Exhibit 10.1

EXECUTION COPY

 

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LOGO [g90526image001.jpg]

CREDIT AGREEMENT

dated as of

February 28, 2006

among

CENTRAL GARDEN & PET COMPANY,

The Subsidiary Borrowers from Time to Time Party Hereto

The Lenders from Time to Time Party Hereto

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Administrative Agent

BANK OF AMERICA, N.A.

as Syndication Agent

and

CIBC WORLD MARKETS CORP., SUNTRUST BANK

and UNION BANK OF CALIFORNIA, N.A.,

as Co-Documentation Agents

 

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J.P. MORGAN SECURITIES INC. and BANC OF AMERICA SECURITIES LLC,

as Joint Bookrunners and Joint Lead Arrangers

 

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TABLE OF CONTENTS

 

         Page ARTICLE I Definitions      SECTION 1.01. Defined Terms    1  
SECTION 1.02. Classification of Loans and Borrowings    26   SECTION 1.03. Terms
Generally    27   SECTION 1.04. Accounting Terms; GAAP    27   SECTION 1.05.
Company Acting on Behalf of Itself and Subsidiary Borrowers    27 ARTICLE II The
Credits    28   SECTION 2.01. Commitments.    28   SECTION 2.02. Loans and
Borrowings.    28   SECTION 2.03. Requests for Borrowings    29   SECTION 2.04.
Determination of Dollar Amounts    30   SECTION 2.05. Swingline Loans.    30  
SECTION 2.06. Letters of Credit.    31   SECTION 2.07. Funding of Borrowings.   
36   SECTION 2.08. Interest Elections.    37   SECTION 2.09. Termination and
Reduction of Commitments.    38   SECTION 2.10. Repayment of Loans; Evidence of
Debt.    39   SECTION 2.11. Prepayment of Loans.    41   SECTION 2.12. Fees.   
43   SECTION 2.13. Interest.    44   SECTION 2.14. Alternate Rate of Interest   
45   SECTION 2.15. Increased Costs.    45   SECTION 2.16. Break Funding Payments
   47

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Table of Contents

(continued)

 

         Page   SECTION 2.17. Taxes.    47   SECTION 2.18. Payments Generally;
Pro Rata Treatment; Sharing of Set-offs.    49   SECTION 2.19. Mitigation
Obligations; Replacement of Lenders.    50   SECTION 2.20. Incremental Credit
Extensions.    51   SECTION 2.21. Market Disruption    54   SECTION 2.22.
Judgment Currency    54   SECTION 2.23. Designation of Subsidiary Borrowers   
55 ARTICLE III Representations and Warranties    55   SECTION 3.01.
Organization; Powers; Subsidiaries    56   SECTION 3.02. Authorization;
Enforceability    56   SECTION 3.03. Governmental Approvals; No Conflicts    56
  SECTION 3.04. Financial Condition; No Material Adverse Change; Contingent
Obligations.    57   SECTION 3.05. Properties.    57   SECTION 3.06. Litigation
and Environmental Matters.    58   SECTION 3.07. Compliance with Laws and
Agreements; No Burdensome Restrictions    58   SECTION 3.08. Investment and
Holding Company Status    59   SECTION 3.09. Taxes    59   SECTION 3.10. ERISA
   59   SECTION 3.11. Disclosure    59   SECTION 3.12. Federal Reserve
Regulations    59   SECTION 3.13. No Default    60   SECTION 3.14. Solvency   
60

 

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Table of Contents

(continued)

 

         Page   SECTION 3.15. Insurance    60   SECTION 3.16. Senior
Subordinated Notes    60   SECTION 3.17. Collateral Documents    60  

SECTION 3.18. Farnam Acquisition; Incorporation of Certain Representations and
Warranties in the Farnam Stock Purchase Agreement

   60   SECTION 3.19. SDN List Designation    61 ARTICLE IV Conditions    61  
SECTION 4.01. Effective Date    61   SECTION 4.02. Each Credit Event    64  
SECTION 4.03. Designation of a Subsidiary Borrower    64 ARTICLE V Affirmative
Covenants    65   SECTION 5.01. Financial Statements; Ratings Change and Other
Information    65   SECTION 5.02. Notices of Material Events    67   SECTION
5.03. Existence; Conduct of Business    67   SECTION 5.04. Payment of
Obligations    67   SECTION 5.05. Maintenance of Properties; Insurance    68  
SECTION 5.06. Books and Records; Inspection Rights    68   SECTION 5.07.
Compliance with Laws.    69   SECTION 5.08. Use of Proceeds    69   SECTION
5.09. Subsidiary Guaranty and Collateral Documents; Additional Subsidiary
Guarantors.    69   SECTION 5.10. Collateral.    70 ARTICLE VI Negative
Covenants    71   SECTION 6.01. Indebtedness    71

 

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Table of Contents

(continued)

 

         Page   SECTION 6.02. Liens    73   SECTION 6.03. Fundamental Changes.
   74   SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions
   74   SECTION 6.05. Swap Agreements    75   SECTION 6.06. Restricted Payments
   75   SECTION 6.07. Transactions with Affiliates    76   SECTION 6.08.
Restrictive Agreements    76   SECTION 6.09. Changes in Fiscal Year    76  
SECTION 6.10. Asset Sales    76   SECTION 6.11. Leases    77   SECTION 6.12.
Payments and Modification of Subordinated Indebtedness    77   SECTION 6.13.
Capital Expenditures    78   SECTION 6.14. Non-Guarantor Subsidiaries;
Guarantors Under Senior Subordinated Notes    78   SECTION 6.15. Financial
Covenants.    78 ARTICLE VII Events of Default    79 ARTICLE VIII The
Administrative Agent    82   SECTION 8.01. General    82   SECTION 8.02. PTR
Scheme.    85 ARTICLE IX Miscellaneous    86   SECTION 9.01. Notices.    86  
SECTION 9.02. Waivers; Amendments.    87   SECTION 9.03. Expenses; Indemnity;
Damage Waiver.    88   SECTION 9.04. Successors and Assigns.    89

 

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Table of Contents

(continued)

 

         Page   SECTION 9.05. Survival    93   SECTION 9.06. Counterparts;
Integration; Effectiveness    93   SECTION 9.07. Severability    93   SECTION
9.08. Right of Setoff    93   SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process.    94   SECTION 9.10. WAIVER OF JURY TRIAL    95  
SECTION 9.11. Headings    95   SECTION 9.12. Confidentiality.    95   SECTION
9.13. USA PATRIOT Act    96 ARTICLE X Company Guarantee   

 

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Table of Contents

(continued)

             Page SCHEDULES:        Schedule 2.01   –   Commitments    Schedule
2.02   –   Mandatory Cost    Schedule 2.06   –   Existing Letters of Credit   
Schedule 3.01   –   Subsidiaries    Schedule 3.06   –   Disclosed Matters   
Schedule 3.15   –   Insurance    Schedule 6.01   –   Existing Indebtedness   
Schedule 6.02   –   Existing Liens    Schedule 6.08   –   Restrictive Agreements
   EXHIBITS:        Exhibit A   –   Form of Assignment and Assumption    Exhibit
B-1   –   Form of Opinion of Loan Parties’ Counsel    Exhibit B-2   –   Form of
Opinion of Loan Parties’ Local U.S. Counsel    Exhibit C   –   Form of
Commitment and Acceptance    Exhibit D   –   Form of Written Money Transfer
Instruction    Exhibit E   –   List of Closing Documents    Exhibit F-1   –  
Form of Borrowing Subsidiary Agreement    Exhibit F-2   –   Form of Borrowing
Subsidiary Termination    Exhibit G   –   Form of Pledge and Security Agreement
(U.S.)    Exhibit H   –   Form of Subsidiary Guaranty (U.S.)    Exhibit I   –  
Form of Compliance Certificate   

 

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CREDIT AGREEMENT dated as of February 28, 2006 among CENTRAL GARDEN & PET
COMPANY, the SUBSIDIARY BORROWERS from time to time party hereto, the LENDERS
from time to time party hereto, BANK OF AMERICA, N.A., as Syndication Agent, and
CIBC WORLD MARKETS CORP., SUNTRUST BANK and UNION BANK OF CALIFORNIA, N.A., as
Co-Documentation Agents, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

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

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

“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the sum of (i) (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate plus, without
duplication, (ii) in the case of Loans by a Lender from its office or branch in
the United Kingdom, the Mandatory Cost.

“Administrative Agent” means JPMorgan Chase Bank, National Association, in its
capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

“Affected Foreign Subsidiary” means any Foreign Subsidiary to the extent such
Foreign Subsidiary acting as a Subsidiary Guarantor would (a) be prohibited by
applicable law or (b) would cause a Deemed Dividend Problem.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Aggregate Revolving Commitment” means the aggregate of the Revolving
Commitments of all of the Lenders, as reduced or increased from time to time
pursuant to the terms and conditions of this Agreement. As of the Effective
Date, the Aggregate Revolving Commitment is $350,000,000.

“Aggregate Tranche B Term Loan Commitment” means the aggregate of the Tranche B
Term Loan Commitments of all of the Lenders, as reduced or increased from time
to time pursuant to the terms and conditions of this Agreement. As of the
Effective Date, the Aggregate Tranche B Term Loan Commitment is $300,000,000.

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“Agreed Currencies” means (i) Dollars, (ii) euro, (iii) Pounds Sterling,
(iv) Canadian Dollars, (v) Australian Dollars, (vi) Japanese Yen and (vii) any
other currency agreed to by the Administrative Agent.

“Agreement” means this Credit Agreement, as the same may be amended, restated,
supplemented or otherwise modified from time to time.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus  1/2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
sum of the total Revolving Commitments and the total Term Loan Commitments at
such time that is represented by the sum of such Lender’s Revolving Commitment
and Term Loan Commitment at such time; provided, however, that (i) if the
Revolving Commitments have terminated or expired, the Applicable Percentage
shall be determined based upon Revolving Credit Exposure at such time and
(ii) if any of the Term Loan Commitments have terminated or expired, the
Applicable Percentage shall be determined based upon the outstanding principal
amount of the applicable Term Loans at such time.

“Applicable Pledge Percentage” means 100%, but 65% in the case of a pledge of
Equity Interests in a Foreign Subsidiary to the extent a 100% pledge would cause
a Deemed Dividend Problem.

“Applicable Rate” means, for any day:

(a) with respect to any Tranche B Term Loan that is an ABR Loan, .50% per annum;

(b) with respect to any Tranche B Term Loan that is a Eurocurrency Loan,
1.50% per annum; and

(c) with respect to any ABR Loan or Eurocurrency Loan that is a Revolving Loan,
or with respect to the Letter of Credit participation fees described in
Section 2.12(b)(i) or the commitment fees payable hereunder, as the case may be,
the applicable rate per annum set forth below under the caption “Revolving Loan
ABR Spread”, “Revolving Loan Eurocurrency Spread and Letter of Credit
Participation Fees” or “Commitment Fee Rate,” as the case may be, based upon the
Leverage Ratio as reflected in the then most recently delivered Financials:

 

Pricing
Level:

  

Total Leverage Ratio:

   Revolving Loan ABR
Spread:    

Revolving Loan
Eurocurrency Spread
and

Letter of Credit
Participation Fees:

    Commitment Fee Rate:  

Level I

   Less than 2.0 to 1.0    0.00 %   0.75 %   0.175 %

Level II

   Greater than or equal to 2.0 to 1.0 but less than 2.5 to 1.0    0.00 %  
0.875 %   0.20 %

Level III

   Greater than or equal to 2.5 to 1.0 but less than 3.0 to 1.0    0.00 %   1.00
%   0.225 %

Level IV

   Greater than or equal to 3.0 to 1.0 but less than 3.5 to 1.0    0.00 %  
1.125 %   0.25 %

Level V

   Greater than or equal to 3.5 to 1.0 but less than 4.0 to 1.0    0.125 %  
1.25 %   0.275 %

Level VI

   Greater than or equal to 4.0 to 1.0    0.25 %   1.375 %   0.30 %

 

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For purposes of, and notwithstanding, this clause (c),

(i) if at any time the Company fails to deliver the Financials required under
Section 5.01(a) or 5.01(b) on or before the date such Financials are due,
Pricing Level VI shall be deemed applicable until five (5) Business Days after
such Financials are actually delivered, after which the Applicable Rate shall be
determined in accordance with the table above;

(ii) adjustments, if any, to the Applicable Rate then in effect shall be
effective five (5) Business Days after the Administrative Agent has received the
applicable Financials (it being understood and agreed that each change in the
Applicable Rate shall apply during the period commencing on the effective date
of such change and ending on the date immediately preceding the effective date
of the next such change); and

(iii) each determination of the Applicable Rate for purposes of this clause
(c) made by the Administrative Agent in accordance with the foregoing shall be
conclusive and binding on the Borrowers and each Lender (absent manifest error).

Notwithstanding the foregoing, during the period beginning on the Effective Date
and ending on the date of delivery of the applicable Financials for the quarter
ending March 25, 2006, the Applicable Rate for purposes of this clause (c) shall
be based on Pricing Level VI, and thereafter, the Applicable Rate shall be
determined in accordance with the preceding table and provisions.

“Applicable Revolving Credit Percentage” means, with respect to any Lender that
has a Revolving Commitment, the percentage of the Aggregate Revolving Commitment
represented by such Lender’s Revolving Commitment. If the Revolving Commitments
have terminated or expired, the Applicable Revolving Credit Percentage shall be
determined based upon the percentage of the total Revolving Credit Exposures
represented by such Lender’s Revolving Credit Exposure.

“Approved Fund” has the meaning assigned to such term in Section 9.04.

 

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“Approximate Equivalent Amount” of any currency with respect to any amount of
Dollars shall mean the Equivalent Amount of such currency with respect to such
amount of Dollars on or as of such date, rounded up to the nearest amount of
such currency as determined by the Administrative Agent from time to time.

“Asset Sale” means any sale, transfer, lease or other disposition (including
pursuant to a Sale and Leaseback Transaction) of any property or asset of the
Company or any of its Subsidiaries (including a disposition of Equity Interests
of any Person), in one or a series of transactions.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

“Attributable Receivables Indebtedness” at any time shall mean the principal
amount of Indebtedness which (i) if a Permitted Receivables Facility is
structured as a secured lending agreement, constitutes the principal amount of
such Indebtedness or (ii) if a Permitted Receivables Facility is structured as a
purchase agreement, would be outstanding at such time under the Permitted
Receivables Facility if the same were structured as a secured lending agreement
rather than a purchase agreement.

“Australian Dollars” means the lawful currency of Australia.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Revolving Loan Maturity Date and the date of
termination of the Revolving Commitments.

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

“Borrower” means the Company or any Subsidiary Borrower.

“Borrowing” means Loans (including one or more Swingline Loans) of the same
Class, Type, and currency made, converted or continued on the same date and, in
the case of Eurocurrency Loans, as to which a single Interest Period is in
effect.

“Borrowing Request” means a request by any Borrower for a Borrowing in
accordance with Section 2.03.

“Borrowing Subsidiary Agreement” means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit F-1.

“Borrowing Subsidiary Termination” means a Borrowing Subsidiary Termination
substantially in the form of Exhibit F-2.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed;

 

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provided that, when used in connection with a Eurocurrency Loan, the term
“Business Day” shall also exclude any day on which banks are not open for
dealings in the applicable Agreed Currency in the London interbank market (and,
if the Borrowings are denominated in euro, a day upon which such clearing system
as is determined by the Administrative Agent to be suitable for clearing or
settlement of euro is open for business).

“Canadian Dollars” means the lawful currency of Canada.

“Capital Expenditures” means, without duplication, any expenditure or commitment
to expend money for any purchase or other acquisition of any asset which would
be classified as a fixed or capital asset on a consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with GAAP.

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

“Capitalized Lease” of a Person means any lease of property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), other than
William E. Brown, of Equity Interests representing more than 25% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Company; (b) occupation of a majority of the seats (other than
vacant seats) on the board of directors of the Company by Persons who were
neither (i) nominated by the board of directors of the Company nor
(ii) appointed by directors so nominated; (c) the acquisition of direct or
indirect Control of the Company by any Person or group; or (d) any “Change in
Control” under and as defined in the Senior Subordinated Note Indenture.

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche
B Term Loans, Incremental Term Loans or Swingline Loans, and (b) any Commitment,
refers to whether such Commitment is a Revolving Commitment, a Tranche B Term
Loan Commitment or an Incremental Term Loan Commitment.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Co-Documentation Agent” means CIBC World Markets Corp., SunTrust Bank or Union
Bank of California, N.A., in its respective capacity as a co-documentation agent
for the credit facility evidenced by this Agreement.

“Collateral” means all property and interests in personal property now owned or
hereafter acquired by any Loan Party in or upon which a security interest or
Lien is from time to time granted to the Administrative Agent, for the benefit
of the Holders of Secured Obligations, whether under a Pledge and Security
Agreement, under any of the other Collateral Documents or under any of the other
Loan Documents.

“Collateral Documents” means all agreements, instruments and documents executed
in connection with this Agreement pursuant to which the Administrative Agent is
granted a security interest in Collateral, including, without limitation, each
Pledge and Security Agreement and all other security agreements, control
agreements, collateral access agreements, loan agreements, notes, guarantees,
subordination agreements, pledges, powers of attorney, consents, assignments,
contracts, fee letters, notices, leases, mortgages, financing statements and all
other written matter whether heretofore, now, or hereafter executed by or on
behalf of the Company or any of its Subsidiaries and delivered to the
Administrative Agent or any of the Lenders, together with all agreements and
documents referred to therein or contemplated thereby.

“Commitment” means a Revolving Commitment, a Tranche B Term Loan Commitment
and/or an Incremental Term Loan Commitment.

“Commitment and Acceptance” is defined in Section 2.20.

“Company” means Central Garden & Pet Company, a Delaware corporation.

“Computation Date” is defined in Section 2.04.

“Consolidated EBITDA” means, with reference to any period, (a) Consolidated Net
Income for such period, plus, (b) without duplication and to the extent deducted
from revenues in determining Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization, (v) extraordinary non-cash losses incurred other than in the
ordinary course of business and (vi) non-cash restructuring charges minus,
(c) without duplication and to the extent included in determining such
Consolidated Net Income, extraordinary non-cash gains realized other than in the
ordinary course of business, all calculated for the Company and its Subsidiaries
in accordance with GAAP on a consolidated basis. For purposes of this Agreement,
Consolidated EBITDA for any period of four (4) consecutive fiscal quarters
during which an acquisition shall have been made by the Company or any
Subsidiary shall be calculated after giving pro forma effect (calculated in a
manner reasonably acceptable to the Administrative Agent) to such acquisition,
as if such acquisition occurred on the first day of such four (4) fiscal quarter
period. Without limiting the

 

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foregoing, the portion of Consolidated EBITDA attributable to Farnam and its
subsidiaries for the period of time prior to the Farnam Acquisition shall be
(w) $11,629,540 for the fiscal quarter ending in March 2005, (x) $8,400,670 for
the fiscal quarter ending in June 2005, (y) $5,833,852 for the fiscal quarter
ending in September 2005 and (z) $2,054,963 for the fiscal quarter ending in
December 2005.

“Consolidated Interest Expense” means, with reference to any period, the
interest expense (including without limitation interest expense under Capital
Lease Obligations that is treated as interest in accordance with GAAP) of the
Company and its Subsidiaries calculated on a consolidated basis for such period
with respect to (a) all outstanding Indebtedness of the Company and its
Subsidiaries allocable to such period in accordance with GAAP and Swap
Agreements (including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers acceptance
financing and net costs under interest rate Swap Agreements to the extent such
net costs are allocable to such period in accordance with GAAP) and (b) the
interest component of all Attributable Receivable Indebtedness of the Company
and its Subsidiaries for such period.

“Consolidated Net Income” means, with reference to any period, the net income
(or loss) of the Company and its Subsidiaries calculated in accordance with GAAP
on a consolidated basis (without duplication) for such period.

“Consolidated Net Worth” means, as of the date of any determination thereof, the
consolidated stockholders’ equity of the Company and its Subsidiaries,
calculated in accordance with GAAP on a consolidated basis as of such date.

“Consolidated Total Assets” means, as of the date of any determination thereof,
total assets of the Company and its Subsidiaries calculated in accordance with
GAAP on a consolidated basis as of such date.

“Consolidated Total Indebtedness” means at any time, the aggregate Indebtedness
of the Company and its consolidated Subsidiaries as of such time. Solely for
purposes of the calculations the Total Leverage Ratio hereunder, the aggregate
amount of Indebtedness of the Company and its Subsidiaries shall be equal to
(i) the sum of clauses (a) through (o) in the definition of “Indebtedness”,
minus (ii) a working capital adjustment of $50,000,000 as of the last day of
each fiscal quarter ending in March of each fiscal year, plus (iii) a working
capital adjustment of $50,000,000 as of the last day of each fiscal quarter
ending in September of each fiscal year.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Credit Event” is defined in Section 4.02.

“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, such
Foreign Subsidiary’s accumulated and undistributed earnings and profits being
deemed to be repatriated to the Company or the applicable parent Domestic
Subsidiary under Section 956 of

 

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the Code and the effect of such repatriation causing material adverse tax
consequences to the Company or such parent Domestic Subsidiary, in each case as
determined by the Company in its commercially reasonable judgment acting in good
faith and in consultation with its legal and tax advisors.

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

“Disqualified Stock” means any preferred stock or other Equity Interest that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is ninety-one (91) days after the latest of the Revolving Loan
Maturity Date, the Tranche B Term Loan Maturity Date and any maturity date
applicable to a tranche of Incremental Term Loans.

“Dollar Amount” of any currency at any date shall mean (i) the amount of such
currency if such currency is Dollars or (ii) the equivalent in such currency of
such amount of Dollars if such currency is a Foreign Currency, calculated on the
basis of the arithmetical mean of the buy and sell spot rates of exchange of the
Administrative Agent for such currency on the London market at 11:00 a.m.,
London time, on or as of the most recent Computation Date provided for in
Section 2.04.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the United States of America or any state thereof or the
District of Columbia.

“Domestic Subsidiary Borrower” means any Domestic Subsidiary that has been
designated as a Subsidiary Borrower pursuant to Section 2.23 and that has not
ceased to be a Subsidiary Borrower pursuant to such Section.

“Effective Date” means the date on or before April 30, 2006 on which the
conditions specified in Section 4.01 are satisfied (or waived in accordance with
Section 9.02).

