender or such controlling Person for such reduction, so
long as such amounts have accrued on or after the day which is 180 days prior to
the date on which such Lender first made demand therefor; provided, that if the
event giving rise to such costs or reductions has retroactive effect, such 180
day period shall be extended to include the period of retroactive effect.

(c) Notwithstanding anything herein to the contrary, each of (x) the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
regulations, guidelines or directives thereunder or issued in connection
therewith, and (y) all requests, rules, guidelines and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities), shall be deemed to be a change in law for
purposes of this Agreement (including without limitation for purposes of this
Section 3.2 and for purposes of Section 3.4), regardless of the date enacted,
adopted or issued.

3.3. Inadequate or Unfair Basis.

If Agent reasonably determines (which determination shall be binding and
conclusive on Borrower) that, by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
the applicable LIBOR Rate, then Agent shall promptly notify the Lenders and
Borrower thereof and, so long as such circumstances shall continue, (a) no
Lender shall be under any obligation to make or convert any Base Rate Loans into
LIBOR Loans and (b) on the last day of the current Interest Period for each
LIBOR Loan, such Loan shall, unless then repaid in full, automatically convert
to a Base Rate Loan.

3.4. Change in Law.

If any change in, or the adoption of any new, law or regulation, or any change
in the interpretation of any applicable law or regulation by any governmental or
other regulatory body charged with the administration thereof, would make it (or
in the good faith judgment of any Lender cause a substantial question as to
whether it is) unlawful for any Lender to make, maintain or fund LIBOR Loans,

 

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then such Lender shall promptly notify each of the other parties hereto and, so
long as such circumstances shall continue, (a) such Lender shall have no
obligation to make or convert any Base Rate Loan into a LIBOR Loan (but shall
make Base Rate Loans concurrently with the making of LIBOR Loans or conversion
of Base Rate Loans into LIBOR Loans by Lenders which are not so affected, in
each case in an amount equal to the amount of LIBOR Loans which would be made or
converted into by such Lender at such time in the absence of such circumstances)
and (b) on the last day of the current Interest Period for each LIBOR Loan of
such Lender (or, in any event, on such earlier date as may be required by the
relevant law, regulation or interpretation), such LIBOR Loan shall, unless then
repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan
made by a Lender which, but for the circumstances described in the foregoing
sentence, would be a LIBOR Loan shall remain outstanding for the period
corresponding to the Interest Period originally applicable to such LIBOR Loan
absent such circumstances.

3.5. Funding Losses.

Borrower hereby agrees that upon demand by any Lender (which demand shall be
accompanied by a statement setting forth the basis for the amount being claimed,
a copy of which shall be furnished to Agent), Borrower will indemnify such
Lender against any net loss or expense which such Lender may sustain or incur
(including any net loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain any LIBOR Loan), as reasonably determined by such Lender, as a result
of (a) any payment, prepayment or conversion of any LIBOR Loan of such Lender on
a date other than the last day of an Interest Period for such Loan (including
any conversion pursuant to Section 3.3 or 3.4) or (b) any failure of Borrower to
borrow, convert or continue any Loan on a date specified therefor in a notice of
borrowing, conversion or continuation pursuant to this Agreement. For the
purposes of this Section 3.5, all determinations shall be made as if such Lender
had actually funded and maintained each LIBOR Loan during each Interest Period
for such Loan through the purchase of deposits having a maturity corresponding
to such Interest Period and bearing an interest rate equal to the LIBOR Rate for
such Interest Period.

3.6. Manner of Funding; Alternate Funding Offices.

Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Loans in any manner it may determine at its sole discretion. Each Lender may, if
it so elects, fulfill its commitment to make any LIBOR Loan by causing any
branch or Affiliate of such Lender to make such Loan; provided that in such
event for the purposes of this Agreement such Loan shall be deemed to have been
made by such Lender and the obligation of Borrower to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or Affiliate.

3.7. Mitigation of Circumstances; Replacement of Lenders.

(a) Each Lender shall promptly notify Borrower and Agent of any event of which
it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Lender’s sole judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by
Borrower to pay any amount pursuant to Section 3.1 or 3.2 or (ii) the occurrence
of any circumstances described in Section 3.3 or 3.4 (and, if any Lender has
given notice of any such event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify
Borrower and Agent). Without limiting the foregoing, each Lender will designate
a different funding office if such designation will avoid (or reduce the cost to
Borrower of) any event described in clause (i) or (ii) above and such
designation would not, in such Lender’s sole judgment, be otherwise
disadvantageous to such Lender.

 

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(b) If (i) Borrower becomes obligated to pay additional amounts to any Lender
pursuant to Section 3.1 or 3.2, or any Lender gives notice of the occurrence of
any circumstances described in Section 3.3 or 3.4, (ii) any Lender does not
consent to any matter requiring its consent under Section 10.1 when the Required
Lenders have otherwise consented to such matter or (iii) any Lender is a
Defaulting Lender and the circumstances causing such status have not been cured
or waived, then Borrower may within 90 days thereafter designate another bank
which is acceptable to Agent and Issuing Lender in their reasonable discretion
(such other bank being called a “Replacement Lender”) to purchase the Loans of
such Lender and such Lender’s rights hereunder (provided, that there shall be a
concurrent purchase of the Loans and rights of any other Lender that then falls
within the scope of the foregoing clauses (i), (ii) or (iii) of this
Section 3.7(b)), without recourse to or warranty by, or expense to, any such
Lenders, for a purchase price equal to the outstanding principal amount of the
Loans payable to any such Lenders plus any accrued but unpaid interest on such
Loans and all accrued but unpaid fees owed to any such Lenders and any other
amounts payable to any such Lenders under this Agreement, and to assume all the
obligations of any such Lenders hereunder, and, upon such purchase and
assumption (pursuant to an Assignment Agreement), any such Lenders shall no
longer be a party hereto or have any rights hereunder (other than rights with
respect to indemnities and similar rights applicable to any such Lenders prior
to the date of such purchase and assumption) and shall be relieved from all
obligations to Borrower hereunder, and the Replacement Lender shall succeed to
the rights and obligations of such Lender hereunder.

3.8. Conclusiveness of Statements; Survival.

Determinations and statements of any Lender pursuant to Section 3.1, 3.2, 3.3,
3.4 or 3.5 shall be conclusive absent demonstrable error. Lenders may use
reasonable averaging and attribution methods in determining compensation under
Sections 3.1, 3.2 and 3.5, and the provisions of such Sections shall survive
repayment of the Loans, cancellation of the Notes, expiration or termination of
the Letters of Credit and termination of this Agreement.

Section 4. Conditions Precedent.

The obligation of each Lender to make its Loans and of Issuing Lender to issue
Letters of Credit is subject to the following conditions precedent:

4.1. Initial Credit Extension.

The obligation of the Term Lenders to make the Term Loan, the obligation of
Revolving Lenders to make the initial Revolving Loans on or after the Closing
Date, and the obligation of Issuing Lender to issue the initial Letter of Credit
hereunder on or after the Closing Date (whichever first occurs) is, in addition
to the conditions precedent specified in Section 4.2, subject to the following
conditions precedent, each of which shall be satisfactory in all respects to
Agent:

4.1.1. Financial Statements; Total Debt to EBITDA Ratio.

Delivery of financial statements, projections and pro forma balance sheets for
Borrower and each of the Existing Portfolio Companies, and an officer’s
certificate from the Chief Financial Officer of the Borrower with respect
thereto, which evidence that the Total Debt to EBITDA Ratio for the twelve month
period ending on June 30, 2011, as calculated on a pro forma basis after giving
effect to the funding of the Term Loan on and the outstanding balance of the
Revolving Outstandings as of the Closing Date and as adjusted by adjustments
satisfactory to Agent, shall not be greater than 2.75:1.00 and which are
otherwise satisfactory to Agent and the Lenders in form and content.

 

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4.1.2. Initial Loans; Availability.

On the Closing Date, after giving effect to the transactions contemplated by
this Agreement to occur on such date, the difference of Borrowing Availability
minus Revolving Outstandings shall be at least $225,000,000.

4.1.3. Corporate Ratings.

Borrower shall have obtained updated Corporate Family ratings from Moody’s and
S&P reaffirming ratings of a minimum of BB- and Ba3, respectively, based on
Borrower having the Indebtedness contemplated under this Agreement.

4.1.4. Fees.

Borrower shall have paid all fees, costs and expenses due and payable under this
Agreement and the other Loan Documents on the Closing Date.

4.1.5. Delivery of Loan Documents.

Borrower shall have delivered to Agent (or otherwise arranged for delivery to
the satisfaction of Agent of) the following documents in form and substance
satisfactory to Agent (and, as applicable, duly executed and dated the Closing
Date or an earlier date satisfactory to Agent):

(a) Agreement. This Agreement, together with the Annexes, Exhibits and Schedules
hereto.

(b) Notes. Notes, for each Lender requesting a Note.

(c) Collateral Documents. The Collateral Agreement, all other Collateral
Documents, and all instruments, documents, certificates and agreements executed
or delivered pursuant thereto (including pledged Collateral, with undated
irrevocable transfer powers executed in blank).

(d) Financing Statements. Properly completed Uniform Commercial Code financing
statements and other filings and documents required by law or the Loan Documents
to provide Agent perfected, first-priority Liens (subject only to Liens
permitted pursuant to Section 7.2) in the Collateral.

(e) Lien Searches. Copies of Uniform Commercial Code search reports listing all
effective financing statements filed against Borrower or any Existing Portfolio
Company, with copies of such financing statements.

(f) Payoff; Release. Payoff letters evidencing repayment in full of all Prior
Debt, termination of all agreements relating thereto and the release of all
Liens granted in connection therewith, with Uniform Commercial Code or other
appropriate termination statements and documents effective to evidence the
foregoing.

(g) Availability Certificate. Availability Certificate reflecting Combined
Eligible Availability as of June 30, 2011 and Total Debt as of the Closing Date.

(h) Letter of Direction. A letter of direction containing funds flow
information, with respect to the proceeds of the Loans on the Closing Date.

(i) Authorization Documents. For Borrower and each Existing Portfolio Company,
such Person’s (i) charter (or similar formation document), certified by the
appropriate governmental

 

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authority, (ii) good standing certificates in its state of incorporation (or
formation) (other than with respect to Subsidiaries of Existing Portfolio
Companies that have no material operations, assets or liabilities) and in each
other state requested by Agent, (iii) bylaws (or similar governing document),
(iv) resolutions of its board of directors (or similar governing body) approving
and authorizing such Person’s execution, delivery and performance of the Loan
Documents (in the case of Borrower), and the Intercompany Debt Documents (in the
case of the Existing Portfolio Companies), to which it is party and the
transactions contemplated thereby, and (v) signature and incumbency certificates
of its officers executing any of the Loan Documents (the requirement of this
clause (v) to apply only to Borrower), all certified by its secretary or an
assistant secretary (or similar officer) as being in full force and effect
without modification. For the Trust, a true, correct, complete and current copy
of the Trust Agreement.

(j) Opinion of Counsel. Opinion of counsel for Borrower, and Borrower hereby
requests such counsel to deliver such opinion and authorizes Agent and Lenders
to rely thereon.

(k) Insurance. Certificates or other evidence of insurance in effect as required
by Section 6.3(b), with endorsements naming (i) Agent, with respect to insurance
policies of Borrower and (ii) Borrower, with respect to insurance policies of
the Existing Portfolio Companies, as loss payee and/or additional insured, as
applicable.

(l) Financials. The financial statements, projections and pro forma balance
sheet described in Section 5.4.

(m) Consents. Evidence that all necessary consents, permits and approvals
(governmental or otherwise) required for the execution, delivery and performance
by Borrower of the Loan Documents have been duly obtained and are in full force
and effect.

(n) Certified Documents. To the extent in existence as of the Closing Date and
not previously delivered to Agent, copies of the Intercompany Debt Documents and
the other Related Agreements (together with (x) any Collateral Assignments and
(y) the Management Fee Subordination Agreement) certified by Borrower’s chief
financial officer, secretary or an assistant secretary (or similar officer) as
being in true, accurate and complete.

(o) Solvency Certificate. A solvency certificate from the chief financial
officer of the Borrower in form and substance satisfactory to Agent.

(p) Other Documents. Such other certificates, documents and agreements as Agent
or any Lender may reasonably request.

4.2. All Credit Extensions.

The obligation of each Lender to make each Loan and of Issuing Lender to issue
each Letter of Credit is subject to the additional conditions precedent that
(unless such conditions are waived by the Agent and Required Lenders), both
before and after giving effect to any borrowing and the issuance of any Letter
of Credit, (a) the representations and warranties of Borrower set forth in this
Agreement and the other Loan Documents shall be true and correct in all material
respects with the same effect as if then made (except to the extent stated to
relate to a specific earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date), (b) no Event of
Default or Default shall have then occurred and be continuing, (c) to the extent
the proceeds of such proposed borrowing are to be used by Borrower or any
Portfolio Company to fund an Acquisition or a dividend, Borrower shall have
delivered to Agent an updated Availability Certificate demonstrating sufficient
Borrowing Availability for such proposed borrowing, and (d) after giving effect
to such proposed borrowing or issuance of a Letter of Credit, Borrower shall be
in pro forma compliance as of the last day of the most recently completed
Computation Period with each covenant set forth in Section 7.14, as

 

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calculated based on the monthly financial statements and related compliance
certificate most recently delivered pursuant to Section 6.1.2 and 6.1.3,
assuming for such purpose that such proposed Borrowing or issuance of a Letter
of Credit had been made on the first day of such most recently completed
Computation Period. Each request by Borrower for the making of a Loan or the
issuance of a Letter of Credit shall be deemed to constitute a representation
and warranty by Borrower that the conditions precedent set forth in Section 4.2
will be satisfied at the time of the making of such Loan or the issuance of such
Letter of Credit.

Section 5. Representations and Warranties.

To induce Agent and Lenders to enter into this Agreement and to induce Lenders
to make Loans and to issue and participate in Letters of Credit hereunder,
Borrower represents and warrants to Agent and Lenders that, both before and
after giving effect to the Related Transactions and, in addition, as of the
Closing Date:

5.1. Organization.

Borrower is a limited liability company validly existing and in good standing
under the laws of the State of Delaware; the Trust and each Subsidiary (other
than Subsidiaries within a Portfolio Company that are not material to such
Portfolio Company taken as a whole) is validly existing and in good standing
under the laws of the jurisdiction of its organization; and each Subsidiary is
duly qualified to do business in each jurisdiction where, because of the nature
of its activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.

5.2. Authorization; No Conflict.

Each of Borrower and each Subsidiary is (or was, as applicable with respect to
Intercompany Debt Documents in effect as of the date hereof) duly authorized to
execute and deliver, as applicable, each Loan Document and each Related
Agreement to which it is a party, Borrower is duly authorized to borrow monies
hereunder, Borrower is duly authorized to perform its Obligations under each
Loan Document to which it is a party, and each Subsidiary is duly authorized to
perform its Obligations under each Intercompany Debt Document to which it is a
party. The execution, delivery and performance by Borrower of this Agreement, by
Borrower of each Loan Document to which it is a party and by each Subsidiary of
each Intercompany Debt Document to which it is a party, and the borrowings by
Borrower hereunder and by each Subsidiary under the Intercompany Debt Documents,
do not and will not (a) require any consent or approval of any governmental
agency or authority (other than any consent or approval which has been obtained
and is in full force and effect), (b) conflict with (i) any provision of
applicable law, (ii) the charter, by-laws or other organizational documents of
Borrower or any other such Person or (iii) any agreement, indenture, instrument
or other document, or any judgment, order or decree, which is binding upon
Borrower or any of its properties or (c) require, or result in, the creation or
imposition of any Lien on any asset of Borrower or any Subsidiary (other than
Liens in favor of Agent created pursuant to the Collateral Documents and Liens
in favor of Borrower created pursuant to the Intercompany Debt Documents).

5.3. Validity; Binding Nature.

Each of this Agreement and each other Loan Document to which Borrower is a party
is the legal, valid and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors’ rights generally and to
general principles of equity. Each Intercompany Debt Document to which any
Subsidiary is a party is the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, subject to
bankruptcy, insolvency and similar laws affecting the enforceability of
creditors’ rights generally and to general principles of equity.

 

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5.4. Financial Condition.

(a) The audited consolidated and consolidating financial statements of the
Trust, Borrower and the Existing Portfolio Companies as at December 31, 2010 and
as of December 31, 2009 (provided, that (x) with respect to Liberty Safe, such
historical audited financial statements are limited to the period from March 31,
2010 through December 31, 2010, (y) with respect to Ergo Baby, such historical
audited financial statements are limited to the period from September 16, 2010
through December 31, 2010, and (z) with respect to CamelBak, such historical
audited financial statements are limited to the fiscal year ended December 31,
2010), and the unaudited consolidated and consolidating (by Portfolio Company)
financial statements of the Trust, Borrower and the Existing Portfolio Companies
as at June 30, 2011 and as at the end of each Fiscal Quarter ending during the
preceding two years, copies of each of which have been delivered pursuant
hereto, were prepared in accordance with GAAP (subject, in the case of such
unaudited statements, to the absence of footnotes and to normal year-end
adjustments) and present fairly the consolidated financial condition of such
Persons as at such dates and the results of their operations for the periods
then ended.

(b) The consolidated and consolidating financial projections (including an
operating budget and a cash flow budget) of Borrower and the Existing Portfolio
Companies for the term of this Agreement (and prepared on a quarterly basis for
at least the first two years of the term of this Agreement) delivered to Agent
and Lenders on or prior to the Closing Date (i) were prepared by Borrower in
good faith and (ii) were prepared in accordance with assumptions for which
Borrower has a reasonable basis, and the accompanying consolidated and
consolidating pro forma balance sheet of Borrower and the Existing Portfolio
Companies as at June 30, 2011, adjusted to give effect to the consummation of
the financings contemplated hereby as if such transactions had occurred on such
date, is consistent in all material respects with such projections.

5.5. No Material Adverse Effect.

Since December 31, 2010, there has been no Material Adverse Effect.

5.6. Litigation.

No litigation (including derivative actions), arbitration proceeding or
governmental investigation or proceeding is pending or, to Borrower’s knowledge,
threatened against Borrower or any Portfolio Company which could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, except as set forth in Schedule 5.6. As of the Closing Date, other than
any liability incident to such litigation or proceedings, Borrower does not have
any material Contingent Obligations except as listed on Schedule 7.1.

5.7. Ownership of Properties; Liens.

Except as would not reasonably be expected to have a Material Adverse Effect,
each of Borrower and each Portfolio Company owns good and, in the case of real
property, marketable title to all of its properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges and claims (including infringement claims with respect to
patents, trademarks, service marks, copyrights and the like), except as
permitted by Section 7.2.

 

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5.8. Capitalization.

All issued and outstanding equity securities of the Subsidiaries are duly
authorized and validly issued, fully paid, non-assessable, and, except as set
forth on Schedule 5.8, free and clear of all Liens. Schedule 5.8 sets forth the
authorized equity securities, and the issued and outstanding equity securities,
of Borrower and each Subsidiary as of the Closing Date. As of the Closing Date,
except as set forth on Schedule 5.8, there are no pre-emptive or other
outstanding rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition of any equity
interests of Borrower or any Subsidiary.

5.9. Pension Plans.

During the twelve-consecutive-month period prior to the Closing Date or the
making of any Loan or the issuance of any Letter of Credit, (i) no steps have
been taken to terminate any Pension Plan and (ii) no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by Borrower or any other member of the Controlled Group of any liability, fine
or penalty which could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect. All contributions (if any) have been
made to any Multiemployer Pension Plan that are required to be made by Borrower
or any other member of the Controlled Group under the terms of the plan or of
any collective bargaining agreement or by applicable law; neither Borrower nor
any member of the Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Pension Plan, incurred any withdrawal liability with respect to
any such plan or received notice of any claim or demand for withdrawal liability
or partial withdrawal liability from any such plan, and no condition has
occurred which, if continued, could result in a withdrawal or partial withdrawal
from any such plan, and neither Borrower nor any member of the Controlled Group
has received any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the IRC, that any such plan is or may be terminated, or that any such plan is
or may become insolvent.

