Exhibit 10.7

 

 

CREDIT AGREEMENT

dated as of April 1, 2016,

among

ARMSTRONG FLOORING, INC.,

and

ARMSTRONG HARDWOOD FLOORING COMPANY,

as Borrowers,

CERTAIN SUBSIDIARIES OF ARMSTRONG FLOORING, INC. IDENTIFIED HEREIN,

as the Guarantors,

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent,

THE OTHER LENDERS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.

and

SUNTRUST ROBINSON HUMPHREY, INC.,

as Co-Syndication Agents,

 

 

Arranged By:

BANK OF AMERICA, N.A.,

JPMORGAN CHASE BANK, N.A.

and

SUNTRUST ROBINSON HUMPHREY, INC.,

as Joint Lead Arrangers and Joint Book Managers

 

 

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EXECUTION COPY

TABLE OF CONTENTS

 

          PAGE  

ARTICLE I.

   DEFINITIONS AND ACCOUNTING TERMS      1   

Section 1.01

  

Defined Terms

     1   

Section 1.02

  

Other Interpretive Provisions

     44   

Section 1.03

  

Accounting Terms

     45   

Section 1.04

  

Rounding

     45   

Section 1.05

  

Times of Day

     45   

Section 1.06

  

Letter of Credit Amounts

     45   

Section 1.07

  

Rates

     45   

Section 1.08

  

Uniform Commercial Code

     46   

ARTICLE II.

   THE COMMITMENTS AND CREDIT EXTENSIONS      46   

Section 2.01

  

Revolving Loans to Borrowers

     46   

Section 2.02

  

Borrowings, Conversions and Continuations of Loans

     49   

Section 2.03

  

Letters of Credit

     51   

Section 2.04

  

Swing Line Loans

     59   

Section 2.05

  

Prepayments

     62   

Section 2.06

  

Termination or Reduction of Aggregate Committed Amount

     62   

Section 2.07

  

Repayment of Obligations

     63   

Section 2.08

  

Interest

     64   

Section 2.09

  

Fees

     64   

Section 2.10

  

Computation of Interest and Fees

     65   

Section 2.11

  

Evidence of Debt

     65   

Section 2.12

  

Payments Generally; Administrative Agent’s Clawback

     66   

Section 2.13

  

Sharing of Payments by Lenders

     67   

Section 2.14

  

Cash Collateral

     68   

Section 2.15

  

Defaulting Lenders

     69   

Section 2.16

  

Joint and Several Liability

     71   

Section 2.17

  

Overadvances and Protective Advances

     72   

ARTICLE III.

   TAXES, YIELD PROTECTION AND ILLEGALITY      74   

Section 3.01

  

Taxes

     74   

Section 3.02

  

Illegality

     78   

Section 3.03

  

Inability to Determine Rates

     79   

Section 3.04

  

Increased Costs

     79   

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Section 3.05

  

Compensation for Losses

     81   

Section 3.06

  

Mitigation of Obligations; Replacement of Lenders

     81   

Section 3.07

  

Survival

     82   

ARTICLE IV.

  

GUARANTY

     82   

Section 4.01

  

The Guaranty

     82   

Section 4.02

  

Obligations Unconditional

     82   

Section 4.03

  

Reinstatement

     83   

Section 4.04

  

Certain Additional Waivers

     83   

Section 4.05

  

Remedies

     84   

Section 4.06

  

Rights of Contribution

     84   

Section 4.07

  

Guarantee of Payment; Continuing Guarantee

     84   

Section 4.08

  

Keepwell

     84   

ARTICLE V.

  

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

     85   

Section 5.01

  

Conditions of Initial Credit Extension

     85   

Section 5.02

  

Conditions to all Credit Extensions

     88   

ARTICLE VI.

  

REPRESENTATIONS AND WARRANTIES

     88   

Section 6.01

  

Existence, Qualification and Power

     88   

Section 6.02

  

Authorization; No Contravention

     89   

Section 6.03

  

Governmental Authorization; Other Consents

     89   

Section 6.04

  

Binding Effect

     89   

Section 6.05

  

Financial Statements; No Material Adverse Effect

     89   

Section 6.06

  

Litigation

     90   

Section 6.07

  

No Default

     90   

Section 6.08

  

Ownership of Property; Liens

     90   

Section 6.09

  

Environmental Compliance

     90   

Section 6.10

  

Insurance

     91   

Section 6.11

  

Taxes

     91   

Section 6.12

  

ERISA Compliance

     91   

Section 6.13

  

Subsidiaries

     92   

Section 6.14

  

Margin Regulations; Investment Company Act

     92   

Section 6.15

  

Disclosure

     92   

Section 6.16

  

Compliance with Laws; OFAC; PATRIOT Act, Etc.

     93   

Section 6.17

  

Intellectual Property; Licenses, Etc.

     93   

Section 6.18

  

Solvency

     94   

Section 6.19

  

Perfection of Security Interests in the Collateral

     94   

 

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Section 6.20

  

Business Locations

     94   

Section 6.21

  

Labor Matters

     95   

Section 6.22

  

Brokers

     95   

Section 6.23

  

Accounts

     95   

Section 6.24

  

Eligible Inventory

     95   

Section 6.25

  

Machinery and Equipment

     96   

Section 6.26

  

Eligible Pledged Cash

     96   

Section 6.27

  

Burdensome Contracts

     96   

ARTICLE VII.

  

AFFIRMATIVE COVENANTS

     96   

Section 7.01

  

Financial Statements

     96   

Section 7.02

  

Certificates; Other Information

     97   

Section 7.03

  

Notices

     98   

Section 7.04

  

Payment of Obligations

     99   

Section 7.05

  

Preservation of Existence, Etc.

     99   

Section 7.06

  

Maintenance of Properties

     99   

Section 7.07

  

Maintenance of Insurance

     100   

Section 7.08

  

Compliance with Laws

     100   

Section 7.09

  

Books and Records

     100   

Section 7.10

  

Appraisals

     100   

Section 7.11

  

Use of Proceeds

     101   

Section 7.12

  

Additional Subsidiaries

     101   

Section 7.13

  

ERISA Compliance

     102   

Section 7.14

  

Pledged Assets

     102   

Section 7.15

  

Further Assurances

     103   

Section 7.16

  

Collateral Administration

     103   

Section 7.17

  

Post-Closing Matters

     108   

ARTICLE VIII.

  

NEGATIVE COVENANTS

     108   

Section 8.01

  

Liens

     108   

Section 8.02

  

Investments

     111   

Section 8.03

  

Indebtedness

     113   

Section 8.04

  

Fundamental Changes

     115   

Section 8.05

  

Dispositions

     115   

Section 8.06

  

Restricted Payments

     116   

Section 8.07

  

Change in Nature of Business

     117   

 

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Section 8.08

  

Transactions with Affiliates

     117   

Section 8.09

  

Burdensome Agreements

     117   

Section 8.10

  

Use of Proceeds

     118   

Section 8.11

  

Financial Covenant

     119   

Section 8.12

  

Prepayment of Other Indebtedness, Etc.

     119   

Section 8.13

  

Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of
Entity

     119   

ARTICLE IX.

  

EVENTS OF DEFAULT AND REMEDIES

     119   

Section 9.01

  

Events of Default

     119   

Section 9.02

  

Remedies Upon Event of Default

     121   

Section 9.03

  

Application of Funds

     122   

Section 9.04

  

License

     123   

Section 9.05

  

Remedies Cumulative; No Waiver

     124   

ARTICLE X.

  

ADMINISTRATIVE AGENT

     124   

Section 10.01

  

Appointment and Authority

     124   

Section 10.02

  

Rights as a Lender

     125   

Section 10.03

  

Exculpatory Provisions

     125   

Section 10.04

  

Reliance by Administrative Agent

     126   

Section 10.05

  

Delegation of Duties

     126   

Section 10.06

  

Resignation of Administrative Agent

     126   

Section 10.07

  

Non-Reliance on Administrative Agent and Other Lenders

     128   

Section 10.08

  

No Other Duties; Etc.

     128   

Section 10.09

  

Administrative Agent May File Proofs of Claim

     128   

Section 10.10

  

Collateral and Guaranty Matters

     129   

Section 10.11

  

Swap Contracts and Treasury Management Agreements

     130   

Section 10.12

  

Secured Bank Product Providers

     130   

Section 10.13

  

Loan Party Representative

     130   

ARTICLE XI.

  

MISCELLANEOUS

     131   

Section 11.01

  

Amendments, Etc.

     131   

Section 11.02

  

Notices; Effectiveness; Electronic Communications

     134   

Section 11.03

  

No Waiver; Cumulative Remedies; Enforcement

     136   

Section 11.04

  

Expenses; Indemnity; Damage Waiver

     136   

Section 11.05

  

Payments Set Aside

     138   

Section 11.06

  

Successors and Assigns

     138   

Section 11.07

  

Treatment of Certain Information; Confidentiality

     143   

 

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Section 11.08

  

Set-off

     143   

Section 11.09

  

Interest Rate Limitation

     144   

Section 11.10

  

Counterparts; Integration; Effectiveness

     144   

Section 11.11

  

Survival of Representations and Warranties

     145   

Section 11.12

  

Severability

     145   

Section 11.13

  

Replacement of Lenders

     145   

Section 11.14

  

Governing Law; Jurisdiction; Etc.

     146   

Section 11.15

  

Waiver of Right to Trial by Jury

     147   

Section 11.16

  

USA PATRIOT Act Notice

     147   

Section 11.17

  

No Advisory or Fiduciary Responsibility

     147   

Section 11.18

  

Electronic Execution of Assignments and Certain Other Documents

     148   

Section 11.19

  

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     148   

 

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SCHEDULES

 

1.01    Eligible Pledged Cash Accounts 1.01(p)    Permitted Inventory Locations
1.02    Excluded Property 2.01    Commitments and Pro Rata Shares 2.03   
Existing Letters of Credit 6.10    Insurance 6.13    Subsidiaries 6.17    IP
Rights 6.20(a)(i)    Location of Chief Executive Office, Etc. 6.20(b)    Changes
in Legal Name, State of Formation and Structure 6.21    Labor Matters 7.16(d)   
Deposit Accounts 7.16(f)    Location of Collateral 7.17    Post-Closing Matters
8.01    Liens Existing on the Closing Date 8.02    Investments Existing on the
Closing Date 8.03    Indebtedness Existing on the Closing Date 8.05   
Dispositions 8.09    Burdensome Agreements 11.02    Certain Addresses for
Notices

EXHIBITS

 

A-1    Form of Loan Notice A-2    Form of Notice of Continuation/Conversion B   
Form of Swing Line Loan Notice C-1    Form of Revolving Note C-2    Form of
Swing Line Note D    Form of Compliance Certificate E    Form of Assignment and
Assumption F    Form of Guaranty Joinder Agreement G    Form of Collateral
Joinder Agreement H    Form of U.S. Tax Compliance Certificates

 

vi

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EXECUTION COPY

CREDIT AGREEMENT

This CREDIT AGREEMENT is entered into as of April 1, 2016 among ARMSTRONG
FLOORING, INC., a Delaware corporation, and ARMSTRONG HARDWOOD FLOORING COMPANY,
a Tennessee corporation, as Borrowers, the Guarantors (defined herein), the
Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent and
Collateral Agent.

WHEREAS, the Borrowers have requested, and the Lenders have agreed to make
available to the Borrowers, a revolving credit facility (including a letter of
credit subfacility) upon and subject to the terms and conditions set forth in
this Agreement to (a) pay, on the date hereof, a dividend or distribution to AWI
in an amount not to exceed $50,000,000 (the “Closing Date Dividend”),
(b) provide for working capital, capital expenditures, Permitted Acquisitions
and other general corporate purposes of the Borrowers and their Subsidiaries and
(c) fund certain fees and expenses associated with the funding of the Loans and
consummation of the Closing Date Dividend and the Spin-Off;

NOW, THEREFORE, in consideration of these premises and the mutual covenants and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01 Defined Terms.

As used in this Agreement, the following terms shall have the meanings set forth
below:

“Acceptable BOL” means with respect to In-Transit Inventory, (i) a tangible,
bill of lading that (ii) covers only such In-Transit Inventory, (iii) is issued
to the order of a Borrower or, if so requested by the Administrative Agent in
its reasonable discretion, to the order of the Administrative Agent, (iv) is
subject to Administrative Agent’s duly perfected, first priority security
interest and no other Lien that is not a Permitted Lien, (v) if Foreign
In-Transit Inventory, is a negotiable document that names the Administrative
Agent as a notify party and bears a conspicuous notation on its face of the
Administrative Agent’s security interest therein (unless such bill of lading is
issued to the order of the Administrative Agent), (vi) if Domestic In-Transit
Inventory, is either a negotiable or non-negotiable bill of lading, and (vii) is
otherwise in form and content reasonably acceptable to the Administrative Agent.

“Account” has the meaning set forth in the UCC, in each case including all
rights to payment for goods sold or leased, or for services rendered, whether or
not they have been earned by performance.

“Account Debtor” means any U.S. Person obligated under an Account, Chattel Paper
or General Intangible.

“Acquisition”, by any Person, means the acquisition by such Person, in a single
transaction or in a series of related transactions, of all or any substantial
portion of the Property of, or of a business unit or division of, another Person
or at least a majority of the Voting Stock of another Person, in each case
whether or not involving a merger or consolidation with such other Person and
whether for cash, property, services, assumption of Indebtedness, securities or
otherwise.

“Adequate Assurance” means:

(a) with respect to Revolving Loans, such assurance as the Administrative Agent
may require, in its discretion,

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(b) with respect to L/C Obligations, such assurance as the L/C Issuer may
require, in its discretion, and

(c) with respect to Swing Line Loans, such assurance as the Swing Line Lender
may require, in its discretion,

in each case, that the Defaulting Lender will be capable of funding its portion
of Revolving Loans, L/C Obligations and Swing Line Loans and participation
interests therein and otherwise honoring its existing and future obligations
hereunder and under the other Loan Documents, including the posting of cash
collateral or letters of credit or other arrangement, in each case in form and
substance and pursuant to arrangements satisfactory to the Administrative Agent,
the L/C Issuer or the Swing Line Lender, as appropriate, in their reasonable
discretion.

“Administrative Agent” means Bank of America in its capacity as administrative
agent for the Lenders under any of the Loan Documents, or any successor
administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address as set
forth on Schedule 11.02, or such other address as the Administrative Agent may
from time to time notify to the Borrowers and the Lenders.

“Administrative Questionnaire” means an administrative questionnaire for the
Lenders in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to any 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. “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. For purposes of this Agreement,
AWI and its Affiliates shall not be considered Affiliates of the Borrowers and
their respective Affiliates.

“Affiliated Lender” means a Lender that is an Affiliate of a Borrower (but
excluding, in any case, each of the Borrowers and the other Loan Parties and
their respective Subsidiaries).

“AFI” means Armstrong Flooring, Inc., a Delaware corporation.

“Agent Parties” has the meaning specified in Section 11.02(c).

“Aggregate Commitments” means the aggregate principal amount of Commitments of
all the Revolving Lenders.

“Aggregate Committed Amount” means, subject to any increase in commitments in
accordance with Section 2.01, TWO HUNDRED TWENTY-FIVE MILLION DOLLARS
($225,000,000).

“Agreement” means this Credit Agreement, as amended and modified.

“Agreement Currency” has the meaning specified in Section 1.08(b).

 

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“Anti-Terrorism Law” means any law relating to terrorism or money laundering,
including the Proceeds of Crime Act and the Patriot Act.