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of

 

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the Company or any Subsidiary directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

“Equivalent Amount” of any currency with respect to any amount of Dollars at any
date shall mean the equivalent in such currency of such amount of Dollars,
calculated on the basis of the arithmetical mean of the buy and sell spot rates
of exchange of the Administrative Agent for such other currency at 11:00 a.m.,
London time, on the date on or as of which such amount is to be determined.

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

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

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal of the Company or any of its ERISA Affiliates
from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Company or any ERISA Affiliate of any notice, concerning the imposition upon the
Company or any of its ERISA Affiliates of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

“EU” means the European Union.

 

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“euro” and/or “EUR” means the single currency of the participating member states
of the EU.

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

“Eurocurrency Payment Office” of the Administrative Agent shall mean, for each
of the Agreed Currencies which is a Foreign Currency, the office, branch,
affiliate or correspondent bank of the Administrative Agent for such currency as
specified from time to time by the Administrative Agent to the Company and each
Lender.

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

“Excess Cash Flow” means, for any fiscal year of the Company, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Working Capital for such fiscal year, and (iv) the
aggregate net amount of non-cash loss on the disposition of property by the
Company and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income minus (b) the sum, without duplication,
of (i) the amount of all non-cash credits included in arriving at such
Consolidated Net Income, (ii) the aggregate amount actually paid by the Company
and its Subsidiaries in cash during such fiscal year on account of Capital
Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such expenditures and any such expenditures financed with the
proceeds of asset dispositions that have not yet been used to pay down the
Loans), (iii) the aggregate amount of all prepayments of Revolving Loans and
Swingline Loans during such fiscal year to the extent accompanying permanent
mandatory or optional reductions of the Revolving Commitments and all mandatory
or optional prepayments of the Term Loans during such fiscal year, other than,
in any such case, mandatory prepayments resulting from Excess Cash Flow pursuant
to Section 2.11(b)(v), (iv) the aggregate amount of all regularly scheduled
principal payments of Long-Term Debt (including the Term Loans) of the Company
and its Subsidiaries made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) increases in Working Capital for such
fiscal year, and (vi) the aggregate net amount of non-cash gain on the
disposition of property by the Company and its Subsidiaries during such fiscal
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Company hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Company is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a

 

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request by the Company under Section 2.19(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such Foreign Lender’s failure to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Company with respect to such withholding tax
pursuant to Section 2.17(a).

“Existing Credit Agreement” means that certain Credit Agreement dated as of
May 14, 2003 by and among the Company, the lenders party thereto and Canadian
Imperial Bank of Commerce, as administrative agent, as the same may have been
amended, restated, supplemented or otherwise modified from time to time prior to
the Effective Date hereof.

“Existing Letters of Credit” is defined in Section 2.06(k).

“Farnam” means Farnam Companies, Inc., an Arizona corporation.

“Farnam Acquisition” means the acquisition by the Company of all of the issued
and outstanding stock of Farnam for a purchase price not to exceed $300,000,000
on the terms and conditions set forth in the Farnam Stock Purchase Agreement.

“Farnam Sellers” has the meaning set forth in the defined term “Farnam Stock
Purchase Agreement”.

“Farnam Stock Purchase Agreement” means that certain Stock Purchase Agreement,
dated as of January 19, 2006, by and among the Company, The Duff Family
Revocable Trust and The Bassham Trust (such trusts, collectively, the “Farnam
Sellers”), together with all exhibits and schedules thereto, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Financial Assistance Problem” means, with respect to any Foreign Subsidiary,
the inability of such Foreign Subsidiary to become a Subsidiary Guarantor or to
permit its Equity Interests to be pledged pursuant to a pledge agreement on
account of legal or financial limitations imposed by the jurisdiction of
organization of such Foreign Subsidiary or other relevant jurisdictions having
authority over such Foreign Subsidiary, in each case as determined by the
Company in its commercially reasonable judgment acting in good faith and in
consultation with its legal and tax advisors.

 

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“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Company.

“Financials” means the annual or quarterly financial statements, and
accompanying certificates and other documents, of the Company required to be
delivered pursuant to Section 5.01(a) or 5.01(b).

“Foreign Currencies” means each Agreed Currency other than Dollars.

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

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

“Foreign Subsidiary Borrower” means any Foreign Subsidiary that has been
designated as a Subsidiary Borrower pursuant to Section 2.23 and that has not
ceased to be a Subsidiary Borrower pursuant to such Section.

“GAAP” means generally accepted accounting principles in the United States of
America.

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

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

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“Holders of Secured Obligations” means the holders of the Secured Obligations
from time to time and shall include (i) each Lender and the Issuing Bank in
respect of its Loans and LC Exposure, (ii) the Administrative Agent, the Issuing
Bank and the Lenders in respect of all other present and future obligations and
liabilities of the Company and each of its Subsidiaries of every type and
description arising under or in connection with this Agreement or any other Loan
Document, (iii) each Lender and affiliate of such Lender in respect of Swap
Agreements entered into with such Person by the Company or its Subsidiaries,
(iv) each indemnified party under Section 9.03 in respect of the obligations and
liabilities of the Company or its Subsidiaries to such Person under this
Agreement or under the other Loan Documents, and (v) in the case of each Person
described in clauses (i) through (iv), such Person’s respective successors and
(in the case of a Lender, permitted) transferees and assigns.

“Hostile Acquisition” means (a) the acquisition of the Equity Interests of a
Person through a tender offer or similar solicitation of the owners of such
Equity Interests which has not been approved (prior to such acquisition) by the
board of directors (or any other applicable governing body) of such Person or by
similar action if such Person is not a corporation and (b) any such acquisition
as to which such approval has been withdrawn.

“Increase Effective Date” is defined in Section 2.20(c).

“Increase Notice” is defined in Section 2.20(b).

“Incremental Term Loan” is defined in Section 2.20(a).

“Incremental Term Loan Commitment” means, with respect to each Lender, the
commitment, if any, of such Lender to make an Incremental Term Loan hereunder on
the applicable Increase Effective Date pursuant to Section 2.20, expressed as an
amount representing the maximum principal amount of the Incremental Term Loan to
be made by such Lender on such Increase Effective Date hereunder.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) the net
obligations of such

 

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Person under any Swap Agreement or under any similar type of agreement, (l) all
Disqualified Stock of such Person, (m) all Off-Balance Sheet Liabilities of such
Person, (n) obligations of such Person under any earn-out provision and (o) all
Attributable Receivables Indebtedness of such Person. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. For purposes of
determining Indebtedness, the “principal amount” of the obligations of the
Company or any Subsidiary in respect of any Swap Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Company or such Subsidiary would be required to pay if such Swap Agreement were
terminated at such time.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Information Memorandum” means the Confidential Information Memorandum dated
January 2006 relating to the Company and the Transactions.

“Interest Election Request” means a request by the applicable Borrower to
convert or continue a Revolving Borrowing or a Term Loan Borrowing in accordance
with Section 2.08.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurocurrency Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

“Interest Period” means with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, such longer period as may be agreed to by all of the Lenders) thereafter,
as the applicable Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a
Eurocurrency Borrowing only, such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurocurrency
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Issuing Bank” means (i) JPMorgan Chase Bank, National Association, in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.06(i), and (ii) solely with respect to
the Existing Letters of Credit deemed

 

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issued by such Person on the Effective Date hereof (but not any extensions,
renewals, replacements or increases of such Existing Letters of Credit),
Canadian Imperial Bank of Commerce and SunTrust Bank. The Issuing Bank may, in
its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate. For the avoidance of doubt, all references contained in this
Agreement and the other Loan Documents to “the Issuing Bank” shall be deemed to
apply equally to each of the institutions referred to in this definition in
their respective capacities as Issuing Banks of any and all Letters of Credit
issued by each such institution.

“Japanese Yen” means the lawful currency of Japan.

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
applicable Borrower at such time. The LC Exposure of any Lender at any time
shall be its Applicable Revolving Credit Percentage of the total LC Exposure at
such time.

“Lead Arrangers” means each of J.P. Morgan Securities Inc. and Banc of America
Securities LLC, and its respective successors, in its capacity as joint lead
arranger and joint bookrunner for the credit transaction evidenced by this
Agreement.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement
(including Existing Letter of Credit deemed issued hereunder).

“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate appearing on, in the case of Dollars, Page 3750 of the Dow
Jones Market Service and, in the case of any Foreign Currency, the appropriate
page of such service which displays British Bankers Association Interest
Settlement Rates for deposits in such Foreign Currency (or, in each case, on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to deposits in the relevant Agreed Currency in the London interbank
market) at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, as the rate for deposits in the
relevant Agreed Currency with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason, then the
“LIBO Rate” with respect to such Eurocurrency Borrowing for such Interest Period
shall be the rate at which deposits in the

 

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relevant Agreed Currency in an Equivalent Amount of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London
office of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period.

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

“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.

“Loan Documents” means this Agreement (including the Company’s Guarantee
included in Article X hereof), each Borrowing Subsidiary Agreement, each
Borrowing Subsidiary Termination, each Subsidiary Guaranty, each Pledge and
Security Agreement, each other Collateral Document, any promissory notes
executed and delivered pursuant to Section 2.10(f) and any and all other
instruments and documents (including any subordination agreements) executed and
delivered in connection with any of the foregoing.

“Loan Parties” means, collectively, the Borrowers and the Subsidiary Guarantors.

“Local Time” means (i) Chicago time in the case of a Loan, Borrowing or LC
Disbursement denominated in Dollars to, or for the account of, the Company or
any Domestic Subsidiary Borrower and (ii) local time at the place of the
relevant Loan or Borrowing (or such earlier local time as is necessary for the
relevant funds to be received and transferred to the Administrative Agent for
same day value on the date the relevant reimbursement obligation is due) in the
case of a Loan or Borrowing which is denominated in a Foreign Currency or which
is to, or for the account of, a Foreign Subsidiary Borrower.

“Long-Term Debt” means any Indebtedness that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability.

“Mandatory Cost” is described in Schedule 2.02.

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, condition (financial or otherwise) or prospects of the Company
and its Subsidiaries taken as a whole or (b) the ability of any Borrower or any
other Loan Party to perform any of its obligations under this Agreement or any
other Loan Document or (c) the value of all or any material part of the
Collateral or on the Administrative Agent’s Liens on the Collateral (on behalf
of itself and the Holders of Secured Obligations) or the priority of such Liens
or (d) the rights of or benefits available to the Lenders under this Agreement
or any other Loan Document.

 

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“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit) of any one or more of the Company and its Subsidiaries in an aggregate
principal amount exceeding $10,000,000.

“Material Subsidiary” means (a) each Subsidiary Borrower and (b) each other
Subsidiary (examined on a consolidated basis with its respective Subsidiaries)
(i) which, as of the most recent fiscal quarter of the Company, for the period
of four consecutive fiscal quarters then ended, for which financial statements
have been delivered pursuant to Section 5.01, contributed greater than five
percent (5%) of the Company’s Consolidated EBITDA for such period or (ii) which
contributed greater than five percent (5%) of the Company’s Consolidated Total
Assets as of such date, excluding any Receivables Entity.

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

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“Net Proceeds” means, with respect to any event (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
fees and out-of-pocket expenses paid by the Company and its Subsidiaries to
third parties (other than fees and expenses paid to Affiliates at prices or on
terms and conditions less favorable to the Company or any such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a Sale and Leaseback Transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made by the Company and its Subsidiaries as a result of
such event to repay Indebtedness (other than the Secured Obligations) secured by
such asset, and (iii) the amount of all taxes paid (or reasonably estimated to
be payable) by the Company and its Subsidiaries, and the amount of any reserves
established by the Company and its Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by the chief financial officer
of the Company); provided that “Net Proceeds” shall include on a
dollar-for-dollar basis all amounts remaining in such reserve after such
liability shall have been satisfied in full or terminated.

“OFAC” is defined in Section 3.19.

“Off-Balance Sheet Liabilities” of a Person means (a) any repurchase obligation
or liability of such Person with respect to accounts or notes receivable sold by
such Person (including Attributable Receivables Indebtedness), (b) any
indebtedness, liability or obligation under any Sale and Leaseback Transaction
which is not a Capital Lease Obligation, (c) any indebtedness, liability or
obligation under any so-called “synthetic lease” transaction entered into by
such Person, or (d) any indebtedness, liability or obligation arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a liability on the balance
sheets of such Person (other than Operating Leases).

 

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“Operating Lease” of a Person means any lease of property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

“Operating Lease Obligations” means, as at any date of determination, the amount
obtained by aggregating the present values, determined in the case of each
particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capital Lease under GAAP) from the date on which each
fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Company and its Subsidiaries.

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.

“Overnight Foreign Currency Rate” means, for any amount payable in a Foreign
Currency, the rate of interest per annum as determined by the Administrative
Agent at which overnight or weekend deposits in the relevant currency (or if
such amount due remains unpaid for more than three (3) Business Days, then for
such other period of time as the Administrative Agent may elect) for delivery in
immediately available and freely transferable funds would be offered by the
Administrative Agent to major banks in the interbank market upon request of such
major banks for the relevant currency as determined above and in an amount
comparable to the unpaid principal amount of the related Borrowing.

“Participant” has the meaning set forth in Section 9.04.

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

“Permitted Acquisition” means (i) subject to the satisfaction of the terms and
conditions applicable thereto set forth in this Agreement, the Farnam
Acquisition and (ii) any other acquisition (whether by purchase, merger,
consolidation or otherwise but excluding in any event a Hostile Acquisition) or
series of related acquisitions by the Company or any Subsidiary of all or
substantially all the assets of, or resulting in ownership of more than 50% of
the Equity Interests in, a Person or a division or line of business of a Person
if, at the time of and immediately after giving effect thereto, (a) no Default
has occurred and is continuing or would arise after giving effect thereto,
(b) such Person or division or line of business is engaged in the same or a
similar line of business as the Company and its Subsidiaries on the Effective
Date or a business reasonably related thereto, (c) in the case of an acquisition
resulting in ownership of more than 50% of the Equity Interests in a Person, the
Company shall directly or indirectly (through one or more Subsidiaries) Control
such Person, (d) without limiting the preceding clause (a), all actions required
to be taken with respect to any acquired, newly formed or resulting Subsidiary
under Section 5.09 and Section 5.10 shall have been taken and, in the case of an
acquisition or involving a merger or consolidation, the Company and its
Subsidiaries shall be in compliance with Section 6.03 and (e) the Company and
its Subsidiaries are in compliance,

 

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on a pro forma basis reasonably acceptable to the Administrative Agent after
giving effect to such acquisition (without giving effect to any synergies or
cost savings), with the covenants contained in Sections 6.14 and 6.15 recomputed
as of the last day of the most recently ended fiscal quarter of the Company for
which financial statements are available, as if such acquisition (and any
related incurrence or repayment of Indebtedness, with any new Indebtedness being
deemed to be amortized over the applicable testing period in accordance with its
terms) had occurred on the first day of each relevant period for testing such
compliance and, if the aggregate consideration paid in respect of such
acquisition exceeds $50,000,000, the Company shall have delivered to the
Administrative Agent a certificate of a Financial Officer of the Company to such
effect, together with all relevant financial information, statements and
projections reasonably requested by the Administrative Agent.

“Permitted Encumbrances” means:

(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than sixty (60) days or are
being contested in compliance with Section 5.04;

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

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII; and

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Company or any Subsidiary;

provided that, the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Investments” means:

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

 

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

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

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

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000.

“Permitted Receivables Facility” shall mean the receivables facility or
facilities created under the Permitted Receivables Facility Documents, providing
for the sale or pledge by the Company and/or one or more other Receivables
Sellers of Permitted Receivables Facility Assets (thereby providing financing to
the Company and the Receivables Sellers) to the Receivables Entity (either
directly or through another Receivables Seller), which in turn shall sell or
pledge interests in the respective Permitted Receivables Facility Assets to
third-party investors pursuant to the Permitted Receivables Facility Documents
(with the Receivables Entity permitted to issue investor certificates, purchased
interest certificates or other similar documentation evidencing interests in the
Permitted Receivables Facility Assets) in return for the cash used by the
Receivables Entity to purchase the Permitted Receivables Facility Assets from
the Company and/or the respective Receivables Sellers, in each case as more
fully set forth in the Permitted Receivables Facility Documents; provided, that
(i) the maximum aggregate amount of Attributable Receivables Indebtedness
permitted to be outstanding (and the actual amount outstanding) thereunder shall
not exceed $100,000,000 at any time, and (ii) the investors party thereto shall
have entered into an intercreditor agreement with the Administrative Agent, for
itself and the Holders of Secured Obligations, in form and substance reasonably
satisfactory to the Administrative Agent, providing for the treatment of Liens
on the Permitted Receivables Facility Assets.

“Permitted Receivables Facility Assets” shall mean (i) Receivables (whether now
existing or arising in the future) of the Company and its Subsidiaries which are
transferred or pledged to the Receivables Entity pursuant to the Permitted
Receivables Facility and any related Permitted Receivables Related Assets which
are also so transferred or pledged to the Receivables Entity and all proceeds
thereof and (ii) loans to the Company and its Subsidiaries secured by
Receivables (whether now existing or arising in the future) of the Company and
its Subsidiaries which are made pursuant to the Permitted Receivables Facility.

“Permitted Receivables Facility Documents” shall mean each of the documents and
agreements entered into in connection with the Permitted Receivables Facility,
including all

 

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documents and agreements relating to the issuance, funding and/or purchase of
certificates and purchased interests, all of which documents and agreements
shall be in form and substance reasonably satisfactory to the Administrative
Agent, in each case as such documents and agreements may be amended, modified,
supplemented, refinanced or replaced from time to time so long as (i) any such
amendments, modifications, supplements, refinancings or replacements do not
impose any conditions or requirements on the Company or any of its Subsidiaries
that are more restrictive in any material respect than those in existence
immediately prior to any such amendment, modification, supplement, refinancing
or replacement, (ii) any such amendments, modifications, supplements,
refinancings or replacements are not adverse in any material respect to the
interests of the Lenders and (iii) any such amendments, modifications,
supplements, refinancings or replacements are otherwise in form and substance
reasonably satisfactory to the Administrative Agent.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pledge and Security Agreement” means (i) that certain Pledge and Security
Agreement dated as of the Effective Date in the form of Exhibit G by and among
the Loan Parties party thereto and the Administrative Agent for the benefit of
the Holders of Secured Obligations or (ii) any similar pledge and/or security
agreement governed by applicable local law with respect to a Foreign Subsidiary
(modified as deemed reasonably acceptable by the Administrative Agent to reflect
foreign law provisions, customs and practices), in any such case, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

“Pounds Sterling” means the lawful currency of the United Kingdom.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, National Association as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

“Proposed New Lender” is defined in Section 2.20.

“PTR Scheme” means the Provisional Treaty Relief scheme as described in the
United Kingdom’s Inland Revenue Guidelines dated January 2003 and administered
by H.M. Revenue & Custom’s Centre for Non-Residents.

“Receivables” shall mean all accounts receivable (including, without limitation,
all rights to payment created by or arising from sales of goods, leases of goods
or the rendition of services rendered no matter how evidenced whether or not
earned by performance).

 

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“Receivables Entity” shall mean a wholly-owned Subsidiary of the Company which
engages in no activities other than in connection with the financing of accounts
receivable of the Receivables Sellers and which is designated (as provided
below) as the “Receivables Entity” (a) no portion of the Indebtedness or any
other obligations (contingent or otherwise) of which (i) is guaranteed by the
Company or any other Subsidiary of the Company (excluding guarantees of
obligations (other than the principal of, and interest on, Indebtedness))
pursuant to Standard Securitization Undertakings, (ii) is recourse to or
obligates the Company or any other Subsidiary of the Company in any way (other
than pursuant to Standard Securitization Undertakings) or (iii) subjects any
property or asset of the Company or any other Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any of its Subsidiaries has any contract, agreement,
arrangement or understanding (other than pursuant to the Permitted Receivables
Facility Documents (including with respect to fees payable in the ordinary
course of business in connection with the servicing of accounts receivable and
related assets)) on terms less favorable to the Company or such Subsidiary than
those that might be obtained at the time from persons that are not Affiliates of
the Company, and (c) to which neither the Company nor any other Subsidiary of
the Company has any obligation to maintain or preserve such entity’s financial
condition or cause such entity to achieve certain levels of operating results.
Any such designation shall be evidenced to the Administrative Agent by filing
with the Administrative Agent an officer’s certificate of the Company certifying
that, to the best of such officer’s knowledge and belief after consultation with
counsel, such designation complied with the foregoing conditions.

“Receivables Sellers” shall mean the Company and those Subsidiaries that are
from time to time party to the Permitted Receivables Facility Documents.

“Register” has the meaning set forth in Section 9.04.

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

“Required Lenders” means, at any time, Lenders having Revolving Credit
Exposures, unused Revolving Commitments, outstanding principal amount of the
Term Loans and unused Term Loan Commitments representing more than 50% of the
sum of the total Revolving Credit Exposures, unused Revolving Commitments, the
aggregate outstanding principal amount of the Term Loans and unused Term Loan
Commitments at such time.

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

“Revolving Commitment” means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit and

 

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Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09,
(b) increased from time to time pursuant to Section 2.20 and (c) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Revolving
Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or
Commitment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable.

“Revolving Commitment Increase” is defined in Section 2.20(a).

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and its
LC Exposure and Swingline Exposure at such time.

“Revolving Lender” means any Lender with a Revolving Commitment.

“Revolving Loan” means a Loan made pursuant to Section 2.03.

“Revolving Loan Maturity Date” means February 28, 2011.

“S&P” means Standard & Poor’s.

“Sale and Leaseback Transaction” means any sale or other transfer of assets or
property by any Person with the intent to lease any such asset or property as
lessee.

“Secured Obligations” means all indebtedness (including interest accruing during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding),
obligations and liabilities of any of the Company and its Subsidiaries to any of
the Holders of Secured Obligations, individually or collectively, existing on
the Effective Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents or
any Swap Agreement between any Loan Party and a Lender or affiliate thereof or
in respect of any of the Loans made or reimbursement or other obligations
incurred or any of the Letters of Credit or other instruments at any time
evidencing any thereof.

“Senior Subordinated Note Indenture” means that certain Indenture, dated as of
January 30, 2003, by and among the Company and certain of its Subsidiaries and
Wells Fargo Bank, National Association, as trustee thereunder, as the same may
be amended, restated, supplemented, modified, extended, refinanced or replaced
from time to time pursuant to the terms of this Agreement.