5.10. Investment Company Act.

None of the Trust, Borrower or any Subsidiary is an “investment company” or a
company “controlled” by an “investment company” or a “subsidiary” of an
“investment company”, within the meaning of the Investment Company Act of 1940.

5.11. Use of Proceeds.

The Borrower has not used the proceeds of any Loan or Letter of Credit in a
manner prohibited by Section 6.10.

5.12. Margin Stock.

None of the Trust, Borrower or any Subsidiary is engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock. No portion of the Obligations or the
Intercompany Debt is secured directly or indirectly by Margin Stock.

5.13. Taxes.

Except as would not reasonably be expected to have a Material Adverse Effect,
each of Borrower and each Portfolio Company has filed all tax returns and
reports required by law to have been

 

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filed by it and has paid all taxes and governmental charges thereby shown or
otherwise to be owing, except any such taxes or charges which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.

5.14. Solvency.

On the Closing Date, and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, Borrower is Solvent.

5.15. Environmental Matters.

Except as set forth in Schedule 5.15, the on-going operations of Borrower and
each Portfolio Company comply in all respects with all Environmental Laws,
except such non-compliance which could not (if enforced in accordance with
applicable law) reasonably be expected to result in a Material Adverse Effect.
Borrower and each Portfolio Company have obtained, and maintained in good
standing, all licenses, permits, authorizations and registrations required under
any Environmental Law and necessary for their respective ordinary course
operations, and Borrower and each Portfolio Company are in compliance with all
material terms and conditions thereof, in each case except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
Except as set forth in Schedule 5.15, none of Borrower, any Portfolio Company or
any of their respective properties or operations is subject to any outstanding
written order from or agreement with any Federal, state or local governmental
authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Substance.
Except as set forth in Schedule 5.15, there are no Hazardous Substances or other
conditions or circumstances existing with respect to any property, or arising
from operations prior to the Closing Date, of Borrower or any Portfolio Company
that could reasonably be expected to result in a Material Adverse Effect.
Neither Borrower nor any Portfolio Company has any underground storage tanks
that are not properly registered or permitted under applicable Environmental
Laws or that are leaking or disposing of Hazardous Substances.

5.16. Insurance.

Borrower and each Portfolio Company and their respective properties are insured
with financially sound and reputable insurance companies which are not
Affiliates of Borrower, in such amounts, with such deductibles and covering such
risks as are customarily carried by companies engaged in similar businesses and
owning similar properties in localities where Borrower or such Portfolio Company
operates.

5.17. Information.

All information heretofore or contemporaneously herewith furnished in writing by
Borrower to Agent or any Lender for purposes of or in connection with this
Agreement and the transactions contemplated hereby is, and all written
information hereafter furnished by or on behalf of the Trust or Borrower to
Agent or any Lender pursuant hereto or in connection herewith will be, true and
accurate in every material respect on the date as of which such information is
dated or certified, and none of such information is or will be incomplete by
omitting to state any material fact necessary to make such information not
misleading in light of the circumstances under which made (it being recognized
by Agent and Lenders that any projections and forecasts provided by Borrower are
based on good faith estimates and assumptions believed by Borrower to be
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).

 

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5.18. Intellectual Property.

Except as set forth in Schedule 5.18, Borrower owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the business of Borrower, without
any infringement upon rights of others which could reasonably be expected to
have a Material Adverse Effect.

5.19. Restrictive Provisions.

Neither Borrower nor any Portfolio Company is a party to any agreement or
contract or subject to any restriction contained in its operative documents
which could reasonably be expected to have a Material Adverse Effect.

5.20. Labor Matters.

Except as set forth on Schedule 5.20, Borrower is not subject to any labor or
collective bargaining agreement. There are no existing or threatened strikes,
lockouts or other labor disputes involving Borrower that singly or in the
aggregate could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of Borrower are not in violation of the
Fair Labor Standards Act or any other applicable law, rule or regulation dealing
with such matters.

5.21. No Default.

No Event of Default or Default exists or would result from the incurrence by
Borrower of any Debt hereunder or under any other Loan Document. As of the
Closing Date, no event of default under and as defined in any of the
Intercompany Debt Documents has occurred and is continuing.

5.22. Related Agreements.

Borrower has furnished Agent a true and correct copy of the Related Agreements
pursuant hereto. Each of Borrower and, to Borrower’s knowledge, each other party
to the Related Agreements, has duly taken all necessary organizational action to
authorize the execution, delivery and performance of the Related Agreements and
the consummation of transactions contemplated thereby. As of the Closing Date,
the Related Transactions occurring prior to the Closing Date have been
consummated in accordance with the terms of the Related Agreements and
applicable law. The execution and delivery of the Related Agreements in
existence as of the Closing Date, and the consummation of the Related
Transactions occurring prior to the Closing Date, did not violate any statute or
regulation of the United States (including any securities law) or of any state
or other applicable jurisdiction, or any order, judgment or decree of any court
or governmental body binding on Borrower or, to Borrower’s knowledge, any other
party to the Related Agreements, or result in a breach of, or constitute a
default under, any material agreement, indenture, instrument or other document,
or any judgment, order or decree, to which Borrower is a party or by which
Borrower is bound or, to Borrower’s knowledge, to which any other party to the
Related Agreements is a party or by which any such party is bound. No statement
or representation made in the Related Agreements in existence as of the Closing
Date by Borrower or, to Borrower’s knowledge, any other Person, contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time that such statement or representation is made. As of the Closing Date
and any other date on which such representations and warranties are otherwise
remade or deemed remade hereunder, (i) each of the representations and
warranties contained in the Related Agreements in existence as of the Closing
Date made by Borrower is true and correct in all material respects and (ii) to
Borrower’s knowledge, each of the representations and warranties contained in
the Related Agreements in existence as of the Closing Date made by any Person
other than Borrower is true and correct in all material respects.

 

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5.23. Compliance with Laws / Anti-Terrorism Laws.

Each of Borrower and each Portfolio Company is in compliance with all applicable
laws (including without limitation, all applicable Bank Secrecy Act, Foreign
Corrupt Practices Act, Patriot Act, Gramm-Leach-Bliley and anti-money laundering
laws and all laws promulgated by the Securities and Exchange Commission) and
regulations, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply could not reasonably be expected to have
a Material Adverse Effect. Without limiting the generality of the foregoing,
neither Borrower nor any Portfolio Company (i) is in violation of any
Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a
Blocked Person, or is controlled by a Blocked Person, (iv) is acting for or on
behalf of a Blocked Person, (v) is associated with a Blocked Person or (vi) is
providing material financial or technical support or other services to or in
support of acts of terrorism of a Blocked Person. Neither Borrower nor any
Portfolio Company (A) conducts any business or engages in making or receiving
any contribution of funds, goods or services to or for the benefit of any
Blocked Person, or (B) deals in, or otherwise engages in any transaction
relating to, any property or interest in property blocked pursuant to Executive
Order No. 13224, any similar executive order or other Anti-Terrorism Law.

Section 6. Affirmative Covenants.

Until the expiration or termination of the Revolving Loan Commitments and
thereafter until all Obligations (other than contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted) of
Borrower hereunder and under the other Loan Documents are paid in full and all
Letters of Credit have been terminated, Borrower agrees that, unless at any time
Required Lenders shall otherwise expressly consent in writing, it will:

6.1. Information.

Furnish to Agent, for further distribution by Agent to Lenders:

6.1.1. Annual Report.

(a) Promptly when available and in any event within 90 days after the close of
each Fiscal Year of Borrower or fiscal year of a Portfolio Company or Outside
Company (as applicable): (i) for Borrower, a copy of the annual audit report of
Borrower and the Subsidiaries for such Fiscal Year, including therein a
consolidated balance sheet and statement of earnings and cash flows of Borrower
and the Subsidiaries as at the end of such Fiscal Year, certified without
qualification (except for qualifications relating to changes in accounting
principles or practices reflecting changes in generally accepted principles of
accounting and required or approved by Borrower’s independent certified public
accountants) by independent auditors of recognized standing selected by Borrower
and reasonably acceptable to Agent, and an Excess Cash Flow Certificate, and
(ii) for each Portfolio Company and each Outside Company, a copy of the annual
audit report of such Portfolio Company or Outside Company for such Fiscal Year,
including therein a consolidated balance sheet and statement of earnings and
cash flows of such Portfolio Company or Outside Company as at the end of such
Fiscal Year, certified without qualification (except for qualifications relating
to changes in accounting principles or practices reflecting changes in generally
accepted principles of accounting and required or approved by such Portfolio
Company’s or Outside Company’s independent certified public accountants) by
independent auditors of recognized standing selected by such Portfolio Company
or Outside Company and reasonably acceptable to Agent; provided, that audited
financial statements for Portfolio Companies and Outside Companies with respect
to fiscal years prior to the first full fiscal year occurring after such
Portfolio Company or Outside Company has become a Portfolio Company or Outside
Company shall only be required to be delivered to the extent they are available.

 

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(b) Promptly when available and in any event within 90 days after the close of
each Fiscal Year: a copy of the consolidating (by Portfolio Company and Outside
Company) balance sheet and statement of earnings and cash flows of Borrower and
the Subsidiaries as at the end of such Fiscal Year, certified without
qualification by the chief financial officer of Borrower.

6.1.2. Interim Reports.

Promptly when available and in any event within 45 days after the end of each
month (including months that correspond to the end of a Fiscal Quarter other
than Fiscal Quarters ending on December 31), (i) consolidated and consolidating
(by Portfolio Company and Outside Company) balance sheets of the Trust, Borrower
and the Subsidiaries as of the end of such month, together with consolidated and
consolidating (by Portfolio Company and Outside Company) statements of earnings
and a consolidated and consolidating statement of cash flows for such month and
for the period beginning with the first day of such Fiscal Year and ending on
the last day of such month, together with a comparison with the corresponding
period of the previous Fiscal Year and a comparison with the budget for such
period of the current Fiscal Year, certified by the chief financial officer of
Borrower (except that such monthly financial statements (a) will be subject to
normal year-end adjustments and (b) will not contain footnotes), and (ii) a
written statement of Borrower’s management setting forth a discussion of the
financial condition, changes in financial condition and results of operations
for Borrower and for each Portfolio Company.

6.1.3. Compliance Certificate.

Contemporaneously with the furnishing of a copy of each annual audit report
pursuant to Section 6.1.1 and each set of quarterly statements pursuant to
Section 6.1.2 (and as required by Section 7.11) a duly completed Compliance
Certificate, with appropriate insertions, dated the date of such annual report
or such quarterly statements, and signed by the chief financial officer of
Borrower, containing a computation of each of the financial ratios and
restrictions set forth in Section 7.14 and to the effect that such officer has
not become aware of any Event of Default or Default that has occurred and is
continuing or, if there is any such event, describing it and the steps, if any,
being taken to cure it.

6.1.4. Reports to SEC and Shareholders.

Promptly upon the filing or sending thereof, copies of (a) all regular, periodic
or special reports of the Trust, Borrower or any Subsidiary filed with the
Securities Exchange Commission, (b) all registration statements of the Trust,
Borrower or any Subsidiary filed with the Securities Exchange Commission (other
than on Form S-8) and (c) all proxy statements or other communications made to
security holders generally.

6.1.5. Notice of Default; Litigation; ERISA Matters.

Promptly upon becoming aware of any of the following, written notice describing
the same and the steps being taken by Borrower or the applicable Subsidiary
affected thereby with respect thereto:

(a) the occurrence of an Event of Default or a Default;

(b) any litigation, arbitration or governmental investigation or proceeding not
previously disclosed by Borrower to Lenders which has been instituted or, to the
knowledge of Borrower, is threatened against Borrower or any Subsidiary or to
which any of the properties of any thereof is subject which could reasonably be
expected to have a Material Adverse Effect;

 

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(c) the institution of any steps by any member of the Controlled Group or any
other Person to terminate any Pension Plan, or the failure of any member of the
Controlled Group to make a required contribution to any Pension Plan (if such
failure is sufficient to give rise to a Lien under ERISA) or to any
Multiemployer Pension Plan, or the taking of any action with respect to a
Pension Plan which could result in the requirement that Borrower or any
Subsidiary furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan or Multiemployer
Pension Plan which could result in the incurrence by any member of the
Controlled Group of any material liability, fine or penalty (including any claim
or demand for withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent liability of Borrower
or any Subsidiary with respect to any post-retirement welfare plan benefit, or
any notice that any Multiemployer Pension Plan is in reorganization, that
increased contributions may be required to avoid a reduction in plan benefits or
the imposition of an excise tax, that any such plan is or has been funded at a
rate less than that required under Section 412 of the IRC, that any such plan is
or may be terminated, or that any such plan is or may become insolvent;

(d) any cancellation or material change in any insurance maintained by Borrower
or any Subsidiary; or

(e) any other event (including (i) any violation of any Environmental Law or the
assertion of any Environmental Claim or (ii) the enactment or effectiveness of
any law, rule or regulation) which could reasonably be expected to have a
Material Adverse Effect.

6.1.6. Availability Certificate.

Concurrent with the delivery of each interim report pursuant to Section 6.1.2,
an Availability Certificate dated as of the end of the most recently ended month
covered by such interim report and executed by a chief financial officer of
Borrower on behalf of Borrower; provided that at any time an Event of Default
exists, Agent may require Borrower to deliver Availability Certificates more
frequently.

6.1.7. Management Report.

Promptly upon receipt thereof, copies of all detailed financial and management
reports submitted to Borrower, the Trust or any Subsidiary by independent
auditors in connection with each annual or interim audit made by such auditors
of the books of Borrower or any Subsidiary.

6.1.8. Projections.

Commencing with respect to the Fiscal Year ending December 31, 2012, as soon as
practicable, and in any event not later than 60 days after the first day of each
Fiscal Year, financial projections for Borrower and the Subsidiaries for such
Fiscal Year (including monthly operating and cash flow budgets) prepared on a
consolidated and consolidating (by Portfolio Company) basis and in a manner
consistent with the projections delivered by Borrower to Agent prior to the
Closing Date or otherwise in a manner reasonably satisfactory to Agent,
accompanied by a certificate of a chief financial officer of Borrower on behalf
of Borrower to the effect that (a) such projections were prepared by Borrower in
good faith, (b) Borrower has a reasonable basis for the assumptions contained in
such projections and (c) such projections have been prepared in accordance with
such assumptions.

 

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6.1.9. Notice of an Event of Default under Intercompany Debt Documents; Notice
of Disqualified Portfolio Company.

Promptly following the Borrower’s knowledge of the occurrence thereof, notice of
any event of default under an Intercompany Debt Document applicable to any
Portfolio Company, together with copies of any written correspondence with the
applicable Portfolio Company regarding such event of default. Promptly following
the Borrower’s knowledge of the occurrence thereof, notice that a Portfolio
Company has become a Disqualified Portfolio Company together with an updated
Availability Certificate reflecting that such Portfolio Company has become a
Disqualified Portfolio Company.

6.1.10. Other Information.

Promptly from time to time, such other information concerning Borrower and any
Subsidiary as any Lender or Agent may reasonably request, including, without
limitation, any information determined by Agent or any Lender to be required
under the USA Patriot Act.

6.2. Books; Records; Inspections.

Keep, and cause each Subsidiary to keep, its books and records in accordance
with sound business practices sufficient to allow the preparation of financial
statements in accordance with GAAP; permit, and cause each Subsidiary that is a
borrower or guarantor under any Qualified Intercompany Debt Documents to permit,
Agent (accompanied by any Lender) or any representative thereof to inspect, at
reasonable times during normal business hours, the properties and operations of
Borrower or such Subsidiary; and permit, and cause each Subsidiary that is a
borrower or guarantor under any Qualified Intercompany Debt Documents to permit,
at any reasonable time during normal business hours and with reasonable notice
(or at any time without notice if an Event of Default exists), Agent
(accompanied by any Lender) or any representative thereof to visit any or all of
its offices, to discuss its financial matters with its officers and its
independent auditors (and Borrower hereby authorizes such independent auditors
to discuss such financial matters with any Lender or Agent or any representative
thereof), and to examine (and, at the expense of Borrower, photocopy extracts
from) any of its books or other records; and permit, and cause each Subsidiary
that is a borrower or guarantor under any Qualified Intercompany Debt Documents
to permit, Agent and its representatives, at reasonable times during normal
business hours, to inspect the assets owned by such Person, to perform
appraisals of the equipment of Borrower or such Subsidiary, and, at reasonable
times during normal business hours, to inspect, audit, check and make copies of
and extracts from the books, records, computer data, computer programs,
journals, orders, receipts, correspondence and other data relating to any assets
of Borrower or such Subsidiary. All such inspections or audits by Agent shall be
at Borrower’s expense, provided that so long as no Event of Default or Default
exists, Borrower shall not be required to reimburse Agent for inspections and
audits more frequently than once each Fiscal Year. Notwithstanding the
foregoing, as they relate to any Subsidiary, the inspection and visitation
rights provided for under this Section 6.2 shall only apply if an Event of
Default exists hereunder or if such Subsidiary is in payment default under the
Intercompany Debt Documents to which it is a party.

6.3. Maintenance of Property; Insurance.

(a) Keep, and cause each Subsidiary to keep, all property useful and necessary
in the business of such Person in good working order and condition, ordinary
wear and tear excepted.

(b) Maintain, and cause each Subsidiary to maintain, with responsible insurance
companies, such insurance coverage as shall be required by all laws,
governmental regulations and court decrees and orders applicable to it and such
other insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; provided that in any
event, such insurance shall insure against all risks and liabilities of the type
insured against as of the Closing Date and

 

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shall have insured amounts no less than, and deductibles no higher than, those
amounts provided for as of the Closing Date. Upon request of Agent or any
Lender, Borrower shall furnish to Agent or such Lender a certificate setting
forth in reasonable detail the nature and extent of all insurance maintained by
Borrower and each Subsidiary. With respect to the insurance policies of the
Subsidiaries that are borrowers or guarantors under any Qualified Intercompany
Debt Documents, Borrower shall, as part of and in connection with such
Intercompany Debt Documents, (x) cause each issuer of an insurance policy to
provide Borrower with an endorsement (i) showing Borrower as a loss payee with
respect to each policy of property or casualty insurance and naming Borrower as
an additional insured with respect to each policy of liability insurance and
(ii) providing that 30 days’ notice will be given to Borrower prior to any
cancellation of, or reduction or change in coverage provided by or other
material modification to such policy, and (y) obtain a collateral assignment of
each business interruption insurance policy maintained by such Subsidiaries.

(c) Unless Borrower provides Agent with evidence of the continuing insurance
coverage required by this Agreement, Agent may purchase insurance at Borrower’s
expense to protect the assets of Borrower (and may require Borrower at its
expense to procure insurance to protect the assets of the Subsidiaries that are
borrowers or guarantors under any Qualified Intercompany Debt Documents). The
coverage that Agent purchases or requires, as applicable, may, but need not, pay
any claim that is made against Borrower (or any Subsidiary, as applicable) in
connection with the assets of such party. Borrower may later cancel any
insurance purchased or required by Agent, but only after providing Agent with
evidence that Borrower has obtained the insurance coverage required by this
Agreement. If Agent purchases insurance for the Collateral, as set forth above,
Borrower will be responsible for the costs of that insurance, including interest
and any other charges that may be imposed with the placement of the insurance,
until the effective date of the cancellation or expiration of the insurance and
the costs of the insurance may be added to the principal amount of the Loans
owing hereunder.