“Applicable Borrower” means the applicable Borrower with regard to any Credit
Extension.

“Applicable Law” means all laws, rules, regulations and legally binding
governmental guidelines applicable to the Person, conduct, transaction,
agreement or matter in question, including all applicable statutory law and
common law, and all provisions of constitutions, treaties, statutes, rules,
regulations, orders and decrees of Governmental Authorities (having the force of
law).

“Applicable Rate” means, from time to time:

(a) The respective margin set forth below, based on the Borrowers’ average daily
Excess Availability expressed as a percentage of the average daily Borrowing
Base for the most recent fiscal quarter determined as of the most recent
determination date:

 

         

Revolving Loans

   

Letter of Credit Fee

Pricing Level

  

Excess Availability

  

Eurodollar

Rate Loans

   Base
Rate Loans      

I

   > 66.66%    1.25%      0.25 %    1.25%

II

   £ 66.66%, but > 33.33%    1.50%      0.50 %    1.50%

III

   £ 33.33%    1.75%      0.75 %    1.75%

Through the second full fiscal quarter ending after the Closing Date, margins
shall be determined as if Level II were applicable. Thereafter, margins shall be
subject to increase or decrease by the Administrative Agent on the first day of
the fiscal quarter following each fiscal quarter end. If the Administrative
Agent is unable to calculate average daily Excess Availability for a fiscal
quarter due to the Borrowers’ failure to deliver any Borrowing Base Certificate
when required hereunder, then, at the option of the Administrative Agent or
Required Lenders, margins shall be determined as if Level III were applicable
until the first day of the calendar month following its receipt.

(b) With respect to the commitment fee set forth in Section 2.09(a),
(i) one-quarter of one percent (0.25%) per annum to the extent that average
Revolver Usage during a fiscal quarter is greater than or equal to thirty-five
percent (35%), and (ii) three-eighths of one percent (0.375%) per annum
otherwise.

(c) Notwithstanding anything to the contrary contained in this definition, the
determination of the Applicable Rate for any period shall be subject to the
provisions of Section 2.10(b).

“Approved Fund” means any Fund 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.

“Arrangers” means Bank of America, N.A., JPMorgan Chase Bank, N.A., and SunTrust
Robinson Humphrey, Inc.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form (including electronic
documentation generated by MarkitClear or other electronic platform) approved by
the Administrative Agent.

 

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“Attorney Costs” means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
(b) in respect of any Synthetic Lease, the capitalized amount of the remaining
lease payments under the relevant lease that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a Capital Lease, (c) in respect of any securitization
transaction or series of transactions (including factoring arrangements) of any
Person, the outstanding principal amount of such financing, after taking into
account reserve accounts and making appropriate adjustments, determined by the
Administrative Agent in its reasonable judgment and (d) in the case of any Sale
and Leaseback Transaction, the present value (discounted in accordance with GAAP
at the debt rate implied in the applicable lease) of the obligations of the
lessee for rental payments during the term of such lease).

“Audited Financial Statements” means the audited consolidated balance sheet of
AFI and its Subsidiaries for the fiscal year ended December 31, 2015, and the
related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year of AFI and its Subsidiaries, including the
notes thereto.

“Australian Dollars” means the lawful currency of Australia.

“Australian Incremental Amendment” an amendment establishing an Australian
Incremental Credit Facility in form and substance satisfactory to the
Administrative Agent, the Borrowers and each FILO Lender, the terms and
conditions of which shall satisfy all the Australian Incremental Conditions.

“Australian Incremental Conditions” means, in addition to the conditions
specified in Section 2.01, the collective reference to the following conditions,
or any of them, as the context may require:

(A) the Dollar Equivalent of the aggregate principal amount of all loans
outstanding at any time under the Australian Incremental Credit Facility shall
not exceed Fifteen Million Dollars ($15,000,000);

(B) the payment waterfall established in connection therewith shall provide that
any funds remaining after Full Payment of the Obligations under the Australian
Incremental Credit Facility shall be applied to other outstanding Obligations;

(C) subject to other express limitations set forth in Section 2.01, the
Australian Incremental Credit Facility shall be on terms and conditions as
determined by AFI, the Administrative Agent and the Australian Incremental
Lenders, it being understood and agreed that such terms and conditions may
include, without limitation, Australian Incremental Credit Facility-specific
borrowing base, advance rate, eligibility criteria, availability reserves
(including reserves implemented against the Borrowing Base with respect to
obligations owing to the Australian Incremental Lenders), pledge of all assets
of the borrowers under the Australian Incremental Facility, cash dominion
requirements, collection allocation mechanisms, representations, warranties,
covenants and Events of Default, interest rates, fees, final maturity date,
amortization, mandatory and voluntary prepayment and commitment termination
provision as to the Australian Incremental Credit Facility or any other
provision of the Loan Documents related to cash dominion, and amendment and
waiver provisions (including modifications to Section 11.01 to provide for
customary or market provisions in favor of the Australian

 

4

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Incremental Lenders, which may include voting rights in favor of the Australian
Incremental Lenders relating to modifications of the Australian Borrowing Base
and release of Australian collateral) in respect of or relating to the
Australian Incremental Credit Facility and other customary or market terms and
conditions for asset-based loans advanced in Australian Dollars;

(D) subject to amortization or mandatory Australian Incremental Credit Facility
reduction terms and conditions, the stated maturity date of the Australian
Incremental Credit Facility shall not be earlier than the then Maturity Date;

(E) the arrangement of the Australian Incremental Credit Facility, and any
upfront, underwriting, arrangement or similar fees in respect of the Australian
Incremental Credit Facility, shall be agreed to solely by AFI, the
Administrative Agent and the Australian Incremental Lenders;

(F) the Australian Incremental Credit Facility shall be subject to closing
conditions as may be determined by the Administrative Agent, the Australian
Incremental Lenders and AFI;

(G) the Australian Incremental Credit Facility shall be subject to the condition
precedent that no Event of Default shall have occurred and be continuing
immediately before or after giving effect thereto; and

(H) the Australian Incremental Amendment and all other documentation in respect
of the Australian Incremental Credit Facility shall be consistent with the
foregoing and in form and substance reasonably satisfactory to the
Administrative Agent and the Australian Incremental Lenders.

“Australian Incremental Credit Facility” has the meaning set forth in
Section 2.01(b)(iv).

“Australian Incremental Lender” means any Lender or Eligible Assignee that
satisfies the applicable conditions of Section 2.01 and becomes a Lender under
the Australian Incremental Credit Facility, if any, as may be established from
time to time in accordance herewith.

“Auto-Extension Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

“Availability” means as of any date of determination, (a) the lesser of (i) the
Commitments and (ii) the Borrowing Base as of such date of determination, minus
(b) the principal balance of all Revolving Loans and all L/C Obligations.

“Availability Period” means, the period from and including the Closing Date to
the earliest of (a) with respect to the Commitments (other than issuance and
extension of Letters of Credit), the Maturity Date and, with respect to the
issuance and extension of Letters of Credit, the Letter of Credit Expiration
Date, (b) the date of termination of the Aggregate Committed Amount of
Commitments pursuant to Section 2.06, and (c) the date of termination of the
commitment of each Revolving Lender to make Revolving Loans and of the
obligation of the of the L/C Issuers to make L/C Credit Extensions pursuant to
Section 9.02.

“Availability Reserves” means the sum (without duplication) of (a) the Rent and
Charges Reserve; (b) the Bank Product Reserve; (d) the Priority Payables
Reserve; (e) the Inventory Reserve; (f) the Dilution Reserve; (g) the Warranty
Reserve; (h) the Distribution Reserve; (i) reserves established in

 

5

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any FILO Incremental Amendment, Australian Incremental Amendment or Canadian
Incremental Amendment; (j) the loan balance of any Overadvance Loans under any
Incremental Credit Facility to a Foreign Subsidiary of AFI; and (k) such
additional reserves, in such amounts and with respect to such matters, as the
Administrative Agent may establish in its Permitted Discretion.

“AWI” means Armstrong World Industries, Inc., a Pennsylvania corporation.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“Bank of America” means Bank of America, N.A. and its successors.

“Bank of America (Canada)” means Bank of America (acting through its Canada
branch).

“Bank Product” means any of the following products, services or facilities
extended to any Loan Party or Affiliate of a Loan Party by a Lender or any of
its Affiliates: (a) Cash Management Services; (b) products under Swap Contracts;
(c) commercial credit card, purchasing cards and merchant card services; and
(d) other banking products or services, other than Letters of Credit.

“Bank Product Reserve” means at any time with respect to Secured Bank Product
Obligations for the account of the Loan Parties and their Subsidiaries, an
amount equal to the sum of (a) the Swap Termination Value of the then
outstanding Qualified Secured Bank Product Obligations for the account of the
Loan Parties and their Subsidiaries owing (i) to Bank of America and its
Affiliates as determined by the Administrative Agent in its reasonable
discretion and (ii) to any other Secured Bank Product Provider as set forth in
the notice delivered by such Secured Bank Product Provider providing such Bank
Product and the Loan Party Representative to the Administrative Agent in
accordance with the definition of Secured Bank Product Provider, and (b) with
respect to any other Secured Bank Product Obligations for the account of the
Loan Parties and their Subsidiaries, reserves established by the Administrative
Agent from time to time in its Permitted Discretion to reflect the reasonably
anticipated liabilities in respect of the then outstanding Secured Bank Product
Obligations for the account of the Loan Parties and their Subsidiaries.

“Bankruptcy Code” means Title 11 of the United States Code.

“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Delaware.

“Base Rate” means for any day, a per annum rate equal to the greatest of (a) the
Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%;
and (c) Eurodollar Rate for a 30 day interest period as of such day, plus 1.0%;
provided, that for the avoidance of doubt, in no event shall the Base Rate be
less than zero.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower Materials” has the meaning specified in Section 7.02.

 

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“Borrowers” means (a) AFI and (b) each Domestic Subsidiary of AFI that
(i) executes this Agreement on the Closing Date as a Borrower or (ii)(x) is
joined as a Borrower pursuant to joinder documentation reasonably acceptable to
the Administrative Agent and (y) has delivered to each Lender all information
reasonably requested by such Lender to enable it to meet its internal “know your
customer” requirements and internal operating procedures.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.01.

“Borrowing Base” means at any time, an amount equal to the result (expressed in
Dollars) of, without duplication:

(a) the Value of Eligible Accounts of Account Debtors with a Corporate Rating of
at least A by S&P and A2 by Moody’s multiplied by the advance rate of 90%, plus

(b) the Value of Eligible Accounts of Account Debtors not covered by clause
(a) above multiplied by the advance rate of 85%, plus

(c) the lesser of (i) 70% of the Value of Eligible Inventory (excluding Eligible
Supplies Inventory) and (ii) 85% of the NOLV Percentage of the Value of Eligible
Inventory (excluding Eligible Supplies Inventory), plus

(d) the lesser of (i) 50% of the Value of Eligible Supplies Inventory and
(ii) $10,000,000, plus

(e) during the M&E Availability Period, the M&E Sublimit as of such time, plus

(f) 100% of Eligible Pledged Cash of the Borrowers, minus

(g) all Availability Reserves, any change therein to become effective
immediately upon notification thereof to AFI by the Administrative Agent.

The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Certificate theretofore delivered to the Administrative
Agent with such adjustments as the Administrative Agent deems appropriate in its
Permitted Discretion to assure that the Borrowing Base is calculated in
accordance with the terms of this Agreement.

Notwithstanding anything to the contrary in this Agreement, any Accounts,
Inventory, Equipment, or other Property acquired in a Permitted Acquisition or
otherwise outside the Ordinary Course of Business or added to the Borrowing Base
as a result of the addition of a new Borrower hereunder, in each case shall not
be included in the calculation of the Borrowing Base until completion of
applicable field examinations and appraisals (which shall not be included in the
limits on the number of field examinations or appraisals provided in
Section 10.1.1) satisfactory to the Administrative Agent.

“Borrowing Base Certificate” means a certificate, executed by a Responsible
Officer of AFI, in form and substance satisfactory to the Administrative Agent.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, New York, New York and, if such day relates to any Eurodollar Rate
Loan, means any such day that is also a London Banking Day.

 

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“Businesses” means, at any time, a collective reference to the businesses
operated by AFI and its Subsidiaries at such time.

“Canadian Dollars or Cdn$” means the lawful currency of Canada.

“Canadian Incremental Amendment” an amendment establishing a Canadian
Incremental Credit Facility in form and substance satisfactory to the
Administrative Agent, Canadian Subsidiaries of AFI and each Canadian Incremental
Lender, the terms and conditions of which shall satisfy all the Canadian
Incremental Conditions.

“Canadian Incremental Conditions” means, in addition to the conditions specified
in Section 2.01, the collective reference to the following conditions, or any of
them, as the context may require:

(A) the Dollar Equivalent of the aggregate principal amount of all loans
outstanding at any time under the Canadian Incremental Credit Facility shall not
exceed Twenty Million Dollars ($20,000,000);

(B) the payment waterfall established in connection therewith shall provide that
any funds remaining after Full Payment of the Obligations under the Canadian
Incremental Credit Facility shall be applied to other outstanding Obligations;

(C) subject to other express limitations set forth in Section 2.01, the Canadian
Incremental Credit Facility shall be on terms and conditions as determined by
AFI, the Administrative Agent and the Canadian Incremental Lenders, it being
understood and agreed that such terms and conditions may include, without
limitation, Canadian Incremental Credit Facility-specific borrowing base,
advance rate, eligibility criteria, availability reserves (including reserves
implemented against the Borrowing Base with respect to obligations owing to the
Canadian Incremental Lenders), pledge of specified assets of the borrowers under
the Canadian Incremental Facility, cash dominion requirements, collection
allocation mechanisms, representations, warranties, covenants and Events of
Default, interest rates, fees, final maturity date, amortization, mandatory and
voluntary prepayment and commitment termination provision as to the Canadian
Incremental Credit Facility or any other provision of the Loan Documents related
to cash dominion, and amendment and waiver provisions (including modifications
to Section 11.01 to provide for customary or market provisions in favor of the
Canadian Incremental Lenders, which may include voting rights in favor of the
Canadian Incremental Lenders relating to modifications of the Canadian Borrowing
Base and release of Australian collateral) in respect of or relating to the
Canadian Incremental Credit Facility and other customary or market terms and
conditions for asset-based loans advanced in Canadian Dollars;

(D) subject to amortization or mandatory Canadian Incremental Credit Facility
reduction terms and conditions, the stated maturity date of the Canadian
Incremental Credit Facility shall not be earlier than the then Maturity Date;

(E) the arrangement of the Canadian Incremental Credit Facility, and any
upfront, underwriting, arrangement or similar fees in respect of the Canadian
Incremental Credit Facility, shall be agreed to solely by AFI, the
Administrative Agent and the Canadian Incremental Lenders;

 

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(F) the Canadian Incremental Credit Facility shall be subject to closing
conditions as may be determined by the Administrative Agent, the Canadian
Incremental Lenders and AFI; and

(G) the Canadian Incremental Amendment and all documentation in respect of the
Canadian Incremental Credit Facility shall be consistent with the foregoing and
in form and substance reasonably satisfactory to the Administrative Agent and
the Canadian Incremental Lenders.

“Canadian Incremental Credit Facility” has the meaning set forth in
Section 2.01(b)(iii).