“Senior Subordinated Notes” means the Company’s 9.125% Senior Subordinated Notes
due 2013 issued pursuant to the Senior Subordinated Note Indenture in an
aggregate principal amount of $150,000,000, as the same may be amended,
restated, supplemented, modified, extended, refinanced or replaced from time to
time pursuant to the terms of this Agreement.

 

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“Solvent” means, in reference to any Person, (a) the fair value (measured on a
going concern basis) of the assets of such Person and its subsidiaries, taken as
a whole, will exceed their debts and liabilities, subordinated, contingent or
otherwise; (b) the present fair saleable value (measured on a going concern
basis) of the property of such Person and its subsidiaries, taken as a whole,
will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured in
the ordinary course of business; (c) such Person and its subsidiaries, taken as
a whole, will be able to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) such Person and its subsidiaries, taken as a whole, will not
have unreasonably small capital with which to conduct the business in which they
are engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.

“Standard Securitization Undertakings” shall mean representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary thereof
in connection with the Permitted Receivables Facility which are reasonably
customary in an accounts receivable financing transaction.

“Statutory Reserve Rate” means, with respect to any currency, a fraction
(expressed as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum
reserve, liquid asset, fees or similar requirements (including any marginal,
special, emergency or supplemental reserves or other requirements) established
by any central bank, monetary authority, the Board, the Financial Services
Authority, the European Central Bank or other Governmental Authority for any
category of deposits or liabilities customarily used to fund loans in such
currency, expressed in the case of each such requirement as a decimal. Such
reserve percentages shall, in the case of US Dollar denominated Loans, include
those imposed pursuant to Regulation D of the Board. Eurocurrency Loans shall be
deemed to be subject to such reserve, liquid asset or similar requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under any applicable law, rule or
regulation, including Regulation D. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve,
liquid asset or similar requirement.

“Subordinated Indebtedness” means any Indebtedness of the Company or any of its
Subsidiaries incurred from time to time the payment of which and, if applicable,
Liens securing such Indebtedness, are subordinated to payment of the Secured
Obligations under the Loan Documents to the written satisfaction of, and the
terms and conditions of which are otherwise reasonably satisfactory to, the
Administrative Agent, including, without limitation, the Indebtedness evidenced
by the Senior Subordinated Notes.

“Subordinated Indebtedness Documents” means any document, agreement or
instrument evidencing any Subordinated Indebtedness or entered into in
connection with any Subordinated Indebtedness, including, without limitation,
the Senior Subordinated Note Indenture and the Senior Subordinated Notes.

 

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“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

“Subsidiary” means any subsidiary of the Company. Unless otherwise expressly
provided, all references herein to a “Subsidiary” shall mean a Subsidiary of the
Company after giving effect to the Farnam Acquisition.

“Subsidiary Borrower” means any Domestic Subsidiary Borrower or any Foreign
Subsidiary Borrower.

“Subsidiary Guarantor” means each Material Subsidiary and each other Subsidiary
required to become a “Subsidiary Guarantor” as a result of Section 6.14 (other
than any Affected Foreign Subsidiary or Receivables Entity). The Subsidiary
Guarantors on the Effective Date are identified as such in Schedule 3.01 hereto.

“Subsidiary Guaranty” means (i) that certain Guaranty dated as of the Effective
Date in the form of Exhibit H (including any and all supplements thereto) and
executed by each Subsidiary Guarantor, or (ii) any similar guaranty governed by
applicable local law with respect to a Foreign Subsidiary (modified as deemed
reasonably acceptable by the Administrative Agent to reflect foreign law
provisions, customs and practices), in each case as amended, restated,
supplemented or otherwise modified from time to time.

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

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Revolving Credit Percentage of the total
Swingline Exposure at such time.

“Swingline Lender” means JPMorgan Chase Bank, National Association, in its
capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

 

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“Syndication Agent” means Bank of America, N.A., in its capacity as syndication
agent for the credit facility evidenced by this Agreement.

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

“Term Loan” means a Tranche B Term Loan and/or an Incremental Term Loan.

“Term Loan Commitment” means a Tranche B Term Loan Commitment and/or an
Incremental Term Loan Commitment.

“Total Leverage Ratio” has the meaning set forth in Section 6.15(b).

“Tranche B Term Loan” means a Loan made pursuant to Section 2.01(b)(i).

“Tranche B Term Loan Commitment” means, with respect to each Lender, the
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder. The
amount of each Lender’s Tranche B Term Loan Commitment is set forth on Schedule
2.01.

“Tranche B Term Loan Maturity Date” means September 30, 2012.

“Transactions” means the execution, delivery and performance by the Loan Parties
of this Agreement and the other Loan Documents, the borrowing of Loans, the use
of the proceeds thereof and the issuance of Letters of Credit hereunder, and the
consummation of the Farnam Acquisition.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“UK Borrower” means a Foreign Subsidiary of the Company that is organized under
the laws of England and Wales and that is, or may hereafter become, a Subsidiary
Borrower hereunder, subject to the terms and conditions of this Agreement.

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

“Working Capital” means, at any date, the excess of current assets of the
Company and its Subsidiaries on such date over current liabilities of the
Company and its Subsidiaries on such date, all determined on a consolidated
basis in accordance with GAAP.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

 

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SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Company notifies the Administrative Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Company that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

SECTION 1.05. Company Acting on Behalf of Itself and Subsidiary Borrowers.
Whether or not expressly provided herein, each notice or certificate delivered
hereunder or in connection herewith or the other Loan Documents by or to the
Company (in its capacity as a Borrower) or an officer thereof, and each notice
or consent requested by or from the Company (in its capacity as a Borrower) or
an officer thereof, shall be so delivered or given to, by or on behalf of the
Company for the benefit of itself and the Subsidiary Borrowers. In furtherance
and without limitation of the foregoing, the Company is hereby authorized and
given an irrevocable power of attorney by and on behalf of each of the
Subsidiary Borrowers to perform and accept any and all such actions on its
behalf under this Agreement and the other Loan Documents.

 

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ARTICLE II

The Credits

SECTION 2.01. Commitments.

(a) Subject to the terms and conditions set forth herein, each Lender agrees to
make Revolving Loans to the Borrowers in Agreed Currencies from time to time
during the Availability Period in an aggregate principal amount that will not
result in (i) such Lender’s Revolving Credit Exposure exceeding the Dollar
Amount of such Lender’s Revolving Commitment or (ii) subject to Section 2.04,
the sum of the total Revolving Credit Exposures exceeding the Aggregate
Revolving Commitment. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow
Revolving Loans.

(b) Subject to the terms and conditions set forth herein (i) each Lender agrees
to make a Tranche B Term Loan to the Company on the Effective Date, in Dollars,
in a principal amount equal to its Tranche B Term Loan Commitment and (ii) each
Lender that has an Incremental Term Loan Commitment in accordance with the
provisions of Section 2.20 agrees to make an Incremental Term Loan to the
Company on the applicable Increase Effective Date for such Incremental Term
Loan, in Dollars, in a principal amount equal to its Incremental Term Loan
Commitment for such tranche of Incremental Term Loans. Amounts repaid or prepaid
in respect of Term Loans may not be reborrowed.

SECTION 2.02. Loans and Borrowings.

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Revolving Lenders ratably in accordance with their
respective Revolving Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender’s failure to make Loans as
required.

(b) Subject to Section 2.14, each Revolving Borrowing and each Term Loan
Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the
relevant Borrower may request in accordance herewith; provided that each ABR
Loan shall only be made in Dollars. Each Swingline Loan shall be an ABR Loan.
Each Lender at its option may make any Eurocurrency Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the relevant
Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurocurrency Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 (or the Approximate Equivalent Amount of
each such amount if such Borrowing is denominated in a Foreign Currency). At the
time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $1,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the Aggregate Revolving Commitment or that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.06(e). Each Swingline Loan shall be in an amount that is an
integral multiple of $250,000 and not less than $500,000. Borrowings of more
than one Type and Class may be outstanding at the same time.

 

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(d) Notwithstanding any other provision of this Agreement, no Borrower shall be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested (i) with respect to a Revolving Borrowing would end
after the Revolving Loan Maturity Date, (ii) with respect to a Tranche B Term
Loan Borrowing would end after the Tranche B Term Loan Maturity Date or
(iii) with respect to an Incremental Term Loan Borrowing would end after the
applicable maturity date for the tranche of Incremental Term Loans subject
thereto.

SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing or a
Term Loan Borrowing, the applicable Borrower, or the Company on behalf of the
applicable Borrower, shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurocurrency Borrowing, not later than noon,
Local Time, three (3) Business Days (in the case of a Eurocurrency Borrowing
denominated in Dollars to the Company) or four (4) Business Days (in the case of
a Eurocurrency Borrowing denominated in a Foreign Currency or a Eurocurrency
Borrowing to a Foreign Subsidiary Borrower), in each case before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than noon,
Chicago time, one (1) Business Day before the date of the proposed Borrowing;
provided that any such notice of an ABR Revolving Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be
given not later than 12:00 noon, Chicago time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or facsimile to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the applicable Borrower, or the Company on behalf of the
applicable Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:

(i) the aggregate amount of the requested Borrowing and whether such Borrowing
is to be a Revolving Loan, a Tranche B Term Loan or an Incremental Term Loan;

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

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

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

(v) the location and number of the applicable Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Borrowing is specified, then, in the case of a
Borrowing denominated in Dollars to the Company or any Domestic Subsidiary
Borrower, the requested Borrowing shall be an ABR Borrowing. If no Interest
Period is specified with respect to any requested Eurocurrency Revolving
Borrowing, then the relevant Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a

 

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Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. Determination of Dollar Amounts. The Administrative Agent will
determine the Dollar Amount of each Eurocurrency Borrowing (a) as of the date
three (3) Business Days prior to the date of such Borrowing or, if applicable,
date of conversion/continuation of any Borrowing as a Eurocurrency Borrowing,
(b) as of the last Business Day of each calendar month and (c) during the
continuation of an Event of Default, on any other Business Day elected by the
Administrative Agent in its discretion or upon instruction by the Required
Lenders. Each day upon or as of which the Administrative Agent determines Dollar
Amounts as described in the preceding clauses (a), (b) and (c) is herein
described as a “Computation Date” with respect to each Borrowing for which a
Dollar Amount is determined on or as of such day.

SECTION 2.05. Swingline Loans.

(a) Subject to the terms and conditions set forth herein, the Swingline Lender
agrees to make Swingline Loans in Dollars to the Company from time to time
during the Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $10,000,000 or (ii) the Dollar Amount of
the aggregate amount of the Lenders’ Revolving Credit Exposures exceeding the
Aggregate Revolving Commitment; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Company may borrow, prepay and reborrow Swingline Loans.

(b) To request a Swingline Loan, the Company shall notify the Administrative
Agent of such request by telephone (confirmed by facsimile), not later than 1:00
p.m., Chicago time, on the day of a proposed Swingline Loan. Each such notice
shall be irrevocable and shall specify the requested date (which shall be a
Business Day) and amount of the requested Swingline Loan. The Administrative
Agent will promptly advise the Swingline Lender of any such notice received from
the Company. The Swingline Lender shall make each Swingline Loan available to
the Company by means of a credit to the general deposit account of the Company
with the Swingline Lender (or, in the case of a Swingline Loan made to finance
the reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the Issuing Bank) by 4:00 p.m., Chicago time, on the requested
date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent
and the Revolving Lenders not later than 11:00 a.m., Chicago time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Revolving Lender’s Applicable Revolving Credit Percentage of such Swingline
Loan or Swingline Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s
Applicable Revolving Credit Percentage of such Swingline

 

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Loan or Loans. Each Revolving Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever. Each
Revolving Lender shall comply with its obligation under this paragraph by wire
transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Revolving Lender (and
Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the
Revolving Lenders), and the Administrative Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Revolving Lenders. The
Administrative Agent shall notify the Company of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in
respect of such Swingline Loan shall be made to the Administrative Agent and not
to the Swingline Lender. Any amounts received by the Swingline Lender from the
Company (or other party on behalf of the Company) in respect of a Swingline Loan
after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent;
any such amounts received by the Administrative Agent shall be promptly remitted
by the Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear; provided that any such payment so remitted shall be repaid
to the Swingline Lender or to the Administrative Agent, as applicable, if and to
the extent such payment is required to be refunded to the Company for any
reason. The purchase of participations in a Swingline Loan pursuant to this
paragraph shall not relieve the Company of any default in the payment thereof.

SECTION 2.06. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Company
may request the issuance of Letters of Credit denominated in Dollars for its own
account or for the account of any Subsidiary of the Company, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period; provided, however,
that, notwithstanding the issuance of any Letter of Credit for the account of
any Subsidiary of the Company, any and all reimbursement obligations with
respect to LC Disbursements, fees, costs, expenses, indemnities or other
obligations owing with respect any such Letter of Credit under this Agreement
shall constitute primary obligations of the Company as a named co-applicant on
such Letter of Credit (and, if the Issuing Bank so requests, such obligations
shall be joint and several obligations the Company and such Subsidiary, as
evidenced by a separate agreement in form and substance reasonably satisfactory
to the Company and the Issuing Bank, signed by such Subsidiary, providing for
such joint and several liability and affirming such Subsidiary’s assumption of
all of the covenants and other obligations set forth in this Section 2.06). In
the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Company to, or entered into by
the Company with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an

 

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outstanding Letter of Credit), the Company shall hand deliver or facsimile (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the relevant account party, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit; provided, however, that notwithstanding
the foregoing, no Existing Letter of Credit shall be extended beyond, or renewed
following, the current expiry date thereof or amended to accomplish the
foregoing or to increase the undrawn face amount from the current undrawn face
amount thereof, but rather shall terminate on its current expiry date and, if
the Company so requests, may be reissued as a new Letter of Credit in accordance
with the terms hereof by JPMorgan or one of its Affiliates in its capacity as
Issuing Bank. If requested by the Issuing Bank, the Company also shall submit a
letter of credit application on the Issuing Bank’s standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Company shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the amount of the LC Exposure shall not exceed $50,000,000 and
(ii) subject to Section 2.04, the total Revolving Credit Exposures shall not
exceed the Aggregate Revolving Commitment.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to the Revolving Loan Maturity Date; provided,
however, that the Existing Letters of Credit shall expire on the dates set forth
on Schedule 2.06 hereto.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Revolving Credit Percentage of the aggregate Dollar Amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Revolving Lender’s Applicable Revolving Credit Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Company on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Company for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

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(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Company shall reimburse such LC Disbursement by
paying to the Administrative Agent the amount of such LC Disbursement, not later
than 1:00 p.m., Chicago time, on the date that such LC Disbursement is made, if
the Company shall have received notice of such LC Disbursement prior to 11:00
a.m., Chicago time, on such date, or, if such notice has not been received by
the Company prior to such time on such date, then not later than 1:00 p.m.,
Chicago time, on (i) the Business Day that the Company receives such notice, if
such notice is received prior to 11:00 a.m., Chicago time, on the day of
receipt, or (ii) the Business Day immediately following the day that the Company
receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that the Company may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in
the amount of such LC Disbursement and, to the extent so financed, the Company’s
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Borrowing or Swingline Loan. If the Company fails to
make such payment when due, the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from the Company
in respect thereof and such Revolving Lender’s Applicable Revolving Credit
Percentage thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Revolving Credit
Percentage of the payment then due from the Company, in the same manner as
provided in Section 2.07 with respect to Loans made by such Revolving Lender
(and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of
the Revolving Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Company
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that the Revolving Lenders have
made payments pursuant to this paragraph to reimburse the Issuing Bank, then to
such Revolving Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Company of its obligation to reimburse such LC
Disbursement.

(f) Obligations Absolute. The Company’s obligation to reimburse LC Disbursements
as provided in paragraph (e) of this Section shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Company’s obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the

 

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preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Company to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Company to the extent permitted by applicable law) suffered by the Company that
are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Company by telephone (confirmed by facsimile) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Company of its obligation to reimburse the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Company shall reimburse such LC Disbursement in full on the date such
LC Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Company reimburses such LC Disbursement, at the rate per annum
then applicable to ABR Revolving Loans; provided that, if the Company fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Revolving Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Revolving Lender to the extent of such payment.

(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among the Company, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Company shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this

 

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Agreement with respect to Letters of Credit to be issued by it thereafter and
(ii) references herein to the term “Issuing Bank” shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from the
Administrative Agent or those Lenders with Revolving Credit Exposure
representing greater than 50% of the total Revolving Credit Exposure (or, if the
maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of
cash collateral pursuant to this paragraph, the Company shall deposit in an
account with the Administrative Agent, in the name of the Administrative Agent
and for the benefit of the Lenders, an amount in cash equal to 105% of the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Company described in clause (h) or (i) of Article VII. The
Company also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.11(b). Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account and the
Company hereby grants the Administrative Agent a security interest in such
account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Company’s risk and expense, such deposits shall
not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Company for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Company under this Agreement. If the Company is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, such amount (to the extent not applied as aforesaid) shall
be returned to the Company within three (3) Business Days after all Events of
Default have been cured or waived.

(k) Existing Letters of Credit. Certain letters of credit were issued for the
account of the Company or its Subsidiaries under the Existing Credit Agreement
and remain outstanding on the Effective Date are identified on Schedule 2.06
(the “Existing Letters of Credit”). As of the Effective Date, (i) the Existing
Letters of Credit shall be deemed to be Letters of Credit issued pursuant to and
in compliance with this Section 2.06, (ii) the undrawn amount of the Existing
Letters of Credit and the unreimbursed amount of LC Disbursements with respect
to the Existing Letters of Credit shall be included in the calculation of LC
Exposure and (iii) the provisions of this Section 2.06, Section 2.12(b) and
Section 2.18 shall apply to the

 

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Existing Letters of Credit as if such Letters of Credit were issued hereunder,
and the Company and the Lenders hereby expressly acknowledge their respective
obligations hereunder with respect to the Existing Letters of Credit. The
Existing Letters of Credit shall be subject to limitations on extensions,
renewals and amendments otherwise set forth in this Section 2.06.

SECTION 2.07. Funding of Borrowings.

(a) Each Lender shall make each Loan to be made by it hereunder on the proposed
date thereof by wire transfer of immediately available funds (i) in the case of
Loans denominated in Dollars to the Company, by 1:00 p.m., Chicago time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders and (ii) in the case of each Loan denominated
in a Foreign Currency or to a Foreign Subsidiary Borrower, by 1:00 p.m., Local
Time, in the city of the Administrative Agent’s Eurocurrency Payment Office for
such currency and Borrower and at such Eurocurrency Payment Office for such
currency and Borrower; provided that Swingline Loans shall be made as provided
in Section 2.05. The Administrative Agent will make such Loans available to the
relevant Borrower by promptly crediting the amounts so received, in like funds,
to (x) an account of such Borrower maintained with the Administrative Agent in
New York City or Chicago and designated by the relevant Borrower in the
applicable Borrowing Request, in the case of Loans denominated in Dollars to the
Company or a Domestic Subsidiary Borrower and (y) an account of such Borrower
maintained with the Administrative Agent in the relevant city or other
jurisdiction and designated by such Borrower in the applicable Borrowing
Request, in the case of Loans denominated in a Foreign Currency or to a Foreign
Subsidiary Borrower; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank.

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

 

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SECTION 2.08. Interest Elections.

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

(b) To make an election pursuant to this Section, a Borrower, or the Company on
its behalf, shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if
such Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or facsimile to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the relevant Borrower, or the Company on its behalf. Notwithstanding any
contrary provision herein, this Section shall not be construed to permit any
Borrower to (i) change the currency of any Borrowing, (ii) elect an Interest
Period for Eurocurrency Loans that does not comply with Section 2.02(d) or
(iii) convert any Borrowing to a Borrowing of a Type not available under the
Class of Commitments pursuant to which such Borrowing was made.

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

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

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

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

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

If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then the applicable Borrower shall be deemed to
have selected an Interest Period of one month’s duration.

 

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

(e) If the relevant Borrower, or the Company on its behalf, fails to deliver a
timely Interest Election Request with respect to a Eurocurrency Borrowing prior
to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period
(i) in the case of a Borrowing denominated in Dollars, such Borrowing shall be
converted to an ABR Borrowing and (ii) in the case of a Borrowing denominated in
a Foreign Currency, such Borrowing shall automatically continue as a
Eurocurrency Borrowing in the same Agreed Currency with an Interest Period of
one month unless (x) such Eurocurrency Borrowing is or was repaid in accordance
with Section 2.11 or (y) such Borrower, or the Company on its behalf, shall have
given the Administrative Agent an Interest Election Request requesting that, at
the end of such Interest Period, such Eurocurrency Borrowing continue as a
Eurocurrency Borrowing for the same or another Interest Period. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Company, then, so long as an Event of Default is continuing
(i) no outstanding Borrowing may be converted to or continued as a Eurocurrency
Borrowing and (ii) unless repaid, each Eurocurrency Borrowing in Dollars shall
be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.

SECTION 2.09. Termination and Reduction of Commitments.

(a) Unless previously terminated, the (i) the Term Loan Commitments shall
terminate at 5:00 p.m., New York time, on the Effective Date, (ii) any
Incremental Term Loan Commitments shall terminate at 5:00 p.m., New York Time on
the Increase Effective Date applicable thereto and (iii) the Revolving
Commitments shall terminate on the Revolving Loan Maturity Date.

(b) The Company may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $5,000,000 and not less than $15,000,000
and (ii) the Company shall not terminate or reduce the Revolving Commitments if,
after giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.11, the Dollar Amount of the sum of the Revolving Credit Exposures
would exceed the Aggregate Revolving Commitment.

(c) The Company shall notify the Administrative Agent of any election to
terminate or reduce the Commitments of any Class under paragraph (b) of this
Section at least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments of
any Class shall be permanent. Each reduction of the Commitments of any Class
shall be made ratably among the Lenders in accordance with their respective
Commitments with respect to such Class.

 

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SECTION 2.10. Repayment of Loans; Evidence of Debt.

(a) Each Borrower hereby unconditionally promises to pay (i) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Revolving Loan made to such Borrower on the earlier of the
Revolving Loan Maturity Date and the date of termination of the Revolving
Commitments in the currency of such Loan, (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Term Loan as
provided in Section 2.10(b), and (iii) in the case of the Company, to the
Swingline Lender the then unpaid principal amount of each Swingline Loan on the
earliest of (x) the Revolving Loan Maturity Date, (y) the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two (2) Business Days after such Swingline Loan is made and (z) the
date of termination of the Revolving Commitments; provided that on each date
that a Revolving Borrowing is made, the Company shall repay all Swingline Loans
then outstanding.