6.4. Compliance with Laws; Payment of Taxes and Liabilities.

(a) Comply, and cause the Trust and each Subsidiary to comply, in all material
respects with all applicable laws, rules, regulations, decrees, orders,
judgments, licenses and permits (including, without limitation, Environmental
Laws), except where failure to comply could not reasonably be expected to have a
Material Adverse Effect; (b) without limiting clause (a) above, ensure, and
cause the Trust and each Subsidiary to ensure, that no person who owns a
controlling interest in or otherwise controls the Trust, Borrower or a
Subsidiary is or shall be (i) listed on the Specially Designated Nationals and
Blocked Person List maintained by OFAC, Department of the Treasury, and/or any
other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (ii) a person designated under Section 1(b),
(c) or (d) or Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders; (c) without limiting
clause (a) above, comply and cause the Trust and each Subsidiary to comply, with
all applicable Bank Secrecy Act and anti-money laundering laws and regulations
and (d) pay, and cause each Subsidiary to pay, prior to delinquency, all taxes
and other governmental charges against it or any of its property, as well as
claims of any kind which, if unpaid, could become a Lien on any of its property;
provided, that the foregoing shall not require any Person to pay any such tax or
charge so long as it shall contest the validity thereof in good faith by
appropriate proceedings and shall set aside on its books adequate reserves with
respect thereto in accordance with GAAP.

6.5. Maintenance of Existence.

Maintain and preserve, and (subject to Section 7.5) cause the Trust and each
Subsidiary to maintain and preserve, (a) its existence and good standing in the
jurisdiction of its organization and (b) its qualification to do business and
good standing in each jurisdiction where the nature of its business makes such
qualification necessary, other than any such jurisdiction where the failure to
be qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect.

 

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6.6. Employee Benefit Plans.

Maintain each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.

6.7. Environmental Matters.

If any release or disposal of Hazardous Substances shall occur or shall have
occurred on any real property or any other assets of Borrower or any Subsidiary,
cause, or direct the applicable Subsidiary to cause, the prompt containment and
removal of such Hazardous Substances and the remediation of such real property
or other assets as is necessary to comply in all material respects with
applicable Environmental Laws and to preserve the value of such real property or
other assets.

6.8. Further Assurances.

Take-such actions as are necessary or as Agent or the Required Lenders may
reasonably request from time to time to ensure that the Obligations of Borrower
under the Loan Documents are secured by substantially all of the present and
future assets of and equity interests in Borrower, including (a) the execution
and delivery by Borrower of reasonable and customary security agreements, pledge
agreements, mortgages, deeds of trust, financing statements and other documents,
and the filing or recording of any of the foregoing and (b) the delivery by
Borrower of certificated securities and other Collateral with respect to which
perfection is obtained by possession.

6.9. Interest Rate Protection.

Within 90 days of the Closing Date, Borrower shall enter into and maintain
interest rate protection agreements having terms (including, without limitation,
rates) reasonably satisfactory to Agent and from a counterparty that is a Lender
or an Affiliate of a Lender with respect to at least 50% of the aggregate
outstanding balance of the Term Loan with an average period of at least two
(2) years.

6.10. Use of Proceeds.

Use the proceeds of the Loans, and the Letters of Credit, solely to repay the
Prior Debt, to satisfy fees and expenses arising in connection with the closing
of the loan facility hereunder, to fund Permitted Eligible Acquisitions and
Permitted Ineligible Acquisitions, to fund distributions permitted to be made by
Borrower under Section 7.4, to fund advances of Qualified Intercompany Debt by
Borrower and to fund other Investments by Borrower permitted to be made
hereunder, and for other permitted general business purposes of Borrower and, in
the case of proceeds of Incremental Term Loans, to repay, in whole or in part,
Revolving Loans then outstanding; and not use or permit any proceeds of any Loan
to be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of “purchasing or carrying” any Margin Stock.

Section 7. Negative Covenants.

Until the expiration or termination of the Revolving Loan Commitments and
thereafter until all Obligations (other than contingent indemnification
obligations to the extent no claim giving rise thereto has been asserted) of
Borrower hereunder and under the other Loan Documents are paid in full and all
Letters of Credit have been terminated, Borrower agrees that, unless at any time
Required Lenders shall otherwise expressly consent in writing, it will:

7.1. Debt.

Not, and not permit any Subsidiary to, create, incur, assume or suffer to exist
any Debt, except:

(a) Obligations under this Agreement and the other Loan Documents;

 

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(b) (i) Debt of the Portfolio Companies (exclusive of Debt of the Portfolio
Companies permitted pursuant to other clauses of this Section 7.1 that are
applicable to Portfolio Companies) that does not exceed in the aggregate at any
time outstanding for any Portfolio Company the lesser of (x) $3,000,000 and
(y) the product of (I) the Existing Portfolio Company EBITDA or New Portfolio
Company EBITDA (as applicable) of such Portfolio Company for the twelve month
period ending on the last day of the month for which financial statements
regarding such Portfolio Company have been most recently delivered to Agent in
accordance with the terms of this Agreement times (II) 0.25 (with measurements
under this clause (i) made at the time of incurrence of any such Debt of the
Portfolio Companies); and (ii) Debt of Borrower that does not exceed $1,000,000
in the aggregate at any time outstanding;

(c) Qualified Intercompany Debt;

(d) Hedging Obligations for bona fide hedging purposes and not for speculation;

(e) Debt described on Schedule 7.1 as of the Closing Date, and any extension,
renewal or refinancing thereof so long as the maximum principal amount thereof
is not increased;

(f) Outside Debt owing solely by Outside Companies;

(g) (i) guarantees of obligations under real property leases and obligations in
respect of severance payments provided by entities within the same Portfolio
Company or Outside Company (as applicable), so long as any such guarantee is
provided at the time such obligations are incurred, and (ii) guarantees by the
Borrower of obligations of Subsidiaries to the extent required by applicable law
in an aggregate amount not to exceed $10,000,000 at any time outstanding;

(h) Contingent Obligations, if any, arising with respect to customary
indemnification obligations in favor of purchasers in connection with
dispositions permitted under Section 7.5;

(i) balances outstanding under the Halo Credit Card Arrangement incurred
pursuant to and in accordance with the terms of the Halo Credit Card Agreement,
so long as (i) the credit available under the Halo Credit Card Arrangement is
used solely to satisfy trade accounts payable of Halo and its Wholly-Owned
Subsidiaries arising in the ordinary course of business, (ii) the aggregate
balance outstanding under the Halo Credit Card Arrangement does not exceed
$10,000,000 at any time and (iii) the aggregate amount of finance charges
outstanding under the Halo Credit Card Arrangement does not exceed $40,000 at
any time; and

(j) Permitted Earn-Outs not to exceed $10,000,000 in the aggregate at any time
outstanding for all Portfolio Companies collectively.

7.2. Liens.

Not, and not permit any Subsidiary to, create or permit to exist any Lien on any
of its real or personal properties, assets or rights of whatsoever nature
(whether now owned or hereafter acquired), except:

(a) Liens for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or being diligently contested in good faith
by appropriate proceedings and, in each case, for which it maintains adequate
reserves in accordance with GAAP and the execution or other enforcement of which
is effectively stayed;

 

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(b) Liens arising in the ordinary course of business (such as (i) Liens of
carriers, warehousemen, mechanics, landlords and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker’s
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being
diligently contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price of
property or services and, in each case, for which it maintains adequate reserves
in accordance with GAAP and the execution or other enforcement of which is
effectively stayed;

(c) Liens described on Schedule 7.2 as of the Closing Date;

(d) to the extent securing Debt that is permitted to be incurred pursuant to
Section 7.1(b), (i) Liens on the assets of a Portfolio Company arising in
connection with Capital Leases of such Portfolio Company (and attaching only to
the property being leased), (ii) Liens on the assets of a Portfolio Company
existing on property at the time of the acquisition thereof by such Portfolio
Company (and not created in contemplation of such acquisition) and (iii) Liens
that constitute purchase money security interests on any property of a Portfolio
Company securing debt of such Portfolio Company incurred for the purpose of
financing all or any part of the cost of acquiring such property, provided that
any such Lien attaches to such property within 60 days of the acquisition
thereof and attaches solely to the property so acquired;

(e) attachments, appeal bonds, judgments and other similar Liens, for sums not
exceeding $500,000 for any Portfolio Company, for any Outside Company, or for
Borrower arising in connection with court proceedings; provided, that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings;

(f) easements, rights of way, restrictions, minor defects or irregularities in
title and other similar Liens not interfering in any material respect with the
ordinary conduct of the business of Borrower or any Subsidiary;

(g) Liens arising under the Loan Documents;

(h) Liens in favor of Borrower arising under Qualified Intercompany Debt
Documents and securing Intercompany Debt;

(i) Liens securing Outside Debt that solely apply to the assets of Outside
Companies;

(j) leases or subleases granted to other Persons not interfering in any material
respect with the conduct of the business of the Borrower or any Subsidiary;

(k) precautionary financing statement filings regarding operating leases; and

(l) the replacement, extension or renewal of any Lien permitted by clause
(c) above upon or in the same property subject thereto arising out of the
extension, renewal or replacement of the Debt secured thereby (without increase
in the amount thereof).

 

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7.3. [Reserved].

7.4. Restricted Payments.

Not, and not permit any Subsidiary to, (a) make any dividend or other
distribution to any of its equity holders, (b) purchase or redeem any of its
equity interests or any warrants, options or other rights in respect thereof,
(c) pay any management fees or similar fees to any of its equity holders or any
Affiliate thereof, (d) make any redemption, prepayment (whether mandatory or
optional), defeasance, repurchase or any other payment in respect of any Debt
that has been subordinated to the Obligations or (e) set aside funds for any of
the foregoing. Notwithstanding the foregoing, (i) any Portfolio Company and any
Outside Company may pay pro rata dividends and other distributions to Borrower
and to the other holders of the equity interests of such Portfolio Company or
Outside Company; (ii) Borrower may make distributions to the Trust to permit the
Trust to satisfy expenses of the Trust that relate to Borrower and its
Subsidiaries and to pay federal and state income taxes then due and owing by the
Trust (or its equity holders), so long as the amount of such distributions for
the payment of taxes shall not be greater than they would have been had Borrower
not filed consolidated income tax returns with such Person; (iii) Borrower and
the Portfolio Companies may pay Management Fees to Manager, and reimburse
Manager for its reasonable expenses incurred in connection with its management
of Borrower, pursuant to and in accordance with the terms of the Management Fee
Agreement as in effect on the date hereof and the other Management Fee Documents
(provided, that (x) any amounts paid by Borrower under the Management Fee
Agreement shall be net of amounts paid by Portfolio Companies to Manager or its
Affiliates pursuant to Management Fee Documents to which the Portfolio Companies
are party and (y) the making and receipt of payments under the Management Fee
Documents shall be subject to the provisions of the Management Fee Subordination
Agreement); (iv) Subsidiaries may pay Transaction Services Fees, in each case to
the extent that (i) such transaction fee is reasonable and customary based on
the applicable acquisition or sale and (ii) such transaction fee has been
approved by the board of directors of the applicable Portfolio Company or
Outside Company and by the compensation committee of Borrower; (v) Borrower may
make Allocation Member Distributions; (vi) Borrower may make distributions to
the Trust, for further Distribution to the equityholders of the Trust, if, after
giving effect thereto and the incurrence of any Debt in connection therewith,
(x) no Event of Default exists (and, assuming any such incurrence of Debt in
connection therewith had occurred on the first day of the then most recently
ended Computation Period for which financial statements have been delivered
hereunder, would not exist under Section 7.14.2), and (y) either (1) the amount
of Borrowing Availability is not less than the greater of (A) the product of
Consolidated EBITDA for the twelve month period ending on the last day of the
month for which financial statements have been most recently delivered to Agent
in accordance with this Agreement times 0.25 and (B) $25,000,000, or (2) the
Fixed Charge Coverage Ratio for the twelve month period ending on the last day
of the month for which financial statements have been most recently delivered in
accordance with this Agreement, calculated with the amount of any such
distribution by Borrower, together with all other such distributions by Borrower
during such period of measurement, being counted as a charge in the denominator
of the Fixed Charge Coverage Ratio, is greater than 1.00; (vii) each Portfolio
Company may purchase or redeem shares of its preferred stock from any one or
more stockholders through recapitalizations of Intercompany Debt permitted
hereunder if, after giving pro forma effect thereto and the incurrence of any
Debt in connection therewith, (x) no Event of Default exists, (y) the Total Debt
to EBITDA Ratio as of the last day of the most recently ended Computation Period
for which financial statements have been delivered to Agent pursuant to this
Agreement (calculated assuming any such incurrence of Debt in connection
therewith had occurred on the first day of such Computation Period) is less than
2.00 to 1.00, and (z) the amount of Borrowing Availability is not less than the
greater of (A) the product of Consolidated EBITDA for the twelve month period
ending on the last day of the month for which financial statements have been
most recently delivered to Agent in accordance with this Agreement times 0.25
and (B) $25,000,000, (viii) each Portfolio Company may purchase or redeem shares
of its stock from any one or more stockholders, provided that (x) the amount
paid to or as directed by such stockholders in respect of all such purchases and
redemptions shall not exceed $1,500,000 in the aggregate for any such Portfolio
Company per Fiscal

 

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Year, and (y) no such purchase or redemption shall be made by a Portfolio
Company unless such Portfolio Company is in pro forma compliance with the
financial covenants under its Intercompany Debt Documents, after giving effect
to such proposed purchase or redemption; and (ix) to the extent due and payable
and permitted under the applicable subordination provisions thereof, the
Portfolio Companies may make regularly scheduled payments in respect of
Permitted Earn-Outs, subject to (i) the amount of revolver borrowing
availability under the Intercompany Debt Documents between Borrower and the
applicable Portfolio Company after giving effect to such payment being not less
than the product of the Existing Portfolio Company EBITDA or New Portfolio
Company EBITDA of such Portfolio Company, as applicable, for the twelve month
period ending on the last day of the month for which financial statements have
most recently been delivered to Agent in accordance with this Agreement times
0.25, and (ii) there being no violation of the financial covenants under the
Intercompany Debt Documents between the Borrower and the applicable Portfolio
Company as determined on a proforma basis, after giving effect to such payment.

7.5. Mergers; Consolidations; Asset Sales.

(a) Not, and not permit the Trust or any Subsidiary to, be a party to any merger
or consolidation, except for (i) any such merger or consolidation of any
Subsidiary into the parent company of such Subsidiary or into a Domestic
Subsidiary that is a borrower or guarantor under any Qualified Intercompany Debt
Documents, (ii) a Permitted Trust Merger, (iii) Permitted Eligible Acquisitions
and (iv) Permitted Ineligible Acquisitions.

(b) Not, and not permit any Subsidiary to, sell, transfer, dispose of, convey or
lease any of its assets or equity interests, or sell or assign with or without
recourse any receivables, except for (i) sales of inventory by the Portfolio
Companies in the ordinary course of business, (ii) a sale by Borrower of a
Portfolio Company, so long as (1) no Event of Default exists or would result
therefrom (and, in furtherance thereof, Borrower has delivered an updated
Availability Certificate to Agent, prepared on a pro forma basis giving effect
to such sale and the application of the proceeds thereof, demonstrating that
Borrowing Availability shall be in excess of Revolving Outstandings after giving
effect to such sale) and (2) all Intercompany Debt owing by such Portfolio
Company is repaid in cash in full at the time of the closing of such sale,
(iii) a going-public transaction consummated by a Portfolio Company or a
transaction entered into by Borrower that results in a sale or other disposition
of a portion of its equity interests in a Portfolio Company, in each case so
long as (1) such Portfolio Company is reclassified as an Outside Company upon
the consummation of such transaction, (2) no Event of Default exists or would
result therefrom (and in furtherance thereof, Borrower has delivered an updated
Availability Certificate to Agent, prepared on a pro forma basis giving effect
to such sale and the application of the proceeds thereof and to the applicable
Portfolio Company constituting an Outside Company, demonstrating that Borrowing
Availability shall be in excess of Revolving Outstandings after giving effect to
such sale and the reclassification of such Portfolio Company as an Outside
Company) and (3) all Intercompany Debt owing by such Portfolio Company is repaid
in cash in full upon the consummation of such transaction, (iv) a sale by
Borrower of an Outside Company for at least fair market value (as determined by
the Board of Directors of Borrower) and sales and dispositions by Borrower of
equity interests in Outside Companies for at least fair market value (as
determined by the Board of Directors of Borrower), (v) sales and dispositions of
assets by any Outside Company for at least fair market value (as determined by
the Board of Directors of such Outside Company), and (vi) so long as no Event of
Default exists or would result therefrom, sales and dispositions of assets by
any Portfolio Company for at least fair market value (as determined by the Board
of Directors of such Portfolio Company), so long as the net book value of all
assets sold or otherwise disposed of by such Portfolio Company in any Fiscal
Year does not exceed the amount that is equal to 35% of the net book value of
the tangible assets of such Portfolio Company as of the last day of the most
recently ended fiscal year of such Portfolio Company; provided, that the net
book value of all assets sold or otherwise disposed of by all Portfolio
Companies in any Fiscal Year pursuant to this clause (vi) may not exceed the
amount that is equal to 15% of the net book value of the combined tangible
assets of all Portfolio Companies as of the last day of the most recently ended
Fiscal Year.

 

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7.6. Modification of Organizational Documents.

Not permit the Trust Agreement or the Borrower LLC Agreement, or the charter,
by-laws or other organizational documents of Borrower or any Subsidiary, to be
amended or modified in any way which could reasonably be expected to materially
adversely affect the interests of Agent or any Lender.

7.7. [Reserved.]

7.8. Transactions with Affiliates.

Except as disclosed on Schedule 7.8 and except for transactions, arrangements
and contracts that are otherwise expressly permitted under the terms of this
Agreement, not, and not permit any Subsidiary to, enter into, or cause, suffer
or permit to exist any transaction, arrangement or contract with any of its
other Affiliates, which is not on arm’s-length terms.

7.9. Inconsistent Agreements.

Not, and not permit any Subsidiary to, enter into any agreement containing any
provision which would (a) be violated or breached by any borrowing by Borrower
hereunder or by the performance by Borrower of any of its Obligations hereunder
or under any other Loan Document, or by any borrowing by a Portfolio Company
under the Intercompany Debt Documents to which it is a party or the performance
by such Portfolio Company of its obligations under the Intercompany Debt
Documents to which it is a party, (b) prohibit Borrower from granting to Agent
and Lenders a Lien on any of its assets, or prohibit a Portfolio Company from
granting a Lien on its assets to Borrower pursuant to the Qualified Intercompany
Debt Documents to which such Portfolio Company is a party, or (c) create or
permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i) pay dividends or make other distributions to
Borrower or any other Subsidiary, or pay any Debt owed to Borrower or any other
Subsidiary, (ii) make loans or advances to Borrower or any other Subsidiary that
is a parent company of such Subsidiary or (iii) transfer any of its assets or
properties to Borrower or any other Subsidiary that is a parent company of such
Subsidiary other than, in the case of each of the foregoing clauses (i) through
(iii), (A) customary restrictions and conditions contained in agreements
relating to the sale of all or a substantial part of the capital stock or assets
of any Subsidiary pending such sale, provided such restrictions and conditions
apply only to the Subsidiary to be sold and such sale is permitted hereunder,
(B) restrictions provided for under Qualified Intercompany Debt Documents and
documentation applicable to Outside Companies governing Outside Debt,
(C) restrictions or conditions imposed by any agreement relating to purchase
money Debt, Capital Leases and other secured Debt permitted by this Agreement if
such restrictions or conditions apply only to the property or assets securing
such Debt and (D) customary provisions in leases and other contracts restricting
the assignment thereof.