“Canadian Incremental Lender” means any Lender or Eligible Assignee that
satisfies the applicable conditions of Section 2.01 and becomes a Lender under
the Canadian Incremental Credit Facility, if any, as may be established from
time to time in accordance herewith.

“Capital Expenditures” means all liabilities incurred or expenditures made by a
Loan Party or Subsidiary for the acquisition of fixed assets, or any
improvements, replacements, substitutions or additions thereto with a useful
life of more than one year; provided, however, that Capital Expenditures shall
not include any such expenditures which are: (a) made with the proceeds of any
contribution of capital to AFI or sale or issuance by AFI of Capital Stock, in
each case the proceeds of which have been contributed to the Borrowers, which
are designated as being for such purpose by written notice from AFI to the
Administrative Agent and which expenditures are made within six (6) months of
the receipt of such proceeds; (b) Permitted Acquisitions; or (c) made with net
proceeds of the sale or other disposition (including by casualty or
condemnation) of a capital asset reinvested in assets to the extent such
reinvestment is made within six (6) months of the effective date of such sale or
disposition.

“Capital Lease” means, as applied to any Person, any lease of any Property by
that Person as lessee which, in accordance with GAAP, is required to be
accounted for as a capital lease on the balance sheet of that Person.

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

“Capital Stock Equivalents” means warrants, options or other rights for the
purchase, acquisition or exchange of any items of Capital Stock (including
through convertible securities).

“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of one or more of the Administrative
Agent, L/C Issuer or Swing Line Lender (as applicable) and the Lenders, as
appropriate, as collateral for the L/C Obligations, Obligations in respect of
Swing Line Loans, or obligations of the Lenders to fund participations in
respect of either thereof (as the context may require), cash or deposit account
balances or, if the Administrative Agent, the L/C Issuer or Swing Line Lender
benefiting from such collateral shall agree in its sole discretion, other credit
support, in each case pursuant to documentation in form and substance
satisfactory to (a) the Administrative Agent and (b) the L/C Issuer or the Swing
Line Lender (as applicable), in an amount equal to the Minimum Collateral
Amount. “Cash Collateral” shall have a meaning correlative to the foregoing and
shall include the proceeds of such cash collateral and other credit support.

 

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“Cash Dominion Event” means the period (a) commencing on the date that (i) an
Event of Default exists or (ii) Excess Availability is less than the greater of
(A) 10.0% of the Line Cap and (B) $20,000,000, in either case, for a period of
five (5) or more consecutive days and (b) continuing until a period of 30
consecutive days has elapsed during which at all times (i) no Event of Default
exists and (ii) Excess Availability is equal to or greater than the greater of
(A) 10.0% of the Line Cap and (B) $20,000,000.

“Cash Equivalents” means, as at any date, (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody’s is at least P-1 or the equivalent
thereof (any such bank being an “Approved Bank”), in each case with maturities
of not more than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody’s and maturing within six
months of the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by the United States in which
such Person shall have a perfected first priority security interest (subject to
no other Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations, (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940 which are
administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d), and (f) with
respect to Foreign Subsidiaries, instruments equivalent to those referred to in
clauses (a) through (e) above denominated in any foreign currency comparable in
credit quality and tenor to those referred to above and customarily used by
corporations for cash management purposes in any jurisdiction outside the United
States.

“Cash Management Services” means services relating to operating, collections,
payroll, trust, or other depository or disbursement accounts, including
automated clearinghouse, e-payable, electronic funds transfer, wire transfer,
controlled disbursement, overdraft, depository, information reporting, lockbox
and stop payment services.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided, that notwithstanding anything herein to the
contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

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“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934), directly or indirectly, of more than fifty
percent (50%) of the Capital Stock of AFI entitled to vote for members of the
board of directors or equivalent governing body on a fully diluted basis; or

(b) during any period of twelve consecutive months, a majority of the members of
the board of directors or other equivalent governing body of AFI cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body, (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body, or (iv) who were members of
that board or equivalent governing body on the Closing Date.

“Civil Code” means the Civil Code of Québec, or any successor statute, as
amended from time to time, and includes all regulations thereunder.

“Claims” means all claims, liabilities, obligations, losses, damages, penalties,
judgments, proceedings, interest, costs and expenses of any kind (including
remedial response costs, reasonable attorneys’ fees (which shall be limited to
the fees, disbursements and other charges of one primary counsel and one local
counsel in each relevant jurisdiction for the Indemnitees (unless there is an
actual or perceived conflict of interest or the availability of different claims
or defenses in which case each such Indemnitee may retain its own counsel)) and
Extraordinary Expenses) at any time (including after Full Payment of the
Obligations or replacement of the Administrative Agent or any Lender) incurred
by any Indemnitee or asserted against any Indemnitee by any Loan Party or other
Person, in any way relating to (a) any Loans, Letters of Credit, Loan Documents,
Borrower Materials, or the use thereof or transactions relating thereto, (b) any
action taken or omitted in connection with any Loan Documents, (c) the existence
or perfection of any Liens, or realization upon any Collateral, (d) exercise of
any rights or remedies under any Loan Documents or Applicable Law, or
(e) failure by any Loan Party to perform or observe any terms of any Loan
Document, in each case including all costs and expenses relating to any
investigation, litigation, arbitration, settlement (which settlement costs will
be subject to consultation with the Borrowers) or other proceeding (including an
Insolvency Proceeding or appellate proceedings), whether or not the applicable
Indemnitee is a party thereto.

“Closing Date” means the date hereof.

“Closing Date Dividend” has the meaning specified in the recitals hereof.

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

“Collateral” means a collective reference to all Property with respect to which
Liens in favor of the Collateral Agent are purported to be granted pursuant to
and in accordance with the terms of the Collateral Documents.

“Collateral Agent” means Bank of America in its capacity as collateral agent for
the holders of the secured obligations identified in the Collateral Documents,
and its successors and assigns in such capacity.

 

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“Collateral Documents” means a collective reference to the Security Agreement,
each Pledge Agreement, each Collateral Joinder Agreement and other security
documents as may be executed and delivered by the Loan Parties pursuant to the
terms of Section 7.14.

“Collateral Joinder Agreement” means a joinder agreement by which an additional
pledgor or guarantor may be added to a Pledge Agreement or the Security
Agreement.

“Commitment” means, as to each Revolving Lender, its obligation to (a) make
Revolving Loans pursuant to Section 2.01(a), (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans and Protective
Advances. The amount of the initial aggregate Commitments is equal to the
Aggregate Committed Amount as of the Closing Date.

“Commitment Percentage” means, for each Revolving Lender, a fraction (expressed
as a percentage carried to the ninth decimal place), the numerator of which is
such Revolving Lender’s Revolving Committed Amount and the denominator of which
is the Revolving Committed Amount of all Lenders. The initial Commitment
Percentages are set out in Schedule 2.01.

“Commitment Termination Date” means the earliest of (a) the Maturity Date,
(b) the date on which AFI terminates or reduces to zero the Commitments pursuant
to Section 2.06, and (c) the date on which the Commitments are terminated
pursuant to Section 9.02.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.).

“Compliance Certificate” means a certificate substantially in the form of
Exhibit D.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated EBITDA” means, for any period, for AFI and its Subsidiaries on a
consolidated basis, an amount equal to (i) Consolidated Operating Income for
such period plus (ii) the amount of depreciation and amortization expense for
such period, as determined in accordance with GAAP, plus (iii) to the extent
relating to the applicable period, (A) all extraordinary, nonrecurring or
one-time charges, (B) pro forma cost savings for acquisitions in an aggregate
amount of up to the greater of (i) $10 million or (ii) 10% of Consolidated
EBITDA, as yet unrealized, projected in good faith over the next twelve months,
(C) all non-cash charges (other than non-cash charges relating to Collateral
included in the Borrowing Base or pensions, and provided that for any such
non-cash charges resulting in a cash payment or cash outlay in a subsequent
period, Consolidated EBITDA will be reduced by the amount of the cash payment or
cash outlay in the period made), (D) cash restructuring charges limited to $10
million in any period of four consecutive fiscal quarters, (E) cost initiative
charges embedded in cost of goods sold (cash and non-cash charges) and which
taken together with cost initiative charges embedded in selling, general and
administrative expenses shall be limited to $5 million in any period of four
consecutive fiscal quarters, (F) cost initiative charges embedded in selling,
general and administrative expenses (cash and non-cash charges) and which taken
together with cost initiative charges embedded in cost of goods sold shall be
limited to $5 million in any period of four consecutive fiscal quarters, and
(G) losses on sales of assets (cash and non-cash), minus (iv) gains on sales of
assets (cash and non-cash); provided that, notwithstanding the foregoing, for
purposes of calculating Consolidated EBITDA for the fiscal quarters ended
June 30, 2016, September 30, 2016 and December 31, 2016, Consolidated EBITDA for
the quarters predating the Closing Date shall be as shown on Schedule 8.11.

 

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“Consolidated Operating Income” means, for any period, for AFI and its
Subsidiaries on a consolidated basis, the operating income of AFI and its
Subsidiaries (before deductions for interest and taxes) for that period, as
determined in accordance with GAAP.

“Consolidated Total Assets” means, on any date, total assets of AFI and its
Subsidiaries on a consolidated basis determined in accordance with GAAP as of
the last day of the fiscal quarter immediately preceding the date of
determination.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

“Control” has the meaning specified in the definition of “Affiliate”.

“Corporate Rating” means, as of any date of determination, the rating as
determined by either S&P or Moody’s (collectively, the “Corporate Ratings”) of
the corporate credit rating or corporate family rating of any Person.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“Creditor Representative” means under any Applicable Law, a receiver, manager,
controller, interim receiver, receiver and manager, trustee (including any
trustee in bankruptcy), custodian, conservator, administrator, examiner,
sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator,
administrative receiver, judicial manager, statutory manager or similar officer
or fiduciary.

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Loans and
Credit Extensions under this Agreement.

“Debt Transactions” means, with respect to AFI and its Subsidiaries, any sale,
issuance, placement, assumption or guaranty of Funded Indebtedness, whether or
not evidenced by a promissory note or other written evidence of Indebtedness,
other than Indebtedness permitted under subsections (a) through (f), inclusive,
and (h) through (u), inclusive, of Section 8.03.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus two percent (2%) per annum, in each
case to the fullest extent permitted by applicable Laws and (b) when used with
respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum, in all cases to the fullest extent permitted by applicable Laws.

 

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“Defaulting Lender” means, subject to Section 2.15(b), any Lender that (a) has
failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder, unless such Lender
notifies the Administrative Agent and the Borrowers in writing that such failure
is a result of such Lender’s determination that one or more conditions precedent
to funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing
Line Lender or any other Lender any other amount required to be paid by it
hereunder (including in respect of its participation in Letters of Credit or
Swing Line Loans) within two Business Days of the date when due, (b) has
notified the Borrowers, the Administrative Agent, the L/C Issuer or the Swing
Line Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund a
Loan hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the
Borrowers, to confirm in writing to the Administrative Agent and the Borrowers
that it will comply with its prospective funding obligations hereunder (provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon receipt of such written confirmation by the Administrative Agent and
the Borrowers), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity or (iii) become the subject of a Bail-in Action;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such Lender with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (d) above, and of the effective date of such status, shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 2.15(b)) as of the date established
therefor by the Administrative Agent in a written notice of such determination,
which shall be delivered by the Administrative Agent to the Borrowers, the L/C
Issuer, the Swing Line Lender and each other Lender promptly following such
determination.

“Deposit Account” means (i) any “deposit account” as such term is defined in
Article 9 of the UCC and in any event shall include all accounts and
sub-accounts relating to any of the foregoing and (ii) with respect to any such
Deposit Account located outside of the U.S., any bank account with a deposit
function.

“Deposit Account Control Agreement” means a control agreement reasonably
satisfactory to Administrative Agent executed by an institution maintaining a
Deposit Account for a Loan Party, to perfect the Administrative Agent’s Lien on
such account.

“Designated Jurisdiction” means, at any time, a country, region or territory
that is itself the subject or target of any comprehensive territorial Sanctions
(at the date of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and
Syria).

“Dilution Percent” means the percent, determined for each Applicable Borrower
and for all Borrowers in the aggregate for the most recent Fiscal Quarter, equal
to (a) bad debt write-downs or write-offs, discounts, returns, promotions,
credits, credit memos and other dilutive items with respect to the applicable
Borrower’s Accounts, divided by (b) gross sales of the Applicable Borrower.

 

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“Dilution Reserve” means the aggregate amount of reserves, as established by the
Administrative Agent from time to time, in an amount equal to the Value of the
Eligible Accounts multiplied by 1.0% for each percentage point (or portion
thereof) that the Borrowers’ Dilution Percent exceeds 5.0%, or such other
calculation procedure as may be agreed by the Administrative Agent and AFI.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any Sale and Leaseback Transaction) of any Property by
AFI or any of its Subsidiaries (including the Capital Stock of any Subsidiary),
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith, but excluding (i) the Permitted Dispositions, (ii) the
sale, lease, license, transfer or other disposition of inventory or other
Property in the ordinary course of business, (iii) the sale, lease, license,
transfer or other disposition of machinery, equipment or other Property no
longer used or useful in the conduct of business, (iv) any sale, lease, license,
transfer or other disposition of Property to any Loan Party, (v) any Disposition
to the extent constituting a Permitted Investment, (vi) any sale, lease,
license, transfer or other disposition of Property by any Foreign Subsidiary to
AFI or any of its Subsidiaries, (vii) dispositions of equipment or real property
to the extent that (a) such property is exchanged for credit against the
purchase price of similar replacement equipment or property or (b) the proceeds
of such disposition are reasonably promptly applied to the purchase price of
such replacement equipment or property; (viii) licenses, sublicenses, leases and
subleases not interfering in any material respect with the business of AFI or
its Subsidiaries, (ix) sales or discounts of accounts receivable in connection
with the compromise or collection thereof and (x) dispositions set forth on
Schedule 8.05.

“Distribution” means any declaration or payment of a distribution, interest or
dividend on any Capital Stock (other than payment-in-kind); or purchase,
redemption, or other acquisition or retirement for value of any Capital Stock.

“Distribution Reserve” means a reserve equal to the amount of any dividends or
distributions declared in accordance with Section 8.06 but not yet paid.

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

“Dollar Equivalent” means on any date, with respect to any amount denominated in
Dollars, such amount in Dollars, and with respect to any stated amount in a
currency other than Dollars, the amount of Dollars that the Administrative Agent
determines (which determination shall be conclusive and binding absent manifest
error) would be necessary to be sold on such date at the applicable Spot Rate to
obtain the stated amount of the other currency.

“Domestic In-Transit Inventory” means Inventory that has been purchased by a
Borrower and that is in-transit from a Vendor from a location within the United
States to such Borrower or a Permitted Inventory Location.

“Domestic Pledge Agreement” means that certain Amended and Restated Pledge
Agreement dated as of the Closing Date given by AFI and certain of its Domestic
Subsidiaries, as pledgors, to the Administrative Agent to secure the Secured
Obligations.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any State of the United States or the District of Columbia, other than (a) a
Subsidiary which is a disregarded entity for U.S. Federal income tax purposes
and directly or indirectly holds any interest in a Subsidiary not organized
under the laws of any state of the United States or the District of Columbia or
(b) any other Subsidiary which is a Subsidiary of an entity described in the
foregoing clause (a).

 

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“Dominion Account” means each special account established by the Loan Parties at
Bank of America or another bank acceptable to the Administrative Agent, over
which the Administrative Agent may exercise exclusive control for withdrawal
purposes and which is not a disbursement account.