(b) Subject to adjustment as described below and the full repayment thereof on
the Tranche B Term Loan Maturity Date, the Company shall repay the Tranche B
Term Loans on each date set forth below in an aggregate principal amount equal
to the amount set forth opposite such date:

 

Date

   Principal Amount

June 30, 2006

   $750,000

September 30, 2006

   $750,000

December 31, 2006

   $750,000

March 31, 2007

   $750,000

June 30, 2007

   $750,000

September 30, 2007

   $750,000

December 31, 2007

   $750,000

March 31, 2008

   $750,000

June 30, 2008

   $750,000

September 30, 2008

   $750,000

December 31, 2008

   $750,000

March 31, 2009

   $750,000

June 30, 2009

   $750,000

September 30, 2009

   $750,000

December 31, 2009

   $750,000

March 31, 2010

   $750,000

June 30, 2010

   $750,000

September 30, 2010

   $750,000

December 31, 2010

   $750,000

March 31, 2011

   $750,000

June 30, 2011

   $750,000

September 30, 2011

   $750,000

December 31, 2011

   $750,000

March 31, 2012

   $750,000

June 30, 2012

   $750,000

Tranche B Term Loan Maturity Date

   Remaining Unpaid Balance

 

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To the extent not previously paid, all Tranche B Term Loans and all accrued and
unpaid interest due thereon shall be due and payable on the Tranche B Term Loan
Maturity Date. Prepayment of a Tranche B Term Loan Borrowing shall be applied to
reduce the scheduled repayments of the Tranche B Term Loan Borrowings to be made
pursuant to this Section in inverse order of maturity. The Company shall repay
any Incremental Term Loans on the dates and in such increments as shall be
determined with respect to such Incremental Term Loans in accordance with
Section 2.20. In addition to the scheduled payments on the Term Loans, the
Borrower (i) may make the voluntary prepayments described in Section 2.11(a) for
credit against the scheduled payments on the Term Loans pursuant to
Section 2.11(a) and (ii) shall make the mandatory prepayments prescribed in
Section 2.11(b) for credit against the scheduled payments on the Term Loans
pursuant to Section 2.11(b). Each repayment of a Term Loan Borrowing shall be
applied ratably to the Loans included in the repaid Borrowing. Repayments of
Term Loan Borrowings shall be accompanied by accrued interest on the amount
repaid.

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

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

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

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

 

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SECTION 2.11. Prepayment of Loans.

(a) Voluntary Prepayments. Any Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with the provisions of this Section 2.11(a). The applicable
Borrower, or the Company on behalf of the applicable Borrower, shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by telephone (confirmed by facsimile) of any prepayment
hereunder (i) in the case of prepayment of a Eurocurrency Borrowing, not later
than noon, Local Time, three (3) Business Days before the date of prepayment,
(ii) in the case of prepayment of an ABR Borrowing, not later than noon, Chicago
time, one (1) Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 1:00 p.m., Chicago time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to
the extent required by Section 2.13 and (ii) break funding payments pursuant to
Section 2.16. Prepayments of Term Loans shall also be subject to the
requirements of Section 2.10(b).

(b) Mandatory Prepayments.

(i) If at any time, (A) other than as a result of fluctuations in currency
exchange rates, the sum of the aggregate principal Dollar Amount of all of the
Revolving Credit Exposures (calculated, with respect to those Borrowings
denominated in Foreign Currencies, as of the most recent Computation Date with
respect to each such Borrowing) exceeds the Aggregate Revolving Commitment and
(B) solely as a result of fluctuations in currency exchange rates, the sum of
the aggregate principal Dollar Amount of all of the Revolving Credit Exposures
(as so calculated) exceeds 105% of the Aggregate Revolving Commitment, the
Borrowers shall within one (1) Business Day after demand repay Revolving
Borrowings and, if no Revolving Borrowings are then outstanding, cash
collateralize LC Disbursements in an account with the Administrative Agent
pursuant to Section 2.06(j), in an aggregate principal amount sufficient to
eliminate any such excess.

(ii) In the event the Company or any Subsidiary receives Net Proceeds from the
issuance or sale by the Company or any Subsidiary of any Equity Interests, the
Borrowers shall make a mandatory prepayment of the Loans, within five
(5) Business Days after the Company’s or any Subsidiaries’ receipt of such Net
Proceeds, in an aggregate amount equal to 50% of such Net Proceeds.
Notwithstanding the foregoing, Net Proceeds from any such issuance or sale of
Equity Interests with respect to which the Company shall have given the
Administrative Agent written notice, within five (5) Business Days of receipt of
such Net Proceeds, of its intention to use such Net Proceeds

 

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within one hundred eighty (180) days following such sale or issuance to finance
a Permitted Acquisition, shall not be subject to the provisions of the first
sentence of this Section 2.11(b)(ii) unless and to the extent that such
applicable period shall have expired without such Net Proceeds being used for
such Permitted Acquisition.

(iii) In the event the Company or any Subsidiary receives any Net Proceeds from
an Asset Sale (other than an Asset Sale of the type permitted by
Section 6.10(a), (b) or (c) and other than a sale of Equity Interests addressed
by clause (ii) above), the Borrowers shall make a mandatory prepayment of the
Loans, within five (5) Business Days after the Company’s or any Subsidiary’s
receipt of such Net Proceeds, in an aggregate amount equal to 100% of such Net
Proceeds. Notwithstanding the foregoing, Net Proceeds of any such Asset Sales
with respect to which the Company shall have given the Administrative Agent
written notice, within five (5) Business Days of receipt of such Net Proceeds,
of its intention to replace the property subject to any such Asset Sale or
invest such Net Proceeds in the purchase of assets (other than securities,
unless those securities represent Equity Interests in an entity that becomes a
Subsidiary Guarantor) to be used by one or more of the Company or its
Subsidiaries in their businesses within one hundred eighty (180) days following
such Asset Sale, shall not be subject to the provisions of the first sentence of
this Section 2.11(b)(iii) unless and to the extent that such applicable period
shall have expired without such Net Proceeds being used for such replacement or
investment.

(iv) In the event and on such occasion that the Company or any Subsidiary
receives any Net Proceeds from any casualty or other insured damage to, or any
taking under power of eminent domain or by casualty or other insured damage to,
or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Company or any Subsidiary (any such
event being referred to as a “Recovery Event”), within five (5) Business Days
after the Company’s or any Subsidiaries’ receipt of such Net Proceeds, the
Company shall make a mandatory prepayment of the Loans in an aggregate amount
equal to 100% of such Net Proceeds. Notwithstanding the foregoing, Net Proceeds
of any such Recovery Event with respect to which the Company shall have given
the Administrative Agent written notice, within five (5) Business Days of
receipt of such Net Proceeds, of its intention to replace, repair or restore the
property subject to any such Recovery Event or invest such Net Proceeds in the
purchase of real property, equipment or tangible assets to be used by one or
more of the Company or its Subsidiaries in their businesses within one hundred
eighty (180) days following such event, shall not be subject to the provisions
of the first sentence of this Section 2.11(b)(iv) unless and to the extent that
such applicable period shall have expired without such replacement or investment
having been made.

(v) Following the end of each fiscal year of the Company, commencing with the
fiscal year ending on or about September 30, 2006, the Borrowers shall prepay
the Loans in aggregate amount equal to (i) 50% of Excess Cash Flow of the
Company and its Consolidated Subsidiaries for such fiscal year if the Total
Leverage Ratio as of the last date of such fiscal year was greater than or equal
to 4.0 to 1.0; (ii) 25% of Excess Cash Flow of the Company and its Consolidated
Subsidiaries for such fiscal year if the Total Leverage Ratio as of the last
date of such fiscal year was greater than or equal to 3.5 to

 

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1.0 but less than 4.0 to 1.0; and (iii) 0% of Excess Cash Flow of the Company
and its Consolidated Subsidiaries for such fiscal year if the Total Leverage
Ratio as of the last date of such fiscal year was less than 3.5 to 1.0. Each
prepayment pursuant to this paragraph shall be made not later than the earlier
to occur of the tenth (10th) day after the date on which financial statements
are delivered pursuant to Section 5.01 with respect to the fiscal year for which
Excess Cash Flow of the Company and its Consolidated Subsidiaries is being
calculated and the one hundred twentieth (120th) day after the end of such
fiscal year.

(vi) Each mandatory prepayment required by clauses (b)(ii), (b)(iii), (b)(iv)
and (b)(v) of this Section 2.11 shall be referred to in this clause (vi) as a
“Designated Prepayment.” Designated Prepayments shall be applied first to repay
the then remaining installments of the Term Loans (allocated ratably between or
among the Tranche B Term Loans and any tranches of Incremental Term Loans) in
the inverse order of maturity, and second, upon repayment in full of the Term
Loans, to prepay the Swingline Loans and then the Revolving Loans then
outstanding (with no accompanying reduction in the Aggregate Revolving
Commitment). Designated Prepayments of Loans shall first be applied to ABR Loans
and to any Eurocurrency Loans maturing on such date and then to subsequently
maturing Eurocurrency Loans in order of maturity. Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing. All
mandatory prepayment hereunder shall be accompanied by (x) accrued interest to
the extent required by Section 2.13 and (y) break fund payments pursuant to
Section 2.16.

SECTION 2.12. Fees.

(a) The Company agrees to pay to the Administrative Agent for the account of
each Revolving Lender a commitment fee, which shall accrue at the Applicable
Rate on the average daily unused Dollar Amount (without giving effect to the
outstanding principal amount of any Swingline Loan) of the Revolving Commitment
of such Lender during the period from and including the Effective Date to but
excluding the date on which such Revolving Commitment terminates. Accrued
commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).

(b) The Company agrees to pay (i) to the Administrative Agent for the account of
each Revolving Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the Applicable Rate (which shall be the
same Applicable Rate used to determine the interest rate applicable to
Eurocurrency Revolving Loans) on the average daily amount of such Lender’s LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender’s Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of
0.125% per annum on the average daily amount of the LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of

 

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termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third (3rd) Business Day following such last
day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
ten (10) days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

(c) The Company agrees to pay to the Administrative Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Company and the Administrative Agent.

(d) All fees payable hereunder or under any other Loan Document shall be paid on
the dates due, in Dollars and immediately available funds, to the Administrative
Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the
Lenders. Fees paid shall not be refundable under any circumstances.

SECTION 2.13. Interest.

(a) The Loans comprising each ABR Borrowing (including each Swingline Loan)
shall bear interest at the Alternate Base Rate plus the Applicable Rate (which,
in the case of Swingline Loans shall be the Applicable Rate for ABR Revolving
Loans).

(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by any Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.
Without limiting the foregoing, during the occurrence and continuance of any
other Event of Default, the Administrative Agent or the Required Lenders may, at
their option, by notice to the Borrower (i) declare that the principal of any
Loan shall bear interest at 2% plus the rate otherwise applicable to such Loan
as provided in the preceding paragraphs of this Section or (ii) declare that any
other amount owing hereunder shall bear interest at 2% plus the rate applicable
to ABR Revolving Loans as provided in paragraph (a) of this Section.

 

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(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest (i) computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year) and (ii) for
Borrowings denominated in Pounds Sterling shall be computed on the basis of a
year of 365 days, and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

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

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

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

then the Administrative Agent shall give notice thereof to the applicable
Borrower and the Lenders by telephone or facsimile as promptly as practicable
thereafter and, until the Administrative Agent notifies the applicable Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing
shall be ineffective and (ii) if any Borrowing Request requests a Eurocurrency
Borrowing, such Borrowing shall be made as an ABR Borrowing; provided that if
the circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.

SECTION 2.15. Increased Costs.

(a) If any Change in Law shall:

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

 

45

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

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan or of maintaining its
obligation to make any such Loan (including, without limitation, pursuant to any
conversion of any Borrowing denominated in an Agreed Currency into a Borrowing
denominated in any other Agreed Currency) or to increase the cost to such Lender
or the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit (including, without limitation, pursuant to any conversion of any
Borrowing denominated in an Agreed Currency into a Borrowing denominated in any
other Agreed Currency) or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder, whether of principal, interest or
otherwise (including, without limitation, pursuant to any conversion of any
Borrowing denominated in an Agreed Currency into a Borrowing denominated in any
other Agreed Currency), then the applicable Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

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

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section together with reasonably detailed calculations thereof shall be
delivered to the Company and shall be conclusive absent manifest error. The
Company shall pay, or cause the other Borrowers to pay, such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Company shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing

 

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Bank, as the case may be, notifies the Company of the Change in Law giving rise
to such increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.11(b) and is revoked in
accordance therewith) or (d) the assignment of any Eurocurrency Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Company pursuant to Section 2.19, then, in any such event, the
applicable Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. Such loss, cost or expense to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for
deposits in the relevant currency of a comparable amount and period from other
banks in the eurocurrency market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section together with reasonably detailed calculations thereof shall be
delivered to the applicable Borrower and shall be conclusive absent manifest
error. The applicable Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

SECTION 2.17. Taxes.

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

 

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(b) In addition, each Borrower shall pay any Other Taxes related to such
Borrower and imposed on or incurred by the Administrative Agent, a Lender or the
Issuing Bank to the relevant Governmental Authority in accordance with
applicable law.

(c) The relevant Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within ten (10) days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of such Borrower
hereunder or any other Loan Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank together with reasonably
detailed calculations thereof, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by any Borrower to a Governmental Authority, such Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by such Borrower as will permit such payments to be made
without withholding or at a reduced rate.

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

 

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

(a) Each Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to (i) in the case of payments denominated in
Dollars by the Company or any Domestic Subsidiary Borrower, 1:00 p.m., Chicago
time and (ii) in the case of payments denominated in a Foreign Currency or by a
Foreign Subsidiary Borrower, 12:00 noon, Local Time, in the city of the
Administrative Agent’s Eurocurrency Payment Office for such currency, in each
case on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made (i) in the same currency in which the applicable
Borrowing or LC Disbursement was made and (ii) to the Administrative Agent at
its offices at 131 South Dearborn Street, Chicago, Illinois 60603 or, in the
case of a Borrowing denominated in a Foreign Currency or to a Foreign Subsidiary
Borrower, the Administrative Agent’s Eurocurrency Payment Office, except
payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17, 2.20 (in connection with the reallocation of Revolving Credit
Exposures) and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments denominated in the same
currency received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder or under
any other Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. Notwithstanding the foregoing provisions of this
Section, if, after the making of any Borrowing in any Foreign Currency, currency
control or exchange regulations are imposed in the country which issues such
currency with the result that the type of currency in which the Borrowing was
made (the “Original Currency”) no longer exists or any Borrower is not able to
make payment to the Administrative Agent for the account of the Lenders in such
Original Currency, then all payments to be made by such Borrower hereunder in
such currency shall instead be made when due in Dollars in an amount equal to
the Dollar Amount (as of the date of repayment) of such payment due, it being
the intention of the parties hereto that the Borrowers take all risks of the
imposition of any such currency control or exchange regulations.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Term Loans,

 

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Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Term Loans, Revolving Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Term
Loans, Revolving Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Term Loans,
Revolving Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements and Swingline Loans to any
assignee or participant, other than to the Company or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.

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

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.15, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority

 

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for the account of any Lender pursuant to Section 2.17, then such Lender shall
use reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Company hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment including the $3,500 fee contemplated by
Section 9.04(b).

(b) If any Lender requests compensation under Section 2.15, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Company may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under the Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Company shall have received the prior written consent of the Administrative
Agent (and, if a Revolving Commitment is being assigned, the Issuing Bank),
which consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.15
or payments required to be made pursuant to Section 2.17, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.

SECTION 2.20. Incremental Credit Extensions.

(a) At any time, but not more than four (4) times during the term of this
Agreement, and subject to the terms and conditions of this Section 2.20, the
Company may request (i) one or more additional tranches of term loans (the
“Incremental Term Loans”) and/or (ii) one or more increases in the Aggregate
Revolving Commitment (each such increase, a “Revolving Commitment Increase”)
without the consent of any Lender not providing such Incremental Term Loans or
Revolving Commitment Increases, as the case may be; provided that, without the
prior written consent of all of the Lenders, the aggregate amount of all
Incremental Term Loans and Revolving Commitment Increases made during the term
of this Agreement shall not exceed $150,000,000. Any tranche of Incremental Term
Loans (A) shall be available to the Company in Dollars, (B) shall rank pari
passu in right of payment and of security with the Revolving Loans and the Term
Loans, (C) shall not mature earlier than the Tranche B Term Loan Maturity Date
(but may, subject to the next succeeding clause (D), have amortization prior to
such date), (D) shall not have a weighted average life that is shorter than the
then-remaining weighted average life of the Tranche B Term Loans and (E) except
as set forth above, shall be

 

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treated substantially the same as (and in any event no more favorably than) the
Tranche B Term Loans (in each case, including with respect to mandatory and
voluntary prepayments); provided that (1) the terms and conditions applicable to
Incremental Term Loans maturing after the Tranche B Term Loan Maturity Date may
provide for material additional or different financial or other covenants or
prepayment requirements applicable only during periods after the Tranche B Term
Loan Maturity Date and (2) the Incremental Term Loans may be priced differently
than the Tranche B Term Loans.

(b) Each tranche of Incremental Term Loans and each Revolving Commitment
Increase shall be in a minimum amount of $25,000,000 and integral multiples of
$10,000,000. A commitment to make Incremental Term Loans shall become an
“Incremental Term Loan Commitment” under this Agreement, and a commitment to
participate in a Revolving Commitment Increase shall become a “Revolving
Commitment” (or in the case of a Revolving Commitment Increase to be provided by
an existing Revolving Lender, an increase in such Lender’s Revolving Commitment)
under this Agreement, in any such case, pursuant to a “Commitment and
Acceptance” substantially in the form of Exhibit C (a “Commitment and
Acceptance”). Any request for a tranche of Incremental Term Loans or a Revolving
Commitment Increase shall be made in a written notice (an “Increase Notice”)
given to the Administrative Agent and the Lenders by the Company not less than
ten (10) Business Days or, in the case of a request for a tranche of Incremental
Term Loans, twenty (20) Business Days, prior to the proposed effective date
therefor, which Increase Notice shall specify the amount of the proposed tranche
of Incremental Term Loans or the Revolving Commitment Increase, as the case may
be, and the proposed effective date thereof. Incremental Term Loans may be made,
and Revolving Commitment Increases may be provided, by any existing Lender or by
any other bank or other financial institution (any such other bank or other
financial institution, a “Proposed New Lender”); provided that any Proposed New
Lender shall be consented to by the Administrative Agent and, in the case of a
Revolving Commitment Increase, the Issuing Bank (which consent shall not be
unreasonably withheld or delayed). The Administrative Agent shall notify the
Company and the Lenders on or before the Business Day immediately prior to the
proposed effective date of the tranche of Incremental Term Loan Commitments (and
the related Incremental Term Loans) or the Revolving Commitment Increase, of the
amount of each Lender’s and Proposed New Lender’s Incremental Term Loan
Commitment or new or increased Revolving Commitment, as applicable, and the
resulting aggregate amount of the tranche of Incremental Term Loan Commitments
(and the related Incremental Term Loans) or the amount of the Aggregate
Revolving Commitment, as the case may be, which amount shall be effective on the
following Business Day, subject to the satisfaction of the conditions described
in clause (c) below.

(c) Without limiting the applicability of any conditions to Borrowings set forth
in this Agreement, the effectiveness of any tranche of Incremental Term Loan
Commitments (and the corresponding availability of the related Incremental Term
Loans) and the effectiveness of each Revolving Commitment Increase shall be
subject to the following conditions precedent:

(i) Both as of the date of the applicable Increase Notice and as of the proposed
effective date of such Incremental Term Loan Commitments (and related
Incremental Term Loans) or Revolving Commitment Increase, (i) all
representations and

 

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warranties under Article III and the other Loan Documents shall be true and
correct in all material respects as though made on such date (except with
respect to any representation or warranty expressly stated to have been made as
of a specific date which shall have been true and correct in all material
respects as of such specified date), (ii) no event shall have occurred and then
be continuing which constitutes a Default and (iii) the Company shall have
demonstrated to the Administrative Agent’s reasonable satisfaction that, as of
the proposed effective date of the Incremental Term Loan Commitments, after
giving effect thereto, the Company and its Subsidiaries are in compliance on a
pro forma basis with the covenants contained in Sections 6.14 and 6.15
recomputed as of the last day of the most recently ended fiscal quarter of the
Company for which financial statements are available, as if such Incremental
Term Loan Commitments had been effective as of the first day of each relevant
period for testing such compliance;

(ii) the Borrowers, the Administrative Agent and each Proposed New Lender or
Lender that shall have agreed to provide a “Commitment” in support of such
Incremental Term Loans or Revolving Commitment Increase shall have executed and
delivered a Commitment and Acceptance;

(iii) counsel for the Borrowers and the Subsidiary Guarantors shall have
provided to the Administrative Agent supplemental opinions in form and substance
reasonably satisfactory to the Administrative Agent;

(iv) the Borrowers, the Subsidiary Guarantors and the Proposed New Lenders shall
otherwise have executed and delivered such other instruments and documents as
may be required under Article IV or that the Administrative Agent shall have
reasonably requested in connection with such increase (including, in the case of
a tranche of Incremental Term Loans, an amendment to this Agreement and, as
appropriate, the other Loan Documents, executed by the Borrowers, each Lender
agreeing to provide such Incremental Term Loans, if any, each Proposed New
Lender, if any, and the Administrative Agent, which amendment or amendments may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the reasonable opinion of the Administrative Agent, to effect such Incremental
Term Loans in accordance with this Section 2.20), and each Loan Party shall have
reaffirmed its obligations, and the Liens granted, under the Loan Documents; and

(v) in the case of a Revolving Commitment Increase, the Administrative Agent
shall have administered the reallocation of the Revolving Credit Exposures on
the effective date of such increase ratably among the Revolving Lenders
(including new Lenders) after giving effect to such increase; provided, that
(1) the Borrowers hereby agree to compensate the Revolving Lenders for all
losses, expenses and liabilities incurred by any Revolving Lender in connection
with the sale or assignment of any Eurocurrency Loan resulting from such
reallocation on the terms and in the manner set forth in Section 2.16, and
(2) the Administrative Agent and the Lenders hereby agree that the minimum
borrowing, pro rata borrowing and pro rata payment requirements contained
elsewhere in this Agreement shall not apply to the reallocation of Revolving
Credit Exposures effected pursuant to this clause (v).