7.10. Business Activities.

Not act, and not permit the Trust to act, in any capacity other than as a
holding company (it being agreed and understood that the Trust may make
Investments in sister companies to Borrower so long as the Trust does not incur
any Debt in connection with any such Investments), and not permit any Subsidiary
to, engage in any line of business other than the businesses engaged in on the
Closing Date, in the case of Existing Portfolio Companies owned as of the
Closing Date, or on the date of the acquisition thereof pursuant to a Permitted
Eligible Acquisition or a Permitted Ineligible Acquisition (as applicable), in
the case of New Portfolio Companies and Outside Companies acquired after the
Closing Date, and businesses reasonably related thereto. Not issue any equity
interest other than equity securities issued to the Trust and not pledged to any
Person and Allocation Interests issued pursuant to the provisions of the
Borrower LLC Agreement.

 

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7.11. Investments.

Not, and not permit any Subsidiary to, make or permit to exist any Investment in
any other Person, except the following:

(a) contributions by Borrower to the capital of a Portfolio Company or a
Subsidiary Outside Company, so long as all of the equity interests in such
Portfolio Company or Outside Company owned by Borrower have been pledged to
Agent to secure the Obligations in accordance with Section 6.8(a);

(b) Investments in Portfolio Companies constituting Qualified Intercompany Debt;
provided that, in the case of (x) the initial incurrence of such Qualified
Intercompany Debt by a Portfolio Company, (y) any subsequent incurrence of
Qualified Intercompany Debt in connection with the consummation of add-on
Acquisitions of Targets by a Portfolio Company, or (z) any incurrence of
Qualified Intercompany Debt by a Portfolio Company in connection with a
recapitalization of such Portfolio Company involving an increase to the amount
of Qualified Intercompany Debt of such Portfolio Company, Agent has received
projections and other financial data reasonably acceptable to the Agent which
demonstrates that, after giving effect to the incurrence of any such Qualified
Intercompany Debt by a Portfolio Company, (i) such Portfolio Company is Solvent
and (ii) the Portfolio Company Leverage Ratio for such Portfolio Company is not
greater than 5.00 to 1.00;

(c) Investments of Debt in Subsidiary Outside Companies, so long as the
instruments evidencing any such Debt Investment have been pledged to Agent to
secure the Obligations in accordance with Section 6.8(a);

(d) Contingent Obligations constituting Debt permitted by Section 7.1 or Liens
permitted by Section 7.2;

(e) Cash Equivalent Investments;

(f) bank deposits in the ordinary course of business;

(g) Investments in securities of Account Debtors received pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of
such Account Debtors;

(h) (i) Investments listed on Schedule 7.11 as of the Closing Date and
(ii) equity Investments held in a Non-Subsidiary Outside Company previously made
in compliance with the terms of this Agreement and as in existence as of the
date upon which the applicable entity first became a Non-Subsidiary Outside
Company (it being agreed and understood that no further Investments may be made
in such Non-Subsidiary Outside Company); and

(i) Permitted Eligible Acquisitions and Permitted Ineligible Acquisitions.

7.12. Restriction of Amendments to Certain Documents.

(a) Not amend or otherwise modify, or waive any rights under any Related
Agreement other than the Intercompany Debt Documents, other than amendments,
modifications and waivers not materially adverse to the interests of Agent or
any Lender; (b) not amend or otherwise modify, or waive any rights under, any
provisions of the Intercompany Debt Documents to the extent that any such
amendment, modification or waiver would have the effect of extending any
maturity dates, reducing any

 

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scheduled amounts for repayments of principal, extending any scheduled payment
dates for principal, reducing any interest or fees, reducing any interest rates,
reducing or deferring any mandatory prepayments, waiving any payment defaults or
waiving any bankruptcy defaults (provided, that this clause (b) shall not
prohibit amended payments terms that are implemented in connection with a
recapitalization of a Portfolio Company that is permitted hereunder so long as
such payments terms are consistent with the applicable Intercompany Debt
Documents as in effect prior to such amendments and are otherwise reasonably
acceptable to Agent); (c) not release, or permit the release of, any Liens
provided for under the Intercompany Debt Documents other than in connection with
a Disposition that is permitted by the provisions of Section 7.5; (d) not
terminate, or permit the termination of, any third-party documents and
deliveries provided in furtherance of the Liens provided for under the
Intercompany Debt Documents other than in connection with a Disposition that is
permitted by the provisions of Section 7.5; and (e) not administer any of the
Intercompany Debt Documents other than on an arms’-length basis.

7.13. Fiscal Year; Accounting Methods.

Not change its Fiscal Year. Not change its method of accounting (other than as
may be required to conform to GAAP).

7.14. Financial Covenants.

7.14.1. Fixed Charge Coverage Ratio.

Not permit the Fixed Charge Coverage Ratio for any Computation Period to be less
than 1.50 to 1.00.

7.14.2. Total Debt to EBITDA Ratio.

Not permit the Total Debt to EBITDA Ratio as of the last day of any Computation
Period to exceed 3.50 to 1.00.

7.15. Bank Accounts.

Not maintain or establish any new bank accounts other than the bank accounts set
forth on Schedule 7.15 without prior written notice to Agent and unless Agent,
Borrower and the bank at which the account is to be opened enter into a
tri-party agreement regarding such bank account pursuant to which such bank
acknowledges the security interest and control of Agent in such bank account and
agrees to limit its set-off rights on terms satisfactory to Agent.

7.16. Subsidiaries.

Not, and not permit any Subsidiary that is a borrower or guarantor under any
Qualified Intercompany Debt Documents, to establish or acquire any new
Subsidiary except (i) a Subsidiary that is a Target in a Permitted Eligible
Acquisition or a Permitted Ineligible Acquisition, or that is a Subsidiary
formed for the sole purpose of consummating a Permitted Eligible Acquisition or
a Permitted Ineligible Acquisition (“Acquisition Subsidiary”), (ii) a Domestic
Subsidiary of a Portfolio Company that is joined to the Qualified Intercompany
Debt Documents applicable to such Portfolio Company, with such joinder
documents, among other things, causing Borrower to have a perfected,
first-priority Lien (subject only to permitted Liens) in substantially all of
the assets of and equity interest in such Domestic Subsidiary,
(iii) Subsidiaries of Outside Companies, and (iv) a Foreign Subsidiary of a
Portfolio Company provided that 65% of the total outstanding voting equity
interests of such Foreign Subsidiary are pledged to Borrower pursuant to the
definition of Qualified Intercompany Debt Documents, and subject to the 15%
limitation for Subsidiaries of a Portfolio Company that are CFCs set forth in
the definition of Qualified Intercompany Debt Documents.

 

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Section 8. Events of Default; Remedies.

8.1. Events of Default.

Each of the following shall constitute an Event of Default under this Agreement:

8.1.1. Non-Payment of Credit.

Default in the payment when due of the principal of any Loan; or default, and
continuance thereof for 3 days, in the payment when due of any interest, fee,
reimbursement obligation with respect to any Letter of Credit or other amount
payable by Borrower hereunder or under any other Loan Document.

8.1.2. Default Under Other Debt.

Any default shall occur under the terms applicable to any other Debt of Borrower
in an aggregate amount (for all such Debt so affected and including undrawn
committed or available amounts and amounts owing to all creditors under any
combined or syndicated credit arrangement) exceeding $500,000 and such default
shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable (or require Borrower to
purchase or redeem such Debt or post cash collateral in respect thereof) prior
to its expressed maturity.

8.1.3. Bankruptcy; Insolvency.

Borrower or the Trust becomes insolvent or generally fails to pay, or admits in
writing its inability or refusal to pay, debts as they become due; or the Trust
or Borrower applies for, consents to, or acquiesces in the appointment of a
trustee, receiver or other custodian for such Person or any property thereof, or
makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for the Trust or Borrower or for a substantial part of
the property of any thereof and is not discharged within 60 days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution or liquidation proceeding,
is commenced in respect of the Trust or Borrower, and if such case or proceeding
is not commenced by such Person, it is consented to or acquiesced in by such
Person, or remains for 60 days undismissed; or the Trust or Borrower takes any
action to authorize, or in furtherance of, any of the foregoing.

8.1.4. Non-Compliance with Loan Documents.

(a) Failure by Borrower to comply with or to perform any covenant set forth in
Sections 6.1.1, 6.1.2, 6.1.3, 6.1.5(a), 6.1.6, 6.1.8, 6.3(b), 6.5, 6.7, 6.8(b),
6.9, 6.10 and 7; or (b) failure by Borrower to comply with or to perform any
other provision of this Agreement or any other Loan Document applicable to it
(and not constituting an Event of Default under any other provision of this
Section 8) and continuance of such failure described in this clause (b) for 30
consecutive days commencing with the date of such failure.

8.1.5. Representations; Warranties.

Any representation or warranty made by Borrower herein or any other Loan
Document is breached or is false or misleading in any material respect, or any
schedule, certificate, financial statement, report, notice or other writing
furnished by Borrower to Agent or any Lender in connection herewith is false or
misleading in any material respect on the date as of which the facts therein set
forth are stated or certified.

 

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8.1.6. Pension Plans.

(a) Institution of any steps by any Person to terminate a Pension Plan if as a
result of such termination Borrower or any member of the Controlled Group could
be required to make a contribution to such Pension Plan, or could incur a
liability or obligation to such Pension Plan, in excess of $250,000; (b) a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under ERISA; or (c) there shall occur any withdrawal or partial
withdrawal from a Multiemployer Pension Plan and the withdrawal liability
(without unaccrued interest) to Multiemployer Pension Plans as a result of such
withdrawal (including any outstanding withdrawal liability that Borrower or any
member of the Controlled Group have incurred on the date of such withdrawal)
exceeds $250,000.

8.1.7. Judgments.

Final judgments which exceed an aggregate of $500,000 shall be rendered against
Borrower and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 30 days after entry or filing of such
judgments.

8.1.8. Invalidity of Collateral Documents.

Any Collateral Document shall cease to be in full force and effect; or Borrower
(or any Person by, through or on behalf of Borrower) shall contest in any manner
the validity, binding nature or enforceability of any Collateral Document.

8.1.9. Invalidity of Management Fee Subordination Agreement.

Any subordination provision in the Management Fee Subordination Agreement shall
cease to be in full force and effect, or any Person (including the Manager)
shall contest in any manner the validity, binding nature or enforceability of
any such provision.

8.1.10. Change of Control.

(a) Manager ceases to be the manager under the Management Fee Agreement or the
Management Fee Agreement ceases to be in full force and effect in accordance
with their terms in effect as of the Closing Date in any respect, (b) the equity
interests in the Trust cease to be registered for trading on a Public Market, or
(c) the Trust shall cease to directly own and control 100% of each class of the
outstanding equity interests of Borrower (other than the Allocation Interests
and other than to the extent resulting from a Permitted Trust Merger) or shall
pledge the equity interests in Borrower owned by the Trust to any Person.

8.1.11. Activities of the Trust or Borrower.

Borrower or the Trust (i) conducts any business other than (x) its ownership of
equity securities of Borrower and the ownership of equity securities in sister
companies to Borrower in respect of which the Trust has not incurred any Debt,
in the case of the Trust and (y) the ownership of its Investments in the
Portfolio Companies, in the case of Borrower, together in each case with
activities incidental to the conduct of its business as a holding company.

 

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8.2. Remedies.

8.2.1. Termination of Revolving Loan Commitments; Acceleration.

If any Event of Default described in Section 8.1.3 shall occur, the Revolving
Loan Commitments shall immediately terminate and the Loans and all other
Obligations shall become immediately due and payable and Borrower shall become
immediately obligated to cash collateralize all Letters of Credit in a manner
acceptable to Agent, all without presentment, demand, protest or notice of any
kind. With respect to the Revolving Loan Commitments and Revolver Debt, if any
Event of Default (other than an Event of Default described in Section 8.1.3)
shall occur and be continuing, Agent (upon the written request of Required
Revolving Lenders) shall declare the Revolving Loan Commitments to be terminated
in whole or in part and/or declare all or any part of the Revolver Debt to be
due and payable and/or demand that Borrower immediately cash collateralize all
or any Letters of Credit in a manner acceptable to Agent, whereupon the
Revolving Loan Commitments shall immediately terminate (or be reduced, as
applicable) and/or the Revolver Debt shall become immediately due and payable
(in whole or in part, as applicable) and/or Borrower shall immediately become
obligated to cash collateralize the Letters of Credit (all or any, as
applicable) in a manner acceptable to Agent, all without presentment, demand,
protest or notice of any kind. With respect to the Term Debt, if any Event of
Default (other than an Event of Default described in Section 8.1.3) shall occur
and be continuing, Agent, upon the written request of Required Term Lenders,
shall declare all or any part of the Term Debt to be due and payable, whereupon
the Term Debt shall become immediately due and payable (in whole or in part, as
applicable), without presentment, demand, protest or notice of any kind. Agent
shall promptly advise Borrower of any such declarations described in the
preceding two sentences, but failure to do so shall not impair the effect of
such declaration. Any cash collateral delivered hereunder shall be held by Agent
(without liability for interest thereon) and applied to Obligations arising in
connection with any drawing under a Letter of Credit. After the expiration or
termination of all Letters of Credit, such cash collateral shall be applied by
Agent to any remaining Obligations and any excess shall be delivered to Borrower
or as a court of competent jurisdiction may elect.

8.2.2. Remedial Action Against Collateral.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document to the contrary, Required Revolving Lenders (and only Required
Revolving Lenders) shall have the exclusive right to direct Agent with respect
to the taking of Enforcement Action (or not taking Enforcement Action) against
the Collateral upon the occurrence and during the continuation of an
Acceleration Event, including, but not limited to, the exclusive right to direct
Agent with respect to taking or retaking possession of the Collateral and
holding, preparing for sale, processing, selling, leasing, disposing of, or
liquidating the Collateral, pursuant to a foreclosure or otherwise. No Term
Lender shall contest in any manner any such action or inaction with respect to
the Collateral in accordance with the provisions of this Section 8.2.2.
Notwithstanding the foregoing, if an Acceleration Event has occurred and is
continuing and Required Revolving Lenders have not directed Agent to take
Enforcement Action with respect to any material portion of the Collateral
within ninety (90) days of the occurrence of such Acceleration Event, Required
Term Lenders may provide written instructions to Agent to take Enforcement
Action in respect of the Collateral and, unless and until Agent is in receipt of
written instructions from Required Revolving Lenders to take Enforcement Action
in respect of a material portion of the Collateral, Agent shall follow such
written instructions of Required Term Lenders. In the event of competing
instructions from Required Revolving Lenders and Required Term Lenders regarding
Enforcement Action with respect to the Collateral, the instructions of Required
Revolving Lenders shall govern and control. The provisions of this Section 8.2.2
are solely as among, and for the exclusive benefit of, Agent and the Lenders,
and Borrower shall not have any rights, whether as a third party beneficiary or
otherwise, of any of the provisions of this Section 8.2.2. Without limiting the
generality of the foregoing, (x) the enforcement of any or all of the provisions
of this Section 8.2.2 shall be considered enforcement as among Agent and the
Lenders only, and shall not be considered an action against

 

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Borrower in any respect and (y) the provisions of this Section 8.2.2, together
with the provisions of Section 2.12.2, shall be considered “subordination
agreements” within the meaning of Title 11 of the United States Code.

8.3. Purchase Option for Term Lenders Upon Acceleration Event.

8.3.1. Purchase Notice.

Upon the occurrence and during the continuation of an Acceleration Event or the
commencement of Enforcement Action by Agent against a material portion of the
Collateral, one or more Term Lenders shall have the option to purchase from the
Revolving Lenders all, but not less than all, of the Revolver Debt owing to them
by giving a written notice of an intent to exercise such purchase option (the
“Purchase Notice”) to Agent. The applicable Term Lenders shall provide Borrower
with a copy of any Purchase Notice. The Purchase Notice from the applicable Term
Lenders to Agent shall be irrevocable. Prior to Agent’s receipt of a Purchase
Notice, (a) there shall be no restriction on Agent or Revolving Lenders taking
(or refraining from taking) any Enforcement Action with respect to the
Collateral or taking (or refraining from taking) any other action or exercising
(or refraining from exercising) any other remedy with respect to the Revolving
Loan Commitments and the Revolver Debt, and neither Agent nor any Revolving
Lender shall have any liability for any of the foregoing, (c) Revolving Lenders
shall be free to assign, participate or otherwise transfer or dispose of their
interests in the Revolver Debt, in each case subject to the purchase option
provided for in this Section 8.3, without prior notice to, or consent of, any
Term Lenders (it being understood that this Section 8.3 is solely a right of the
Term Lenders to purchase the Revolver Debt if they so choose to deliver a
Purchase Notice in accordance with this Section 8.3, and this Section 8.3 does
not constitute a right of first refusal in favor of any Term Lender) and
(d) Agent and Revolving Lenders may otherwise act with respect to the Revolving
Loan Commitments and the Revolver Debt as if the purchase option in this
Section 8.3 did not exist. In no event shall any Revolving Lender be deemed to
be holding any Revolver Debt for the benefit of, on account of, or as an agent
or fiduciary for any Term Lender.

8.3.2. Purchase Option Closing.

On the date specified by the applicable Term Lenders in the Purchase Notice
(which shall not be less than three (3) Business Days, nor more than ten
(10) Business Days, after the receipt by Agent of the Purchase Notice), the
Revolving Lenders shall sell to the applicable Term Lenders, and the applicable
Term Lenders shall purchase from the Revolving Lenders, the Revolver Debt.

8.3.3. Purchase Price.

Such purchase and sale of the Revolver Debt shall be made by execution and
delivery by the applicable parties of an assignment agreement in accordance with
the assignment provisions hereof. Upon the date of such purchase and sale, the
applicable Term Lenders shall (i) pay to Agent, for the ratable benefit of the
Revolving Lenders, as the purchase price therefor the sum of the full amount (at
par) of all of the Revolver Debt then outstanding and unpaid and (ii) furnish
cash collateral to the Agent with respect to the outstanding Letters of Credit
in an amount equal to 105% of such outstanding Letters of Credit. Such purchase
price and cash collateral shall be remitted, without set-off, recoupment or
counterclaim, by wire transfer of immediately available funds to Agent. Interest
shall be calculated to but excluding the Business Day on which such purchase and
sale shall occur if the amounts so paid by the applicable Term Lenders to Agent
are received prior to 1:00 p.m. New York time.

8.3.4. Nature of Sale.

Such purchase and sale shall be expressly made without representation or
warranty of any kind by Agent or any Revolving Lender as to the Revolver Debt or
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Agent or any Revolving Lender, except for several (not joint) representations
and warranties of the Revolving Lenders as to the following: (i) the amount of
the Revolver Debt being purchased (including as to the principal of and accrued
and unpaid interest on such Revolver Debt, fees, costs and expenses thereof),
(ii) that the applicable Revolving Lender owns the Revolver Debt free and clear
of any liens created by it, and (iii) that the applicable Revolving Lender has
the full right and power to assign its Revolver Debt and such assignment has
been duly authorized by all necessary corporate action by such Revolving Lender.

The provisions of this Section 8.3 are solely as among, and for the exclusive
benefit of, Agent and the Lenders, and Borrower shall not have any rights,
whether as a third party beneficiary or otherwise, of any of the provisions of
this Section 8.3. Without limiting the generality of the foregoing, the
enforcement of any or all of the provisions of this Section 8.3 shall be
considered enforcement as among Agent and the Lenders only, and shall not be
considered an action against Borrower in any respect.

Section 9. Agent.

9.1. Appointment; Authorization.

(a) Each Lender hereby irrevocably appoints, designates and authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, Agent shall not have any duty or
responsibility except those expressly set forth herein, nor shall Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent.