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Eligible Accounts” means an Account owing to a Borrower that arises in the
Ordinary Course of Business from the sale of goods or rendition of services, is
payable in Dollars and is deemed by the Administrative Agent, in its Permitted
Discretion, to be a Eligible Account. Without limiting the foregoing, no Account
shall be a Eligible Account if (a) it is unpaid for more than sixty (60) days
after the original due date, or more than ninety (90) days after the original
invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are
not Eligible Accounts under the foregoing clause; (c) (i) except with respect to
Accounts of Home Depot, Lowes Home Improvement and JJ Haines & Co., when
aggregated with other Accounts owing by the Account Debtor, it exceeds 10% of
the aggregate Eligible Accounts (or such higher percentage as the Administrative
Agent may establish for the Account Debtor from time to time), (ii) with respect
to Accounts of Home Depot or Lowes Home Improvement, when the Accounts owing by
such Account Debtors are aggregated with all other Accounts, it exceeds 35% of
the aggregate Eligible Accounts and (iii) with respect to Accounts of JJ
Haines & Co., when the Accounts owing by JJ Haines & Co. are aggregated with all
other Accounts, it exceeds 15% of the aggregate Eligible Accounts; (d) it does
not conform with a covenant or representation herein; (e) it is owing by a
creditor or supplier, or is otherwise subject to a potential offset,
counterclaim, dispute, deduction, discount, recoupment, reserve, defense,
chargeback, credit or allowance (but ineligibility shall be limited to the
amount thereof); (f) an Insolvency Proceeding has been commenced by or against
the Account Debtor; or the Account Debtor has failed, has suspended or ceased
doing business, is liquidating, dissolving or winding up its affairs, is not
Solvent, or is subject to any Sanction or on any specially designated nationals
list maintained by OFAC; or the applicable Borrower is not able to bring suit or
enforce remedies against the Account Debtor through judicial process; (g) the
Account Debtor has its principal offices or assets outside of the United States,
unless the Account is supported by a letter of credit (delivered to and directly
drawable by the Administrative Agent) or credit insurance satisfactory in all
respects to the Administrative Agent; (h) it is owing by a Governmental
Authority, unless (i) the Account Debtor is the U.S. or any department, agency
or instrumentality thereof and the Account has been assigned to the
Administrative Agent in compliance with the federal Assignment of Claims Act or
(ii) such Account is backed by a letter of credit reasonably acceptable to the
Administrative Agent and which is in the possession of the Administrative Agent;
(i) it is not subject to a duly perfected, first priority Lien in favor of the
Administrative Agent, or is subject to any other Lien; (j) the goods giving rise
to it have not been delivered to the Account Debtor, the services giving rise to
it have not been accepted

 

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by the Account Debtor, or it otherwise does not represent a final sale; (k) it
is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced
to judgment; (l) its payment has been extended or the Account Debtor has made a
partial payment; (m) it arises from a sale to an Affiliate, from a sale on a
cash-on-delivery, bill-and-hold, sale-or-return, sale-on-approval, consignment,
or other repurchase or return basis, or from a sale for personal, family or
household purposes; (n) it represents a progress billing or retainage, or
relates to services for which a performance, surety or completion bond or
similar assurance has been issued; (o) it includes a billing for interest, fees
or late charges, but ineligibility shall be limited to the extent thereof; or
(p) it constitutes a “memo billing” or similar arrangement for Inventory or
other goods shipped to a distributor (regardless of whether such distributor,
Home Depot or Lowes Home Improvement or other Person is listed as the Account
Debtor) resulting in an offset against receivables on the balance sheet of AFI
or any other Borrower for all or any portion of the Inventory or goods so
shipped. In calculating delinquent portions of Accounts under clauses (a) and
(b), (i) credit balances of Home Depot and Lowes Home Improvement of more
than 120 days after the original invoice date shall be excluded and (ii) with
respect to any other Account Debtors, credit balances of more than 90 days after
the original invoice date shall be excluded.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 11.06(b)(iii)).

“Eligible In-Transit Inventory” means on any date, Inventory owned by a Borrower
that would be Eligible Inventory it were not subject to a Document and not
In-Transit Inventory, and that Administrative Agent, in its Permitted
Discretion, deems to be Eligible In-Transit Inventory. Without limiting the
foregoing, no Inventory shall be Eligible In-Transit Inventory unless (i) under
the terms of sale, title and risk of loss with respect to such Inventory have
passed from the Vendor to a Borrower; (ii) such Inventory is fully insured in a
manner satisfactory to Administrative Agent; (iii) the Vendor with respect to
such Inventory is an Eligible Vendor; (iv) such Inventory is in the possession
of a common carrier or an Eligible NVOCC that has issued an Acceptable BOL;
(iv) all original counterparts of the Acceptable BOL in respect of such
Inventory (whether issued by a carrier or an NVOCC) are in the United States;
(v) with respect to Foreign In-Transit Inventory, all original counterparts of
the Acceptable BOL are in the possession of Administrative Agent or an agent
thereof that is party to an Imported Goods Agreement or in the possession of a
Borrower as a result of Administrative Agent’s (or such agent’s) delivery to
such Borrower to facilitate offloading of such Inventory at the port of entry;
and (vi) such Inventory is being handled by a NVOCC, customs broker,
freight-forwarder or other handler that has delivered an Imported Goods
Agreement or other Lien Waiver acceptable to Administrative Agent.

“Eligible Inventory” means Inventory (excluding Eligible Supplies Inventory)
owned by Borrowers that the Administrative Agent, in its Permitted Discretion,
elects to include as Eligible Inventory. Without limiting the foregoing, no
Inventory shall be Eligible Inventory unless it (a) is goods that are first
quality work-in-process approved by the Administrative Agent, finished goods or
raw materials, and not packaging or shipping materials, labels, samples, display
items or bags; (b) is not held on consignment, nor subject to any deposit or
down payment; (c) is in new and saleable condition and is not damaged,
defective, shopworn or otherwise unfit for sale; (d) is not slow-moving,
perishable, obsolete or unmerchantable, and does not constitute returned or
repossessed goods; (e) meets all standards imposed by any Governmental
Authority, has not been acquired from a Person subject to any Sanction or on any
specially designated nationals list maintained by OFAC, and does not constitute
hazardous materials under any Environmental Law; (f) conforms with the covenants
and representations herein and in the other Loan Documents; (g) is subject to
the Administrative Agent’s duly perfected, first priority Lien, and no other
Lien; (h) except as otherwise expressly permitted in clause (m) of this
definition, is at a Permitted Inventory Location within the United States
(including any state or commonwealth thereof) and is not consigned to any
Person; (i) except as otherwise expressly permitted in clause (m) of this
definition,

 

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is not subject to any warehouse receipt or negotiable Document; (j) is not
subject to any License or other arrangement that restricts Borrowers’ or the
Administrative Agent’s right to dispose of such Inventory, unless the
Administrative Agent has received an appropriate consent to use; (k) is not
located on leased premises or in the possession of a warehouseman, processor,
repairman, mechanic, shipper, freight forwarder or other Person, unless the
lessor or such Person has delivered a Lien Waiver or an appropriate Rent and
Charges Reserve has been established; (l) with respect to work-in-process, has
not been approved by the Administrative Agent; and (m) is not In-Transit
Inventory except between Permitted Inventory Locations of the Borrowers or
In-Transit Inventory that constitutes Eligible In-Transit Inventory; provided,
that in no event shall Eligible In-Transit Inventory constitute more than
$15,000,000 of Eligible Inventory included in the Borrowing Base.

“Eligible Machinery and Equipment” means all Equipment of the Borrowers
reflected in the most recent Borrowing Base Certificate, except any Equipment
with respect to which any of the exclusionary criteria set forth below applies
(unless the Administrative Agent in its Permitted Discretion elects to include
such Equipment). No Equipment shall be Eligible Machinery and Equipment if:

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

(b) such Equipment is not located in the United States; or

(c) such Equipment is located in a public warehouse or in possession of a bailee
or in a facility leased by any Borrower; provided, that Equipment situated at a
location not owned by a Loan Party will be Eligible Machinery and Equipment if
the Administrative Agent has received a Collateral Access Agreement with respect
to such location (and, if no such Collateral Access Agreement has been received
with respect to such location, such Equipment may nevertheless be Eligible
Machinery and Equipment in the Permitted Discretion of the Administrative Agent
but the Administrative Agent may impose Rent and Charges Reserves with respect
to such location); or

(d) it is not at all times subject to the Collateral Agent’s duly perfected
first-priority security interest or is subject to a Lien that is not a Permitted
Lien; or

(e) it is obsolete, unmerchantable or is not in good working condition; or

(f) it is damaged or defective and is not repairable; or

(g) it is located at an outside repair facility (unless payables in respect
thereof are reserved); or

(h) it is not serviced or maintained in accordance with industry standards; or

(i) it does not conform in all material respects to any covenants, warranties
and representations set forth in this Agreement; or

(j) it does not meet in all material respects all standards imposed by any
applicable Governmental Authority; or

(k) it is not used or held for sale in the ordinary course of the applicable U.S
Borrower’s business;

(j) it is not covered by casualty insurance reasonably acceptable to the
Administrative Agent; or

(l) it constitutes a “Fixture” under the applicable laws of the jurisdiction in
which such Equipment is located.

 

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If any Equipment at any time ceases to be Eligible Machinery and Equipment for
any reason (including any permitted Disposition thereof), such Equipment shall
promptly be excluded from the calculation of the Borrowing Base.

“Eligible NVOCC” means with respect to any Foreign In-Transit Inventory, an
NVOCC in respect of such Inventory that (i) is not an Affiliate of any Borrower
or the applicable Vendor and is otherwise acceptable to the Administrative
Agent; (ii) is engaged by such Borrower as freight forwarder with respect to
such Inventory; (iii) has received from the carrier a tangible bill of lading
with respect to such Inventory that names such NVOCC as consignee and, if so
requested by Administrative Agent, has granted Administrative Agent a security
interest in such bill of lading as security for the Obligations; (iv) has issued
an Acceptable BOL with respect to such Inventory; (v) has entered into an
Imported Goods Agreement; and (vi) has not asserted any adverse claim or Lien
against any such Inventory.

“Eligible Pledged Cash” means at any date of determination thereof, 100% of the
unrestricted cash of the applicable Borrower at such date that (a) does not
constitute operating cash of each such Borrower, (b) is segregated from
operating and other cash of AFI and its Subsidiaries, (c) is on deposit in one
or more Eligible Pledged Cash Accounts, and (d) is subject to a duly perfected
first priority Lien in favor of the Administrative Agent.

“Eligible Pledged Cash Account” means each special account established in the
United States by a Borrower at Bank of America and which is designated as an
“Eligible Pledged Cash Account” on Schedule 1.01 or otherwise designated by the
Administrative Agent as an “Eligible Pledged Cash Account” in its Permitted
Discretion; provided that not more frequently than once per month, each Borrower
may, upon not less than two (2) Business Days prior written notice to the
Administrative Agent, decrease the amount of Eligible Pledged Cash by
withdrawing cash from its respective Eligible Pledged Cash Account(s), if
(a) immediately before such withdrawal no Default or Event of Default exists or
would exist after giving effect thereto, (b) prior to and after giving effect to
such withdrawal, Availability shall not be less than zero, (c) the applicable
Borrower(s) deliver a Borrowing Base Certificate to the Administrative Agent
reflecting solely the change in the Borrowing Base, after giving effect to such
withdrawal, and (d) the Borrowing Base shall be reduced immediately upon such
withdrawal.

“Eligible Supplies Inventory” means supplies Inventory (which, for avoidance of
doubt, shall not include raw materials) owned by Borrowers that the
Administrative Agent, in its Permitted Discretion, deems to be Eligible Supplies
Inventory. Without limiting the foregoing, no Inventory shall be Eligible
Supplies Inventory unless it (a) is replacement parts or manufacturing supplies;
(b) is not held on consignment, nor subject to any deposit or down payment;
(c) is in new and saleable condition and is not damaged, defective, shopworn or
otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or
unmerchantable, and does not constitute returned or repossessed goods; (e) meets
all standards imposed by any Governmental Authority, has not been acquired from
a Person subject to any Sanction or on any specially designated nationals list
maintained by OFAC, and does not constitute hazardous materials under any
Environmental Law; (f) conforms with the covenants and representations herein
and in the other Loan Documents; (g) is subject to the Administrative Agent’s
duly perfected, first priority Lien, and no other Lien; (h) is within the United
States (including any state or commonwealth thereof) or such other jurisdictions
determined by the Administrative Agent in its Reasonable Discretion, is not
In-Transit Inventory and is not consigned to any Person; (i) is not subject to
any warehouse receipt or negotiable Document; (j) is not subject to any License
or other arrangement that restricts Borrowers’ or the Administrative Agent’s
right to dispose of such Inventory, unless the Administrative Agent has received
an appropriate Lien Waiver; and (k) is not located on leased premises or in the
possession of a

 

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warehouseman, processor, repairman, mechanic, shipper, freight forwarder or
other Person, unless the lessor or such Person has delivered a Lien Waiver or an
appropriate Rent and Charges Reserve has been established.

“Eligible Vendor” means a Vendor which (i) is located in the United States,
China or any other country acceptable to the Administrative Agent in its sole
discretion, (ii) has received timely payment or performance of all Indebtedness
and other obligations at any time owed to it by the Borrowers (whether such
Debts or other obligations arise from any such Borrower’s purchase of goods or
otherwise), (iii) has not asserted (and has no right to assert) any reclamation,
repossession, diversion, stoppage in transit, Lien or title retention rights in
respect of such In-Transit Inventory, and (iv) if so requested by Administrative
Agent in its sole discretion, has entered into a Vendor Agreement.

“Environmental Laws” means any and all federal, state, local, foreign and other
applicable statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrowers, any other Loan Party or any of
their respective Subsidiaries 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.

“Equipment” means all machinery, apparatus, equipment, fittings, furniture,
fixtures, motor vehicles and other fixed assets owned by any Borrower and used
or held for sale by such Borrower in the ordinary course of its business,
whether now owned or hereafter acquired by a Borrower and wherever located, and
all parts, accessories and special tools and all increases and accessions
thereto and substitutions and replacements therefore.

“Equipment Appraisal” means as of any date of determination (a) the Equipment
appraisal delivered to the Administrative Agent on or prior to the Closing Date
or (b) a replacement Equipment appraisal delivered pursuant to Section 7.10
hereof, whichever is in effect as of such date.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with AFI within the meaning of Section 414(b) or (c) of the
Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code
for purposes of provisions relating to Section 412 of the Internal Revenue
Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by AFI or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by AFI or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization pursuant to
Section 418 of the Code; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of

 

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ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon AFI or any
ERISA Affiliate.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.1

“Eurodollar Rate” means the per annum rate of interest (rounded up to the
nearest 1/100th of 1% and in no event less than zero) determined by the
Administrative Agent at or about 11:00 a.m. (London time) two Business Days
prior to an interest period, for a term equivalent to such period, equal to the
London Interbank Offered Rate, or comparable or successor rate approved by the
Administrative Agent, as published on the applicable Reuters screen page (or
other commercially available source designated by the Administrative Agent from
time to time); provided, that any comparable or successor rate shall be applied
by the Administrative Agent, if administratively feasible, in a manner
consistent with market practice.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

“Event of Default” has the meaning specified in Section 9.01.

“Excess Availability” means as of any date of determination, an amount equal to
(a) the Line Cap minus (b) the principal balance of all Total Revolving
Outstandings.