 

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Upon satisfaction of the conditions precedent to any tranche of Incremental Term
Loans or Revolving Commitment Increase, the Administrative Agent shall promptly
advise the Company and each Lender of the effective date thereof (each such
effective date, an “Increase Effective Date”). Upon any Increase Effective Date
that is supported by a Proposed New Lender, such Proposed New Lender shall
become a party to this Agreement as a Lender and shall have the rights and
obligations of a Lender hereunder. Nothing contained herein shall constitute, or
otherwise be deemed to be, a commitment on the part of any Lender to make
Incremental Term Loans or increase its Revolving Commitment at any time.

SECTION 2.21. Market Disruption. Notwithstanding the satisfaction of all
conditions referred to in Article II and Article IV with respect to any
Borrowing to be effected in any Foreign Currency, if (i) there shall occur on or
prior to the date of such Borrowing any change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which would, in the reasonable opinion of the Administrative
Agent or the Revolving Lenders having at such time Revolving Credit Exposures
and unused Revolving Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Revolving Commitments, make it
impracticable for the applicable Eurocurrency Borrowings to be denominated in
the Agreed Currency specified by the applicable Borrower or (ii) an Equivalent
Amount of such currency is not readily calculable, then the Administrative Agent
shall forthwith give notice thereof to such Borrower and the Lenders, and such
Borrowing shall not be denominated in such Agreed Currency but shall, except as
otherwise set forth in Section 2.07, be made on the date of such Borrowing in
Dollars, in an aggregate principal amount equal to the Dollar Amount of the
aggregate principal amount specified in the related Borrowing Request or
Interest Election Request, as the case may be, as ABR Loans, unless such
Borrower notifies the Administrative Agent at least one (1) Business Day before
such date that (a) it elects not to borrow on such date or (b) it elects to
borrow on such date in a different Agreed Currency, as the case may be, in which
the denomination of such Loans would, in the reasonable opinion of the
Administrative Agent and Revolving Lenders having at such time Revolving Credit
Exposures and unused Revolving Commitments representing more than 50% of the sum
of the total Revolving Credit Exposures and unused Revolving Commitments, be
practicable and in an aggregate principal amount equal to the Dollar Amount of
the aggregate principal amount specified in the related Borrowing Request or
Interest Election Request, as the case may be.

SECTION 2.22. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from any Borrower hereunder in
the currency expressed to be payable herein (the “specified currency”) into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the specified currency with such other currency at the Administrative
Agent’s main New York City office on the Business Day preceding that on which
final, non-appealable judgment is given. The obligations of each Borrower in
respect of any sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or the Administrative Agent (as the case may be) of any
sum adjudged to be so due in such other currency such Lender or the
Administrative Agent (as the case may be) may in accordance with normal,
reasonable banking procedures purchase the specified currency

 

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with such other currency. If the amount of the specified currency so purchased
is less than the sum originally due to such Lender or the Administrative Agent,
as the case may be, in the specified currency, each Borrower agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the
Administrative Agent, as the case may be, against such loss, and if the amount
of the specified currency so purchased exceeds (a) the sum originally due to any
Lender or the Administrative Agent, as the case may be, in the specified
currency and (b) any amounts shared with other Lenders as a result of
allocations of such excess as a disproportionate payment to such Lender under
Section 2.18, such Lender or the Administrative Agent, as the case may be,
agrees to remit such excess to such Borrower.

SECTION 2.23. Designation of Subsidiary Borrowers. The Company may at any time
and from time to time designate up to two (2) wholly-owned Domestic Subsidiaries
or Foreign Subsidiaries as a Subsidiary Borrower during the term of this
Agreement; provided, that any Subsidiary’s eligibility as a Subsidiary Borrower
shall be subject to (a) the consent of the Administrative Agent (such consent
not to be unreasonably withheld or delayed) with notice to the Lenders and
(b) the Administrative Agent’s receipt of evidence reasonably satisfactory to it
that such Subsidiary would not, in its capacity as a Borrower hereunder, be
required by law to withhold or deduct any Taxes from or in respect of any sum
payable hereunder by such Subsidiary to the Administrative Agent or any Lender
unless an exemption from such requirement can be obtained by such Subsidiary
(with the reasonable cooperation of the Administrative Agent and the Lenders)
and that no other material adverse tax, regulatory or other consequences would
affect the Administrative Agent or the Lenders as a result of such Subsidiary’s
status as a Borrower. Subject to the foregoing, upon delivery to the
Administrative Agent of a Borrowing Subsidiary Agreement executed by such
Subsidiary and the Company and the satisfaction (or waiver in accordance with
the terms hereof) of the other conditions precedent set forth in Section 4.03,
such Subsidiary shall for all purposes of this Agreement be a Subsidiary
Borrower and a party to this Agreement until the Company shall have executed and
delivered to the Administrative Agent a Borrowing Subsidiary Termination with
respect to such Subsidiary, whereupon such Subsidiary shall cease to be a
Subsidiary Borrower and a party to this Agreement. Notwithstanding the preceding
sentence, no Borrowing Subsidiary Termination will become effective as to any
Subsidiary Borrower at a time when any principal of or interest on any Loan to
such Borrower shall be outstanding hereunder, provided that such Borrowing
Subsidiary Termination shall be effective to terminate the right of such
Subsidiary Borrower to make further Borrowings under this Agreement. As soon as
practicable upon receipt of a Borrowing Subsidiary Agreement, the Administrative
Agent shall furnish a copy thereof to each Lender.

ARTICLE III

Representations and Warranties

The Company represents and warrants to the Administrative Agent, the Issuing
Bank and the Lenders with respect to itself and, to the extent applicable, its
Subsidiaries (and each Subsidiary Borrower shall also be deemed to independently
make each representation and warranty with respect to itself and, to the extent
applicable, its Subsidiaries to the extent that such representation and warranty
relates to such Subsidiary Borrower or its Subsidiaries) that:

 

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SECTION 3.01. Organization; Powers; Subsidiaries. Each of the Company and its
Subsidiaries (excluding, solely for the purpose of this representation and
warranty as made on and as of the Effective Date, Farnam and its subsidiaries)
is duly organized, validly existing and in good standing (to the extent such
concept is applicable in the relevant jurisdiction) under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry
on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing (to the extent such concept is applicable) in, every jurisdiction where
such qualification is required. Schedule 3.01 hereto (as supplemented from time
to time) identifies each Subsidiary, whether or not such Subsidiary is a
Material Subsidiary or a Subsidiary Guarantor, the jurisdiction of its
incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by the Company and the other Subsidiaries and, if such percentage is not
100% (excluding directors’ qualifying shares as required by law), a description
of each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares and other
equity interests indicated on Schedule 3.01 as owned by the Company or another
Subsidiary are owned, beneficially and of record, by the Company or such
Subsidiary free and clear of all Liens. There are no outstanding commitments or
other obligations of the Company to issue, and no options, warrants or other
rights of any Person to acquire, any shares of any class of capital stock or
other equity interests of the Company, except for pursuant to the Company’s
employee and non-employee benefit plans filed with the Securities and Exchange
Commission. There are no outstanding commitments or other obligations of any
Subsidiary to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
such Subsidiary.

SECTION 3.02. Authorization; Enforceability. The Transactions are within each
Loan Party’s corporate or other organizational powers, as applicable, and have
been duly authorized by all necessary corporate or other organizational action
and, if required, by all necessary shareholder or other equity holder action, as
applicable. This Agreement, and each of the other Loan Documents, has been duly
executed and delivered by each Loan Party party thereto and constitutes a legal,
valid and binding obligation of each such Loan Party, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law. Without limiting the foregoing, each Borrowing Subsidiary
Agreement has been duly executed and delivered by the Borrower party thereto and
constitutes a legal, valid and binding obligation of such Borrower, enforceable
against such Borrower in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Company or any of its Subsidiaries or any order of any

 

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Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Company or any of its
Subsidiaries or its assets (including, without limitation, the Senior
Subordinated Note Indenture and the Senior Subordinated Notes), or give rise to
a right thereunder to require any payment to be made by the Company or any of
its Subsidiaries, and (d) will not result in the creation or imposition of any
Lien on any asset of the Company or any of its Subsidiaries.

SECTION 3.04. Financial Condition; No Material Adverse Change; Contingent
Obligations.

(a) The Company has heretofore furnished to the Lenders its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended September 24, 2005 reported on by Deloitte & Touche
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
(and the portion of the fiscal year) ended December 24, 2005, certified by its
chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Company and its consolidated Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) above.

(b) Since September 24, 2005, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries (excluding, solely for the purpose of this
representation and warranty as made on and as of the Effective Date, Farnam and
its subsidiaries), taken as a whole; provided, that, solely with respect to the
representation and warranty made pursuant to this clause (b) on and as of the
Effective Date, the words “prospects or” shall not be deemed to be included in
such representation and warranty.

(c) Except as disclosed in the financial statements referred to in clause
(a) above or in the notes thereto or in the Disclosed Matters, neither the
Company nor any of its Subsidiaries (excluding, solely for the purpose of this
representation and warranty as made on and as of the Effective Date, Farnam and
its subsidiaries) has, as of the Effective Date, any contingent liabilities
which are material individually or in the aggregate. After the Effective Date,
neither the Company nor any of its Subsidiaries has any contingent liabilities
except as disclosed in the financial statements referred to in clause (a) above
or in the notes thereto or in the Disclosed Matters, or except for any
contingent liability that could not reasonably be expected to have a Material
Adverse Effect.

SECTION 3.05. Properties.

(a) Each of the Company and its Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes. There are no Liens on any of the owned
real or personal properties of the Company or any of its Subsidiaries except for
Liens permitted by Section 6.02.

 

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(b) Each of the Company and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Company and its
Subsidiaries does not, to the knowledge of the Company or its Subsidiaries,
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.06. Litigation and Environmental Matters.

(a) There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of any Borrower,
threatened against or affecting the Company or any of its Subsidiaries
(excluding, solely for the purpose of clause (i) of this representation and
warranty as made on and as of the Effective Date, Farnam and its Subsidiaries)
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to result in a Material Adverse Effect (other than the
Disclosed Matters) or (ii) that involve this Agreement or the Transactions.
There are no labor controversies pending against or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
(excluding, solely for the purpose of clause (x) of this representation and
warranty as made on and as of the Effective Date, Farnam and its subsidiaries)
(x) which could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect, or (y) that involve this Agreement or the
Transactions.

(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (excluding, solely for the purpose of this representation and
warranty as made on and as of the Effective Date, Farnam and its subsidiaries)
(i) has failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any basis for any Environmental Liability.

(c) Since the date of this Agreement, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect. Neither
the Company nor any Subsidiary (excluding, solely for the purpose of this
representation and warranty as made on and as of the Effective Date, Farnam and
its subsidiaries) is party or subject to any law, regulation, rule or order, or
any obligation under any agreement or instrument, that has a Material Adverse
Effect.

SECTION 3.07. Compliance with Laws and Agreements; No Burdensome Restrictions.
Each of the Company and its Subsidiaries (excluding, solely for the purpose of
this representation and warranty as made on and as of the Effective Date, Farnam
and its subsidiaries) is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. Without limiting the

 

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foregoing, neither the Company nor any Subsidiary (excluding, solely for the
purpose of this representation and warranty as made on and as of the Effective
Date, Farnam and its subsidiaries) is in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any (i) agreement or instrument to which it is a party, which default would
reasonably be expected to have a Material Adverse Effect or (ii) any agreement
or instrument evidencing or governing Material Indebtedness. Neither the Company
nor any of its Subsidiaries (excluding, solely for the purpose of this
representation and warranty as made on and as of the Effective Date, Farnam and
its subsidiaries) is party or subject to any law, regulation, rule or order, or
any obligation under any agreement or instrument, that has, or could reasonably
be expected to have, a Material Adverse Effect.

SECTION 3.08. Investment and Holding Company Status. Neither the Company nor any
of its Subsidiaries (excluding, solely for the purpose of this representation
and warranty as made on and as of the Effective Date, Farnam and its
subsidiaries) is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

SECTION 3.09. Taxes. Each of the Company and its Subsidiaries (excluding, solely
for the purpose of this representation and warranty as made on and as of the
Effective Date, Farnam and its subsidiaries) has timely filed or caused to be
filed all Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
the Company or such Subsidiary, as applicable, has set aside on its books
adequate reserves in accordance with GAAP or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.

SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

SECTION 3.11. Disclosure. The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither any of the other reports, financial statements,
certificates or other information furnished by or on behalf of the Company or
any Subsidiary to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished), taken as a whole, nor the
Information Memorandum, contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Company represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

SECTION 3.12. Federal Reserve Regulations. No part of the proceeds of any Loan
have been used or will be used, whether directly or indirectly, for any purpose
that entails a

 

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violation of any of the Regulations of the Board, including Regulations T, U and
X. Margin stock (as defined in Regulation U) constitutes less than 25% of the
value of those assets of the Company and its Subsidiaries which are subject to
any limitation on sale, pledge, or other restriction hereunder.

SECTION 3.13. No Default. Each Loan Party is in full compliance with this
Agreement and the other Loan Documents, and no Default has occurred and is
continuing.

SECTION 3.14. Solvency. Immediately after the consummation of the Transactions
to occur on the Effective Date and immediately following the making of each Loan
and each issuance of a Letter of Credit hereunder and after giving effect to the
application of the proceeds of such Loans and Letters of Credit, the Company and
its Subsidiaries, taken as a whole, are and will be Solvent.

SECTION 3.15. Insurance. Each of the Company and its Subsidiaries maintains,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations. Schedule 3.15 sets forth a description of all material insurance
maintained by or on behalf of the Company and the Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance that are due and payable have been paid. The Company believes that the
insurance maintained by or on behalf of the Borrower and the Subsidiaries is
adequate.

SECTION 3.16. Senior Subordinated Notes. The subordination provisions of the
Senior Subordinated Notes and the Senior Subordinated Note Indenture are
enforceable against the holders thereof in accordance with their terms and the
Secured Obligations constitute “Senior Debt” and “Designated Senior Debt” under
the Senior Subordinated Note Indenture.

SECTION 3.17. Collateral Documents. The provisions of this Agreement and the
other Loan Documents create legal and valid Liens on all the Collateral in favor
of the Administrative Agent, for the benefit of the Administrative Agent and the
Holders of Secured Obligations, and such Liens, when properly recorded or filed
(or, as appropriate, possession or control is obtained) in accordance with
applicable law, constitute perfected and continuing Liens on the Collateral,
securing the Secured Obligations, enforceable against the applicable Loan Party
and all third parties, and having priority over all other Liens on the
Collateral except in the case of Liens of the type permitted under Section 6.02,
but solely to the extent any such permitted Liens would have priority over the
Liens in favor of the Administrative Agent pursuant to any applicable law.

SECTION 3.18. Farnam Acquisition; Incorporation of Certain Representations and
Warranties in the Farnam Stock Purchase Agreement. Each representation and
warranty made in Section 3.2 of the Stock Purchase Agreement by the Farnam
Sellers with respect to Farnam and its subsidiaries to the Company is true and
correct on and as of the Effective Date and, along with the related definitions,
is incorporated herein by reference, and made a part hereof as if set forth
herein in full (it being understood and agreed that each such representation and
warranty shall be deemed to be made by the Company with respect to Farnam and
its subsidiaries to the Administrative Agent and the Lenders). Without in any
way limiting the

 

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foregoing, on and as of the Effective Date, (i) the Stock Purchase Agreement is
in final form, together with all related closing documents and opinions, all of
which have been delivered by the parties thereto (and copies of which have been
furnished to the Administrative Agent), (ii) all conditions precedent to the
Farnam Acquisition have been satisfied (or waived in accordance with the terms
of the Stock Purchase Agreement), (iii) the Farnam Acquisition shall be
consummated substantially concurrently with the initial Loans and other
extensions of credit made on the Effective Date, and (iv) the aggregate
consideration paid or payable by the Company and its Subsidiaries in connection
with the Farnam Acquisition shall not exceed $300,000,000.

SECTION 3.19. SDN List Designation. Neither the Company nor any of its
Subsidiaries or Affiliates is a country, individual or entity named on the
Specifically Designated National and Blocked Persons (SDN) list issued by the
Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury of
the United States of America.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from (i) each
party hereto either (A) a counterpart of this Agreement signed on behalf of such
party or (B) written evidence satisfactory to the Administrative Agent (which
may include facsimile transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement and (ii) each Loan
Party either (A) a counterpart signed on behalf of such Loan Party or
(B) written evidence satisfactory to the Administrative Agent (which may include
facsimile transmission of a signed signature page of such Loan Party) that such
Loan Party has signed a counterpart, of each Loan Document to which it is a
party, including, without limitation, a Subsidiary Guaranty (in the case of each
Subsidiary Guarantor), a Pledge and Security Agreement, and such other
Collateral Documents and Loan Documents as the Administrative Agent or its
counsel may have reasonably requested, as further described in the list of
closing documents attached as Exhibit E.

(b) The Administrative Agent shall have received favorable written opinions
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of (i) Orrick, Herrington & Sutcliffe LLP, special counsel for the Loan
Parties, addressing matters of California, New York and Delaware law and
substantially in the form of Exhibit B-1, and (ii) local Arizona and Wisconsin
counsel for the domestic Loan Parties which are Material Subsidiaries,
substantially in the form of Exhibit B-2, in each case, covering such matters
relating to the Loan Parties, this Agreement or the Transactions as the
Administrative Agent or the Required Lenders shall reasonably request. The
Company hereby requests such counsel to deliver such opinions.

 

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(c) The Lenders shall have received (i) audited consolidated financial
statements of the Company for the fiscal years ended September 25, 2004 and
September 24, 2005, (ii) unaudited interim consolidated financial statements of
the Company for each quarterly period ended subsequent to the date of the latest
financial statements delivered pursuant to clause (i) of this paragraph as to
which such financial statements are available, (iii) consolidated financial
statements of Farnam for such periods and in such form as shall be acceptable to
the Administrative Agent and (iv) reasonably satisfactory pro forma opening
financial statements from the Company giving effect to the Farnam Acquisition
and projections for the Company and its Subsidiaries for the five years after
the Effective Date, together with such information as the Administrative Agent
and the Lenders shall reasonably request (including, without limitation, a
reasonably detailed description of the assumptions used in preparing such
projections and, in the case of Farnam, information for the period of time
preceding the Effective Date but subsequent to the date of the consolidated
financial statements referred to in clause (iii) above).

(d) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the initial Loan Parties, the
authorization of the Transactions and any other legal matters relating to such
Loan Parties, the Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel and as further
described in the list of closing documents attached as Exhibit E.

(e) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a Financial
Officer of the Company, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.

(f) The Administrative Agent shall have received evidence satisfactory to it
that the Existing Credit Agreement and instruments, documents and agreements
delivered in connection therewith shall have been cancelled and terminated, all
Indebtedness and other amounts owing thereunder shall have been fully repaid or
shall be so repaid with the initial Loans, and all Liens granted thereunder
shall have been terminated and released.

(g) The Administrative Agent (for the benefit of itself and the other parties
entitled thereto) and the Lead Arrangers shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Company hereunder.

(h) The Administrative Agent shall have received evidence satisfactory to it
that Farnam’s and the Company’s respective directors and shareholders shall have
approved the Farnam Acquisition; and all regulatory, legal and third-party
approvals (including, without limitation, by the holders of any Indebtedness of
the Company, Farnam or their respective subsidiaries that will remain
outstanding on the Effective Date) necessary or, in the discretion of the
Administrative Agent, advisable in connection with the Transactions and the
continuing operations of the Company and its Subsidiaries (after giving effect
to the Farnam Acquisition) shall have been obtained.

 

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(i) Liens creating a first priority (except in the case of Liens permitted under
Section 6.02, but solely to the extent any such permitted Liens would have
priority over the Liens in favor of the Administrative Agent pursuant to any
applicable law) security interest in the Collateral in favor of the
Administrative Agent (for itself and the other Holders of Secured Obligations)
shall have been perfected (and all actions required in connection therewith
shall have been taken).

(j) There shall exist an absence of any injunction or temporary restraining
order or any pending or threatened litigation which, in the judgment of the
Administrative Agent could prohibit the making of the Loans, the issuance of
Letters of Credit or the consummation of the Farnam Acquisition or the related
transactions.

(k) The Administrative Agent shall have received a certificate from the chief
financial officer of the Company concerning the value, solvency and other
appropriate factual information and advice, in form and substance reasonably
satisfactory to the Administrative Agent, supporting the conclusions that, after
giving effect to the Farnam Acquisition, the Company and its Subsidiaries, taken
as a whole, are Solvent and will be Solvent subsequent to incurring the
indebtedness in connection with the Farnam Acquisition.

(l) No event, development or circumstance has occurred (including a material
adverse change) of the type described in clauses (i) through (iii) of
Section 3.2.6 of the Stock Purchase Agreement with respect to Farnam and its
subsidiaries, taken as a whole, since October 31, 2005.

(m) The Administrative Agent shall have received copies of the Stock Purchase
Agreement in final form, together with all related closing documents and
opinions, all of which shall have been delivered by the parties thereto, all
conditions precedent to the Farnam Acquisition shall have been satisfied (or
waived in accordance with the terms of the Stock Purchase Agreement), the Farnam
Acquisition shall be consummated substantially concurrently with the initial
Loans and other extensions of credit made on the Effective Date, and the
aggregate consideration paid or payable by the Company and its Subsidiaries in
connection with the Farnam Acquisition shall not exceed $300,000,000.

(n) The Administrative Agent shall have received each other instrument, document
or agreement identified on the list of closing documents attached hereto as
Exhibit E, all in form and substance reasonably satisfactory to the
Administrative Agent.

The initial Borrowings and, if applicable, other extensions of credit made on
the Effective Date shall be deemed to constitute a representation and warranty
by the Borrowers on the Effective Date as to the matters specified in this
Section.

The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., New York City time, on April 30, 2006 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).

 

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SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing (other than the conversion of a Eurocurrency Loan
into an ABR Loan), and of the Issuing Bank to issue, amend, renew or extend any
Letter of Credit, including the deemed issuance of the Existing Letters of
Credit (each such event, a “Credit Event”), including, without limitation, the
initial Credit Events occurring on the Effective Date, is subject to the
satisfaction of the following conditions:

(a) The representations and warranties of the Borrowers set forth in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Credit Event (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).

(b) At the time of and immediately after giving effect to such Credit Event, no
Default shall have occurred and be continuing.