(b) Issuing Lender shall act on behalf of Lenders (according to their Pro Rata
Shares) with respect to any Letters of Credit issued by it and the documents
associated therewith. Issuing Lender shall have all of the benefits and
immunities (i) provided to Agent in this Section 9 with respect to any acts
taken or omissions suffered by Issuing Lender in connection with Letters of
Credit issued by it or proposed to be issued by it and the applications and
agreements for letters of credit pertaining to such Letters of Credit as fully
as if the term “Agent”, as used in this Section 9, included Issuing Lender with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to Issuing Lender.

9.2. Delegation of Duties.

Agent may execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.

9.3. Limited Liability.

None of Agent or any of its directors, officers, employees or agents shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except to the extent resulting from its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction), or (b) be responsible in any manner to any Lender for any
recital, statement, representation or warranty made by Borrower or any Affiliate
of Borrower, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
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or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document (or the creation,
perfection or priority of any Lien or security interest therein), or for any
failure of Borrower or any other party to any Loan Document to perform its
Obligations hereunder or thereunder. Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of Borrower or any
Affiliate of Borrower.

9.4. Reliance.

Agent shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to Borrower), independent accountants and other experts
selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of Required Lenders, Required Revolving
Lenders, Required Term Lenders, or all Lenders, as applicable hereunder, as it
deems appropriate and, if it so requests, confirmation from Lenders of their
obligation to indemnify Agent against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of Required Lenders, Required Revolving Lenders, Required
Term Lenders, or all Lenders, as applicable hereunder, and such request and any
action taken or failure to act pursuant thereto shall be binding upon each
Lender.

9.5. Notice of Default.

Agent shall not be deemed to have knowledge or notice of the occurrence of any
Event of Default or Default except with respect to defaults in the payment of
principal, interest and fees required to be paid to Agent for the account of
Lenders, unless Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Event of Default or
Default and stating that such notice is a “notice of default”. Agent will notify
Lenders of its receipt of any such notice or any such default in the payment of
principal, interest and fees required to be paid to Agent for the account of
Lenders. Agent shall take such action with respect to such Event of Default or
Default as may be requested by Required Lenders in accordance with Section 8;
provided that unless and until Agent has received any such request, Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Event of Default or Default as it shall deem
advisable or in the best interest of Lenders.

9.6. Credit Decision.

Each Lender acknowledges that Agent has not made any representation or warranty
to it, and that no act by Agent heretofore, herewith or hereafter taken,
including any review of the business and affairs of Borrower, the Trust and the
Subsidiaries and/or any legal or regulatory matters or proceedings that relate
to or otherwise may impact any of Borrower, the Trust and the Subsidiaries,
shall be deemed to constitute any representation or warranty by Agent to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon Agent and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower, the Trust and the Subsidiaries (including, without
limitation, into any legal or regulatory matters or proceedings that relate to
or otherwise may impact any of Borrower, the Trust and the Subsidiaries), and
made its own decision to enter into this Agreement and to extend credit to
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it will, independently and without reliance upon Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower, the Trust and the Subsidiaries (including, without
limitation, as to any legal or regulatory matters or proceedings that relate to
or otherwise may impact any of Borrower, the Trust and the Subsidiaries). Except
for notices, reports and other documents expressly herein required to be
furnished to Lenders by Agent, Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial or other condition or
creditworthiness of Borrower or the Trust or any Affiliate of Borrower or the
Trust which may come into the possession of Agent.

9.7. Indemnification.

Whether or not the transactions contemplated hereby are consummated, each Lender
shall indemnify upon demand Agent and its directors, officers, employees and
agents (to the extent not reimbursed by or on behalf of Borrower and without
limiting the obligation of Borrower to do so), based on such Lender’s Pro Rata
Share, from and against any and all actions, causes of action, suits, losses,
liabilities, damages and expenses, including Legal Costs, except to the extent
any thereof result from the applicable Person’s own gross negligence or willful
misconduct, as determined by a court of competent jurisdiction. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Legal Costs)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrower. The undertaking in
this Section 9.7 shall survive repayment of the Loans, cancellation of the
Notes, expiration or termination of the Letters of Credit, any foreclosure
under, or modification, release or discharge of, any or all of the Collateral
Documents, termination of this Agreement and the resignation or replacement of
Agent.

9.8. Agent Individually.

TD and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with Borrower or the Trust and any Affiliate of Borrower or the Trust as though
TD were not Agent hereunder and without notice to or consent of any Lender. Each
Lender acknowledges that, pursuant to such activities, TD or its Affiliates may
receive information regarding Borrower and the Trust or their Affiliates
(including information that may be subject to confidentiality obligations in
favor of any such Person) and acknowledge that Agent shall be under no
obligation to provide such information to them. With respect to their Loans (if
any), TD and its Affiliates shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though TD were not
Agent, and the terms “Lender” and “Lenders” include TD and its Affiliates, to
the extent applicable, in their individual capacities.

9.9. Successor Agent.

Agent may resign as Agent at any time upon 30 days’ prior notice to Lenders. If
Agent resigns under this Agreement, Required Lenders shall, with (so long as no
Event of Default exists) the consent of Borrower (which shall not be
unreasonably withheld or delayed), appoint from among Lenders a successor agent
for Lenders. If no successor agent is appointed prior to the effective date of
the resignation of Agent, Agent may appoint, on behalf after consulting with
Lenders and (so long as no Event of Default exists) Borrower, a successor agent
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appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term “Agent”
shall mean such successor agent, and the retiring Agent’s appointment, powers
and duties as Agent shall be terminated. After any retiring Agent’s resignation
hereunder as Agent, the provisions of this Section 9 and Sections 10.4 and 10.5
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent’s notice of resignation, the retiring Agent’s resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as Required Lenders appoint a
successor agent as provided for above.

9.10. Collateral Matters.

Lenders irrevocably authorize Agent, at its option and in its discretion, (a) to
release any Lien granted to or held by Agent under any Collateral Document
(i) when all Obligations have been Paid in Full; (ii) constituting property sold
or to be sold or disposed of as part of or in connection with any sale or other
disposition permitted hereunder (it being agreed and understood that Agent may
conclusively rely without further inquiry on a certificate of an officer of
Borrower as to the sale or other disposition of property being made in
compliance with this Agreement); or (iii) subject to Section 10.1, if approved,
authorized or ratified in writing by Required Lenders; or (b) to subordinate its
interest in any Collateral to any holder of a Lien on such Collateral which is
permitted by clause (d)(i) or (d)(iii) of Section 7.2 (it being understood that
Agent may conclusively rely on a certificate from Borrower in determining
whether the Debt secured by any such Lien is permitted by Section 7.1(b)). Upon
request by Agent at any time, Lenders will confirm in writing Agent’s authority
to release, or subordinate its interest in, particular types or items of
Collateral pursuant to this Section 9.10.

9.11. [Reserved.]

9.12. Lead Arrangers, Bookrunner, Syndication Agents and Documentation Agents.

Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, any Lead Arranger, Bookrunner,
Documentation Agent or Syndication Agent designated by Agent and Borrower shall
have no duties or responsibilities, and such Lead Arranger, Bookrunner,
Documentation Agent or Syndication Agent shall not have or be deemed to have any
fiduciary relationship with any Lender, and no implied responsibilities, duties
or obligations shall be construed to exist with respect to any such Lead
Arranger, Bookrunner, Documentation Agent or Syndication Agent in this Agreement
or any other Loan Document.

Section 10. Miscellaneous.

10.1. Waiver; Amendments.

No delay on the part of Agent or any Lender in the exercise of any right, power
or remedy shall operate as a waiver thereof, nor shall any single or partial
exercise by any of them of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement, the Notes or any of the other Loan Documents (or any
subordination and intercreditor agreement or other subordination provisions
relating to any Subordinated Debt) shall in any event be effective unless the
same shall be in writing and approved by Lenders having aggregate Pro Rata
Shares of not less than the aggregate Pro Rata Shares expressly designated
herein with respect thereto or, in the absence of such designation as to any
provision of this Agreement, by Required Lenders, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification, waiver
or consent shall increase any Commitment (other than pursuant to the provisions
of Section 2.1.3 as in effect on the date hereof),

 

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extend the date scheduled for payment of any principal of (except as set forth
below) or interest on the Loans or any fees or other amounts payable hereunder
or under the other Loan Documents or reduce the principal amount of any Loan,
without, in each case, the consent of each Lender affected thereby in addition
to the approval of Required Lenders. No amendment, modification, waiver or
consent shall decrease the amount or rate of interest on any Revolving Loan or
fees or other amounts payable hereunder or under the other Loan Documents with
respect to Revolving Loans (provided, that Required Revolving Lenders may
rescind an imposition of default interest with respect to Revolving Loans
pursuant to Section 2.7.1) or any fees or other amounts payable hereunder or
under the other Loan Documents with respect to Revolving Loans without, in each
case, the consent of each Lender affected thereby in addition to the approval of
Required Revolving Lenders (and without the need for consent from any Term
Lender or Required Lenders), and no amendment, modification, waiver or consent
shall increase the rate of interest on any Revolving Loan or fees or other
amounts payable hereunder or under the other Loan Documents with respect to
Revolving Loans without the consent of Agent and Required Revolving Lenders (and
without the need for approval by any Term Lenders or by Required Lenders). No
amendment, modification, waiver or consent shall decrease the amount or rate of
interest on any Term Loan or fees or other amounts payable hereunder or under
the other Loan Documents with respect to Term Loans (provided, that Required
Term Lenders may rescind an imposition of default interest with respect to Term
Loans pursuant to Section 2.7.1) or any fees or other amounts payable hereunder
or under the other Loan Documents with respect to Term Loans without, in each
case, the consent of each Lender affected thereby in addition to the approval of
Required Term Lenders (and without the need for consent from any Revolving
Lender or Required Lenders), and no amendment, modification, waiver or consent
shall increase the rate of interest on any Term Loan or fees or other amounts
payable hereunder or under the other Loan Documents with respect to Term Loans
without the consent of Agent and Required Term Lenders (and without the need for
approval by any Revolving Lenders or Required Lenders). No amendment,
modification, waiver or consent shall change any of the definitions of
Availability, Combined Eligible Availability, Borrowing Availability or Required
Revolving Lenders without, in each case, the consent of all Revolving Lenders
(and without the need for consent from any Term Lenders or Required Lenders);
provided, however, that (x) changes to the lending multiples contained in the
definition of Availability may be approved with the consent of Required
Revolving Lenders (instead of all Revolving Lenders) and (y) if any proposed
action pursuant to this sentence would cause the amount of Borrowing
Availability to be increased by more than 10% above the amount of Borrowing
Availability in effect immediately prior to such proposed action, the consent of
Required Term Lenders in addition to the requisite level of approval from
Revolving Lenders shall be necessary in order for such proposed action to be
taken. No amendment, modification, waiver or consent shall change the definition
of Required Term Lenders without, in each case, the consent of all Term Lenders
(and without the need for consent from any Revolving Lenders or Required
Lenders). No amendment, modification, waiver or consent shall release any party
from its obligations under the Collateral Agreement or all or any substantial
part of the Collateral granted under the Collateral Documents, change the
definition of Required Lenders, change any provision of this Section 10.1, amend
the provisions of Section 2.12.1, Section 2.12.2, Section 8.2.2, Section 8.3 or
Section 9.10, amend the definition of Defaulting Lender, or reduce the aggregate
Pro Rata Share required to effect any amendment, modification, waiver or
consent, without, in each case, the consent of all Lenders. The effect as an
Event of Default of any event described in Section 8.1.1 may only be waived by
the written concurrence of (i) in the case of any such Event of Default in
respect of Revolver Debt, each Revolver Lender and (ii) in the case of any such
Event of Default in respect of Term Debt, each Term Lender, and the effect as an
Event of Default of any other event described in Section 8 may be waived by the
written concurrence of Required Lenders. No provision of Section 9 or other
provision of this Agreement affecting Agent in its capacity as such shall be
amended, modified or waived without the consent of Agent. No provision of this
Agreement relating to the rights or duties of Issuing Lender in its capacity as
such shall be amended, modified or waived without the consent of Issuing Lender.

Notwithstanding any provision to the contrary set forth in this Agreement, it is
agreed and understood that Defaulting Lenders shall have no voting rights
hereunder, except that (i) no

 

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Defaulting Lender’s Commitment amount may be increased or extended without the
consent of such Defaulting Lender, and (ii) the principal of any Loan owing to a
Defaulting Lender may not be discounted or otherwise forgiven without the
consent of such Defaulting Lender. Without limiting the generality of the
foregoing, Defaulting Lenders (and their respective Pro Rata Shares of the
Revolving Loan Commitment, Revolving Outstandings and Term Loans, as applicable)
shall be excluded from the determination of Required Lenders, Required Revolving
Lenders and Required Term Lenders, and shall not have voting rights with respect
to any matters requiring the approval of Required Lenders, Required Revolving
Lenders, Required Term Lenders, all affected Lenders, all Revolving Lenders, all
Term Lenders or all Lenders.

10.2. Notices.

Except as otherwise provided in Sections 2.2.2 and 2.2.3, all notices hereunder
shall be in writing (including facsimile transmission) and shall be sent to the
applicable party at its address shown on Annex II or at such other address as
such party may, by written notice received by the other parties, have designated
as its address for such purpose. Notices sent by facsimile transmission shall be
deemed to have been given when sent; notices sent by mail shall be deemed to
have been given three Business Days after the date when sent by registered or
certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received. For purposes
of Sections 2.2.2 and 2.2.3, Agent shall be entitled to rely on telephonic
instructions from any person that Agent in good faith believes is an authorized
officer or employee of Borrower, and Borrower shall hold Agent and each other
Lender harmless from any loss, cost or expense resulting from any such reliance.
Borrower and Lenders each hereby acknowledge that, from time to time, Agent may
deliver information and notices to Lenders using the internet service
“Intralinks”. Each of Borrower and each Lender hereby agree that Agent may, in
its discretion, utilize Intralinks for such purpose.

10.3. Computations.

(a) Unless otherwise specifically provided herein, any accounting term used in
this Agreement (including in Section 7.14 or any related definition) shall have
the meaning customarily given such term in accordance with GAAP, and all
financial computations (including pursuant to Section 7.14 and the related
definitions, and with respect to the character or amount of any asset or
liability or item of income or expense, or any consolidation or other accounting
computation) hereunder shall be computed in accordance with GAAP consistently
applied; provided that if Borrower notifies Agent that Borrower wishes to amend
any covenant in Section 7.14 (or any related definition) to eliminate or to take
into account the effect of any change in GAAP on the operation of such covenant
(or if Agent notifies Borrower that Required Lenders wish to amend Section 7.14
(or any related definition) for such purpose), then Borrower’s compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant (or related definition) is amended in a manner
satisfactory to Borrower and Required Lenders. The explicit qualification of
terms or computations by the phrase “in accordance with GAAP” shall in no way be
construed to limit the foregoing.

(b) For all purposes of calculating Borrowing Availability and any financial
tests hereunder, (i) the results of any Outside Companies shall be excluded in
their entirety and (ii) the results of any Portfolio Companies that no longer
constitute Subsidiaries of Borrower as of the applicable date of measurement
shall be excluded in their entirety. In addition, for purposes of calculating
the financing covenants set forth in Section 7.14 at any time when the balance
of the Revolving Loans is zero or the Revolving Loan Commitments have
terminated, if the amount included in Consolidated EBITDA that is attributable
to any one Portfolio Company, or any group of Portfolio Companies operating in
the same business industry, exceeds 40% with respect to Portfolio Companies
other than American Furniture or Halo, or 35% with respect to American Furniture
or Halo, then any such excess amounts shall be excluded from such amount of
Consolidated EBITDA for purposes of such calculations of the financial

 

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covenants (provided, in addition, that such concentration limit shall be 35%
instead of 40% with respect to Portfolio Companies arising after the Closing
Date that were assigned a 35% concentration limit pursuant to the definition of
Combined Eligible Availability).

10.4. Costs; Expenses.

Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses
of Agent (including Legal Costs) in connection with the preparation, execution,
syndication, delivery and administration (including perfection and protection of
Collateral) of this Agreement, the other Loan Documents and all other documents
provided for herein or delivered or to be delivered hereunder or in connection
herewith (including any proposed or actual amendment, supplement or waiver to
any Loan Document), and all reasonable out-of-pocket costs and expenses
(including Legal Costs) incurred by Agent and each Lender after an Event of
Default in connection with the collection of the Obligations and enforcement of
this Agreement, the other Loan Documents or any such other documents. In
addition, Borrower agrees to pay, and to save Agent and Lenders harmless from
all liability for, any fees of Borrower’s auditors in connection with any
reasonable exercise by Agent and Lenders of their rights pursuant to
Section 6.2. All Obligations provided for in this Section 10.4 shall survive
repayment of the Loans, cancellation of the Notes, expiration or termination of
the Letters of Credit and termination of this Agreement).

10.5. Indemnification by Borrower.

In consideration of the execution and delivery of this Agreement by Agent and
Lenders and the agreement to extend the Loans and Commitments provided
hereunder, Borrower hereby agrees to indemnify, exonerate and hold Agent, each
Lender and each of the officers, directors, employees, Affiliates and agents of
Agent and each Lender (each a “Lender Party”) free and harmless from and against
any and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including Legal Costs (collectively, the “Indemnified Liabilities”),
incurred by Lender Parties or any of them as a result of, or arising out of, or
relating to (a) any tender offer, merger, purchase of equity interests, purchase
of assets (including the Related Transactions) or other similar transaction
financed or proposed to be financed in whole or in part, directly or indirectly,
with the proceeds of any of the Loans, (b) the use, handling, release, emission,
discharge, transportation, storage, treatment or disposal of any Hazardous
Substance at any property owned or leased by Borrower or any Subsidiary, (c) any
violation of any Environmental Laws with respect to conditions at any property
owned or leased by Borrower or any Subsidiary or the operations conducted
thereon, (d) the investigation, cleanup or remediation of offsite locations at
which Borrower or any Subsidiary or their respective predecessors are alleged to
have directly or indirectly disposed of Hazardous Substances or (e) the
execution, delivery, performance (including without limitation the funding of
extensions of credit hereunder and the subsequent utilization thereof by
Borrower) or enforcement of this Agreement or any other Loan Document by any
Lender Party, except to the extent any such Indemnified Liabilities result from
the applicable Lender Party’s own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law. All
Obligations provided for in this Section 10.5 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or any modification, release or discharge of, any
or all of the Collateral Documents, termination of the Revolving Commitments and
termination of this Agreement.

10.6. Marshaling; Payments Set Aside.

Neither Agent nor any Lender shall be under any obligation to marshal any assets
in favor of Borrower or any other Person or against or in payment of any or all
of the Obligations. To the extent that Borrower makes a payment or payments to
Agent or any Lender, or Agent or any Lender

 

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enforces its Liens or exercises its rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by Agent or any
Lender in its discretion) to be repaid to a trustee, receiver or any other party
in connection with any bankruptcy, insolvency or similar proceeding, or
otherwise, then (a) to the extent of such recovery, the obligation hereunder or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred and (b) each Lender severally agrees to
pay to Agent upon demand its ratable share of the total amount so recovered from
or repaid by Agent to the extent paid to such Lender.

10.7. Nonliability of Lenders.

The relationship between Borrower on the one hand and Lenders and Agent on the
other hand shall be solely that of borrower and lender. Neither Agent nor any
Lender shall have any fiduciary responsibility to Borrower. Neither Agent nor
any Lender undertakes any responsibility to Borrower to review or inform
Borrower of any matter in connection with any phase of Borrower’s business or
operations. Execution of this Agreement by Borrower constitutes a full, complete
and irrevocable release of any and all claims which Borrower may have at law or
in equity in respect of all prior discussions and understandings, oral or
written, relating to the subject matter of this Agreement and the other Loan
Documents. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agrees not to sue for, any special,
indirect, punitive or consequential damages or liabilities.