“Excluded Accounts” means (a) Deposit Accounts that are zero balance
disbursement accounts, (b) Deposit Accounts used solely to fund payroll, payroll
Taxes and similar employment Taxes or employee benefits in the Ordinary Course
of Business and (c) other Deposit Accounts with an amount on deposit of less
than $1,000,000 at any time in the aggregate for all such Deposit Accounts.

“Excluded Property” means, with respect to any Loan Party, (a) any owned or
leased personal Property which is located outside of the United States, (b) any
real Property of the Loan Parties and any personal Property (including, without
limitation, motor vehicles and aircraft) in respect of which perfection of a
Lien is not either (i) governed by the Uniform Commercial Code or (ii) effected
by appropriate evidence of the Lien being filed in either the United States
Copyright Office or the United States Patent and Trademark Office, (c) the
Capital Stock of any First-Tier Foreign Subsidiary to the extent not required to
be pledged to secure the Obligations pursuant to Section 7.14(b), (d) any
personal Property which, subject to the terms of Section 8.09, is subject to a
Lien of the type described in Section 8.01(i) pursuant to documents which
prohibit such Loan Party from granting any other Liens in such Property,
provided, that no such personal Property shall be included in the Borrowing Base
and in any such case the prohibition would not be rendered ineffective by the
Uniform Commercial Code (including the provisions of Sections 9-407 and 9-408
thereof) or other applicable Law (including Debtor Relief Laws), (e) except as
expressly provided in Section 9.04, any permit, lease, license, contract or
instrument, now or hereafter in effect of a Loan Party, or rights relating
thereto, if the grant of a security interest in such permit, lease, license,
contract or instrument, or rights relating thereto, in a manner contemplated by
the Loan Documents, under the terms thereof or under applicable Law, is
prohibited and would result in the termination thereof or give the other parties
thereto the right to terminate, accelerate or otherwise

 

1  The EU Bail-In Legislation Schedule may be found at
http://www.lma.eu.com/uploads/files/EU%20BAIL-IN%20LEGISLATION%20SCHEDULE%2022-Dec-2015%2010-46%20.pdf

 

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materially and adversely alter such Loan Party’s rights, titles and interests
thereunder (including upon the giving of notice or the lapse of time or both),
provided that in any such case the prohibition, termination or rights to
terminate, accelerate or materially and adversely alter such Loan Party’s
rights, titles and interests would not be rendered ineffective by the Uniform
Commercial Code (including the provisions of Sections 9-407 and 9-408 thereof)
or other applicable Law (including Debtor Relief Laws), and (f) any Property
listed in Schedule 1.02 under the heading “Excluded Property”.

“Excluded Subsidiary” means (a) any Subsidiary that is not a Domestic
Subsidiary, (b) HHW, so long as the aggregate book value of all the assets of
HHW and all other Subsidiaries included in the following clause (c) do not
exceed, in the aggregate, $15,000,000, and (c) any Domestic Subsidiary (other
than HHW) that is not a Material Domestic Subsidiary; provided, that the
aggregate book value of all assets of all such Material Domestic Subsidiaries
that constitute Excluded Subsidiaries at any time under this definition shall
not exceed $5,000,000.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation incurred after the date hereof, if, and to the extent that, all or a
portion of the Guaranty of such Guarantor of, or the grant under a Loan Document
by such Guarantor of a security interest to secure, such Swap Obligation (or any
Guarantee thereof) is or becomes illegal under the Commodity Exchange Act (or
the application or official interpretation thereof) by virtue of such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act (determined after giving
effect to Section 4.08 hereof and any and all guarantees of such Guarantor’s
Swap Obligations by other Loan Parties) at the time the Guaranty of such
Guarantor, or grant by such Guarantor of a security interest, becomes effective
with respect to such Swap Obligation. If a Swap Obligation arises under a Master
Agreement governing more than one Swap Contract, such exclusion shall apply only
to the portion of such Swap Obligation that is attributable to Swap Contracts
for which such Guaranty or security interest becomes illegal.

“Excluded Taxes” means, any of the following Taxes imposed on or with respect to
any Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its Lending Office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a Law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrowers under Section 11.13) or (ii) such Lender changes its Lending Office,
except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c),
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its Lending Office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal
withholding Taxes imposed pursuant to FATCA.

“Existing Letters of Credit” means the letters of credit outstanding on the
Closing Date and identified on Schedule 2.03.

“Extraordinary Expenses” means all costs, expenses or advances that the
Administrative Agent or any security trustee may incur during a Default or Event
of Default, or during the pendency of an Insolvency Proceeding of AFI or any
Subsidiary, including those relating to (a) any audit, inspection, repossession,
storage, repair, appraisal, insurance, manufacture, preparation or advertising
for sale, sale, collection, or other preservation of or realization upon any
Collateral; (b) any action, arbitration or other

 

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proceeding (whether instituted by or against the Administrative Agent, any
security trustee, any L/C Issuer, any Lender, any Loan Party, any representative
of creditors of any Loan Party or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of the
Administrative Agent’s or any security trustee’s Liens with respect to any
Collateral), Loan Documents, Letters of Credit or Obligations, including any
lender liability or other Claims; (c) the exercise of any rights or remedies of
the Administrative Agent or any security trustee in, or the monitoring of, any
Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens
with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation
and documentation of any modification, waiver, workout, restructuring or
forbearance with respect to any Loan Documents or Obligations. Such costs,
expenses and advances include transfer fees, Other Taxes, storage fees,
insurance costs, permit fees, utility reservation and standby fees, legal fees,
appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’
fees, environmental study fees, wages and salaries paid to employees of any Loan
Party or independent contractors in liquidating any Collateral, and travel
expenses.

“Facilities” means, at any time, a collective reference to the facilities and
real properties owned, leased or operated by AFI or any of its Subsidiaries.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code or any intergovernmental agreement
entered into between the United States and the government of another country in
order to implement the requirements of Sections 1471 through 1474 of the Code.

“Federal Funds Rate” means (a) the weighted average of interest rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers on the applicable Business Day (or on the
preceding Business Day, if the applicable day is not a Business Day), as
published by the Federal Reserve Bank of New York on the next Business Day; or
(b) if no such rate is published on the next Business Day, the average rate
(rounded up, if necessary, to the nearest 1/100 of 1%) charged to Bank of
America on the applicable day on such transactions, as determined by Agent.

“Fee Letters” means those certain letter agreements, each dated February 22,
2016, among the Borrowers and each of the Administrative Agent and each of the
Arrangers.

“FILO Credit Facility” has the meaning set forth in Section 2.01(b)(ii).

“FILO Incremental Amendment” an amendment establishing a FILO Credit Facility in
form and substance satisfactory to the Administrative Agent, the US Borrowers
and each FILO Lender, the terms and conditions of which shall satisfy all the
FILO Incremental Conditions.

“FILO Incremental Conditions” means the collective reference to the following
conditions, or any of them, as the context may require:

 

  (1) the aggregate principal amount of all loans under the FILO Credit Facility
shall not exceed Fifteen Million Dollars ($15,000,000);

 

  (2)

the establishment thereof shall result in an amendment of the payment waterfall
in Section 9.03 (without the requirement of the consent of the Lenders under
Section 11.01)

 

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  to include payment of accrued and unpaid interest of Obligations under the
FILO Credit Agreement as a new clause “Eighth” and unpaid payment of principal
of Obligations under the FILO Credit Agreement as a new clause “Ninth”, and
renumbering the existing clauses “Eighth” and “Ninth” as clauses “Tenth” and
“Eleventh,” respectively;

 

  (3) subject to other express limitations set forth in Section 2.01, the FILO
Credit Facility shall be on terms and conditions as determined by AFI, the
Administrative Agent and the FILO Lenders, it being understood and agreed that
such terms and conditions may include, without limitation, FILO Credit
Facility-specific borrowing base, advance rate, eligibility criteria,
availability reserves (including reserves implemented against the Borrowing Base
with respect to obligations owing to the FILO Lenders), representations,
warranties, covenants and Events of Default, interest rates, fees, final
maturity date, amortization, mandatory and voluntary prepayment and commitment
termination provision as to the FILO Credit Facility or any other provision of
the Loan Documents related to cash dominion, and amendment and waiver provisions
(including modifications to Section 11.01 to provide for customary or market
provisions in favor of the FILO Lenders, which may include voting rights in
favor of the FILO Lenders relating to modifications of the Borrowing Base that
would affect the FILO Credit Facility or the FILO Lenders) in respect of or
relating to the FILO Credit Facility and other customary or market terms and
conditions for asset-based “first in, last out” credit facilities of this
nature;

 

  (4) subject to amortization or mandatory FILO Credit Facility reduction terms
and conditions, the stated maturity date of the FILO Credit Facility shall not
be later than the then Maturity Date;

 

  (5) the advance rates in respect of the incremental borrowing base under FILO
Credit Facility shall not exceed five percent (5.0%) on Eligible Accounts or ten
percent (10.0%) on Eligible Inventory;

 

  (6) the arrangement of the FILO Credit Facility, and any upfront,
underwriting, arrangement or similar fees in respect of the FILO Credit
Facility, shall be agreed to solely by AFI, the Administrative Agent and the
FILO Lenders;

 

  (7) the FILO Credit Facility shall be subject to closing conditions as may be
determined by the Administrative Agent, the FILO Lenders and AFI; and

 

  (8) the FILO Incremental Amendment and all documentation in respect of the
FILO Credit Facility shall be consistent with the foregoing and in form and
substance reasonably satisfactory to the Administrative Agent and the FILO
Lenders.

“FILO Lender” means any Lender or Eligible Assignee that satisfies the
applicable conditions of Section 2.01 and becomes a Lender under the FILO Credit
Facility, if any, as may be established from time to time in accordance
herewith.

“Financial Covenant Trigger Period” means the period (a) commencing on the date
that Excess Availability is less than the greater of (i) 10.0% of the Line Cap
and (ii) $20,000,000, and (b) continuing until a period of 30 consecutive days
has elapsed during which at all times Excess Availability is equal to or greater
than the greater of (i) 10.0% of the Line Cap and (ii) $20,000,000.

 

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“First-Tier Foreign Subsidiary” means each Foreign Subsidiary that is owned
directly by a Loan Party.

“Fixed Charge Coverage Ratio” means the ratio, determined on a consolidated
basis for AFI and its Subsidiaries for the most recent 12 months, of
(a) Consolidated EBITDA minus Capital Expenditures (except those financed with
Funded Indebtedness other than Revolving Loans), to (b) Fixed Charges.

“Fixed Charges” means the sum of interest expense paid in cash (other than
payment-in-kind), scheduled principal payments made on Funded Indebtedness, cash
taxes paid and Distributions made in accordance with Section 8.06(h).

“Foreign In-Transit Inventory” means Inventory that has been purchased by a
Borrower and that is in-transit from a Vendor from a location outside the United
States to a Borrower or a Permitted Inventory Location.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which any of the Borrowers are resident for tax
purposes (including such a Lender when acting in the capacity of the L/C
Issuer). For purposes of this definition, the United States, 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.

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

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the L/C Issuer, such Defaulting Lender’s pro rata share of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof, (b) with
respect to the Swing Line Lender, such Defaulting Lender’s pro rata share of
Swing Line Loans other than Swing Line Loans as to which such Defaulting
Lender’s participation obligation has been reallocated to other Lenders in
accordance with the terms hereof and (c) with respect to Protective Advances,
such Defaulting Lender’s pro rata share of Protective Advances other than
Protective Advances as to which such Defaulting Lender’s participation
obligation has been reallocated to other Lenders in accordance with the terms
hereof.

“Full Payment” with respect to any Obligations, (a) the full and indefeasible
cash payment thereof, including any interest, fees and other charges accruing
during an Insolvency Proceeding (whether or not allowed in the proceeding); and
(b) if such Obligations are L/C Obligations or inchoate or contingent in nature,
Cash Collateralization thereof (or delivery of a standby letter of credit
acceptable to Administrative Agent in its discretion, in the amount of required
Cash Collateral). No Loans shall be deemed to have been paid in full unless all
Commitments related to such Loans have terminated.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funded Indebtedness” means, as to any Person at a particular time, without
duplication, the principal amount of all of the following, whether or not
included as indebtedness or liabilities in accordance with GAAP:

 

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(a) all obligations for borrowed money, whether current or long-term (including
the Obligations) and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

(b) all purchase money Indebtedness;

(c) the principal portion of all obligations under conditional sale or other
title retention agreements relating to Property purchased by such Person (other
than customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business);

(d) all obligations arising under standby letters of credit and similar
obligations that back obligations that would constitute Indebtedness (but
specifically excluding those that support performance obligations);

(e) all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business
and other than obligations with respect to compensation);

(f) all Attributable Indebtedness;

(g) all preferred stock or other equity interests providing for mandatory
redemptions, sinking fund or like payments prior to the Maturity Date;

(h) all Funded Indebtedness of others secured by (or for which the holder of
such Funded Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed;

(i) all Guarantees with respect to Funded Indebtedness of the types specified in
clauses (a) through (h) above of another Person; and

(j) all Funded Indebtedness of the types referred to in clauses (a) through
(h) above of any partnership or joint venture (other than a joint venture that
is itself a corporation or limited liability company) in which such Person is a
general partner or joint venturer and has liability for such obligations, but
only to the extent there is recourse to such Person for payment thereof.

For purposes hereof, except as provided in clause (d) above, obligations arising
under letters of credit and similar instruments shall not constitute Funded
Indebtedness.

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, consistently applied
and as in effect from time to time.

“Governmental Authority” means the government of the United States or any other
nation, or of 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 (including any
supra-national bodies such as the European Union or the European Central Bank).

 

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“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness payable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness, (ii) to purchase or
lease property, securities or services for the purpose of assuring the obligee
in respect of such Indebtedness, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness , or (iv) entered into for the purpose of assuring in
any other manner the obligee in respect of such Indebtedness or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any Lien
on any assets of such Person securing any Indebtedness of any other Person,
whether or not such Indebtedness is assumed by such Person. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guaranteed Obligations” has the meaning set forth in Section 4.01.

“Guarantors” means with respect to any Obligations, (a) the Borrowers (for
purposes of obligations of Subsidiaries under Swap Contracts and Treasury
Management Agreements and any Swap Obligation of a Specified Loan Party
(determined before giving effect to Section 4.01 and 4.08) under the Guaranty),
and (b) each Material Domestic Subsidiary of AFI (other than Excluded
Subsidiaries) identified as a “Guarantor” on the signature pages hereto and each
other Person that joins as a Guarantor pursuant to Section 7.12, together with
their successors and permitted Assigns.

“Guaranty” means (a) the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders pursuant to Article IV hereof and (b) any
guaranty established in connection with the Australian Incremental Credit
Facility or the Canadian Incremental Credit Facility, if either is established
from time to time, or any of them, as the context may require.

“Guaranty Joinder Agreement” means a joinder agreement by which a Domestic
Subsidiary of AFI or other Person may become a Guarantor hereunder. A form of
Guaranty Joinder Agreement is attached as Exhibit F.

“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.

“HHW” means HomerWood Hardwood Flooring Company, a Delaware corporation.

“Honor Date” has the meaning set forth in Section 2.03(c)(i).

“Impacted Loan” has the meaning set forth in Section 3.03.