(c) If the Credit Event involves the advancement by the Lenders of new or
incremental Loans or the issuance, amendment, renewal or extension of new or
incremental Letters of Credit, the Administrative Agent shall have received a
certificate from a Financial Officer of the Company (i) demonstrating that the
“Fixed Charge Coverage Ratio” (under and as defined in the Senior Subordinated
Note Indenture) for the Company’s four most recently ended full fiscal quarters
for which internal financial statements are available immediately preceding the
date of such requested Credit Event would have been at least 2.0 to 1.0,
determined on a pro forma basis giving effect to such Credit Event (including a
pro forma application of the net proceeds therefrom), as if the “Indebtedness”
(under and as defined in the Senior Subordinated Note Indenture) represented by
such Credit Event had been incurred at the beginning of such four-quarter period
and (ii) certifying that the Loans or Letters of Credit comprising such Credit
Event are permitted to be incurred as “Indebtedness” under and as defined in the
Senior Subordinated Note Indenture, and constitute “Designated Senior Debt” and
“Senior Debt” thereunder.

(d) No law or regulation shall prohibit, and no order, judgment or decree of any
Governmental Authority shall enjoin, prohibit or restrain, each Lender from
making the requested Loan or the Issuing Bank or any Lender from issuing,
renewing, extending or increasing the face amount of or participating in the
Letter of Credit requested to be issued, renewed, extended or increased.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.

SECTION 4.03. Designation of a Subsidiary Borrower. The designation of a
Subsidiary Borrower pursuant to Section 2.23 is subject to the condition
precedent that the Company or such proposed Subsidiary Borrower shall have
furnished or caused to be furnished to the Administrative Agent:

(a) Copies, certified by the Secretary or Assistant Secretary of such
Subsidiary, of its Board of Directors’ resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for the Administrative Agent)
approving the Borrowing Subsidiary Agreement and any other Loan Documents to
which such Subsidiary is becoming a party;

 

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(b) An incumbency certificate, executed by the Secretary or Assistant Secretary
of such Subsidiary, which shall identify by name and title and bear the
signature of the officers of such Subsidiary authorized to request Borrowings
hereunder and sign the Borrowing Subsidiary Agreement and the other Loan
Documents to which such Subsidiary is becoming a party, upon which certificate
the Administrative Agent and the Lenders shall be entitled to rely until
informed of any change in writing by the Company or such Subsidiary;

(c) Opinions of counsel to such Subsidiary, in form and substance reasonably
satisfactory to the Administrative Agent and its counsel, with respect to the
laws of its jurisdiction of organization and such other matters as are
reasonably requested by counsel to the Administrative Agent and addressed to the
Administrative Agent and the Lenders.

(d) Any promissory notes requested by any Lender, and any other instruments and
documents reasonably requested by the Administrative Agent, each in such form as
the Administrative Agent may reasonably require.

(e) Such other lien searches, instruments, documents or agreements as the
Administrative Agent may reasonably request (including, without limitation, an
amendment or supplement to this Agreement which the Administrative Agent, in its
discretion, shall deem appropriate or necessary) in connection with the addition
of such Subsidiary Borrower, all in form and substance reasonably satisfactory
to the Administrative Agent.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other amounts payable hereunder and under
the other Loan Documents shall have been paid in full and all Letters of Credit
shall have expired or terminated (unless cash collateral in an amount equal to
105% of the aggregate undrawn face amount of such Letters of Credit shall have
been pledged to the Administrative Agent in a manner consistent with
Section 2.06(j) of this Agreement) and all LC Disbursements shall have been
reimbursed, the Company covenants and agrees with the Lenders that:

SECTION 5.01. Financial Statements; Ratings Change and Other Information. The
Company will furnish to the Administrative Agent, who shall in turn furnish to
each Lender:

(a) within 90 days after the end of each fiscal year of the Company, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Deloitte & Touche LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;

 

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(b) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year of the Company, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of a Financial Officer of the Company substantially in
the form of Exhibit I hereto (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with certain
provisions of Article VI (including, Sections 6.14 and 6.15) and the
determination of Material Subsidiaries and the Applicable Rate and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;

(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);

(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Company or
any Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Company to its
shareholders generally, as the case may be;

(f) as soon as available, but in any event not more than ninety (90) days after
the beginning of each fiscal year of the Company, a copy of the plan and
forecast (including a projected consolidated balance sheet, income statement and
funds flow statement) of the Company for each fiscal quarter of the upcoming
fiscal year in form reasonably satisfactory to the Administrative Agent; and

(g) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Company or any
Subsidiary, or compliance with the terms of this Agreement or any other Loan
Document, as the Administrative Agent or any Lender may reasonably request.

 

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In lieu of furnishing to the Administrative Agent hard copies of the quarterly
financial statements described in clause (b) above and the annual financial
statements and auditor’s report described in clause (a) above and the other
documents referred to in clause (e) above, the Company may make such documents
available to the Administrative Agent and the Lenders at its website located at
www.centralgp.com and through the United States Securities and Exchange
Commission’s EDGAR system (“EDGAR”) or by transmitting such documents
electronically to the Administrative Agent and the Lenders. The Administrative
Agent shall provide to any Lender hard copies of such documents upon request if
such Lender does not have access to the Company’s website or EDGAR.

SECTION 5.02. Notices of Material Events. The Company will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Company or any
Affiliate thereof that could reasonably be expected to result in a Material
Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and

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

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

SECTION 5.03. Existence; Conduct of Business. The Company will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises, patents, copyrights,
trademarks and tradenames material to the conduct of its business; provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.

SECTION 5.04. Payment of Obligations. The Company will, and will cause each of
its Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Company or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 5.05. Maintenance of Properties; Insurance. The Company will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations, and the Company will furnish to any
Lender upon request full information as to the insurance carried. The Company
shall deliver to the Administrative Agent endorsements in form and substance
reasonably acceptable to the Administrative Agent (x) to all “All Risk” physical
damage insurance policies on all of the Loan Parties’ tangible real and personal
property and assets and business interruption insurance policies naming the
Administrative Agent as lender loss payee and (y) to all general liability,
property and casualty policies naming the Administrative Agent as an additional
insured; provided, that the Company shall not be required to deliver to the
Administrative Agent such endorsements to any automobile insurance policies. In
the event the Company or any other Loan Party at any time or times hereafter
shall fail to obtain or maintain any of the policies or insurance required
herein or to pay any premium in whole or in part relating thereto, then the
Administrative Agent, without waiving or releasing any obligations or resulting
Event of Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the
Administrative Agent deems advisable. All sums so disbursed by the
Administrative Agent shall constitute part of the Secured Obligations, payable
as provided in this Agreement or other Loan Documents. Except as otherwise
permitted pursuant to Section 2.11(b)(iv) hereof, the Company shall direct (and,
if applicable, shall cause the other Loan Parties to direct) all insurers under
policies of property damage, boiler and machinery and business interruption
insurance and payors and any condemnation claim or award relating to the
property to pay all proceeds payable under such policies or with respect to such
claim or award for any loss with respect to the Collateral directly to the
Administrative Agent, for the benefit of the Holders of Secured Obligations, to
the extent such proceeds are required to be used to prepay the Secured
Obligations pursuant to the terms hereof or any other Loan Document. Each such
policy shall contain a long-form loss-payable endorsement naming the
Administrative Agent as lender loss payee, which endorsement shall be in form
and substance reasonably acceptable to the Administrative Agent.

SECTION 5.06. Books and Records; Inspection Rights. The Company will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Company will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, at the sole
cost of the Company, to visit and inspect any of its property, including,
without limitation, the Collateral, books and financial records of the Company
and its Subsidiaries, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.

 

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SECTION 5.07. Compliance with Laws.

(a) The Company will, and will cause each of its Subsidiaries to, comply with
all laws, rules, regulations and orders of any Governmental Authority applicable
to it or its property (including without limitation Environmental Laws), except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

(b) The Company will ensure, and cause each of its Subsidiaries to ensure, that
no person who owns a controlling interest in or otherwise controls a Loan Party
is or shall be (i) listed on the Specially Designated Nationals and Blocked
Person List maintained by OFAC of 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) of Executive Order No. 13224 (September 23, 2001), any related enabling
legislation or any other similar Executive Orders.

SECTION 5.08. Use of Proceeds. The proceeds of the Revolving Loans will be used
only (i) to finance the Farnam Acquisition and costs and expenses incurred in
connection therewith, (ii) to repay certain existing Indebtedness (including
under the Existing Credit Agreement), (iii) to finance Permitted Acquisitions
and (iv) to finance the working capital needs, and for other general corporate
purposes, of the Company and its Subsidiaries in the ordinary course of
business. The proceeds of the Tranche B Term Loans will be used only (i) to
finance the Farnam Acquisition and costs and expenses incurred in connection
therewith and (ii) to repay certain existing Indebtedness (including under the
Existing Credit Agreement). The proceeds of any Incremental Term Loans will be
used only (i) to finance Permitted Acquisitions and (ii) to finance the working
capital needs, and for other general corporate purposes, of the Company and its
Subsidiaries in the ordinary course of business. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations T, U
and X. Letters of Credit will be issued for general corporate purposes of the
Company and its Subsidiaries in the ordinary course of business.

SECTION 5.09. Subsidiary Guaranty and Collateral Documents; Additional
Subsidiary Guarantors.

(a) The Company shall cause (i) each of its Material Subsidiaries and (ii) each
other Subsidiary necessary for the Company to comply with the requirements set
forth in Section 6.14, to guarantee, pursuant to a Subsidiary Guaranty or a
supplement thereto, the Secured Obligations. In furtherance of the above, the
Company shall promptly upon any Person becoming a Material Subsidiary or a
Subsidiary required to comply with Section 6.14 to provide written notice
thereof to the Administrative Agent and the Lenders, setting forth information
in reasonable detail (as requested by the Administrative Agent) describing all
of the personal property of such Person, and shall promptly (and, in any event,
within thirty (30) days of becoming a Material Subsidiary or a Subsidiary
required to comply with Section 6.14) (A) cause such Person to execute a
Subsidiary Guaranty and a Pledge and Security Agreement (or joinders or
supplements thereto) and such other Collateral Documents as are reasonably
necessary for the Company and its Subsidiaries to comply with this Section 5.09
and Section 5.10, (B) cause the Applicable Pledge Percentage of the issued and
outstanding equity interests of such Person to be delivered to the
Administrative Agent (together with undated stock powers signed in blank, if

 

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applicable) and pledged to the Administrative Agent pursuant to an appropriate
Pledge and Security Agreement (or joinder or other supplement thereto) and
(C) deliver such other documentation as the Administrative Agent may reasonably
request in connection with the foregoing, including, without limitation,
certified resolutions and other authority documents of such Person and, to the
extent reasonably requested by the Administrative Agent with respect to Material
Subsidiaries, favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent.

(b) Without limiting the foregoing clause (a), in the event that a Subsidiary
Guarantor which is not a Material Subsidiary becomes a Material Subsidiary, the
Company shall promptly upon such Person becoming a Material Subsidiary provide
written notice thereof to the Administrative Agent and the Lenders and shall
promptly (and, in any event, within thirty (30) days of becoming a Material
Subsidiary) deliver favorable opinions of counsel to such Person (which shall
cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to in clause (a) above), all in
form, content and scope reasonably satisfactory to the Administrative Agent.

(c) Notwithstanding the foregoing, no Foreign Subsidiary shall be required to
execute and deliver a Subsidiary Guaranty or a Pledge and Security Agreement (or
a joinder or supplement thereto) or any such Collateral Documents if such
execution and delivery would cause a Deemed Dividend Problem or a Financial
Assistance Problem with respect to such Foreign Subsidiary and, in lieu thereof,
the Company and the relevant Subsidiaries shall provide the pledge agreements
with respect to the Applicable Pledge Percentage of Equity Interests of such
Foreign Subsidiary required under this Section 5.09 or Section 5.10.

SECTION 5.10. Collateral.

(a) The Company will cause, and will cause each other Loan Party to cause, all
of its owned existing and future personal property (including, without
limitation, all existing and future intercompany Indebtedness and all existing
and future Equity Interests in Subsidiaries, subject to the limitations herein)
to be subject at all times to first priority, perfected Liens in favor of the
Administrative Agent for the benefit of the Holders of Secured Obligations, to
secure the Secured Obligations in accordance with the terms and conditions of
the Collateral Documents, subject in any case to Liens permitted by Section 6.02
hereof. Without limiting the generality of the foregoing, the Company will cause
the Applicable Pledge Percentage of the issued and outstanding equity interests
of each Loan Party directly owned by the Company or any other Loan Party to be
subject at all times to a first priority, perfected Lien in favor of the
Administrative Agent in accordance with the terms and conditions of the
Collateral Documents or such other security documents as the Administrative
Agent shall reasonably request, together with such other documentation as the
Administrative Agent may reasonably request in connection with the foregoing,
including, without limitation, certified resolutions and other authority
documents of such Person and, to the extent reasonably requested by the
Administrative Agent, customary opinions of counsel with respect to such Person
(which shall cover, among other things, the legality, validity, binding effect
and enforceability of the documentation referred to above and attachment and
perfection of all Liens thereunder), all in form, content and scope reasonably
satisfactory to the Administrative Agent.

 

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(b) The Lenders and the Company, on behalf of itself and the other Loan Parties,
irrevocably authorize the Administrative Agent, at its option and in its
reasonable judgment, in the event that, at any time, the Administrative Agent
determines that it does not have a first priority, perfected Lien on
substantially all of the personal property of any Loan Party to secure the
Secured Obligations, to obtain first priority, perfected Liens on such
unencumbered assets as the Administrative Agent deems necessary (or at the
direction of the Required Lenders) to secure the Secured Obligations. The
Company shall provide, and cause the other Loan Parties to provide, the
Administrative Agent with all information reasonably requested by the
Administrative Agent from time to time related to assets owned by the Company
and the its Subsidiaries, shall cooperate fully with the Administrative Agent
with respect to the performance of due diligence and the execution of
instruments and other Collateral Documents and making of any filings necessary
to facilitate such Lien perfection (including, without limitation, certified
resolutions and other authority documents of any applicable Subsidiary and, to
the extent requested by the Administrative Agent, customary opinions of counsel
with respect to such Subsidiary (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above and attachment and perfection of all Liens thereunder), all in
form, content and scope reasonably satisfactory to the Administrative Agent) and
shall pay all reasonable costs and expenses incurred by the Administrative Agent
and its counsel in connection therewith, whereupon such Subsidiary shall
thereafter be deemed a “Loan Party” hereunder.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees and other amounts payable hereunder and under
the other Loan Documents have been paid in full and all Letters of Credit have
expired or terminated (unless cash collateral in an amount equal to 105% of the
aggregate undrawn face amount of such Letters of Credit shall have been pledged
to the Administrative Agent in a manner consistent with Section 2.06(j) of this
Agreement) and all LC Disbursements shall have been reimbursed, the Company
covenants and agrees with the Lenders that:

SECTION 6.01. Indebtedness. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:

(a) the Secured Obligations and any other Indebtedness created under the Loan
Documents;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01
(including the Senior Subordinated Notes), and extensions, renewals and
replacements of any Indebtedness permitted under this clause (b) with
Indebtedness of a similar type; provided that, except for other Subordinated
Indebtedness permitted by Section 6.01(h), (i) the principal amount of such
Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not
extended to any additional property of any Loan Party, (iii) no Loan Party that
is not originally

 

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obligated with respect to repayment of such Indebtedness is required to become
obligated with respect thereto, (iv) such extension, refinancing or renewal does
not result in a shortening of the average weighted maturity of the Indebtedness
so extended, refinanced or renewed, (v) the terms of any such extension,
refinancing, or renewal are not less favorable to the obligor or obligors
thereunder than the original terms of such Indebtedness and (vi) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment or Liens to the Secured Obligations, then the terms and conditions of
the refinancing, renewal, or extension Indebtedness must include subordination
terms and conditions that are at least as favorable to the Administrative Agent
and the Lenders as those that were applicable to the refinanced, renewed, or
extended Indebtedness;

(c) Indebtedness of the Company to any Subsidiary and of any Subsidiary to the
Company or any other Subsidiary; provided that (i) Indebtedness of any
Subsidiary that is not a Loan Party to any Loan Party shall be subject to
Section 6.04, (ii) Indebtedness of the Company or any Subsidiary to a Loan Party
shall be subject to a first priority Lien in favor of the Administrative Agent
(for itself and the Holders of Secured Obligations) as Collateral for the
Secured Obligations and (iii) Indebtedness of any Loan Party shall be
subordinated to the Secured Obligations on terms reasonably satisfactory to the
Administrative Agent;

(d) Guarantees by the Company of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Company or any other Subsidiary; provided that
(i) the Indebtedness so guaranteed is permitted by this Section 6.01,
(ii) Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not
a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted
under this clause (d) shall be subordinated to the Secured Obligations of the
Company or the applicable Subsidiary on the same terms as the Indebtedness so
guaranteed is subordinated to the Secured Obligations;

(e) Indebtedness of the Company or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 180
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) shall not exceed $20,000,000 at any time outstanding;

(f) Indebtedness of the Company or any Subsidiary incurred pursuant to Permitted
Receivables Facilities; it being understood and agreed that the Attributable
Receivables Indebtedness thereunder shall not exceed an aggregate amount of
$100,000,000 at any time outstanding;

(g) Indebtedness of the Company or any Subsidiary as an account party in respect
of trade letters of credit;

(h) other Subordinated Indebtedness; provided that the Company shall have
demonstrated to the Administrative Agent’s reasonable satisfaction that, after
giving effect to the

 

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incurrence of such Subordinated Indebtedness, the Company and its Subsidiaries
are in compliance on a pro forma basis with the covenants contained in Sections
6.14 and 6.15 recomputed as of the last day of the most recently ended fiscal
quarter of the Company for which financial statements are available, as if such
Subordinated Indebtedness had been incurred on the first day of each relevant
period for testing such compliance; and

(i) other Indebtedness of the Company and its Subsidiaries, not otherwise
permitted by this Section, not exceeding 10% of Consolidated Net Worth at any
time outstanding; provided that the aggregate principal amount of Indebtedness
of the Company’s Subsidiaries that are not Loan Parties permitted by this clause
(i) shall not exceed at any time outstanding $40,000,000 minus the amount of
intercompany Indebtedness incurred by such Subsidiaries pursuant to clause
(c) above.

SECTION 6.02. Liens. The Company will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:

(a) Permitted Encumbrances;

(b) any Lien on any property or asset of the Company or any Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Company or any Subsidiary
and (ii) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof permitted by
Section 6.01;

(c) Liens on fixed or capital assets acquired, constructed or improved by the
Company or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Company or any Subsidiary;

(d) Liens on Permitted Receivables Facility Assets in connection with or to
secure Indebtedness arising under Permitted Receivables Facilities;

(e) customary bankers’ Liens and rights of setoff arising by operation of law
and incurred on deposits made in the ordinary course of business;

(f) Liens in favor of the Administrative Agent for the benefit of itself and the
Holders of Secured Obligations created pursuant to any Loan Document; and

(g) other Liens securing Indebtedness having an aggregate principal amount not
to exceed $50,000,000 at any time.

 

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SECTION 6.03. Fundamental Changes.

(a) The Company will not, and will not permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or sell, transfer, lease or otherwise dispose (including
pursuant to a Sale and Leaseback Transaction) of (in one transaction or in a
series of transactions) any of its assets, or all or substantially all of the
Equity Interests of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing:

(i) any Person may merge into the Company in a transaction in which the Company
is the surviving corporation;

(ii) any Person (other than the Company) may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary; provided, that if any
party to such merger is a Subsidiary that is a Borrower or a Subsidiary
Guarantor, the surviving entity shall be or become a Borrower or a Subsidiary
Guarantor, as the case may be, concurrently with such merger;

(iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the
Company determines in good faith that such liquidation or dissolution is in the
best interests of the Company and is not materially disadvantageous to the
Lenders; and

(iv) any Asset Sale permitted pursuant to Section 6.10 may be consummated;

provided that any merger described in this Section 6.03(a) involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.04.

(b) The Company will not, and will not permit any of its Subsidiaries to, engage
to any material extent in any business other than businesses of the type
conducted by the Company and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.

SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The
Company will not, and will not permit any of its Subsidiaries to, purchase, hold
or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except

(a) Permitted Investments;

(b) investments by the Company and its Subsidiaries existing on the date hereof
in the capital stock of their respective Subsidiaries, as set forth on Schedule
3.01;

(c) subject to the other restrictions in Section 6.01, loans or advances made by
the Company to any Subsidiary and made by any Subsidiary to the Company or any
other

 

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Subsidiary; provided that not more than $10,000,000 in loans, advances or
capital contributions may be made and remain outstanding, during the term of
this Agreement, by any Loan Party to a Subsidiary which is not a Loan Party;

(d) Guarantees constituting Indebtedness permitted by Section 6.01;

(e) investments made in connection with a Permitted Receivables Facility;

(f) Permitted Acquisitions; and

(g) any other investment, loan or advance (other than acquisitions) so long as
the aggregate amount of all such investments, loans and advances does not exceed
15% of Consolidated Net Worth during the term of this Agreement.

SECTION 6.05. Swap Agreements. The Company will not, and will not permit any of
its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Company or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of the
Company or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Company or
any Subsidiary.

SECTION 6.06. Restricted Payments. The Company will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Company may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its common stock, (b) Subsidiaries may declare and pay dividends
ratably with respect to their Equity Interests, (c) the Company may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Company and its
Subsidiaries and (d) if no Default has occurred and is continuing, the Company
may make additional Restricted Payments in an aggregate amount not to exceed
$75,000,000 (the “Maximum Restricted Payment Amount”) during the term of this
Agreement; provided that if the Total Leverage Ratio for the fiscal quarter most
recently ended is less than 3.00 to 1.00 (giving pro forma effect to such
Restricted Payment), the Maximum Restricted Payment Amount shall be increased to
$100,000,000; provided, however, that (i) if as of the end of any fiscal quarter
after the Maximum Restricted Payment Amount has been increased pursuant to the
immediately preceding proviso, the Total Leverage Ratio is greater than or equal
to 3.00 to 1.00 and (ii) the Company has already made Restricted Payments under
this clause (d) during the term of this Agreement in excess of $75,000,000, then
the Maximum Restricted Payment Amount shall be $2,500,000 per fiscal year
(unless the Company has already made Restricted Payments under this clause
(d) in excess of $2,500,000 during the fiscal year in which such reduction of
the Maximum Restricted Payment Amount has occurred, in which case, solely for
such fiscal year, the Maximum Restricted Payment Amount shall equal the actual
amount of Restricted Payments under this clause (d) already made during such
fiscal year and the Company shall not make any additional Restricted Payments
under this clause (d) for the balance of such fiscal year).