10.8. Assignments; Participations.

10.8.1. Assignments.

(a) Any Lender may at any time assign to one or more Persons other than (i) any
natural persons, (ii) any Defaulting Lender or Affiliate of a Defaulting Lender,
or (iii) the Borrower, the Trust, or any of their Subsidiaries or Affiliates
(any such Person not excluded by clauses (i), (ii) or (iii) above, an
“Assignee”) all or any portion of such Lender’s Loans and Revolving Loan
Commitments, with the prior written consent of Agent, Issuing Lender (provided
that Issuing Lender’s consent shall only be required with respect to an
assignment of Revolving Loan Commitments) and, so long as no Event of Default
exists, Borrower (which consents shall not be unreasonably withheld or delayed
and shall not be required for an assignment by a Lender to a Lender or an
Affiliate of a Lender or an Approved Fund). Except as Agent may otherwise agree,
any such assignment (other than any assignment by a Lender to a Lender or an
Affiliate of a Lender or an Approved Fund) shall be in a minimum aggregate
amount equal to $5,000,000 or, if less, the Revolving Loan Commitment or the
principal amount of the Loan being assigned. Borrower and Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned to an Assignee until Agent shall have received
and accepted an effective Assignment Agreement executed, delivered and fully
completed by the applicable parties thereto and a processing fee of $3,500 to be
paid by the Lender to whom such interest is assigned; provided, that no such fee
shall be payable in connection with any assignment by a Lender to a Lender or an
Affiliate of a Lender or an Approved Fund. Any attempted assignment not made in
accordance with this Section 10.8.1 shall be treated as the sale of a
participation under Section 10.8.2. Borrower shall be deemed to have granted its
consent to any assignment requiring its consent hereunder unless Borrower has
expressly objected to such assignment within three Business Days after notice
thereof.

(b) From and after the date on which the conditions described above have been
met and the assignment has been recorded in the register pursuant to
Section 10.8.1(c) below, (i) such Assignee shall be deemed automatically to have
become a party hereto and, to the extent that rights and obligations hereunder
have been assigned to such Assignee pursuant to such Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and (ii) the assigning
Lender, to the extent that

 

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rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, shall be released from its rights (other than its
indemnification rights) and obligations hereunder. Upon the request of the
Assignee (and, as applicable, the assigning Lender) pursuant to an effective
Assignment Agreement, Borrower shall execute and deliver to Agent for delivery
to the Assignee (and, as applicable, the assigning Lender) a Note in the
principal amount of the Assignee’s Pro Rata Share of the Revolving Loan
Commitments (and, as applicable, a Note in the principal amount of the Pro Rata
Share of the Revolving Loan Commitments retained by the assigning Lender). Each
such Note shall be dated the effective date of such assignment. Upon receipt by
the assigning Lender of such Note, the assigning Lender shall return to Borrower
any prior Note held by it.

(c) Agent, acting solely for this purpose as non-fiduciary agent of Borrower,
shall maintain at one of its offices in the United States a copy of each
Assignment Agreement delivered to it and a register for the recordation of the
names and addresses of each Lender, and the Revolving Loan Commitments of, and
principal amount of the Loans owing to, such Lender pursuant to the terms
hereof. The entries in such register shall be conclusive, and Borrower, Agent
and Lenders may treat each Person whose name is recorded therein pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for
inspection by Borrower and any Lender, at any reasonable time upon reasonable
prior notice to Agent.

(d) Notwithstanding the foregoing provisions of this Section 10.8.1 or any other
provision of this Agreement, any Lender may at any time assign all or any
portion of its Loans and its Note (i) as collateral security to a Federal
Reserve Bank or, as applicable, to such Lender’s trustee for the benefit of its
investors (but no such assignment shall release any Lender from any of its
obligations hereunder) and (ii) to (w) an Affiliate of such Lender which is at
least 50% owned (directly or indirectly) by such Lender or by its direct or
indirect parent company, (x) its direct or indirect parent company, (y) to one
or more other Lenders or (z) to a Approved Fund; provided, that unless and until
any such assignment has been recorded in the registry described in
Section 10.8.1(c) above, such assigning Lender shall act as a non-fiduciary
agent of Borrower and maintain a register with respect to all such assignments
under this Section 10.8.1(d) similar to the registry provided for in
Section 10.8.1(c).

10.8.2. Participations.

Any Lender may at any time sell to one or more Persons participating interests
in its Loans, Revolving Loan Commitments or other interests hereunder (any such
Person, a “Participant”). In the event of a sale by a Lender of a participating
interest to a Participant, (a) such Lender’s obligations hereunder shall remain
unchanged for all purposes, (b) Borrower and Agent shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations hereunder and (c) all amounts payable by Borrower shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any event described in Section 10.1
expressly requiring the unanimous vote of all Lenders or, as applicable, all
affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Lender enters
into with any Participant and such Lender shall as a non-fiduciary agent of the
Borrower maintain a register with respect to all participations similar to the
one set forth in Section 10.8.1(c). Borrower agrees that if amounts outstanding
under this Agreement are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement and
with respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share
with each Participant, as provided in Section 2.12.5. Borrower also agrees that
each Participant shall be entitled to the benefits of Section 3 as if it were a
Lender (provided that no Participant shall receive any greater compensation
pursuant to Section 3 than would have been paid to the participating Lender if
no participation had been sold).

 

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10.9. Confidentiality.

Agent and each Lender agree to use commercially reasonable efforts (equivalent
to the efforts Agent or such Lender applies to maintain the confidentiality of
its own confidential information) to maintain as confidential all information
provided to them by Borrower and designated as confidential, except that Agent
and each Lender may disclose such information (a) to Persons employed or engaged
by Agent or such Lender or any of their Affiliates (including collateral
managers of Lenders) in evaluating, approving, structuring or administering the
Loans and the Revolving Loan Commitments; (b) to any assignee or participant or
potential assignee or participant that has agreed to comply with the covenant
contained in this Section 10.9 (and any such assignee or participant or
potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any federal or state regulatory authority or examiner, or any
insurance industry association, or as reasonably believed by Agent or such
Lender to be compelled by any court decree, subpoena or legal or administrative
order or process; (d) as, on the advice of Agent’s or such Lender’s counsel, is
required by law; (e) in connection with the exercise of any right or remedy
under the Loan Documents or in connection with any litigation to which Agent or
such Lender is a party; (f) to any nationally recognized rating agency or
investor of a Lender that requires access to information about a Lender’s
investment portfolio in connection with ratings issued or investment decisions
with respect to such Lender; (g) that ceases to be confidential through no fault
of Agent or any Lender; (h) to a Person that is an investor or prospective
investor in a Securitization that agrees that its access to information
regarding Borrower and the Loans and Revolving Loan Commitments is solely for
purposes of evaluating an investment in such Securitization and who agrees to
treat such information as confidential; or (i) to a Person that is a trustee,
collateral manager, servicer, noteholder or secured party in a Securitization in
connection with the administration, servicing and reporting on the assets
serving as collateral for such Securitization. For purposes of this Section,
“Securitization” means a public or private offering by a Lender or any of its
Affiliates or their respective successors and assigns, of securities which
represent an interest in, or which are collateralized, in whole or in part, by
the Loans or the Revolving Loan Commitments. Notwithstanding the foregoing,
Borrower consents to the publication by Agent or any Lender of a tombstone or
similar advertising material relating to the financing transactions contemplated
by this Agreement, and Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.

10.10. Captions.

Captions used in this Agreement are for convenience only and shall not affect
the construction of this Agreement.

10.11. Nature of Remedies.

All Obligations of Borrower and rights of Agent and Lenders expressed herein or
in any other Loan Document shall be in addition to and not in limitation of
those provided by applicable law. No failure to exercise and no delay in
exercising, on the part of Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

10.12. Counterparts.

This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement. Receipt by telecopy of any executed
signature page to this Agreement or any other Loan Document shall constitute
effective delivery of such signature page.

 

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10.13. Severability.

The illegality or unenforceability of any provision of this Agreement or any
instrument or agreement required hereunder shall not in any way affect or impair
the legality or enforceability of the remaining provisions of this Agreement or
any instrument or agreement required hereunder.

10.14. Entire Agreement.

This Agreement, together with the other Loan Documents, embodies the entire
agreement and understanding among the parties hereto and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof (except as relates to
the fees described in Section 2.8.3) and any prior arrangements made with
respect to the payment by Borrower of (or any indemnification for) any fees,
costs or expenses payable to or incurred (or to be incurred) by or on behalf of
Agent or Lenders.

10.15. Successors; Assigns.

This Agreement shall be binding upon Borrower, Lenders and Agent and their
respective successors and assigns, and shall inure to the benefit of Borrower,
Lenders and Agent and the successors and assigns of Lenders and Agent. No other
Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents. Borrower may not assign or transfer any of its rights
or Obligations under this Agreement without the prior written consent of Agent
and each Lender.

10.16. Governing Law.

THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.

10.17. Forum Selection; Consent to Jurisdiction.

ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN A UNITED STATES
DISTRICT COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE STATE OF NEW YORK;
PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF UNITED STATES DISTRICT COURTS SITTING IN THE BOROUGH OF MANHATTAN IN
THE STATE OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

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10.18. Waiver of Jury Trial.

EACH OF BORROWER, AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

10.19. USA PATRIOT Act Notification.

Agent (for itself and not on behalf of any Lender) and each Lender hereby
notifies Borrower that pursuant to the requirements of the USA PATRIOT Act, it
is required to obtain, verify and record certain information and documentation
that identifies Borrower, which information includes the name and address of
Borrower and such other information that will allow Administrative Agent or such
Lender, as applicable, to identify Borrower in accordance with the USA PATRIOT
Act.

[signature pages follow]

 

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The parties hereto have caused this Agreement to be duly executed and delivered
by their duly authorized officers as of the date first set forth above.

 

BORROWER: COMPASS GROUP DIVERSIFIED HOLDINGS LLC By  

/s/ James J. Bottiglieri

Name  

James J. Bottiglieri

Title  

CFO

 

Signature Page to Credit Agreement

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AGENT: TORONTO DOMINION (TEXAS) LLC By  

/s/ Bebi Yasin

Name  

Bebi Yasin

Title  

Authorized Signatory

 

Signature Page to Credit Agreement

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LEAD ARRANGERS, CO-SYNDICATION AGENTS, CO-DOCUMENTATION AGENTS AND SOLE
BOOKRUNNER: TD SECURITIES (USA) LLC, as a Lead Arranger and as Sole Bookrunner
By  

/s/ K. Alper Ilgar

Name  

K. Alper Ilgar

Title  

Director

BANK OF MONTREAL, acting through its trade name BMO CAPITAL MARKETS, as a Lead
Arranger By  

/s/ James J. Goll

Name  

James J. Goll

Title  

Managing Director

SUNTRUST ROBINSON HUMPHREY, INC., as a Lead Arranger By  

/s/ William Challas

Name  

William Challas

Title  

Director

BANK OF MONTREAL, as Co-Syndication Agent By  

/s/ Katherine K. Robinson

Name  

Katherine K. Robinson

Title  

Vice President

SUNTRUST BANK, as Co-Syndication Agent By  

/s/ Chris Fellows

Name  

Chris Fellows

Title  

Portfolio Manager - Middle Market Banking

 

Signature Page to Credit Agreement

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U.S. BANK NATIONAL ASSOCIATION, as Issuing Lender and as Co-Documentation Agent
By  

/s/ Jason C. Nadler

Name  

Jason C. Nadler

Title  

Vice President

FIFTH THIRD BANK, as Co-Documentation Agent By  

/s/ Philip Renwick

Name  

Philip Renwick

Title  

Vice President

 

Signature Page to Credit Agreement

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LENDERS: TORONTO DOMINION (TEXAS) LLC, as a Lender By  

/s/ Bebi Yasin

Name  

Bebi Yasin

Title  

Authorized Signatory

 

Signature Page to Credit Agreement

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

TD BANK, N.A., as a Lender By  

/s/ Bernadette Collins

Name  

Bernadette Collins

Title  

Senior Vice President

 

Signature Page to Credit Agreement

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

BMO HARRIS FINANCING, INC., as a Lender By  

/s/ Katherine K. Robinson

Name  

Katherine K. Robinson

Title  

Vice President

 

Signature Page to Credit Agreement

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BANK OF MONTREAL, as a Lender By  

/s/ Peter Konigsmann

Name  

Peter Konigsmann

Title  

Director

 

Signature Page to Credit Agreement

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SUNTRUST BANK, as a Lender By  

/s/ Chris Fellows

Name  

Chris Fellows

Title  

Portfolio Manager - Middle Market Banking

 

Signature Page to Credit Agreement

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FIRST TENNESSEE BANK, NATIONAL ASSOCIATION, as a Lender By  

/s/ Jamie M. Swisher

Name  

Jamie M. Swisher

Title  

Vice President

 

Signature Page to Credit Agreement

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THE PRIVATEBANK AND TRUST COMPANY, as a Lender By  

/s/ Sam L. Dendrinos

Name  

Sam L. Dendrinos

Title  

 Managing Director

 

Signature Page to Credit Agreement

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U.S. BANK NATIONAL ASSOCIATION, as a Lender By  

/s/ Jason C. Nadler

Name  

Jason C. Nadler

Title  

Vice President

 

Signature Page to Credit Agreement

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SIEMENS FINANCIAL SERVICES, INC., as a Lender By  

/s/ Paul Ramseur

Name  

Paul Ramseur

Title  

Vice President/Head of Risk Management

By  

/s/ Brigitta Kocherhans

Name  

Brigitta Kocherhans

Title  

Chief Financial Officer

 

Signature Page to Credit Agreement

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WEBSTER BANK, N.A., as a Lender By  

/s/ Hans Jung

Name  

Hans Jung

Title  

Vice President

 

Signature Page to Credit Agreement

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FIFTH THIRD BANK, as a Lender By  

/s/ Philip Renwick

Name  

Philip Renwick

Title  

Vice President

 

Signature Page to Credit Agreement

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BRANCH BANKING AND TRUST COMPANY, as a Lender By  

/s/ Steve W. Whitcomb

Name  

Steve W. Whitcomb

Title  

Senior Vice President

 

Signature Page to Credit Agreement

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MADISON CAPITAL FUNDING LLC, as a Lender By  

/s/ Kevin C. Bolash

Name  

Kevin C. Bolash

Title  

Sr. Vice President

 

Signature Page to Credit Agreement

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MORGAN STANLEY BANK, N.A., as a Lender By  

/s/ Michael King

Name  

Michael King

Title  

Authorized Signatory

 

Signature Page to Credit Agreement

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ANNEX I

Commitments and Pro Rata Shares

 

Lender

   Revolving Loan
Commitment
Amount      Pro Rata Share     Term Loan
Commitment
Amount      Pro Rata Share  

TD Bank, N.A.

   $ 40,000,000         13.79310345 %    $ 0         0 % 

Toronto Dominion (Texas) LLC

   $ 0         0 %    $ 181,000,000         80.44444444 % 

BMO Harris Financing, Inc.

   $ 39,500,000         13.62068965 %    $ 0         0 % 

Bank of Montreal

   $ 0         0 %    $ 2,000,000         0.88888889 % 

SunTrust Bank

   $ 39,500,000         13.62068965 %    $ 5,000,000         2.22222222 % 

First Tennessee Bank, National Association

   $ 15,000,000         5.17241379 %    $ 0         0 % 

The PrivateBank and Trust Company

   $ 20,000,000         6.89655172 %    $ 0         0 % 

U.S. Bank National Association

   $ 39,500,000         13.62068965 %    $ 5,000,000         2.22222222 % 

Siemens Financial Services, Inc.

   $ 25,000,000         8.62068966 %    $ 0         0 % 

Webster Bank, N.A.

   $ 12,000,000         4.13793103 %    $ 3,000,000         1.33333333 % 

Fifth Third Bank

   $ 39,500,000         13.62068965 %    $ 0         0 % 

Branch Banking and Trust Company

   $ 20,000,000         6.89655172 %    $ 0         0 % 

Madison Capital Funding LLC

   $ 0         0 %    $ 20,000,000         8.88888889 % 

Morgan Stanley Bank, N.A.

   $ 0         0 %    $ 9,000,000         4.0 % 

TOTALS

   $ 290,000,000         100 %    $ 225,000,000         100 % 

 

I-1

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Annex II

Addresses

 

Compass Group Diversified Holdings LLC 61 Wilton Road 2nd Floor   Westport,
Connecticut 06880 Attention:   Chief Financial Officer Telecopy:   (203)
221-8253

Toronto Dominion (Texas) LLC,

as Agent and as a Lender

Address for Notices: 31 West 52nd Street New York, New York 10019 Attention:  
Bernadette Collins Telephone:   (212) 827-7464 Telecopy:   (212) 827-7807 and  
77 King Street West, 18th Floor Toronto, Ontario M5K 1A2 Attention:   Elhamy
Khalil / Alice Mare Telecopy:   (416) 982-5535 Address for Payments: Bank:  
Bank of America, N.A. ABA #:   026009593 Account Name:   The Toronto Dominion
Bank Account #:   6550-6-53000 Reference:   Compass Group Diversified Holdings
LLC Contact:   Elhamy Khalil / Alice Mare Phone:   (416) 982-5535 Address:   77
King Street West, 18th Floor   Toronto, Ontario M5K 1A2

 

II-1

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TD Bank, N.A., as a Lender Address for Notices: 31 West 52nd Street New York,
New York 10019 Attention:   Bernadette Collins Telephone:   (212) 827-7464
Telecopy:   (212) 827-7266 Address for Payments: Bank:   TD Bank, N.A.  
Wilmington, DE ABA #:   031101266 Account Name:   Participation Loan WIP Account
#:   124309 Attention:   Investor Processing Reference:   Compass Group
Diversified Holdings LLC Contact:   Marcella Brattan Phone:   (856) 533-4885
Telecopy:   (856-533-7128 Address:   Commercial Loan Servicing / Investor
Processing   6000 Atrium Way   Mt. Laurel, New Jersey 08054

 

II-2

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BMO Harris Financing, Inc., as a Lender Address for Notices: 115 South LaSalle
Street 35th Floor West Chicago, Illinois 60603-4095 Attention:   Katherine
Robinson Telephone:   (312) 461-7345 Telecopy:   (312) 293-4327 Address for
Payments: Bank:   BMO Harris N.A. ABA #:   071000288 Account Name:   BMO HARRIS
FINANCING INC Account #:   181-506-7 Reference:   Compass Group Diversified
Holdings LLC Attention:   Sylvia Sosnowski Primary Operations Contact: Silvia
Sosnowski Phone:   (312) 461-3171 Address:   111 West Monroe Street, 17th Floor
West   Chicago, Illinois 60603 Secondary Operations Contact: Arlett Hall  
Phone:   (312) 461-3118 Address:   111 West Monroe Street, 17th Floor West  
Chicago, Illinois 60603

 

II-3

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Bank of Montreal, as a Lender Address for Notices: 115 South LaSalle Street
Chicago, Illinois 60603-4095 Attention:   Angelina Monarrez Telephone:   (312)
461-7599 Telecopy:   (312) 756-8078 Address for Payments: Bank:   BMO Harris
N.A. ABA #:   071000288 Account Name:   Bank of Montreal Account #:   1833201
Reference:   Compass Group Diversified Holdings LLC Attention:   Cindy Baron
Contact:   Cindy Baron Phone:   (312) 461-2331 Fax:   (312) 461-3458 Address:  
115 South LaSalle Street, 17th Floor   Chicago, Illinois 60603

 