“Imported Goods Agreement” means an agreement among any Borrower, Administrative
Agent and a NVOCC or customs broker or other handler that is in form and
substance satisfactory to Administrative Agent in its Permitted Discretion and
pursuant to which, among other things, the parties have agreed upon their
relative rights with respect to In-Transit Inventory of such Borrower.

“Incremental Credit Facilities” has the meaning specified in Section 2.01(b).

 

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“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all Funded Indebtedness;

(b) the Swap Termination Value of any Swap Contract;

(c) all Guarantees with respect to outstanding Indebtedness of the types
specified in clauses (a) and (b) above of any other Person; and

(d) all Indebtedness of the types referred to in clauses (a) through (c) above
of any partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which such Person is a general
partner or joint venturer, and has liability for such obligations, but only to
the extent there is recourse to such Person for payment thereof.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
(a), Other Taxes.

“Indemnitees” has the meaning set forth in Section 11.04(b).

“Insolvency Proceeding” means any case or proceeding, application, meeting
convened, resolution passed, proposal, corporate action or any other proceeding
commenced by or against a Person under any state, provincial, federal or foreign
law for, or any agreement of such Person to, (a) the entry of an order for
relief under the U.S. Bankruptcy Code, or any other insolvency, debtor relief,
bankruptcy, receivership, debt adjustment law or other similar law (whether
state, provincial, federal or foreign), including foreign insolvency laws
specified in any Australian Incremental Amendment or Canadian Incremental
Amendment; (b) the appointment of a Creditor Representative or other custodian
for such Person or any part of its Property; (c) an assignment or trust mortgage
for the benefit of creditors; (d) the winding up or strike off the Person;
(e) the proposal or implementation of a scheme of arrangement; or (f) a
suspension of payment, moratorium of any debts, official assignment, composition
or arrangement with a Person’s creditors.

“Insurance Subsidiary” means a Subsidiary established by AFI or any of its
Subsidiaries for the purpose of, and to be engaged solely in the business of,
insuring the businesses or facilities owned or operated by AFI or any of its
Subsidiaries or joint ventures or to insure unrelated businesses, provided that
such unrelated business premiums do not exceed 35% of the annual premiums
collected by such Subsidiary.

“Interest Payment Date” means, (a) as to any Base Rate Loan (including Swing
Line Loans), the first (1st) Business Day occurring after the end of each March,
June, September and December, the Maturity Date and, in the case of any Swing
Line Loan, any other dates as may be mutually agreed upon by the Borrowers and
the Swing Line Lender, and (b) as to any Eurodollar Rate Loan, the last Business
Day of each Interest Period for such Loan, the date of repayment of principal of
such Loan, the Maturity Date, and in addition, where the applicable Interest
Period exceeds three months, the date every three months after the beginning of
such Interest Period. If an Interest Payment Date falls on a date that is not a
Business Day, such Interest Payment Date shall be deemed to be the next Business
Day.

 

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“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six, and, if
available to all of the relevant Lenders, twelve months thereafter, as selected
by the applicable Borrower in its Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

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

(iii) no Interest Period shall extend beyond the Maturity Date (or the
Commitment Termination Date, if earlier).

“In-Transit Inventory” means Inventory of Borrowers that is either Domestic
In-Transit Inventory or Foreign In-Transit Inventory.

“Inventory” has the meaning set forth in the UCC or any other Applicable Law, as
applicable, including all goods intended for sale, lease, display or
demonstration; all goods provided under a contract for services; all work in
process; and all raw materials, and other materials and supplies of any kind
that are or could be used in connection with the manufacture, transformation,
printing, packing, shipping, advertising, sale, lease or furnishing of such
goods, or otherwise used or consumed in a Loan Party’s business (but excluding
Equipment).

“Inventory Appraisal” means (a) on the Closing Date, Hilco Valuation’s report
dated January 4, 2016 (as of September 30, 2015), and (b) thereafter, the most
recent Inventory appraisal conducted by an independent appraisal firm and
delivered pursuant to Section 7.10 hereof.

“Inventory Reserve” means the aggregate amount of reserves, as established by
the Administrative Agent from time to time in its Permitted Discretion, to
reflect factors that may negatively impact the value of Eligible Inventory
and/or Eligible Supplies Inventory, including, without duplication of
eligibility criteria, changes in salability, slow moving, obsolescence,
shrinkage, theft, imbalance, change in composition or mix, markdowns and vendor
chargebacks.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Capital Stock of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, including any partnership or joint venture interest in such other
Person, or (c) an Acquisition. For purposes of covenant compliance, the amount
of any Investment at any time shall be the amount actually invested, as
determined at the time of each such Investment, without adjustment for
subsequent increases or decreases in the value of such Investment, net of
(i) any return representing a return of capital with respect to such Investment
and (ii) any dividend, distribution or other return on capital with respect to
such Investment.

“Involuntary Disposition” means any loss of, damage to or destruction of, or any
condemnation or other taking for public use of, any Property of any of the
Borrowers or any of their respective Subsidiaries.

“IP Rights” has the meaning set forth in Section 6.17.

 

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“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any standby Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking
Law & Practice, Inc. (or such later version thereof as may be in effect at the
time of issuance).

“Issuer Documents” means, with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Applicable Borrower (or any Subsidiary) or in
favor of the applicable L/C Issuer and relating to any such Letter of Credit.

“Joinder Agreements” means a Guaranty Joinder Agreement, a Lender Joinder
Agreement and/or a Collateral Joinder Agreement, as appropriate.

“Judgment Currency” has the meaning set forth in Section 1.08(b).

“Laws” means, collectively, all international, foreign, federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Pro Rata Share.

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Borrowing of Revolving Loans.

“L/C Commitment” means, with respect to any L/C Issuer, the commitment of such
L/C Issuer to issue and to honor payment obligations under Letters of Credit in
accordance with Section 2.03.

“L/C Conditions” means the following conditions satisfaction of all of which is
necessary for issuance of a Letter of Credit: (a) each of the conditions set
forth in Article V; (b) after giving effect to such issuance, total L/C
Obligations do not exceed the Letter of Credit Sublimit, no Overadvance exists,
and Revolver Usage does not exceed the Line Cap; (c) such Letter of Credit and
payments thereunder are denominated in Dollars; and (d) the purpose and form of
the proposed Letter of Credit are satisfactory to the Administrative Agent and
applicable L/C Issuer in their reasonable discretion.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.

“L/C Issuer” means with respect to a particular Letter of Credit (a) as to
Existing Letters of Credit, the Lenders identified on Schedule 2.03, (b) Bank of
America in its capacity as issuer of such Letter of Credit or (c) such other
Lender selected by the Applicable Borrower (with the consent of such Lender and
the Administrative Agent) from time to time to issue such Letter of Credit, or
any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including

 

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all L/C Borrowings. For purposes of computing the amount available to be drawn
under any Letter of Credit, the amount of such Letter of Credit shall be
determined in accordance with Section 1.06. For all purposes of this Agreement,
if on any date of determination a Letter of Credit has expired by its terms but
any amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

“Lender” means each of the Persons identified as a “Lender” on the signature
pages hereto (and, as appropriate, includes the Revolving Lenders and Swing Line
Lender) and each Person who joins as a Lender pursuant to the terms hereof,
together with their respective successors and assigns.

“Lender Joinder Agreement” means a joinder agreement by which a Lender is joined
under this Agreement to provide additional commitments in respect of an
Incremental Credit Facility or otherwise.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

“Letter of Credit” means any Existing Letter of Credit and each letter of credit
issued hereunder. A Letter of Credit may be a commercial letter of credit or a
standby letter of credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by the applicable L/C Issuer.

“Letter of Credit Expiration Date” means the day that is thirty (30) days prior
to the Maturity Date then in effect (or, if such day is not a Business Day, the
next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

“Letter of Credit Sublimit” has the meaning specified in Section 2.03(a)(i). The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Committed Amount.

“Lien” means any mortgage, pledge, hypothecation, encumbrance, lien (statutory
or other), charge, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any financing lease
having substantially the same economic effect as any of the foregoing).

“Lien Waiver” means an agreement, in form and substance satisfactory to
Administrative Agent, by which (a) for any material Collateral located on leased
premises or premises subject to a mortgage, the lessor or mortgagee, as
applicable, waives or subordinates any Lien it may have on the Collateral, and
agrees to permit the Administrative Agent to enter upon the premises and remove
the Collateral or to use the premises to store or dispose of the Collateral;
(b) for any Collateral held by a warehouseman, processor, shipper, customs
broker or freight forwarder, such Person waives or subordinates any Lien it may
have on the Collateral, agrees to hold any documents in its possession relating
to the Collateral as agent for Administrative Agent, and agrees to deliver the
Collateral to Administrative Agent upon request; (c) for any Collateral held by
a repairman, mechanic or bailee, such Person acknowledges Administrative Agent’s
Lien, waives or subordinates any Lien it may have on the Collateral, and agrees
to deliver the Collateral to Administrative Agent upon request; and (d) for any
Collateral subject to a licensor’s intellectual property rights, the licensor
grants to Administrative Agent the right, vis-à-vis such licensor, to enforce
Administrative Agent’s Liens with respect to the Collateral, including the right
to dispose of it with the benefit of the intellectual property, whether or not a
default exists under any applicable license.

 

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“Line Cap” means, as of any date of determination, an amount equal to the lesser
of (a) the Borrowing Base as of such date and (b) the Aggregate Commitments as
of such date.

“Liquidity” means, at any time, the sum of (i) unrestricted cash and Cash
Equivalents on hand, plus (ii) the aggregate unused amount of Commitments
hereunder.

“Loan” means any Revolving Loan or Swing Line Loan, any Protective Advance, any
Overadvance Loan, and the Base Rate Loans and Eurodollar Rate Loans comprising
such Loans.

“Loan Documents” means this Agreement, each Note, each Letter of Credit, each
Letter of Credit Application, each Joinder Agreement, the Collateral Documents
and each Fee Letter.

“Loan Notice” means a notice of (a) a Borrowing of Revolving Loans or Swing Line
Loans, (b) a conversion of Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(b), which, if in
writing, shall be substantially in the form of Exhibit A-1 or Exhibit A-2, with
respect to Revolving Loans, and Exhibit B, with respect to Swing Line Loans, or
such other form, as may be approved by the Administrative Agent (including any
form on an electronic platform or electronic transmission system as shall be
approved by the Administrative Agent), appropriately completed and signed by a
Responsible Officer of AFI.

“Loan Parties” means, collectively, the Borrowers and each Guarantor.

“Loan Party Representative” has the meaning specified in Section 10.13.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

“M&E Availability Period” means the period commencing on the Closing Date and
ending on the first to occur of (a) the Maturity Date and (b) the date that AFI
has delivered irrevocable notice to the Administrative Agent of its election to
cancel 100% of the portion of the Borrowing Base based on Eligible Machinery and
Equipment.

“M&E Cap” means $50,000,000, as such amount is reduced quarterly after the
Closing Date amortizing on a seven year straight-line basis; provided, however,
that if a new Equipment Appraisal is obtained in accordance with Section 7.10,
the M&E Cap shall be reset to reflect the results of such appraisal and such
amount shall thereafter reduce quarterly after such appraisal date amortizing on
a seven year straight-line basis

“M&E Sublimit” means, as of any date of determination, the lesser of (a) 85% of
the M&E Value as of such date and (b) the M&E Cap as of such date.

“M&E Value” means the Value of Eligible Machinery and Equipment based upon the
Equipment Appraisal delivered on or prior to the Closing Date, as such amount is
reduced quarterly after the Closing Date amortizing on a seven year
straight-line basis; provided, however, that if a new Equipment Appraisal is
obtained in accordance with Section 7.10, the M&E Value shall be reset to
reflect the results of such appraisal and such amount shall thereafter reduce
quarterly after such appraisal date amortizing quarterly on a seven year
straight-line basis.

“Master Agreement” has the meaning specified in the definition of “Swap
Contract”.

 

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“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or condition (financial or otherwise) of AFI and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Borrowers and
their respective Subsidiaries taken as a whole to perform their obligations
under any Loan Document to which they are a party; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against the
Borrowers and their respective Subsidiaries taken as a whole of any Loan
Document to which they are a party.

“Material Domestic Subsidiary” means any Domestic Subsidiary of AFI that
individually, or together with its Subsidiaries on a consolidated basis, has
assets of more than $1,000,000; provided, that in no event shall any Insurance
Subsidiary constitute a Material Domestic Subsidiary.

“Material First-Tier Foreign Subsidiary” means any other First-Tier Foreign
Subsidiary that individually, or together with its Subsidiaries on a
consolidated basis, has assets of more than $5,000,000; provided, however, that
notwithstanding the foregoing, the following Foreign Subsidiaries shall not
constitute Material First-Tier Foreign Subsidiaries: (i) any Foreign Subsidiary
organized under the laws of the People’s Republic of China or any state or other
political subdivision thereof; (ii) any Insurance Subsidiary; and (iii) any
other Foreign Subsidiary if a pledge of such Foreign Subsidiary’s Capital Stock
violates any Law or could reasonably be expected to have an adverse effect on
the business of such Foreign Subsidiary.

“Maturity Date” means April 1, 2021.

“Maximum Rate” has the meaning specified in Section 11.09.

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances provided to reduce or
eliminate Fronting Exposure during the existence of a Defaulting Lender or in
accordance with Section 9.03, an amount equal to 105% of the Fronting Exposure
of the L/C Issuer with respect to Letters of Credit issued and outstanding at
such time, (ii) with respect to Cash Collateral consisting of cash or deposit
account balances provided in accordance with the provisions of
Section 2.14(a)(i),(a)(ii) or (a)(iii), an amount equal to 105% of the
Outstanding Amount of all L/C Obligations, and (iii) otherwise, an amount
determined by the Administrative Agent and the L/C Issuer in their sole
discretion of the amount that is due or could become due, including all fees,
expenses, indemnifications and other amounts relating to such Obligations

“MNPI” has the meaning specified in clause (3) of the proviso to
Section 2.05(a)(ii)(A).

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which AFI or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.

“Net Cash Proceeds” means the aggregate cash or Cash Equivalents proceeds
(including insurance proceeds and condemnation awards) received by AFI or any of
its Subsidiaries, net of (a) direct costs incurred in connection therewith
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions), (b) taxes paid or payable as a result thereof, (c) the
amount necessary to retire any Indebtedness secured by a Permitted Lien on the
related Property, (d) amounts paid or reserved to fund any liabilities in
connection with any Disposition and (e) for Debt Transactions, the “Net Cash
Proceeds” subject to mandatory prepayment under Section 2.05(b)(iii) will be
reduced by the portion thereof used or to be used for a Permitted Acquisition or
to refinance other permitted

 

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Indebtedness, in each case, in the period beginning two month prior to the date
of the Debt Transaction and ending two months after the date of the Debt
Transaction; understood and agreed that “Net Cash Proceeds” shall include,
without limitation, any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration received by the Borrowers or any
Subsidiary in any Disposition or Involuntary Disposition when and as received.

“NOLV Percentage” means the net orderly liquidation value of Inventory or
Equipment, expressed as a percentage of Value, expected to be realized at an
orderly, negotiated sale held within a reasonable period of time, net of all
liquidation expenses, as determined from the most recent Inventory Appraisal or
Equipment Appraisal, as applicable, approved by the Administrative Agent.

“Non-Consenting Lender” has the meaning specified in Section 11.13.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.

“Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Notes” means the Revolving Notes and the Swing Line Note.

“Notice of Continuation/Conversion” means the written notice of continuation or
conversion in substantially the form of Exhibit A-2.