 

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SECTION 6.07. Transactions with Affiliates. The Company will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Company or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions permitted by the terms of this Agreement solely between or
among the Company and its wholly owned Subsidiaries and not involving any other
Affiliate and (c) any Restricted Payment permitted by Section 6.06.

SECTION 6.08. Restrictive Agreements. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of the Company or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to holders of its Equity Interests or to make or repay loans or advances to the
Company or any other Subsidiary or to Guarantee Indebtedness of the Company or
any other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement and the other
Loan Documents, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof and specifically identified on Schedule
6.08 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in Permitted Receivables Facility Documents, (iv) the foregoing shall
not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (v) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (vi) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.

SECTION 6.09. Changes in Fiscal Year. The Company will not, nor will it permit
any of its Subsidiaries to, change its fiscal year from the basis in effect on
the Effective Date.

SECTION 6.10. Asset Sales. The Company will not, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose (including pursuant to
a Sale and Leaseback Transaction) of any property or asset of the Company or any
of its Subsidiaries (including a disposition of Equity Interests of any
Subsidiary) other than:

(a) sales or other dispositions of inventory in the ordinary course of business;

(b) sales or other dispositions of used, obsolete, worn-out or surplus equipment
or property in the ordinary course of business;

 

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(c) sales or transfers of Permitted Receivables Facility Assets under and in
accordance with the terms of Permitted Receivables Facilities;

(d) other sales, transfers, leases or other dispositions (including pursuant to
a Sale and Leaseback Transaction) of assets for fair value not exceeding 10% of
Consolidated Total Assets in aggregate amount during any fiscal year and not
exceeding 35% of Consolidated Total Assets in aggregate amount during the term
of this Agreement; provided, that such sale, transfer, lease or other
disposition is for at least 90% cash consideration; provided, further, that,
with respect to any sale, lease or disposition of assets pursuant to this
Section 6.10(d), (i) the Net Proceeds of such sale or other disposition of
assets are applied as required by Section 2.11(b) and (ii) at the time of such
sale or other disposition, and immediately after giving effect thereto, no
Default shall have occurred and be continuing.

SECTION 6.11. Leases. The Company will not, and will not permit any Subsidiary
to, enter into or remain liable upon any Operating Lease, except for Operating
Leases which have Operating Lease Obligations of not more than $40,000,000 at
any one time outstanding. The Company will not, and will not permit any
Subsidiary to, enter into any Sale and Leaseback Transaction except to the
extent that the underlying sale, lease, Indebtedness, Liens (if applicable) or
any other component of the transaction is otherwise permitted hereunder.

SECTION 6.12. Payments and Modification of Subordinated Indebtedness. The
Company will not, and will not permit any Subsidiary to, directly or indirectly,
declare, pay, make or set aside any amount for payment in respect of
Subordinated Indebtedness, except for regularly scheduled payments of principal
and interest at the non-default rate of interest (but no voluntary prepayments)
in respect of such Subordinated Indebtedness and indemnity obligations payable
pursuant to the Subordinated Indebtedness Documents, in each case made in full
compliance with any and all subordination provisions applicable to such
Subordinated Indebtedness. The Company will not, and will not permit any
Subsidiary to, directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness or any Indebtedness from time to time outstanding
under the Subordinated Indebtedness Documents. Furthermore, the Company will
not, and will not permit any Subsidiary to, amend the Subordinated Indebtedness
Documents or any document, agreement or instrument evidencing any Indebtedness
incurred pursuant to the Subordinated Indebtedness Documents (or any
replacements, substitutions, extensions or renewals thereof) or pursuant to
which such Indebtedness is issued where such amendment, modification or
supplement provides for the following or which has any of the following effects:

(a) increases the overall principal amount of any such Indebtedness or increases
the amount of any single scheduled installment of principal or interest;

(b) shortens or accelerates the date upon which any installment of principal or
interest becomes due or adds any additional mandatory redemption provisions;

(c) shortens the final maturity date of such Indebtedness or otherwise
accelerates the amortization schedule with respect to such Indebtedness;

(d) increases the rate of interest accruing on such Indebtedness;

 

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(e) provides for the payment of additional fees or increases existing fees;

(f) amends or modifies any financial or negative covenant (or covenant which
prohibits or restricts the Company or any Subsidiary from taking certain
actions) in a manner which is more onerous or more restrictive in any material
respect to the Company or such Subsidiary or which is otherwise materially
adverse to the Borrower, any Subsidiary and/or the Lenders or, in the case of
any such covenant, which places material additional restrictions on the Company
or such Subsidiary or which requires the Company or such Subsidiary to comply
with more restrictive financial ratios or which requires the Company or such
Subsidiary to better its financial performance, in each case from that set forth
in the existing applicable covenants in the Subordinated Indebtedness Documents
or the applicable covenants in this Agreement; or

(g) amends, modifies or adds any affirmative covenant in a manner which (i) when
taken as a whole, is materially adverse to the Borrower, any Subsidiary and/or
the Lenders or (ii) is more onerous than the existing applicable covenant in the
Subordinated Indebtedness Documents or the applicable covenant in this
Agreement.

SECTION 6.13. Capital Expenditures. The Company will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, in excess of $50,000,000 (the
“Maximum Capital Expenditures Amount”) for Capital Expenditures of the Company
and its Subsidiaries during any fiscal year of the Company; provided that the
Maximum Capital Expenditures Amount for any fiscal year shall be increased by an
amount equal to the excess, if any (but in no event more than $5,000,000), of
the Maximum Capital Expenditures Amount for the previous fiscal year (without
giving effect to any adjustment in accordance with this proviso) over the actual
amount of Capital Expenditures for such previous fiscal year.

SECTION 6.14. Non-Guarantor Subsidiaries; Guarantors Under Senior Subordinated
Notes. The Company shall not permit (a) the portion of Consolidated EBITDA
represented by Subsidiaries which are not Subsidiary Guarantors to exceed ten
percent (10%) of the Company’s Consolidated EBITDA or (b) the total assets of
the Subsidiaries which are not Subsidiary Guarantors to be equal to or greater
than ten percent (10%) of the Company’s Consolidated Total Assets. In addition,
the Company shall not at any time permit any Subsidiary to guaranty any other
Indebtedness of a Borrower (including, without limitation, the obligations under
the Senior Subordinated Note Indenture and/or the Senior Subordinated Notes)
unless and until such Subsidiary has become a Subsidiary Guarantor pursuant to,
and in accordance with the terms of, Sections 5.09 and 5.10 hereof.

SECTION 6.15. Financial Covenants.

(a) Minimum Interest Coverage Ratio. The Company will not permit the ratio,
determined as of the end of each of its fiscal quarters ending on and after
March 25, 2006 for the period of 4 consecutive fiscal quarters ending with the
end of such fiscal quarter, of (i) Consolidated EBITDA to (ii) Consolidated
Interest Expense, all calculated for the Company and its Subsidiaries on a
consolidated basis, to be less than:

(A) 3.0 to 1.0 commencing with and for the fiscal quarter ending on March 25,
2006 through the fiscal quarter ending in June 2006;

 

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(B) 3.25 to 1.0 commencing with and for the fiscal quarter ending in September
2006 through the fiscal quarter ending in December 2006; and

(C) 3.5 to 1.0 commencing with and for the fiscal quarter ending in March 2007
and for each fiscal quarter thereafter.

(b) Maximum Leverage Ratio. The Company will not permit the ratio, determined as
of the end of each of its fiscal quarters ending on and after March 25, 2006, of
(i) Consolidated Total Indebtedness as of the last day of such fiscal quarter to
(ii) Consolidated EBITDA for the period of 4 consecutive fiscal quarters ending
with the end of such fiscal quarter (such ratio, the “Total Leverage Ratio”),
all calculated for the Company and its Subsidiaries on a consolidated basis, to
be greater than:

(A) 4.75 to 1.0 commencing with and for the fiscal quarter ending on March 25,
2006 through the fiscal quarter ending in September 2006;

(B) 4.5 to 1.0 commencing with and for the fiscal quarter ending in December
2006 through the fiscal quarter ending in March 2007;

(C) 4.0 to 1.0 commencing with and for the fiscal quarter ending in June 2007
through the fiscal quarter ending in September 2007;

(D) 3.75 to 1.0 commencing with and for the fiscal quarter ending in December
2007 through the fiscal quarter ending June 2008; and

(E) 3.5 to 1.0 commencing with and for the fiscal quarter ending in September
2008 and for each fiscal quarter thereafter.

ARTICLE VII

Events of Default

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

(a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b) any Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in clause (a) of this Article)
payable under this Agreement, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three (3) Business
Days;

(c) any representation or warranty made or deemed made by or on behalf of any
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this

 

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Agreement or any other Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been incorrect in any material respect
when made or deemed made;

(d) (i) the Company or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03 (with respect
to organizational existence), 5.08, 5.09 or 5.10 or in Article VI or (ii) any
Loan Document shall for any reason not be or shall cease to be in full force and
effect or is declared to be null and void, or the Company or any Loan Party
takes any action for the purpose of terminating, repudiating or rescinding any
Loan Document or any of its obligations thereunder not otherwise permitted
hereunder;

(e) any Borrower or any Subsidiary Guarantor, as applicable, shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in clause (a), (b) or (d) of this Article)
or any other Loan Document, and such failure shall continue unremedied for a
period of thirty (30) days after the earlier to occur of (i) written notice
thereof from the Administrative Agent to the Company (which notice will be given
at the request of any Lender) or (ii) the date on which an officer of the
Company knew or should have known of such failure;

(f) the Company or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable after all
applicable grace periods;

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) bankruptcy, winding up, dissolution, liquidation,
reorganization or other relief in respect of the Company or any Subsidiary or
its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered;

(i) the Company or any Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking bankruptcy, winding up, dissolution, liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any Subsidiary
or for a

 

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substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

(j) the Company or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $20,000,000 shall be rendered against the Company, any Subsidiary or
any combination thereof (excluding amounts to the extent covered by a valid and
binding policy of insurance between the defendant and the insurer covering full
payment thereof and with respect to which such insurer has been notified, and
has not disputed the claim made for payment), or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the Company or
any Subsidiary to enforce any such judgment, and the same shall remain
undischarged, unstayed (including pursuant to an appeal), unvacated or unbonded,
as appropriate, for a period of sixty (60) consecutive days;

(l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document; or

(o) any Loan Document shall fail to remain in full force or effect or any action
shall be taken or shall be failed to be taken to discontinue or to assert the
invalidity or unenforceability of, or which results in the discontinuation or
invalidity or unenforceability of, any Loan Document or any Lien in favor of the
Administrative Agent under the Loan Documents, or such Lien shall not have the
priority contemplated by the Loan Documents;

then, and in every such event (other than an event with respect to the Company
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder
and under the other Loan Documents, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrowers; and in case of any event with respect to any
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations

 

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accrued hereunder and under the other Loan Documents, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers. Upon the occurrence and
the continuance of an Event of Default, the Administrative Agent may, and at the
request of the Required Lenders shall, exercise any rights and remedies provided
to the Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the Uniform Commercial Code.

ARTICLE VIII

The Administrative Agent

SECTION 8.01. General. Each of the Lenders and the Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf, and on behalf of the
Holders of Secured Obligations, and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

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

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Company or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Company or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement,

 

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instrument or document, (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent, or (vi) the perfection or
priority of any of the Liens on any of the Collateral.

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

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

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Company. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by any Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between such Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance

 

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upon the Administrative Agent or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or
thereunder.

None of the Lenders, if any, identified in this Agreement as a Syndication Agent
or Co-Documentation Agent shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of such Lenders shall have
or be deemed to have a fiduciary relationship with any Lender. Each Lender
hereby makes the same acknowledgments with respect to the relevant Lenders in
their respective capacities as Syndication Agent or Co-Documentation Agents, as
applicable, as it makes with respect to the Administrative Agent in the
preceding paragraph.

Except with respect to the exercise of setoff rights of any Lender, including
the Issuing Bank, in accordance with Section 9.08, the proceeds of which are
applied in accordance with this Agreement and the other Loan Documents, and
subject to the agreements in the second succeeding paragraph, each Lender agrees
that it will not take any action, nor institute any actions or proceedings,
against any Borrower or other Loan Party with respect to any Loan Document
without the prior written consent of the Required Lenders or, as may be provided
in this Agreement or the other Loan Documents, with the consent of the
Administrative Agent.

The Lenders, including the Issuing Bank, are not partners or co-venturers, and
no Lender shall be liable for the acts or omissions of, or (except as otherwise
set forth herein in case of the Administrative Agent) authorized to act for, any
other Lender. The Administrative Agent shall have the exclusive right on behalf
of the Lenders to enforce the payment of the principal of and interest on any
Loan or any Letter of Credit after the date such principal or interest has
become due and payable pursuant to the terms of this Agreement.

In its capacity, the Administrative Agent is a “representative” of the Holders
of Secured Obligations within the meaning of the term “secured party” as defined
in the New York Uniform Commercial Code. Each Lender authorizes the
Administrative Agent to enter into each of the Collateral Documents to which it
is a party and to take all action contemplated by such documents. Each Lender
agrees that no Holder of Secured Obligations (other than the Administrative
Agent) shall have the right individually to seek to realize upon the security
granted by any Collateral Document, it being understood and agreed that such
rights and remedies may be exercised solely by the Administrative Agent for the
benefit of the Holders of Secured Obligations upon the terms of the Collateral
Documents. In the event that any Collateral is hereafter pledged by any Person
as collateral security for the Secured Obligations, the Administrative Agent is
hereby authorized, and hereby granted a power of attorney, to execute and
deliver on behalf of the Holders of Secured Obligations any Loan Documents
necessary or appropriate to grant and perfect a Lien on such Collateral in favor
of the Administrative Agent on behalf of the Holders of Secured Obligations. The
Administrative Agent is further authorized, and hereby granted a power of
attorney, to execute and deliver on behalf of the Holders of Secured Obligations
any intercreditor agreements necessary or appropriate to subordinate
Subordinated Indebtedness to the Secured Obligations. The Lenders hereby
authorize the Administrative Agent, at its option and in its discretion, to
release any Lien granted

 

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to or held by the Administrative Agent upon any Collateral (i) upon termination
of the Commitments and payment and satisfaction of all of the Secured
Obligations (other than contingent indemnity obligations and Secured Obligations
in respect of Swap Agreements) at any time arising under or in respect of this
Agreement or the Loan Documents or the transactions contemplated hereby or
thereby; (ii) as permitted by, but only in accordance with, the terms of the
applicable Loan Document; or (iii) if approved, authorized or ratified in
writing by the Required Lenders, unless such release is required to be approved
by all of the Lenders hereunder. Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent’s authority
to release particular types or items of Collateral pursuant hereto. Upon any
sale or transfer of assets constituting Collateral which is permitted pursuant
to the terms of any Loan Document, or consented to in writing by the Required
Lenders or all of the Lenders, as applicable, and upon at least five
(5) Business Days’ prior written request by the Company to the Administrative
Agent, the Administrative Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Administrative Agent for the benefit of the
Holders of Secured Obligations herein or pursuant hereto upon the Collateral
that was sold or transferred; provided, however, that (i) the Administrative
Agent shall not be required to execute any such document on terms which, in the
Administrative Agent’s opinion, would expose the Administrative Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Secured Obligations or any
Liens upon (or obligations of the Company or any Subsidiary in respect of) all
interests retained by the Company or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to constitute
part of the Collateral.

The acknowledgments and agreements of any Lender in this Section 8.01 shall be
deemed to be made by such Lender on behalf of itself and its Affiliates. For
purposes of such acknowledgements and agreements, the term “Lender” shall
include the Issuing Bank.

SECTION 8.02. PTR Scheme.

(i) In the event that the UK Subsidiary becomes a Foreign Subsidiary Borrower
party hereto, each Revolving Lender (a) irrevocably appoints the Administrative
Agent to act as syndicate manager under, and authorizes the Administrative Agent
to operate, and take any action necessary or desirable under, the PTR Scheme in
connection with this Agreement, (b) shall cooperate with the Administrative
Agent in completing any procedural formalities necessary under the PTR Scheme,
and shall promptly supply to the Administrative Agent such information as the
Administrative Agent may request in connection with the operation of the PTR
Scheme, and (c) without limiting the liability of the UK Borrower under this
Agreement, shall, within five (5) Business Days of demand, indemnify the
Administrative Agent for any liability or loss incurred by the Administrative
Agent as a result of the Administrative Agent acting as syndicate manager under
the PTR Scheme in connection with such Lender’s participation in any Borrowing
(except to the extent that the liability or loss arises directly from the
Administrative Agent’s gross negligence or willful misconduct).

 

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(ii) The UK Borrower acknowledges that it is fully aware of its contingent
obligations under the PTR Scheme and shall (a) promptly supply to the
Administrative Agent such information as the Administrative Agent may request in
connection with the operation of the PTR Scheme and (b) act in accordance with
any provisional notice issued by H.M. Revenue & Customs under the PTR Scheme.

(iii) Each of the parties hereto acknowledge that the Administrative Agent
(a) is entitled to rely completely upon information provided to it in connection
with subparagraphs (i) or (ii) above, (b) is not obliged to undertake any
inquiry into the accuracy of such information, nor into the taxation status of
any Lender or, as the case may be, UK Borrower providing such information and
(c) shall have no liability to any Person for the accuracy of any information
the Administrative Agent submits in connection with sub-paragraph (i)(a) above.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:

(i) if to any Borrower, to it c/o Central Garden & Pet Company, 1340 Treat
Boulevard, Suite 600, Walnut Creek, California 94597, Attention of Roger J.
Fleischmann (Facsimile No. (925) 947-0438);

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, National
Association, Loan and Agency Services Group, 10 South Dearborn Street, 19th
Floor, Suite IL1-0010, Chicago, Illinois 60603-2003, Attention of Deborah Turner
(Facsimile No. (312) 385-7096);

(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, National
Association, Global Trade Services, Regional Processing Center, 333 South Grand
Avenue, Suite 3600, Los Angeles, California, Attention of Danny Blagojevic, Vice
President & Manager, (Facsimile No. (213) 621-8079);

(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, National
Association, Loan and Agency Services Group, 10 South Dearborn Street, 19th
Floor, Suite IL1-0010, Chicago, Illinois 60603-2003, Attention of Deborah Turner
(Facsimile No. (312) 385-7096); and

(v) if to any other Lender, to it at its address (or facsimile number) set forth
in its Administrative Questionnaire.

 

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(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Company may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

SECTION 9.02. Waivers; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

(b) Except as provided in Section 2.20, neither this Agreement nor any other
Loan Document nor any provision hereof or thereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders or by the Borrowers and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon (other than (a) a waiver
of the application of the default rate of interest pursuant to Section 2.13(c)
hereof or (b) as a result of a change in the definition of Total Leverage Ratio
or any of the components thereof or the method of calculation thereof), or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this

 

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Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender or (vi) other than
pursuant to a transaction permitted by the terms of this Agreement or any other
Loan Document, (x) release all or substantially all of the Collateral or
(y) release the Company or all or substantially all of the Subsidiary Guarantors
from, their respective obligations under Article X or the Subsidiary Guaranties,
as applicable, without the written consent of each Lender; provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
or under any other Loan Document without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be.

SECTION 9.03. Expenses; Indemnity; Damage Waiver.

(a) The Company shall pay (i) all reasonable, documented out-of-pocket expenses
incurred by the Administrative Agent and its Affiliates, including the
reasonable, documented fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable,
documented out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all documented, out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with any Loan Document,
including its rights under this Section, or in connection with the Loans made or
Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit. Expenses being reimbursed by the Company under this
Section include, without limiting the generality of the foregoing, costs and
expenses incurred in connection with (i) lien searches, (ii) taxes, fees and
other charges for filing financing statements and continuations, and other
actions to perfect, protect, and continue the Administrative Agent’s Liens and
the Collateral and (iii) sums paid or incurred to take any action required of
any Loan Party under the Loan Documents that such Loan Party fails to pay or
take.

(b) The Company shall indemnify the Administrative Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement or any
other Loan Document or agreement or instrument contemplated hereby or thereby,
the performance by the parties of this Agreement or any other Loan Document of
their respective obligations hereunder or thereunder or the consummation of the
Transactions or any other transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use of the

 

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proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.

(c) To the extent that the Company fails to pay any amount required to be paid
by it to the Administrative Agent, the Issuing Bank or the Swingline Lender or
any Related Party of any of them under paragraph (a) or (b) of this Section,
each Lender severally agrees to pay to the Administrative Agent, the Issuing
Bank or the Swingline Lender, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity
as such.

(d) To the extent permitted by applicable law, no Borrower shall assert, and
each Borrower hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen
(15) days after written demand therefor.

SECTION 9.04. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) no Borrower may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by any Borrower without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

 

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(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

(A) the Company; provided that no consent of the Company shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee; and

(B) the Administrative Agent; provided that no consent of the Administrative
Agent shall be required for an assignment of any Term Loans from a Lender to an
Affiliate, or an Approved Fund, of such Lender; and

(C) the Issuing Bank; provided that no consent of the Issuing Bank shall be
required for an assignment of any Term Loans from a Lender to an Affiliate, or
an Approved Fund, of such Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate, or an
Approved Fund, of a Lender or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
(x) with respect to a Revolving Commitment or Revolving Credit Exposure, the
lesser of $5,000,000 and the remaining amount of such Lender’s Revolving Credit
Exposure or Revolving Commitment and (y) with respect to Term Loans, the lesser
of $1,000,000 and the remaining amount of such Lender’s Term Loans, unless each
of the Company and the Administrative Agent otherwise consent, provided that no
such consent of the Company shall be required if an Event of Default has
occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement
and the other Loan Documents, provided that this clause shall not be construed
to prohibit the assignment of a proportionate part of all the assigning Lender’s
rights and obligations in respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 (except in the case of an assignment from a Lender
to an Affiliate, or an Approved Fund, of such Lender); and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information

 

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(which may contain material non-public information about the Company and its
affiliates, the Loan Parties and their Related Parties or their respective
securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws,
including Federal and state securities laws.