II-4

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SunTrust Bank, as a Lender Address for Notices: Mail Code: GA-ATL-0244 25 Park
Place, 23rd Floor Atlanta, Georgia 30308 Attention:   Chris Fellows Telephone:  
(404) 813-2511 Telecopy:   (404) 532-0417 Address for Payments: Bank:   SunTrust
Bank ABA #:   061000104 Account Name:   Wire Clearing Account Account #:  
9088000112 Reference:   Compass Group Diversified Holdings LLC Attention:  
Corporate Banking Support Contact:   Marlene Fabien Phone:   (770) 352-5155 Fax:
  (404) 588-4402 Address:   211 Perimeter Ctr Parkway, 5th Floor   Atlanta,
Georgia 30346

 

II-5

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First Tennessee Bank National Association, as a Lender Address for Notices: 5821
Fairview Road, Suite 320 Charlotte, North Carolina 28209 Attention:   Jamie
Swisher Telephone:   (704) 554-4725 Telecopy:   (704) 554-4735 Address for
Payments: Bank:   First Tennessee Bank National Association ABA #:   084000026
Account Name:   Bank Secrecy Account Account #:   1141743913 Reference:  
Compass Group Diversified Holdings LLC Attention:   Participations Contact:  
Participations Group Phone:   (800) 809-9436 Facsimile:   (901) 579-3428
Address:   300 Court Avenue, 7th Floor   Memphis, Tennessee 38101

 

II-6

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The PrivateBank and Trust Company, as a Lender Address for Notices: 120 South
LaSalle Street Chicago, Illinois 60603 Attention:   Khary Kenyatta Telephone:  
(312) 564-1189 Telecopy:   (312) 564-6889 Address for Payments: Bank:   The
PrivateBank ABA #:   071-006-486 Account Name:   Loan Control Account #:  
150805001 Reference:   Compass Group Diversified Holdings LLC Attention:  
Syndications Team Contact:   Israel Balaguer Phone:   (312) 564-1777 Facsimile:
  (312) 564-1794 Address:   120 South LaSalle Street   Chicago, Illinois 60603

 

II-7

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U.S. Bank National Association, as Issuing Lender and as a Lender Address for
Notices: 11204 Holmes Road Kansas City, Missouri 64131 Attention:   Jason Nadler
Telephone:   (816) 508-3814 Telecopy:   (816) 508-3824 Address for Payments:
Bank:   US Bank   Oshkosh, Wisconsin ABA #:   081000210 Account Name:   Complex
Credits WIP Account #:   00018642160600 Reference:   Compass Group Diversified
Attention:   Complex Credits WIP Contact:   Barb Campbell Phone:   (920)
237-7370 Facsimile:   (920) 237-7003 Address:   400 City Center   Oshkosh,
Wisconsin 54901

 

II-8

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Siemens Financial Services, Inc., as a Lender Address for Notices: 170 Wood
Avenue South Iselin, New Jersey 08830 Attention:   Paul Ramseur Telephone:  
(732) 590-6572 Telecopy:   (732) 476-3469 Address for Payments: Bank:   Citibank
New York ABA #:   021000089 Account Name:   Siemens Financial Services, Inc.
Account #:   30824246 Reference:   Compass Group Diversified Holdings Attention:
  7325-90 Bank Loans Contact:   April Greaves-Bryan Phone:   (732) 476-3443
Address:   170 Wood Avenue South   Iselin, New Jersey 08830

 

II-9

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Webster Bank, N.A., as a Lender Address for Notices: 123 Bank Street Waterbury,
Connecticut 06702 Attention:   Hans Jung Telephone:   (203) 578-2329 Telecopy:  
(203) 578-2759 Address for Payments: Bank:   Webster Bank   Waterbury,
Connecticut ABA #:   211170101 Account Name:   Commercial Loans - Incoming Wires
Account #:   19124483 Reference:   Compass Group Diversified Holdings Attention:
  Juan Rivera – Loan Support Services Contact:   Juan Rivera Phone:   (860)
612-5649 Facsimile:   (860) 612-5659 Address:   436 Slaten Road   New Britain,
Connecticut 06053

 

II-10

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Fifth Third Bank, as a Lender Address for Notices: 222 S. Riverside Plaza
Chicago, Illinois 60606 Attention:   Philip Renwick Telephone:   (312) 704-7349
Telecopy:   (312) 704-4127 Address for Payments: Bank:   Fifth Third Bank  
Cincinnati, Ohio ABA #:   042000314 Account Name:   Commercial Loan Wires
Account #:   89922553 Reference:   Compass Group Diversified Holdings LLC
Contact:   Christin Bell Phone:   (513) 358-2633 Facsimile:   (513) 358-9480
Address:   5050 Kingsley Drive   Cincinnati, Ohio 45227

 

II-11

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Branch Banking and Trust Company, as a Lender Address for Notices: 200 West
Second Street, 16th Floor Winston Salem, North Carolina Attention:   Steve
Whitcomb Telephone:   (336) 733-2754 Telecopy:   (336) 733-2740 Address for
Payments: Bank:   BB&T   Winston Salem, North Carolina ABA #:   053101121
Account Name:   Compass Group Diversified Holdings Account #:   4990024761
Reference:   Compass Group Diversified Holdings LLC Attention:   Wendy Gerringer
Contact:   Wendy Gerringer Phone:   (336) 733-2774 Facsimile:   (336) 733-2740
Address:   200 West Second Street, 16th Floor   Winston Salem, North Carolina
27101

 

II-12

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Madison Capital Funding LLC, as a Lender Address for Notices: 30 South Wacker
Drive – Suite 3700 Chicago, Illinois 60606 Attention:   Kevin Bolash Telephone:
  (312) 596-6938 Telecopy:   (312) 596-6950 Address for Payments: Bank:  
JPMorgan Chase Bank, NA   New York, New York ABA #:   021000021 Account Name:  
Madison Capital Funding LLC Account #:   304938610 Reference:   Compass Group
Contact:   Ericka Crespo Phone:   (312) 980-5961 Facsimile:   (312) 596-6952
Address:   30 South Wacker Drive – Suite 3700   Chicago, Illinois 60606

 

II-13

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Morgan Stanley Bank, N.A., as a Lender Address for Notices: 750 Seventh Avenue,
11th Floor New York, New York 10019 Attention:   Harry Comninellis Telephone:  
(212) 762-0360 Telecopy:   (212) 507-3203 Address for Payments: Bank:  
Citibank, N.A.   New York, New York ABA #:   021000089 Account Name:   Morgan
Stanley Bank, NA Account #:   30440947 Reference:   Compass Group Diversified
Holdings LLC Attention:   Morgan Stanley Loan Servicing Contact:   Morgan
Stanley Loan Servicing Phone:   (443) 627-4355 Facsimile:   (718) 233-2140
Address:   1000 Lancaster Street   Baltimore, MD 21202

 

II-14

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Annex III

Conditions to Permitted Eligible Acquisitions

(1) Agent (for further distribution by Agent to Lenders) shall receive not less
than fifteen Business Days’ prior written notice of such Acquisition, which
notice shall include a reasonably detailed description of the proposed terms of
such Acquisition, and shall receive not less than 5 Business Days’ prior to the
consummation of such Acquisition substantially final versions of the primary
acquisition documents (including the purchase agreement and any Intercompany
Debt Documents) to be executed in connection with such Acquisition;

(2) such Acquisition shall not be hostile and shall have been approved by the
board of directors (or other similar body) and/or the stockholders or other
equityholders of the Target;

(3) no Default or Event of Default is in existence or would occur after giving
effect to such Acquisition;

(4) (i) Agent shall have received an updated Availability Certificate prepared
on a pro forma basis after giving effect to the consummation of the Acquisition
and the incurrence of any Loans, other Debt or Contingent Obligations in
connection therewith, and (ii) Borrowing Availability immediately after
consummation of the Acquisition and the incurrence of any Loans, other Debt or
Contingent Obligations in connection therewith, shall be an amount equal to or
greater than the product of (x) Consolidated EBITDA for the twelve month period
ending on the last day of the most recently ended month for which financial
statements have been delivered to Agent in accordance with the provisions of
this Agreement (calculated on a pro forma basis after giving effect to the Pro
Forma EBITDA of the Target) times (y) 0.25;

(5) after giving effect to such Acquisition and the incurrence of any Loans,
other Debt or Contingent Obligations in connection therewith, Borrower shall be
in compliance on a pro forma basis with the covenants set forth in Section 7.14
recomputed for the most recent Computation Period of Borrower for which
information is available regarding the business being acquired;

(6) such Acquisition shall only involve a Target organized within the United
States or Canada (with all Subsidiaries of such Target, subject to proviso
(ii) below, organized within the United States or, with respect to a Target
organized within Canada, organized within Canada) and/or business and assets
located in the United States or Canada); provided, that (i) with respect to any
such Target, business or assets located in Canada, Agent shall be reasonably
satisfied that the Liens granted by such Target, or in such business or assets,
as applicable, in satisfaction of the requirements of clause (15) below, are
valid and enforceable in all respects and (ii) the provisions of this paragraph
shall not apply to add-on Acquisitions of Targets and/or businesses and assets
outside of the United States or Canada or Acquisitions of Targets organized
within the United States or Canada that have Subsidiaries organized outside of
the United States or Canada so long as Agent has received financial data that is
reasonably acceptable to Agent which demonstrates that, after giving effect to
any such Acquisition (either as a result of the add-on Acquisition of Targets
and/or businesses and assets outside of the United States or Canada by an
Existing Portfolio Company or a New Portfolio Company or as a result of the
percentage of Existing Portfolio Company EBITDA or New Portfolio Company EBITDA
(as applicable) attributable to Subsidiaries organized outside of the United
States or Canada or businesses and assets located outside of the United States
or Canada of the Target in any Acquisition that is to become a Portfolio
Company), no more than 15% of the aggregate amount of Existing Portfolio Company
EBITDA or New Portfolio Company EBITDA (as applicable) of the applicable
Portfolio Company is attributable to Subsidiaries, businesses and assets outside
of the United States (in the case of Portfolio Companies organized within the
United States) and Canada (in the case of Portfolio Companies organized in
Canada and in the case of

 

III-1

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Portfolio Companies organized in the United States to the extent that the
Subsidiaries that are organized in Canada of the applicable Portfolio Company
organized in the United States become guarantors under the Intercompany Debt
Documents of such Portfolio Company);

(7) the business of the Target would not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect to
Borrower prior to such Acquisition;

(8) Agent (for further distribution by Agent to Lenders) shall have received
(w) a general description of (i) the Target’s business, (ii) the Target’s
competitive position within the Target’s industry, (iii) material agreements
binding upon the Target or any of its personal or real property and, if
requested by Agent, copies of such material agreements and (iv) pending material
litigation involving the Target; (x) background checks with respect to the
management of the Target, (y) environmental reports and related information
regarding any property owned, leased or otherwise used by the Target; and
(z) any other material due diligence information or investigation with respect
to the Target that is reasonably required by Agent, which, in the case of the
foregoing clauses (x) and (y), shall be prepared by Acceptable Professionals and
in form and substance reasonably satisfying Agent that no Material Adverse
Effect would be caused by, or would exist after giving effect to, the proposed
Acquisition;

(9) with respect to any Acquisition that is an add-on acquisition by a Portfolio
Company, the Target in such Acquisition shall comprise a business of the type
engaged in by such acquiring Portfolio Company;

(10) Agent (for further distribution by Agent to Lenders) shall have received a
financial due diligence report with respect to the Target from an Approved
Professional, inclusive of a quality of earnings assessment and a calculation of
the Pro Forma EBITDA for the Target;

(11) the Target must have had a positive Pro Forma EBITDA on a cumulative basis
for the immediately preceding four fiscal quarters;

(12) the Target must have in place, with financially sound and reputable
insurers, public liability, property damage and business interruption insurance
with respect to its business and properties against loss or damage of the kinds
customarily carried or maintained by Persons of established reputation engaged
in similar businesses and in commercial reasonable amounts, and Agent shall
receive, within thirty (30) days immediately after the consummation of the
Acquisition of the Target, evidence of such insurance;

(13) the acquisition documents governing such Acquisition shall permit the
collateral assignment by Borrower of its rights under such acquisition documents
to Agent as security for the Obligations and for Agent’s reliance on any legal
opinions rendered in connection with such Acquisition, and Borrower shall have
executed and delivered to Agent a collateral assignment of its rights under such
acquisition documents to Agent that is reasonably satisfactory to Agent in form
and content;

(14) there shall be no Debt incurred or assumed in connection with such
Acquisition other than Revolving Loans funded to Borrower under this Agreement,
Qualified Intercompany Debt incurred by the applicable Target and Indebtedness
permitted under Section 7.1(b);

(15) to the extent that any investments of Qualified Intercompany Debt are made
in the Target in connection with such Acquisition, (i) such Debt shall be
evidenced by Qualified Intercompany Debt Documents pursuant to which, among
other things, a perfected, first-priority Lien has been granted to Borrower in
substantially all of the assets of and equity interests in such Target

 

III-2

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(regardless of where such Target is organized) in accordance with the definition
of the term Qualified Intercompany Debt Documents; and (ii) Agent shall have
received projections and other financial data reasonably acceptable to Agent
which demonstrates that, after giving effect to such Debt investments, (x) such
Target is Solvent and (y) the Portfolio Company Leverage Ratio for such Target
would not be greater than 5.00;

(16) all material consents necessary for such Acquisition (including such
consents as the Agent deems reasonably necessary) have been acquired and such
Acquisition is consummated in accordance with the applicable acquisition
documents and applicable law; and

(17) promptly after obtaining knowledge thereof, Borrower shall provide to Agent
notice of any material change to any of the documents or information previously
provided pursuant to clauses (1) through (16) above.

 

III-3

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Annex IV

Conditions to Permitted Ineligible Acquisitions

(1) Agent (for further distribution by Agent to Lenders) shall receive not less
than fifteen Business Days’ prior written notice of such Acquisition, which
notice shall include a reasonably detailed description of the proposed terms of
such Acquisition, and shall receive not less than 5 Business Days’ prior to the
consummation of such Acquisition substantially final versions of the primary
acquisition documents (including the purchase agreement and any Intercompany
Debt Documents) to be executed in connection with such Acquisition;

(2) such Acquisition shall not be hostile and shall have been approved by the
board of directors (or other similar body) and/or the stockholders or other
equityholders of the Target;

(3) no Default or Event of Default is in existence or would occur after giving
effect to such Acquisition;

(4) (i) Agent shall have received an updated Availability Certificate prepared
on a pro forma basis after giving effect to the consummation of the Acquisition
and the incurrence of any Loans, other Debt or Contingent Obligations in
connection therewith, and (ii) Borrowing Availability immediately after
consummation of the Acquisition and the incurrence of any Loans, other Debt or
Contingent Obligations in connection therewith, shall be an amount equal to or
greater than the product of (x) Consolidated EBITDA for the twelve month period
ending on the last day of the most recently ended month for which financial
statements have been delivered to Agent in accordance with the provisions of
this Agreement (calculated on a pro forma basis after giving effect to the Pro
Forma EBITDA of the Target) times (y) 0.25;

(5) after giving effect to such Acquisition and the incurrence of any Loans,
other Debt or Contingent Obligations in connection therewith, Borrower shall be
in compliance on a pro forma basis with the covenants set forth in Section 7.14
recomputed for the most recent Computation Period of Borrower for which
information is available regarding the business being acquired;

(6) the business of the Target would not subject Agent or any Lender to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect to
Borrower prior to such Acquisition;

(7) Agent (for further distribution by Agent to Lenders) shall have received
(w) a general description of (i) the Target’s business, (ii) the Target’s
competitive position within the Target’s industry, (iii) material agreements
binding upon the Target or any of its personal or real property and, if
requested by Agent, copies of such material agreements and (iv) pending material
litigation involving the Target; (x) background checks with respect to the
management of the Target, (y) environmental reports and related information
regarding any property owned, leased or otherwise used by the Target; and
(z) any other material due diligence information or investigation with respect
to the Target that is reasonably required by Agent, which, in the case of the
foregoing clauses (x) and (y), shall be prepared by Acceptable Professionals;

(8) Agent (for further distribution by Agent to Lenders) shall have received a
financial due diligence report with respect to the Target from an Approved
Professional, inclusive of a quality of earnings assessment and a calculation of
the Pro Forma EBITDA for the Target;

 

IV-1

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(9) the acquisition documents governing such Acquisition, and the loan documents
governing any Debt investments made by Borrower in the applicable Target, shall
permit the collateral assignment by Borrower of its rights under such
acquisition documents to Agent as security for the Obligations, and for Agent’s
reliance on any legal opinions rendered in connection with such Acquisition, and
Borrower shall have executed and delivered to Agent a collateral assignment of
its rights under such documents to Agent that is reasonably satisfactory to
Agent in form and content;

(10) all material consents necessary for such Acquisition (including such
consents as the Agent deems reasonably necessary) have been acquired and such
Acquisition is consummated in accordance with the applicable acquisition
documents and applicable law; and

(11) promptly after obtaining knowledge thereof, Borrower shall provide to Agent
notice of any material change to any of the documents or information previously
provided pursuant to clauses (1) through (10) above.

 

IV-2

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Exhibit A

Form of Assignment Agreement

This Assignment Agreement (this “Assignment Agreement”) is entered into as of
                     by and between the Assignor named on the signature page
hereto (“Assignor”) and the Assignee named on the signature page hereto
(“Assignee”). Reference is made to the Credit Agreement dated as of October 27,
2011 (as amended or otherwise modified from time to time, the “Credit
Agreement”) among Compass Diversified Holdings LLC, a Delaware limited liability
company (“Borrower”), the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent. Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to them
in the Credit Agreement.

Assignor and Assignee agree as follows:

1. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases
and assumes from Assignor the interests set forth on the schedule attached
hereto, in and to Assignor’s rights and obligations under the Credit Agreement
and the other Loan Documents as of the Effective Date (as defined below). Such
purchase and sale is made without recourse, representation or warranty except as
expressly set forth herein.

2. Assignor (i) represents that as of the Effective Date, that it is the legal
and beneficial owner of the interests assigned hereunder free and clear of any
adverse claim, (ii) makes no other representation or warranty and assumes no
responsibility with respect to any statement, warranties or representations made
in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any Loan Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or any other
Person or the performance or observance by Borrower or any other Person of its
Obligations under the Credit Agreement or the Loan Documents or any other
instrument or document furnished pursuant thereto.

3. Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment Agreement; (ii) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant thereto and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment Agreement; (iii) agrees that it will, independently and without
reliance upon Agent, Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement;
(iv) appoints and authorizes Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement as are delegated to Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their terms all
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; (vi) represents that on the date of this Assignment
Agreement it is not presently aware of any facts that would cause it to make a
claim under the Credit Agreement; and (vii) if organized under the laws of a
jurisdiction outside the United States, attaches the forms prescribed by the
Internal Revenue Service of the United States, which have been duly executed,
certifying as to Assignee’s exemption from United States withholding taxes with
respect to all payments to be made to Assignee under the Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty.

 

A-1

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

4. The effective date for this Assignment Agreement shall be as set forth on the
schedule attached hereto (the “Effective Date”). Following the execution of this
Assignment Agreement, it will be delivered to Agent for acceptance and recording
by Agent pursuant to the Credit Agreement.

5. Upon such acceptance and recording, from and after the Effective Date,
(i) Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment Agreement, have the rights and obligations of a
Lender thereunder and (ii) Assignor shall, to the extent provided in this
Assignment Agreement, relinquish its rights (other than indemnification rights)
and be released from its obligations under the Credit Agreement.

6. Upon such acceptance and recording, from and after the Effective Date, Agent
shall make all payments in respect of the interest assigned hereby (including
payments of principal, interest, fees and other amounts) to Assignee. Assignor
and Assignee shall make all appropriate adjustments in payments for periods
prior to the Effective Date with respect to the making of this assignment
directly between themselves.