“NVOCC” means with respect to any Foreign In-Transit Inventory, a non-vessel
operating common carrier engaged as a freight forwarder or otherwise to assist
in the importation of such In-Transit Inventory.

“Obligations” means with respect to the Borrowers and each Guarantor (a) all
advances to, and debts, liabilities, obligations, covenants and duties of, any
Loan Party arising under any Loan Document or otherwise with respect to any Loan
or Letter of Credit, whether absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, and (b) all Secured Bank Product Obligations; provided that the
“Obligations” of a Guarantor shall exclude any Excluded Swap Obligations with
respect to such Guarantor.

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

“Ordinary Course of Business” means the ordinary course of business of any
Borrower or Subsidiary, consistent with Applicable Law and past practices.

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 3.06).

“Outstanding Amount” means (a) with respect to Revolving Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any Borrowings and prepayments or repayments of Revolving Loans
and Swing Line Loans, as the case may be, occurring on such date; and (b) with
respect to any L/C Obligations on any date, the aggregate outstanding amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrowers of Unreimbursed Amounts.

“Overadvance” has the meaning specified in Section 2.17(a).

“Overadvance Loan” means a Base Rate Loan made to a Borrower when an Overadvance
exists or is caused by the funding thereof.

“Overnight Rate” means, for any day, the greater of (a) the Federal Funds Rate
and (b) an overnight rate determined by the Administrative Agent, the applicable
L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with
banking industry rules on interbank compensation.

“Participant” has the meaning specified in Section 11.06(d).

“Participant Register” has the meaning specified in Section 11.06(d).

“Patriot Act” has the meaning specified in Section 11.16.

“Payment Item” means each check, draft or other item of payment payable to a
Loan Party, including those constituting proceeds of any Collateral.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by AFI or any ERISA
Affiliate or to which AFI or any ERISA Affiliate contributes or has an
obligation to contribute, or in the case of a multiple employer or other plan
described in Section 4064(a) of ERISA, has made contributions at any time during
the immediately preceding five plan years.

“Permitted Acquisitions” means Investments consisting of an Acquisition by a
Loan Party, provided that (i) immediately after giving effect to such
Acquisition, such Loan Party would be in compliance with Section 8.07, (ii) in
the case of an Acquisition of all or substantially all of the Capital Stock of
another Person, the board of directors (or other comparable governing body) of
such other

 

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Person shall have duly approved such Acquisition, (iii) either (A) both
(1) Excess Availability on a Pro Forma Basis for the thirty (30) day period
ending on and including the date of such Acquisition is not less than the
greater of (I) 12.5% of the Line Cap and (II) $25,000,000 and (2) the Loan
Parties will be in compliance with the financial covenant under Section 8.11
after giving effect thereto on Pro Forma Basis or (B) Excess Availability on a
Pro Forma Basis for the thirty (30) day period ending on and including the date
of such Acquisition is not less than the greater of (1) 20.0% of the Line Cap
and (2) $40,000,000, (iv) no Default or Event of Default shall exist immediately
before or immediately after giving effect thereto on a Pro Forma Basis and
(v) AFI shall deliver to the Administrative Agent a compliance certificate
confirming the foregoing, in form and detail reasonably satisfactory to the
Administrative Agent.

“Permitted Discretion” means a determination made in the exercise, in good
faith, of reasonable business judgment (from the perspective of a secured,
asset-based lender).

“Permitted Inventory Locations” means each location in the United States listed
on Schedule 1.01(p) and from time to time each other location within the United
States which AFI has notified the Administrative Agent in writing is a location
at which Inventory of a Borrower is maintained.

“Permitted Investments” means, at any time, Investments by AFI or any of its
Subsidiaries permitted to exist at such time pursuant to the terms of
Section 8.02.

“Permitted Liens” means, at any time, Liens in respect of Property of AFI or any
of its Subsidiaries permitted to exist at such time pursuant to the terms of
Section 8.01.

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

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by AFI or, with respect to any such plan that
is subject to Section 412 of the Internal Revenue Code or Title IV of ERISA, any
ERISA Affiliate.

“Platform” has the meaning specified in Section 7.02.

“Pledge Agreements” means (a) the Domestic Pledge Agreement and (b) any other
pledge agreement given by any Person to the Collateral Agent to secure the
Obligations, including in connection with any Australian Incremental Credit
Facility or Canadian Incremental Credit Facility, in each case as amended and
modified.

“Prime Rate” means the rate of interest announced by Bank of America from time
to time as its prime rate. Such rate is set by Bank of America on the basis of
various factors, including its costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such rate. Any change in such rate
publicly announced by Bank of America shall take effect at the opening of
business on the day specified in the announcement.

“Priority Payables Reserve” means on any date of determination, a reserve in
such amount as the Administrative Agent may determine in its Permitted
Discretion which reflects amounts secured by any Liens, choate or inchoate,
which are or may be senior to the Administrative Agent’s and/or the Secured
Parties’ Liens or that may be required to be paid to permit or facilitate
exercise of rights or remedies with respect to the Collateral including, without
limitation, any such amounts due and not paid for wages or vacation pay, amounts
due and not paid under any legislation relating to workers’ compensation or to
employment insurance, and amounts currently or past due and not paid for real
estate, municipal or similar Taxes (to the extent impacting any Collateral).

 

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“Protective Advance” has the meaning specified in Section 2.17(b).

“Pro Forma Basis” means, for purposes of calculating the financial covenant set
forth in Section 8.11 and for purposes of determining the Applicable Rate, that
any Disposition, Involuntary Disposition, Acquisition or incurrence or
assumption of Indebtedness pursuant to subsections (e), (g) or (h) of
Section 8.03 or pursuant to an Incremental Credit Facility shall be deemed to
have occurred as of the first day of the most recent four fiscal quarter period
preceding the date of such transaction for which AFI has delivered financial
statements pursuant to Section 7.01(a) or (b). In connection with the foregoing,
(a) with respect to any Disposition or Involuntary Disposition, (i) income
statement and cash flow statement items (whether positive or negative)
attributable to the Property disposed of shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and
(ii) Indebtedness which is retired shall be excluded and deemed to have been
retired as of the first day of the applicable period and (b) with respect to any
Acquisition, (i) income statement items attributable to the Person or Property
acquired shall be included to the extent relating to any period applicable in
such calculations to the extent (A) such items are not otherwise included in
such income statement items for AFI and its Subsidiaries in accordance with GAAP
or in accordance with any defined terms set forth in this Section 1.01 and
(B) such items are supported by financial statements or other information
reasonably satisfactory to the Administrative Agent and (ii) any Indebtedness
incurred or assumed by AFI or any Subsidiary (including the Person or Property
acquired) in connection with such transaction and any Indebtedness of the Person
or Property acquired which is not retired in connection with such transaction
(A) shall be deemed to have been incurred as of the first day of the applicable
period and (B) if such Indebtedness has a floating or formula rate, shall have
an implied rate of interest for the applicable period for purposes of this
definition determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.

“Pro Forma Compliance Certificate” means a certificate of a Responsible Officer
of AFI containing reasonably detailed calculations of the financial covenant set
forth in Section 8.11 as of the most recent fiscal quarter end for which AFI has
delivered financial statements pursuant to Section 7.01(a) or (b) after giving
effect to the applicable transaction on a Pro Forma Basis.

“Pro Rata Share” means, as to each Lender at any time, (a) with respect to the
Commitments, such Lender’s Commitment Percentage; provided that if the
Commitments shall have expired or been terminated, then such Lender’s Commitment
Percentage immediately prior to such termination and after giving effect to any
subsequent assignments made pursuant to the terms hereof and (b) with respect to
the aggregate amount of Loans and L/C Obligations hereunder, a percentage equal
to such Lender’s share of the Aggregate Commitments; provided that if the
Commitments shall have expired or been terminated, then a percentage (expressed
as a percentage, carried out to the ninth decimal place) equal to such Lender’s
share of the aggregate amount of Loans and L/C Obligations outstanding. The
initial Pro Rata Shares of each Lender is set forth opposite the name of such
Lender on Schedule 2.01.

“Property” means any interest of any kind in any property or asset, whether
real, personal or mixed, or tangible or intangible.

“Protective Advance” has the meaning specified in Section 2.17(b).

“Public Indenture” means any indenture executed by the Borrowers pursuant to
which Public Notes have been or will be issued.

 

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“Public Lender” has the meaning specified in Section 7.02.

“Public Notes” means any senior unsecured notes issued by the Borrowers after
the Closing Date pursuant to an offering consummated in accordance with the
Securities Act of 1933 or pursuant to an offering registered under the
Securities Act of 1933.

“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets
exceeding $10,000,000 or that qualifies at such time as an “eligible contract
participant” under the Commodity Exchange Act and, in each case, can cause
another Person to qualify as an “eligible contract participant” at such time
under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Qualified Secured Bank Product Obligations” means Secured Bank Product
Obligations with respect to Swap Contracts.

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer and any
other recipient of any payment to be made by or on account of any obligation of
any Loan Party hereunder.

“Register” has the meaning specified in Section 11.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees,
administrators, managers, advisors and representatives of such Person and of
such Person’s Affiliates.

“Rent and Charges Reserve” means the aggregate of (a) all past due rent and
other past due charges owing by any Borrower to any landlord, bailee,
warehouseman or other Person who possesses any Collateral or could assert a Lien
on any Collateral; plus (b) a reserve in an amount not to exceed the lesser of
three months’ rent or the fair market value of Collateral in such Person’s
possession and other charges that could be payable to any such Person, unless
such Person has executed a Lien Waiver.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty day notice period has been waived.

“Reporting Trigger Period” means the period (a) commencing on the date that
(i) an Event of Default occurs or (ii) Excess Availability under the U.S
Revolver Facility is less than the greater of 12.5% of the Line Cap and
$25,000,000, in either case, for a period of five (5) or more consecutive days,
and (b) continuing until a period of 30 consecutive days has elapsed during
which at all times (i) no Event of Default exists and (ii) Excess Availability
is equal to or greater than the greater of 12.5% of the Line Cap and
$25,000,000.

“Request for Credit Extension” means (a) with respect to a Borrowing, a Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.

“Request for Solicitation” has the meaning specified in Section 2.05(a)(ii)(B).

“Required Lenders” means, as of any date of determination, Lenders having more
than fifty percent (50%) of the Aggregate Commitments or, if the Commitments
shall have expired or been terminated, Lenders having more than fifty percent
(50%) of the aggregate remaining Obligations (including, in each case, the
aggregate principal amount of each Lender’s participation interests in L/C
Obligations and Swing Line Loans); provided that the Commitments of, and the
portion of the Obligations held or deemed held by, any Defaulting Lender shall
be excluded for purposes of making determinations of Required Lenders.

 

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“Responsible Officer” means the chief executive officer, president, chief
financial officer, chief operating officer or vice president and treasurer of a
Loan Party and solely for purposes of certifications of corporate documents and
incumbency certificates provided hereunder or in connection herewith, the
secretary or an assistant secretary, and solely for purposes of notices of
borrowing, payments, prepayments and the like under Article II, any other
officer or employee so designated by any of the foregoing officers in a notice
to the Administrative Agent or any other officer or employee of the applicable
Loan Party designated in or pursuant to an agreement between the applicable Loan
Party and the Administrative Agent. Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to the Capital Stock of AFI 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
Capital Stock or of any option, warrant or other right to acquire any such
Capital Stock.

“Revolver Usage” means (a) the aggregate amount of outstanding Revolving Loans
plus (b) the aggregate stated amount of outstanding Letters of Credit, except to
the extent Cash Collateralized by Borrowers.

“Revolving Loan” means a loan made pursuant to Article II, and any Overadvance
Loan, Swingline Loan or Protective Advance.

“Revolving Committed Amount” means, for each Revolving Lender, the amount of
such Revolving Lender’s Commitment. The initial Revolving Committed Amounts are
set out in Schedule 2.01.

“Revolving Lenders” means those Lenders with Commitments, together with their
successors and permitted assigns. The initial Revolving Lenders are identified
on the signature pages hereto and are set out in Schedule 2.01.

“Revolving Loan” has the meaning specified in Section 2.01(a) and includes any
Swingline Loan, Overadvance or Protective Advance.

“Revolving Notes” has the meaning specified in Section 2.11(a).

“Revolving Obligations” means Revolving Loans, Swing Line Loans and L/C
Obligations.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The
McGraw-Hill Companies, Inc. and any successor thereto.

“Sale and Leaseback Transaction” means, with respect to AFI or any Subsidiary,
any arrangement, directly or indirectly, with any person whereby AFI or such
Subsidiary shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property being sold or transferred.

 

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“Sanctions” means any sanction administered or enforced by the United States
Government (including without limitation, OFAC), the United Nations Security
Council, the European Union, or Her Majesty’s Treasury (“HMT”).

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Bank Product Obligations” means Indebtedness, obligations and other
liabilities with respect to Bank Products owing by a Loan Party or Affiliate of
a Loan Party to a Secured Bank Product Provider that the Loan Party
Representative, on behalf of any Loan Party, in a written notice to the
Administrative Agent, as expressly requested be treated as Secured Bank Product
Obligations and/or a Qualified Secured Bank Product Obligation for purposes
hereof, it being understood that such Bank Product obligations shall only
constitute Secured Bank Product Obligations up to the maximum amount (or, in the
case of Qualified Secured Bank Product Obligations, the Swap Termination Value
thereunder) specified by such provider and the Loan Party Representative in
writing to the Administrative Agent, which amount may be established and
increased further by written notice from such provider to the Administrative
Agent from time to time; provided, that Secured Bank Product Obligations of a
Loan Party shall not include its Excluded Swap Obligations.

“Secured Bank Product Provider” means (a) Bank of America or any of its
Affiliates; and (b) any other Lender or Affiliate or branch of a Lender that is
providing a Bank Product; provided, that such provider and the Loan Party
Representative delivers written notice to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent, within 10 days following the
later of the Closing Date or creation of the Bank Product (or such later time as
the Administrative Agent and Loan Party Representative may agree in their
reasonable discretion), (i) describing the Bank Product and setting forth the
maximum amount to be secured by the Collateral (and, if all or any portion of
such Secured Bank Product Obligations are to constitute Qualified Secured Bank
Product Obligations, the Swap Termination Value of such Qualified Secured Bank
Product Obligations), which amount may be increased or decreased from time to
time by further written notice from such provider, and the methodology to be
used in calculating such amount (if applicable), and (ii) if such provider is
not a Lender, agreeing to be bound by Section 10.12.

“Secured Parties” means (a) the Administrative Agent, any L/C Issuer, the
Revolving Lenders and Secured Bank Product Providers of Bank Products for the
account of Loan Parties and their Subsidiaries and (b) Lenders under the FILO
Credit Facility, Australian Incremental Credit Facility and/or Canadian
Incremental Credit Facility, if any, and other Secured Bank Product Providers
specified in any FILO Incremental Amendment, Australian Incremental Amendment or
Canadian Incremental Amendment as may be in effect from time to time.

“Securities Accounts” means all present and future “securities accounts” (as
defined in Article 8 of the UCC or the STA, as applicable), including all
monies, “uncertificated securities,” “securities entitlements” and other
“financial assets” (as defined in Article 8 of the UCC or the STA, as
applicable) contained therein.

“Security Agreement” means the security agreement dated as of the Closing Date
executed in favor of the Collateral Agent by each of the Loan Parties.