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

(ii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

(iii) The Administrative Agent, acting for this purpose as an agent of each
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(iv) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the

 

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information contained therein in the Register; provided that if either the
assigning Lender or the assignee shall have failed to make any payment required
to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d)
or 9.03(c), the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

(c) (i) Any Lender may, without the consent of the Company, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrowers, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of
this Section, each Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Company’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Company
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 2.17(e) as though
it were a Lender.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

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SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any other Loan Document or
any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.

SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final and in whatever currency denominated) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of any Borrower against any of and all the obligations of such
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

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SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court of the State
of New York sitting in New York County and of the United States District Court
of the Southern District of New York, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender or the Borrower may otherwise have to bring any action or
proceeding relating to this Agreement against any Borrower or its properties in
the courts of any jurisdiction or against any Lender, as the case may be.

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

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Each Foreign Subsidiary
Borrower irrevocably designates and appoints the Company, as its authorized
agent, to accept and acknowledge on its behalf, service of any and all process
which may be served in any suit, action or proceeding of the nature referred to
in Section 9.09(b) in any federal or New York State court sitting in New York
City. The Company hereby represents, warrants and confirms that the Company has
agreed to accept such appointment (and any similar appointment by a Subsidiary
Guarantor which is a Foreign Subsidiary). Said designation and appointment shall
be irrevocable by each such Foreign Subsidiary Borrower until all Loans, all
reimbursement obligations, interest thereon and all other amounts payable by
such Foreign Subsidiary Borrower hereunder and under the other Loan Documents
shall have been paid in full in accordance with the provisions hereof and
thereof and such Foreign Subsidiary Borrower shall have been terminated as a
Borrower hereunder pursuant to Section 2.23. Each Foreign Subsidiary Borrower
hereby consents to process being served in any suit, action or proceeding of the
nature referred to in Section 9.09(b) in any federal or New York State court
sitting in New York City by service of process upon the Company as provided in
this Section 9.09(d); provided that, to the extent lawful and possible,

 

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notice of said service upon such agent shall be mailed by registered or
certified air mail, postage prepaid, return receipt requested, to the Company
and (if applicable to) such Foreign Subsidiary Borrower at its address set forth
in the Borrowing Subsidiary Agreement to which it is a party or to any other
address of which such Foreign Subsidiary Borrower shall have given written
notice to the Administrative Agent (with a copy thereof to the Company). Each
Foreign Subsidiary Borrower irrevocably waives, to the fullest extent permitted
by law, all claim of error by reason of any such service in such manner and
agrees that such service shall be deemed in every respect effective service of
process upon such Foreign Subsidiary Borrower in any such suit, action or
proceeding and shall, to the fullest extent permitted by law, be taken and held
to be valid and personal service upon and personal delivery to such Foreign
Subsidiary Borrower. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality.

(a) Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to any Borrower and its obligations, (g)

 

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with the consent of the Company or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing Bank
or any Lender on a non-confidential basis from a source other than the Company
or any of its Subsidiaries. For the purposes of this Section, “Information”
means all information received from the Company relating to the Company or its
business, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the Company; provided that, in the case of information
received from the Company after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

(b) EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12(a)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWERS AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

(c) ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY
ANY BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWERS (AND THEIR
AFFILIATES, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES) AND ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE
BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS
ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE
PROCEDURES AND APPLICABLE LAW.

SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies each Borrower that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies such Borrower, which information includes the name and address
of such Borrower and other information that will allow such Lender to identify
such Borrower in accordance with the Act.

 

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ARTICLE X

Company Guarantee

In order to induce the Lenders to extend credit to the other Borrowers
hereunder, the Company hereby irrevocably and unconditionally guarantees, as a
primary obligor and not merely as a surety, the payment when and as due of the
Secured Obligations of such other Borrowers. The Company further agrees that the
due and punctual payment of such Secured Obligations may be extended or renewed,
in whole or in part, without notice to or further assent from it, and that it
will remain bound upon its guarantee hereunder notwithstanding any such
extension or renewal of any such Secured Obligation.

The Company waives presentment to, demand of payment from and protest to any
Borrower of any of the Secured Obligations, and also waives notice of acceptance
of its obligations and notice of protest for nonpayment. The obligations of the
Company hereunder shall not be affected by (a) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any right or remedy against any Borrower under the provisions of this
Agreement, any other Loan Document or otherwise; (b) any extension or renewal of
any of the Secured Obligations; (c) any rescission, waiver, amendment or
modification of, or release from, any of the terms or provisions of this
Agreement, or any other Loan Document or agreement; (d) any default, failure or
delay, willful or otherwise, in the performance of any of the Secured
Obligations; (e) the failure of the Administrative Agent to take any steps to
perfect and maintain any security interest in, or to preserve any rights to, any
security or collateral for the Secured Obligations, if any; (f) any change in
the corporate, partnership or other existence, structure or ownership of any
Borrower or any other guarantor of any of the Secured Obligations; (g) the
enforceability or validity of the Secured Obligations or any part thereof or the
genuineness, enforceability or validity of any agreement relating thereto or
with respect to any collateral securing the Secured Obligations or any part
thereof, or any other invalidity or unenforceability relating to or against any
Borrower or any other guarantor of any of the Secured Obligations, for any
reason related to this Agreement, any Swap Agreement, any other Loan Document,
or any provision of applicable law, decree, order or regulation of any
jurisdiction purporting to prohibit the payment by such Borrower or any other
guarantor of the Secured Obligations, of any of the Secured Obligations or
otherwise affecting any term of any of the Secured Obligations; or (h) any other
act, omission or delay to do any other act which may or might in any manner or
to any extent vary the risk of the Company or otherwise operate as a discharge
of a guarantor as a matter of law or equity or which would impair or eliminate
any right of the Company to subrogation.

Without limiting the waivers in the foregoing paragraph, the Company hereby
further waives:

(a) any defense arising by reason of or deriving from (1) an election of
remedies by the Administrative Agent and the Holders of Secured Obligations or
(2) any election by the Administrative Agent and the Holders of Secured
Obligations under Section 1111(b) of the Chapter 11 of Title 11 of the United
States Code (11 U.S.C. 101 et seq.) to limit the amount of, or any collateral
securing, its claim against the Company or any other guarantor of the Secured
Obligations;

 

97

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(b) pursuant to California Civil Code Section 2856, all rights and defenses
arising out of an election of remedies by the creditor, even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed the Company’s rights of subrogation
and reimbursement against any other Borrower or guarantor of the Secured
Obligations;

(c) the benefits of Section 2815 of the California Civil Code (or any similar
law in any other jurisdiction) purporting to allow a guarantor to revoke a
continuing guaranty with respect to any transactions occurring after the date of
the guaranty; and

(d) the Company’s right, under Sections 2845 or 2850 of the California Civil
Code, or otherwise, to require the Administrative Agent and the other Holders of
Secured Obligations to institute suit against, or to exhaust any rights and
remedies which the Administrative Agent and the other Holders of Secured
Obligations has or may have against any other Borrower or guarantor of the
Secured Obligations or any third party, or against any collateral provided by
any other guarantor of the Secured Obligations, or any third party; and the
Company further waives any defense arising by reason of any disability or other
defense (other than the defense that the Secured Obligations shall have been
fully and finally performed and indefeasibly paid) of any other Borrower or
guarantor of the Secured Obligations or by reason of the cessation from any
cause whatsoever of the liability of such other Borrowers or guarantors in
respect thereof.

WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH
IN THIS GUARANTEE, THE COMPANY HEREBY ABSOLUTELY, KNOWINGLY, UNCONDITIONALLY,
AND EXPRESSLY WAIVES AND AGREES NOT TO ASSERT ANY AND ALL BENEFITS OR DEFENSES
ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA CIVIL CODE
SECTIONS 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845,
2848, 2849, AND 2850, AND CALIFORNIA UNIFORM COMMERCIAL CODE SECTIONS 3116,
3118, 3119, 3419, 3605.

In accordance with Section 9.09 hereof, this Agreement shall be construed in
accordance with and governed by the law of the state of New York. The foregoing
referenced provisions of California law are included solely out of an abundance
of caution, and shall not be construed to mean that any of the referenced
provisions of California law are in any way applicable to this Agreement or to
any of the Secured Obligations.

The Company further agrees that its agreement hereunder constitutes a guarantee
of payment when due (whether or not any bankruptcy or similar proceeding shall
have stayed the accrual or collection of any of the Secured Obligations or
operated as a discharge thereof) and not merely of collection, and waives any
right to require that any resort be had by the Administrative Agent, the Issuing
Bank or any Lender to any balance of any deposit account or credit on the books
of the Administrative Agent, the Issuing Bank or any Lender in favor of any
Borrower or any other Person.

The obligations of the Company hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, and shall not be subject
to any defense or

 

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set-off, counterclaim, recoupment or termination whatsoever, by reason of the
invalidity, illegality or unenforceability of any of the Secured Obligations,
any impossibility in the performance of any of the Secured Obligations or
otherwise.

The Company further agrees that its obligations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Secured Obligation is rescinded or must otherwise be
restored by the Administrative Agent, the Issuing Bank or any Lender upon the
bankruptcy or reorganization of any Borrower or otherwise.

In furtherance of the foregoing and not in limitation of any other right which
the Administrative Agent, the Issuing Bank or any Lender may have at law or in
equity against the Company by virtue hereof, upon the failure of any other
Borrower to pay any Secured Obligation when and as the same shall become due,
whether at maturity, by acceleration, after notice of prepayment or otherwise,
the Company hereby promises to and will, upon receipt of written demand by the
Administrative Agent, the Issuing Bank or any Lender, forthwith pay, or cause to
be paid, to the Administrative Agent, the Issuing Bank or any Lender in cash an
amount equal to the unpaid principal amount of such Secured Obligations then
due, together with accrued and unpaid interest thereon. The Company further
agrees that if payment in respect of any Secured Obligation shall be due in a
currency other than Dollars and/or at a place of payment other than New York,
Chicago or any other Eurocurrency Payment Office and if, by reason of any Change
in Law, disruption of currency or foreign exchange markets, war or civil
disturbance or other event, payment of such Secured Obligation in such currency
or at such place of payment shall be impossible or, in the reasonable judgment
of the Administrative Agent, the Issuing Bank or any Lender, disadvantageous to
the Administrative Agent, the Issuing Bank or any Lender in any material
respect, then, at the election of the Administrative Agent, the Company shall
make payment of such Secured Obligation in Dollars (based upon the applicable
Equivalent Amount in effect on the date of payment) and/or in New York, Chicago
or such other Eurocurrency Payment Office as is designated by the Administrative
Agent and, as a separate and independent obligation, shall indemnify the
Administrative Agent, the Issuing Bank and any Lender against any losses or
reasonable out-of-pocket expenses that it shall sustain as a result of such
alternative payment.

Upon payment by the Company of any sums as provided above, all rights of the
Company against any Borrower arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be subordinated and junior in
right of payment to the prior indefeasible payment in full in cash of all the
Secured Obligations owed by such Borrower to the Administrative Agent, the
Issuing Bank and the Lenders.

Nothing shall discharge or satisfy the liability of the Company hereunder except
the full performance and payment of the Secured Obligations.

[Signature Pages Follow]

 

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

 

CENTRAL GARDEN & PET COMPANY,

as the Company

By:  

/s/ Roger J. Fleischmann, Jr.

Name:   Roger J. Fleischmann, Jr. Title:   Vice President and Treasurer

Signature Page to Credit Agreement

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JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as Administrative Agent, the Issuing Bank, the Swingline Lender and a Lender

By:  

/s/ Sanjna R. Daphtary

Name:   Sanjna R. Daphtary Title:   Associate

Signature Page to Credit Agreement

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BANK OF AMERICA, N.A.,

as Syndication Agent and a Lender

By:  

/s/ J. Casey Cosgrove

Name:   J. Casey Cosgrove Title:   Vice President

Signature Page to Credit Agreement

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

CIBC WORLD MARKETS CORP.,

as a Co-Documentation Agent

By:  

/s/ Dean J. Decker

Name:   Dean J. Decker Title:   Managing Director CIBC, INC., as a Lender By:  

/s/ Dean J. Decker

Name:   Dean J. Decker Title:   Managing Director

CIBC WORLD MARKETS CORP., as Agent

 

CANADIAN IMPERIAL BANK COMMERCE, as an Issuing Bank with respect to the Existing
Letter of Credit By:  

/s/ Dean J. Decker

Name:   Dean J. Decker Title:   Managing Director CIBC WORLD MARKETS CORP., as
Agent

Signature Page to Credit Agreement

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SUNTRUST BANK, as an Issuing Bank with respect to the Existing Letters of
Credit, a Co-Documentation Agent and a Lender By:  

/s/ Mike Lapresi

Name:   Mike Lapresi Title:   Managing Director

Signature Page to Credit Agreement

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UNION BANK OF CALIFORNIA, N.A.,

as a Co-Documentation Agent and a Lender

By:  

/s/ J. William Bloore

Name:   J. William Bloore Title:   Vice President

Signature Page to Credit Agreement

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WELLS FARGO BANK, N.A.,

as a Lender

By:  

/s/ Margarita Chichioco

Name:   Margarita Chichioco Title:   Vice President

Signature Page to Credit Agreement

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

HARRIS N.A.,

as a Lender

By:  

/s/ C. Scott Place

Name:   C. Scott Place Title:   Director

Signature Page to Credit Agreement

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COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A. “RABOBANK INTERNATIONAL” NEW
YORK BRANCH, as Lender By:  

/s/ R. Clay Jackson

Name:   R. Clay Jackson Title:   Executive Director By:  

/s/ Rebecca O. Morrow

Name:   Rebecca O. Morrow Title:   Executive Director

Signature Page to Central Garden and Pet Company Credit Agreement

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BNP PARIBAS,

as a Lender

By:  

/s/ Pierre Nicholas Rogers

Name:   Pierre Nicholas Rogers Title:   Managing Director By:  

/s/ Katherine Wolfe

Name:   Katherine Wolfe Title:   Managing Director

Signature Page to Credit Agreement

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LASALLE BANK, NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Adam F. Lutostanski

Name:   Adam F. Lutostanski Title:   AVP

Signature Page to Credit Agreement

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GENERAL ELECTRIC CAPITAL CORPORATION,

as a Lender

By:  

/s/ Dwayne L. Coker

Name:   Dwayne L. Coker Title:   Duly Authorized Signatory

Signature Page to Credit Agreement

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WACHOVIA BANK, NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Mark S. Supple

Name:   Mark S. Supple Title:   Director & Vice President

Signature Page to Credit Agreement

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ING CAPITAL, LLC,

as a Lender

By:  

/s/ Marcy Lyons

Name:   Marcy Lyons Title:   Director

Signature Page to Credit Agreement

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

U.S. BANK, NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Janet E. Jordan

Name:   Janet E. Jordan Title:   Vice President

Signature Page to Credit Agreement

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CoBank, ACB

as a Lender

By:  

/s/ S. Richard Dill

Name:   S. Richard Dill Title:   Vice President

Signature Page to Credit Agreement

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

HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Robert P. Reynolds

Name:   Robert P. Reynolds Title:   Vice President & Senior Relationship Manager

Signature Page to Credit Agreement

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CALYON NEW YORK BRANCH,

as a Lender

By:  

/s/ Dianne M. Scott

Name:   Dianne M. Scott Title:   Managing Director By:  

/s/ Ronald G. Moore

Name:   Ronald G. Moore Title:   Director

Signature Page to Credit Agreement

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FARM CREDIT SERVICES OF AMERICA, PCA,

as a Lender

By:  

/s/ Steven L. Moore

Name:   Steven L. Moore Title:   Vice President

Signature Page to Credit Agreement

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GREENSTONE FARM CREDIT SERVICES, ACA/FLCA,

as a Lender

By:  

/s/ Ben Mahlich

Name:   Ben Mahlich Title:   AVP/ Lending Officer

Signature Page to Credit Agreement

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SCHEDULE 2.01

COMMITMENTS

Revolving Commitments

 

LENDER

   REVOLVING
COMMITMENT JPMORGAN CHASE BANK, NATIONAL ASSOCIATION    $ 30,000,000 BANK OF
AMERICA, N.A.    $ 30,000,000 CIBC, INC.    $ 25,000,000 SUNTRUST BANK    $
25,000,000 UNION BANK OF CALIFORNIA, N.A.    $ 25,000,000 WELLS FARGO BANK, N.A.
   $ 20,000,000 HARRIS N.A.    $ 20,000,000

COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”
NEW YORK BRANCH

   $ 20,000,000 BNP PARIBAS    $ 20,000,000 LASALLE BANK, NATIONAL ASSOCIATION
   $ 10,000,000 GENERAL ELECTRIC CAPITAL CORPORATION    $ 10,000,000 WACHOVIA
BANK, NATIONAL ASSOCIATION    $ 15,000,000 ING CAPITAL, LLC    $ 15,000,000 U.S.
BANK NATIONAL ASSOCIATION    $ 15,000,000 COBANK, ACB    $ 15,000,000 HSBC BANK
USA, NATIONAL ASSOCIATION    $ 15,000,000 CALYON NEW YORK BRANCH    $ 15,000,000
FARM CREDIT SERVICES OF AMERICA, PCA    $ 12,500,000 GREENSTONE FARM CREDIT
SERVICES, ACA/FLCA    $ 12,500,000

AGGREGATE REVOLVING COMMITMENT

   $ 350,000,000

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SCHEDULE 2.01

COMMITMENTS

Tranche B Term Loan Commitments

 

LENDER

   TRANCHE B TERM
LOAN COMMITMENT JPMORGAN CHASE BANK, NATIONAL ASSOCIATION    $ 228,000,000 BANK
OF AMERICA, N.A.    $ 2,500,000 CIBC, INC.    $ 1,000,000 SUNTRUST BANK    $
7,000,000 UNION BANK OF CALIFORNIA, N.A.    $ 7,000,000 HARRIS N.A.    $
7,000,000

COÖPERATIEVE CENTRALE RAIFFEISEN- BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”
NEW YORK BRANCH

   $ 7,000,000 BNP PARIBAS    $ 7,000,000 LASALLE BANK, NATIONAL ASSOCIATION   
$ 2,500,000 GENERAL ELECTRIC CAPITAL CORPORATION    $ 19,000,000 WACHOVIA BANK,
NATIONAL ASSOCIATION    $ 3,000,000 ING, CAPITAL LLC    $ 3,000,000 U.S. BANK
NATIONAL ASSOCIATION    $ 3,000,000 COBANK, ACB    $ 3,000,000

AGGREGATE TRANCHE B TERM LOAN COMMITMENT

   $ 300,000,000

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SCHEDULE 2.02

MANDATORY COST

 

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other authority
which replaces all or any of its functions) or (b) the requirements of the
European Central Bank.

 

2. On the first day of each Interest Period (or as soon as possible thereafter)
the Administrative Agent shall calculate, as a percentage rate, a rate (the
“Associated Costs Rate”) for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Associated Costs Rates (weighted in
proportion to the percentage participation of each Lender in the relevant Loan)
and will be expressed as a percentage rate per annum.

 

3. The Associated Costs Rate for any Lender lending from a Facility Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by that Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender’s participation in all Loans made
from that Facility Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of loans made from that Facility Office.

 

4. The Associated Costs Rate for any Lender lending from a Facility Office in
the United Kingdom will be calculated by the Administrative Agent as follows:

 

  (a) in relation to a Loan in Pounds Sterling:

AB +C(B D) +E × 0.01 per cent. per annum

          100 (A +C)

 

  (b) in relation to a Loan in any currency other than Pounds Sterling:

E ×0.01 per cent. per annum.

    300

Where:

 

  A is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which that Lender is from time to time required to maintain
as an interest free cash ratio deposit with the Bank of England to comply with
cash ratio requirements.

 

  B is the percentage rate of interest (excluding the Applicable Rate and the
Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of
interest specified in Section 2.13(c) payable for the relevant Interest Period
on the Loan).

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

  C is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with
the Bank of England.

 

  D is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 

  E is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Reference Banks to the Administrative
Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 

5. For the purposes of this Schedule:

 

  (a) “Eligible Liabilities” and “Special Deposits” have the meanings given to
them from time to time under or pursuant to the Bank of England Act 1998 or (as
may be appropriate) by the Bank of England;

 

  (b) “Facility Office” means the office or offices notified by a Lender to the
Administrative Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five Business Days’ written notice) as the
office or offices through which it will perform its obligations under this
Agreement.

 

  (c) “Fees Rules” means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from time
to time in respect of the payment of fees for the acceptance of deposits;

 

  (d) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable
discount rate);

 

  (e) “Participating Member State” means any member state of the European Union
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Union relating to economic and monetary union.

 

  (f) “Reference Banks” means, in relation to Mandatory Cost, the principal
London offices of JPMorgan Chase Bank, N.A.

 

  (g) “Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 

  (h) “Unpaid Sum” means any sum due and payable but unpaid by any Borrower
under the Loan Documents.

 

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6. In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5 per cent. will be included in the formula as 5
and not as 0.05). A negative result obtained by subtracting D from B shall be
taken as zero. The resulting figures shall be rounded to four decimal places.

 

7. If requested by the Administrative Agent, each Reference Bank shall, as soon
as practicable after publication by the Financial Services Authority, supply to
the Administrative Agent, the rate of charge payable by that Reference Bank to
the Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated for this
purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of that Reference Bank.

 

8. Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Associated Costs Rate. In particular, but
without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:

 

  (i) the jurisdiction of its Facility Office; and

 

  (j) any other information that the Administrative Agent may reasonably require
for such purpose.

Each Lender shall promptly notify the Administrative Agent of any change to the
information provided by it pursuant to this paragraph.

 

9. The percentages of each Lender for the purpose of A and C above and the rates
of charge of each Reference Bank for the purpose of E above shall be determined
by the Administrative Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.

 

10. The Administrative Agent shall have no liability to any person if such
determination results in an Associated Costs Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above
is true and correct in all respects.

 

11. The Administrative Agent shall distribute the additional amounts received as
a result of the Mandatory Cost to the Lenders on the basis of the Associated
Costs Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

 

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12. Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Associated Costs Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all parties hereto.

 

13. The Administrative Agent may from time to time, after consultation with the
Company and the relevant Lenders, determine and notify to all parties hereto any
amendments which are required to be made to this Schedule in order to comply
with any change in law, regulation or any requirements from time to time imposed
by the Bank of England, the Financial Services Authority or the European Central
Bank (or, in any case, any other authority which replaces all or any of its
functions) and any such determination shall, in the absence of manifest error,
be conclusive and binding on all parties hereto.

 

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