7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

8. This Assignment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Assignment. Receipt by telecopy of any executed
signature page to this Assignment shall constitute effective delivery of such
signature page.

 

A-2

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The parties hereto have caused this Agreement to be executed and delivered as of
the date first written above.

 

ASSIGNOR:

 

 

    By:  

 

  Title:  

 

 

ASSIGNEE:

 

 

    By:  

 

  Title:  

 

  [Consented to:  

[Toronto Dominion (Texas) LLC,

as Agent

  By:  

 

Title:

 

 

  ]

[U.S. BANK, National Association,

as Issuing Lender1

  By:  

 

Title:  

 

  ] [Compass Group Diversified Holdings LLC]   By:  

 

Title:  

 

  ]]

 

1 

Applicable for assignments of Revolving Loan Commitments

 

A-3

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

Schedule to Assignment Agreement

 

Assignor:  

 

Assignee:  

 

Effective Date:  

 

Credit Agreement dated as of October 27, 2011 among Compass Group Diversified
Holdings LLC, as Borrower, the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent

Interests Assigned:

 

Commitment/Loan

   Revolving Loan Commitment      Term Loan  

Assignor Amounts

   $                            $                        

Amounts Assigned

   $         $     

Assignee Amounts (post-assignment)

   $         $     

Assignee Information:

 

Address for Notices:   Address for Payments:  

 

       

 

    Bank:  

 

  Attention:  

 

    ABA #:  

 

  Telephone:  

 

    Account #:  

 

  Telecopy:  

 

    Reference:  

 

 

 

A-4

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Exhibit B

Form of Compliance Certificate

Please refer to the Credit Agreement dated as of October 27, 2011 (as amended or
otherwise modified from time to time, the “Credit Agreement”) among the
undersigned (“Borrower”), the financial institutions party thereto and Toronto
Dominion (Texas) LLC, as Agent. This certificate (this “Certificate”), together
with supporting calculations attached hereto, is delivered to Agent and Lenders
pursuant to the terms of the Credit Agreement. Terms used but not otherwise
defined herein are used herein as defined in the Credit Agreement.

[Enclosed herewith is a copy of the [annual audited/quarterly] report of
Borrower as at                      (the “Computation Date”), which report
fairly presents in all material respects the financial condition and results of
operations [(subject to the absence of footnotes and to normal year-end
adjustments)] of Borrower as of the Computation Date and has been prepared in
accordance with GAAP consistently applied.]

Borrower hereby certifies and warrants that the computations set forth on the
schedule attached hereto correspond to the ratios and/or financial restrictions
contained in the Credit Agreement and such computations are true and correct as
at the [Computation Date] [date hereof, after giving pro forma effect to the
Acquisition (and related Loans) pursuant to which this certificate is
delivered].

Borrower further certifies that no Event of Default or Default has occurred and
is continuing.

Borrower has caused this Certificate to be executed and delivered by its officer
thereunto duly authorized on                     .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC

By:

 

 

Title:

 

 

 

B-1

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

Schedule to Compliance Certificate

Dated as of                     

 

A.

  

Section 7.14.1 - Minimum Fixed Charge Coverage Ratio

  

  

1.

  

Consolidated EBITDA (per calculation below)

   $                           

2.

  

Income taxes and tax distributions paid

   $                           

3.

  

Capital Expenditures

   $                           

4.

  

Management Fees paid in cash

   $                           

5.

  

Borrower Expenses

   $                           

6.

  

Sum of (2), (3), (4) and (5)

   $                           

7.

  

Remainder of (1) minus (6)

   $                           

8.

  

Interest Expense accrued for such period and paid or payable in cash (excluding
interest on Qualified Intercompany Debt and interest paid in kind)

   $                           

9.

  

Required payments of principal of Debt (excluding Revolving Loans and excluding
required payments of principal in respect of Qualified Intercompany Debt))

   $                           

10.

  

Sum of (8) and (9)

   $                           

11.

  

Ratio of (7) to (10)

              to 1          

12.

  

Minimum Required

     1.50 to 1   

B.

  

Section 7.14.2 - Maximum Total Debt to EBITDA Ratio

     

1.

  

Total Debt

   $                           

2.

  

Consolidated EBITDA (per calculation below)

   $                           

3.

  

Ratio of (1) to (2)

              to 1          

4.

  

Maximum allowed

     3.50 to 1   

 

B-2

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

Existing Portfolio Company EBITDA for each Existing Portfolio Company

 

1.

 

Consolidated Net Income for such Existing Portfolio Company

   $                        

2.

 

Plus:

  

Interest Expense

   $                             

income tax expense

   $                             

depreciation

   $                             

amortization

   $                             

Management Fees satisfied by or otherwise allocable to such Existing Portfolio
Company

   $                             

Non-cash charges reflecting in-process research and development

   $                             

Expense due to forgiveness of non-cash loans to management

   $                             

Other non-cash expenses (or less gains or income) for which no cash outlay (or
receipt) is foreseeable prior to Termination Date

   $                             

One-time acquisition costs and expenses

   $                             

Integration costs incurred in connection with the integration of add-on Targets*

   $                        

For periods prior to the acquisition of such Portfolio Company:

  

Pro Forma EBITDA for such Portfolio Company

   $                        

 

* Not to exceed the lesser of (x) 15% of Existing Portfolio Company EBITDA of
such Existing Portfolio Company after giving effect to the Acquisition of the
applicable add-on Target and (y) forty percent (40%) of the Pro Forma EBITDA of
the applicable add-on Target, and only to the extent incurred within the first
24 months after the Acquisition of applicable Add-On Target and approved by
Agent.

 

B-3

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

New Portfolio Company EBITDA for each New Portfolio Company

For periods after the acquisition of such New Portfolio Company:

1.

 

Consolidated Net Income for such New Portfolio Company

   $                        

2.

 

Plus:

  

Interest Expense

   $                              income tax expense    $                     
        depreciation    $                              amortization    $
                             Management Fees satisfied by or otherwise allocable
to such New Portfolio Company    $                              Non-cash charges
reflecting in-process research and development    $                             
Expense due to forgiveness of non-cash loans to management    $
                             Other non-cash expenses (or less gains or income)
for which no cash outlay (or receipt) is foreseeable    $                     
        One-time acquisition costs and expenses         Integration costs
incurred in connection with the integration of add-on Targets**    $
                       

For periods prior to the acquisition of such Portfolio Company:

  

Pro Forma EBITDA for such Portfolio Company

   $                        

 

** Not to exceed the lesser of (x) 15% of New Portfolio Company EBITDA of such
New Portfolio Company after giving effect to the Acquisition of the applicable
add-on Target and (y) forty percent (40%) of the Pro Forma EBITDA of the
applicable add-on Target, and only to the extent incurred within the first 24
months after the Acquisition of applicable Add-On Target and approved by Agent.

 

B-4

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

Calculation of Consolidated EBITDA

 

1.  

The combined total of the Existing Portfolio Company EBITDA for each Existing
Portfolio Company

   $                         2.  

The combined total of the New Portfolio Company EBITDA for each New Portfolio
Company

   $                         3.  

Sum of (1) and (2)

   $                         4.  

The positive amount, if any, of Net Income Attributable to Non-Controlling
Interests

   $                         5.  

Consolidated EBITDA (remainder of (3) minus (4))

   $                        

 

B-5

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

Exhibit C

Form of Availability Certificate

Please refer to the Credit Agreement dated as of October 27, 2011 (as amended or
otherwise modified from time to time, the “Credit Agreement”) among the
undersigned (“Borrower”), the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent. This certificate
(this “Certificate”), together with supporting calculations attached hereto, is
delivered to Agent and Lenders pursuant to the terms of the Credit Agreement.
Capitalized terms used but not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.

Borrower hereby certifies and warrants that at the close of business on
                     (the “Calculation Date”), Borrowing Availability was
$        , computed as set forth on the schedule attached hereto.

Borrower has caused this Certificate to be executed and delivered by its officer
thereunto duly authorized on                     .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC By:  

 

Title:  

 

 

C-1

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

Schedule to Availability Certificate

Dated as of                     

Availability for each Existing Portfolio Company

 

1.  

Existing Portfolio Company EBITDA

   $                         2.  

Item 1 multiplied by 2.75

   $                         3.  

Principal balance of Qualified Intercompany Debt

   $                         4.  

Ratio of principal balance of Qualified Intercompany Debt over Existing
Portfolio Company EBITDA

   5.  

2.75 minus Item 4

   6.  

Compass-Owned EBITDA with respect to such Existing Portfolio Company

   $                         7.  

Product of Item 5 and Item 6 (but not less than zero)

   $                         8.  

Sum of Item 3 plus Item 7

   $                         9.  

Least of (a) Item 2, (b) Item 8 and (c) 0, if such Existing Portfolio Company is
a Disqualified Portfolio Company

   $                         10.  

Availability for such Existing Portfolio Company

   $                        

Availability for each New Portfolio Company

 

1.  

New Portfolio Company EBITDA

   $                         2.  

Item 1 multiplied by 1.75

   $                         3.  

Principal balance of Qualified Intercompany Debt

   $                         4.  

Ratio of principal balance of Qualified Intercompany Debt over New Portfolio
Company EBITDA

   $                         5.  

1.75 minus Item 4

   $                         6.  

Compass – Owned EBITDA with respect to such New Portfolio Company

   $                         7.  

Product of Item 5 and 6 (but not less than zero)

   $                         8.  

Sum of Item 3 plus Item 7

   $                         9.  

Least of (a) Item 2, (b) Item 8 and (c) 0, if such New Portfolio Company is a
Disqualified Portfolio Company

   $                         10.  

Availability for such New Portfolio Company

   $                        

 

C-2

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

Borrowing Availability

 

1.  

Combined total of the Availability for each Existing Portfolio Company

   $                         2.  

Combined total of the Availability for each New Portfolio Company

   $                         3.  

Item 1 plus Item 2

   $                         4.  

Aggregate principal balance of Qualified Intercompany Debt

   $                         5.  

Lesser of Item 3 and Item 4

   $                         6.  

Excluded amounts where the aggregate amount of the Combined Eligible
Availability attributable to any one Portfolio Company, or any group of
Portfolio Companies operating in the same business industry, exceeds 40% (or, in
the case of American Furniture or Halo 35%), to the extent of any such excess
amounts

   $                         7.  

Combined Eligible Availability [Item 5 minus Item 6]

   $                         8.  

Total Debt (excluding Revolving Outstandings and the Term Loan)

   $                         9.  

Combined Eligible Availability minus Total Debt (excluding Revolving
Outstandings and the Term Loan) [Item 7 minus Item 8]

   $                         10.  

Borrowing Availability [Lesser of Item 9 and Revolving Loan Commitments]

   $                         11.  

Revolving Outstandings

   $                         12.  

Net Availability [Excess of Item 10 over Item 11]

   $                         13.  

Required Prepayment [Excess of Item 11 over Item 10]

   $                        

 

C-3

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

Exhibit D

Form of Note

[FOR THE PURPOSES OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”).
INFORMATION WITH RESPECT TO SUCH OID INCLUDING THE ISSUE PRICE, THE AMOUNT OF
OID, THE ISSUE DATE AND THE YIELD TO MATURITY WITH RESPECT TO THIS NOTE IS
AVAILABLE BY CONTACTING THE CHIEF EXECUTIVE OFFICER OF COMPASS GROUP DIVERSIFIED
HOLDINGS LLC AT 61 WILTON ROAD, 2ND FLOOR, WESTPORT, CONNECTICUT 06880] [TO BE
INCLUDED ON NOTES FOR TERM LOAN LENDERS]

 

$                    

   

 

  New York, New York

The undersigned (“Borrower”), for value received, promises to pay to the order
of                      (“Lender”) at the principal office of Toronto Dominion
(Texas) LLC (the “Agent”) in New York, New York the aggregate unpaid amount of
all Loans made to Borrower by Lender pursuant to the Credit Agreement referred
to below, such principal amount to be payable on the dates set forth in the
Credit Agreement.

Borrower further promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such Loan is paid in full, payable at the
rate(s) and at the time(s) set forth in the Credit Agreement. Payments of both
principal and interest are to be made in lawful money of the United States of
America.

This Note evidences indebtedness incurred under, and is subject to the terms and
provisions of, the Credit Agreement, dated as of October 27, 2011 (as amended,
restated or otherwise modified from time to time, the “Credit Agreement”; terms
not otherwise defined herein are used herein as defined in the Credit
Agreement), among Borrower, the financial institutions (including Lender) party
thereto from time to time and Agent. All of the terms, conditions and covenants
of the Credit Agreement are expressly made a part of this Note by reference in
the same manner and with the same effect as set forth herein. In the event of an
acceleration of the maturity of this Note, this Note shall become immediately
due and payable, without presentation, demand, protest or notice of any kind,
all of which are hereby waived by the Borrower.

This Note is made under and governed by the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC

By:

 

 

Title:

 

 

 

D-1

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

Exhibit E

Form of Notice of Borrowing

Please refer to the Credit Agreement dated as of October 27, 2011 (as amended or
otherwise modified from time to time, the “Credit Agreement”) among the
undersigned (“Borrower”), the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed thereto
in the Credit Agreement. This notice is given pursuant to Section 2.2.2 of the
Credit Agreement. Borrower hereby requests a borrowing under the Credit
Agreement as follows:

The aggregate amount of the proposed borrowing is $        . The requested
borrowing date for the proposed borrowing (which is a Business Day) is
                    ,     . The Revolving Loans comprising the proposed
Borrowing are [Base Rate] [LIBOR] Loans. The duration of the Interest Period for
each LIBOR Loan made as part of the proposed Borrowing, if applicable, is
                     months (which shall be 1, 2, 3 or 6 months).

Borrower hereby represents and warrants to Agent and Lenders that (a) the
representations and warranties set forth in the credit agreement were true and
accurate when made and remain true and accurate on the date hereof as if made on
the date hereof (other than those which, by their terms, specifically are made
as of certain dates prior to the date hereof, which are true and correct as of
such dates) and (b) no event has occurred and is continuing which constitutes a
Default or an Event of Default.

Borrower has caused this Notice to be executed and delivered by its officer
thereunto duly authorized on                     .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC

By:

 

 

Title:

 

 

 

E-1

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

Exhibit F

Form of Notice of Conversion/Continuation

Please refer to the Credit Agreement, dated as of October 27, 2011 as amended or
otherwise modified from time to time, the “Credit Agreement”), among the
undersigned (“Borrower”), the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent. This notice is
given pursuant to Section 2.2.3 of the Credit Agreement. Capitalized terms used
herein but not otherwise defined shall have the meanings ascribed thereto in the
Credit Agreement. Borrower hereby requests a [conversion][continuation] of Loans
as follows:

The date of the proposed [conversion] [continuation] is                     ,
     (which shall be a Business Day). The aggregate amount of the Loans proposed
to be [converted] [continued] is $            . [Specify which part is to be
converted and which part is to be continued, if appropriate.] The Loans to be
[continued] [converted] are [Base Rate Loans] [LIBOR Loans] and the Loans
resulting from the proposed [conversion] [continuation] will be [Base Rate
Loans] [LIBOR Loans]. The duration of the requested Interest Period for each
LIBOR Loan made as part of the proposed [conversion] [continuation] is
                     months (which shall be 1, 2, 3 or 6).

Borrower has caused this Notice to be executed and delivered by its officer
thereunto duly authorized on                     .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC By:  

 

Title:  

 

 

F-1

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

Exhibit G

Form of Excess Cash Flow Certificate

Date:                     , 20    

Please refer to the Credit Agreement dated as of October 27, 2011 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among the undersigned (together with its respective successors and
assigns, the “Borrower”), the financial institutions party thereto, as Lenders,
and Toronto Dominion (Texas) LLC, as Agent. This certificate (this
“Certificate”), together with supporting calculations attached hereto, is
delivered to Agent and Lenders pursuant to the terms of the Credit Agreement.
Terms used but not otherwise defined herein are used herein as defined in the
Credit Agreement.

The officer executing this Certificate is duly authorized to execute and deliver
this Certificate on behalf of Borrower. By executing this Certificate such
officer hereby certifies to Agent and Lenders that:

(a) set forth on Schedule 1 attached hereto is a correct calculation of Excess
Cash Flow for the year ended December 31, 20     and a correct calculation of
the required prepayment of

$                    ;

(b) Schedule 1 attached hereto is based on the audited financial statements
which have been delivered to Agent in accordance with Section 6.1.1 of the
Credit Agreement.

IN WITNESS WHEREOF, Borrower has caused this Certificate to be executed by its
chief financial officer this      day of                     , 20    .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC By:  

 

Title:  

 

 

G-2

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

Schedule 1

to

Excess Cash Flow Certificate

Excess Cash Flow is defined as follows:

 

EBITDA (from applicable attachment to Exhibit B)

   $                        

Plus:        Decrease in Adjusted Working Capital

   $                        

Less:        Scheduled principal payments made with respect to Term Loan

   $                        

Voluntary principal payments made with respect to Term Loan

   $                        

Cash payments (not financed by Debt) made with respect to Capital Expenditures
permitted by Credit Agreement

   $                        

Federal, state, local and foreign income taxes paid in cash

   $                        

Increase in Adjusted Working Capital

   $                        

Interest Expense paid in cash

   $                        

Payments in respect of Permitted Earn-outs

   $                        

Management Fees paid in cash to the extent permitted under Section 7.4

   $                        

Excess Cash Flow

   $                        

Total Debt to EBITDA Ratio (from item C(3) of Exhibit B)

             :1   

Prepayment percent

          % 

Prepayment amount

   $                        

Decrease (increase) in Adjusted Working Capital, for the purposes of the
calculation of Excess Cash Flow, means the following:

 

     Beg. of Period      End of Period  

Consolidated current assets:

   $                            $                        

Less:      cash

     

cash equivalents

     

Adjusted current assets

   $                            $                        

Consolidated current liabilities:

   $                            $                        

Less: short-term Debt (including current portion of long-term Debt)

     

Adjusted current liabilities

   $                            $                        

Adjusted Working Capital (adjusted consolidated current assets minus adjusted
consolidated current liabilities)

   $                            $                        

Decrease (Increase) in Adjusted Working Capital (beginning of period minus end
of period Adjusted Working Capital)

      $                        

 

G-2

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

Exhibit H

Form of Payment Notification

Please refer to the Credit Agreement dated as of October 27, 2011 (as amended or
otherwise modified from time to time, the “Credit Agreement”) among the
undersigned (“Borrower”), the financial institutions party thereto from time to
time, as Lenders, and Toronto Dominion (Texas) LLC, as Agent. Capitalized terms
used herein and not otherwise defined shall have the meanings ascribed thereto
in the Credit Agreement.

This Notice is given pursuant to Section [2.10.1][2.10.2] of the Credit
Agreement. Please be advised that funds in the amount of $         will be wire
transferred to Agent on                     , 20    . Such funds shall
constitute [a voluntary] [a mandatory] prepayment of the [Revolving Loans][Term
Loans], with such prepayment to be applied pursuant to Section 2.10.3 of the
Credit Agreement. [Such mandatory prepayment is being made pursuant to Section
[2.10.2[(a)[(i)][(ii)]] [2.10.2(b)[(i)][(ii)][(iii)]] [2.10.2(c)] [2.10.2(d)] of
the Credit Agreement.] Such amount shall be wire transferred to Agent’s address
for payments set forth on Annex II of the Credit Agreement.

Borrower has caused this Notice to be executed and delivered by its officer
thereunto duly authorized on                     .

 

COMPASS GROUP DIVERSIFIED HOLDINGS LLC By:  

 

Title:  

 

 

H-1