“Solvent” or “Solvency” means, with respect to any Person as of a particular
date, that on such date (a) such Person is generally able to pay its debts and
other liabilities, contingent obligations and other commitments as they mature,
(b) such Person is not engaged in a business or a transaction, and is not about
to engage in a business or a transaction, for which such Person’s Property would
constitute

 

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unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged or is to engage,
(c) the fair value of the Property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person and (d) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay all liabilities of such
Person on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

“Specified Loan Party” has the meaning specified in Section 4.08.

“Spin-Off” means the spin-off of AFI and its Subsidiaries from AWI to occur
immediately following the Closing Date and the Closing Date Dividend.

“Spot Rate” means the exchange rate, as determined by the Administrative Agent,
that is applicable to conversion of one currency into another currency, which is
(a) the exchange rate reported by Bloomberg (or other commercially available
source designated by the Administrative Agent) as of the end of the preceding
business day in the financial market for the first currency; or (b) if such
report is unavailable for any reason, the spot rate for the purchase of the
first currency with the second currency as in effect during the preceding
business day in the Administrative Agent’s principal foreign exchange trading
office for the first currency.

“STA” means the Securities Transfer Act, 2006 (Ontario) (or any successor
statute) and the regulations thereunder.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of Capital Stock having ordinary voting power for the election of
directors or other governing body (other than Capital Stock having such power
only by reason of the happening of a contingency) are at the time beneficially
owned, directly, or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise specified, all references herein to a “Subsidiary”
or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of AFI.

“Super-Majority Lenders” means at any date of determination thereof, Lenders
having Commitments representing more than 66 2⁄3% of the aggregate Commitments
at such time; provided, however, that for so long as any Lender shall be a
Defaulting Lender, the term “Super-Majority Lenders” shall mean Lenders
(excluding such Defaulting Lender) having Commitments representing more than
66 2⁄3% of the aggregate Commitments (excluding the Commitments of each
Defaulting Lender) at such time; provided further, however, that if any of the
Commitments have been terminated, the term “Super-Majority Lenders” shall be
calculated based on the Dollar Equivalent thereof using (a) in lieu of such
Lender’s terminated Commitment, the outstanding principal amount of the Loans by
such Lender to, and (if applicable) participation interests in L/C Obligations
and/or Protective Advances owing by, all Borrowers and (b) in lieu of the
aggregate Commitments to all Borrowers, the aggregate outstanding Loans to, and
(if applicable) L/C Obligations owing by all Borrowers.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the

 

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foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

“Swap Obligation” means with respect to any Guarantor any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Swing Line Commitment” means, with respect to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Loans in accordance with
Section 2.04.

“Swing Line Lender” means Bank of America in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Borrowing of Swing Line Loans
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
form of Exhibit B or such other form as approved by the Administrative Agent
(including any form on an electronic platform or electronic transmission system
as shall be approved by the Administrative Agent), appropriately completed and
signed by a Responsible Officer of AFI.

“Swing Line Note” has the meaning specified in Section 2.11(a).

“Swing Line Sublimit” has the meaning specified in Section 2.04(a). The Swing
Line Sublimit is part of, and not in addition to, the Aggregate Committed
Amount.

“Synthetic Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement
whereby the arrangement is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease or does not otherwise appear on
a balance sheet under GAAP.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Total Revolving Outstandings” means the aggregate Outstanding Amount of all
Revolving Loans, all Swing Line Loans and all L/C Obligations.

 

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“Transfer” has the meaning specified in Section 2.17(b)(iii).

“Transfer Date” has the meaning specified in Section 2.17(b)(iii).

“Treasury Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, funds
transfer, automated clearinghouse, zero balance accounts, returned check
concentration, controlled disbursement, lockbox, purchasing card, travel card,
account reconciliation and reporting and trade finance services.

“Type” means, with respect to any Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.

“UCP” means, with respect to any commercial Letter of Credit, the Uniform
Customs and Practice for Documentary Credits, International Chamber of Commerce
Publication No. 600 (or such later version thereof as may be in effect at the
time of issuance).

“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code in effect
in any applicable jurisdiction from time to time.

“United States” and “U.S.” mean the United States of America.

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

“U.S. Tax Compliance Certificate” has the meaning specified in
Section 3.01(e)(ii)(B)(III).

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Value” means (a) for Inventory, its value determined on the basis of the lower
of weighted average cost or market; (b) for an Account, its book value; and
(c) for Machinery and Equipment, its net orderly liquidation value.

“Vendor” means a Person that sells In-Transit Inventory to a Borrower.

“Vendor Agreement” means an agreement between Administrative Agent and a Vendor,
that is in form and substance satisfactory to Administrative Agent and pursuant
to which, among other things, the parties have agreed upon their relative rights
with respect to In-Transit Inventory of any Borrower purchased from such Vendor.

“Voting Stock” means, with respect to any Person, Capital Stock issued by such
Person the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency.

“Warranty Reserve” means a reserve equal to one quarter of AFI’s annual deferred
warranty expense as set forth on its general ledger.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

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Section 1.02 Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

(a) 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,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) 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 or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “hereto”, “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory, rules, regulations, orders and provisions
consolidating, amending, replacing or interpreting such law and any reference to
any law or regulation shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all assets and properties of whatever kind,
tangible and intangible, real and personal, including cash, securities, accounts
and contract rights.

(b) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

(d) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

(e) To the extent that any of the representations and warranties contained in
Article VI under this Agreement or in any of the other Loan Documents is
qualified by “Material Adverse Effect”, the qualifier “in all material respects”
contained in Section 5.02(a) and the qualifier “in any material respect”
contained in Section 9.01(d) shall not apply.

(f) All determinations (including calculations of Borrowing Base and financial
covenants) made from time to time under the Loan Documents shall be made in
light of the circumstances existing at such time. Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and
otherwise satisfactory to the Administrative Agent (and not necessarily
calculated in accordance with GAAP).

 

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Section 1.03 Accounting Terms.

(a) Except as otherwise specifically prescribed herein, all accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements. Notwithstanding the foregoing, for purposes of
determining compliance with any covenant (including the computation of any
financial covenant) contained herein, Indebtedness of the AFI and its
Subsidiaries shall be deemed to be carried at 100% of the outstanding principal
amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial
liabilities shall be disregarded.

(b) AFI will provide a written summary of material changes in GAAP and in the
consistent application thereof with each annual and quarterly Compliance
Certificate delivered in accordance with Section 7.02(a). If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either AFI or the Required
Lenders shall so request, the Administrative Agent, the Lenders and AFI shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) AFI shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

(c) All calculations of the financial covenant in Section 8.11 shall be made on
a Pro Forma Basis.

Section 1.04 Rounding.

Any financial ratios required to be maintained pursuant to this Agreement shall
be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such
ratio is expressed herein and rounding the result up or down to the nearest
number (with a rounding-up if there is no nearest number).

Section 1.05 Times of Day.

Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

Section 1.06 Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any Issuer Document related thereto, provides for one
or more automatic increases in the stated amount thereof, the amount of such
Letter of Credit shall be deemed to be the maximum stated amount of such Letter
of Credit after giving effect to all such increases, whether or not such maximum
stated amount is in effect at such time.

Section 1.07 Rates. The Administrative Agent does not warrant, nor accept
responsibility, nor shall the Administrative Agent have any liability with
respect to the administration, submission or any other matter related to the
rates in the definition of “Eurodollar Rate” or with respect to any comparable
or successor rate thereto.

 

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Section 1.08 Uniform Commercial Code. As used herein, the following terms are
defined in accordance with the UCC in effect in the State of New York from time
to time: “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,”
“Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,”
“Investment Property,” “Letter-of-Credit Right” and “Supporting Obligation.” In
addition, other terms relating to Collateral used and not otherwise defined
herein that are defined in the UCC shall have the meanings set forth in the UCC
as the context requires.

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

Section 2.01 Revolving Loans to Borrowers.

(a) Revolving Loans. Subject to the terms and conditions set forth herein, each
Revolving Lender severally (and not jointly with the other Revolving Lenders),
upon the terms and subject to the conditions set forth herein, agrees to make
loans (each such loan, a “Revolving Loan”) to any of the Borrowers in Dollars
from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of such
Revolving Lender’s Commitment; provided, however, that after giving effect to
any Borrowing of Revolving Loans, (i) with regard to the Revolving Lenders
collectively, the Total Revolving Outstandings shall not exceed the Line Cap,
(ii) with regard to each Revolving Lender individually, such Revolving Lender’s
Pro Rata Share of Total Revolving Outstandings shall not exceed such Revolving
Lender’s Commitment. Within the limits of each Revolving Lender’s Commitment,
and subject to the other terms and conditions hereof, the Borrowers may borrow
under this Section 2.01, prepay under Section 2.05, and reborrow under this
Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans,
as further provided herein. Borrowers shall be jointly and severally liable to
pay all of the Revolving Loans. Each Revolving Loan shall be funded and repaid
in Dollars. The Revolving Loans made by each Revolving Lender and interest
thereon shall be evidenced by the records of the Administrative Agent and such
Revolving Lender. At the request of any Revolving Lender, the Borrowers shall
deliver promissory note(s) to such Revolving Lender in an amount of such
Revolving Lender’s Commitment.

(b) Incremental Credit Facilities. At any time on or after the Closing Date, the
Borrowers may, on written notice from AFI to the Administrative Agent, establish
additional credit facilities with Lenders or other Eligible Assignees who shall
become Lenders (collectively, the “Incremental Credit Facilities”) by increasing
the Aggregate Committed Amount or establishing other revolving credit
commitments in accordance herewith with the following:

(i) The aggregate amount of loans and commitments for all Incremental Credit
Facilities established after the Closing Date shall not exceed ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000).

(ii) A portion of the Incremental Credit Facilities may be provided to the
Borrowers in the form of a “first-in, last-out” credit facility under this
Agreement (“FILO Credit Facility”) which AFI may by written notice to the
Administrative Agent elect to establish with each FILO Lender that agrees to
make loans in accordance with the FILO Amendment; provided, that (x) it shall be
a condition to the establishment of a FILO Credit Facility that all conditions
set forth in this Section 2.01 and all FILO Incremental Conditions shall be
satisfied, and (y) notwithstanding

 

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anything in Section 11.01 or any other provision of the Loan Documents to the
contrary, (1) the Lenders hereby irrevocably authorize the Administrative Agent
to enter into a FILO Incremental Amendment or other amendments, restatements or
other supplements or modifications to this Agreement and the other Loan
Documents with the applicable Loan Parties and the FILO Lenders as may be
necessary or desirable in order to establish the FILO Credit Facility, in each
case on terms consistent with the conditions set forth in this Section 2.01 and
the FILO Incremental Conditions without the consent or approval of any Lenders
(other than the Lenders participating in the FILO Credit Facility), (2) the
Lenders hereby consent to the FILO Credit Facility, the FILO Incremental
Conditions and other transactions contemplated by this Section 2.01(b)(ii) and
hereby waive the requirements of any provision of this Agreement (including,
without limitation, any pro rata payment section or amendment or waiver section,
but excluding this Section 2.01 and the FILO Incremental Conditions) or any
other Loan Document that might otherwise prohibit or restrict the FILO Credit
Facility, the FILO Credit Facility Amendment or any other transaction
contemplated by this Section 2.01(b)(ii) and (3) the Administrative Agent shall
have the right (but not the obligation) to consult with the Required Lenders
with respect to the FILO Credit Facility and any matter contemplated by this
Section 2.01(b)(ii).

(iii) A portion of the Incremental Credit Facilities may be provided to Canadian
Subsidiaries of AFI in the form of a Canadian Dollar revolving credit facility
(a “Canadian Incremental Credit Facility”), which AFI may by written notice to
the Administrative Agent elect to establish with each Canadian Incremental
Lender that agrees to make Canadian Incremental Revolving Loans; provided, that
(x) it shall be a condition to the establishment of a Canadian Incremental
Credit Facility that all conditions set forth in this Section 2.01 and all
Canadian Incremental Conditions shall be satisfied, and (y) notwithstanding
anything in Section 11.01 or any other provision of the Loan Documents to the
contrary, (1) the Lenders hereby irrevocably authorize the Administrative Agent
to enter into a Canadian Incremental Amendment or other amendments, restatements
or other supplements or modifications to this Agreement and the other Loan
Documents with the applicable Loan Parties and the Canadian Incremental Lenders
as may be necessary or desirable in order to establish the Canadian Incremental
Credit Facility, in each case on terms consistent with the conditions set forth
in this Section 2.01 and the Canadian Incremental Conditions without the consent
or approval of any Lenders (other than the Lenders participating in the Canadian
Credit Facility), (2) the Lenders hereby consent to the Canadian Incremental
Credit Facility, the Canadian Incremental Conditions and other transactions
contemplated by this Section 2.01(b)(iii) and hereby waive the requirements of
any provision of this Agreement (including, without limitation, any pro rata
payment section or amendment or waiver section, but excluding this Section 2.01
and the Canadian Incremental Conditions) or any other Loan Document that might
otherwise prohibit or restrict the Canadian Incremental Credit Facility, the
Canadian Incremental Credit Facility Amendment or any other transaction
contemplated by this Section 2.01(b)(iii) and (3) the Administrative Agent shall
have the right (but not the obligation) to consult with the Required Lenders
with respect to the Canadian Incremental Credit Facility and any matter
contemplated by this Section 2.01(b)(iii).

(iv) A portion of the Incremental Credit Facilities may be provided to
Australian Subsidiaries of AFI in the form of an Australian Dollar revolving
credit facility (an “Australian Incremental Credit Facility”), which AFI may by
written notice to the Administrative Agent elect to establish with each
Australian Incremental Lender that agrees to make Australian Incremental
Revolving Loans; provided, that (x) it shall be a condition to the establishment
of an Australian Incremental Credit Facility that all conditions set forth in
this Section 2.01 and all Australian Incremental Conditions shall be satisfied,
and (y) notwithstanding anything in Section 11.01 or any other provision of the
Loan Documents to the contrary, (1) the Lenders hereby irrevocably authorize the
Administrative Agent to enter into an Australian Incremental Amendment or other

 

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amendments, restatements or other supplements or modifications to this Agreement
and the other Loan Documents with the applicable Loan Parties and the Australian
Incremental Lenders as may be necessary or desirable in order to establish the
Australian Incremental Credit Facility, in each case on terms consistent with
conditions set forth in this Section 2.01 and the Australian Incremental
Conditions without the consent or approval of any Lenders (other than the
Lenders participating in the Australian Incremental Credit Facility), (2) the
Lenders hereby consent to the Australian Incremental Credit Facility, the
Australian Incremental Conditions and other transactions contemplated by this
Section 2.01(b)(iv) and hereby waive the requirements of any other provisions of
this Agreement (including, without limitation, any pro rata payment section or
amendment or waiver section, but excluding this Section 2.01 and the Australian
Incremental Conditions) or any other Loan Document that might otherwise prohibit
or restrict the Australian Incremental Credit Facility, the Australian
Incremental Credit Facility Amendment or any other transaction contemplated by
this Section 2.01(b)(iv) and (3) the Administrative Agent shall have the right
(but not the obligation) to consult with the Required Lenders with respect to
the Australian Incremental Credit Facility and any matter contemplated by this
Section 2.01(b)(iv).

(v) All or a portion of the Incremental Credit Facilities may be provided to the
Borrowers in the form of one or more increases in the Commitments, which AFI may
by written notice to the Administrative Agent elect to establish with each
Revolving Lender that agrees to so increase its Commitments or other Eligible
Assignees that agree to provide a Commitment in connection with the
establishment of such Incremental Credit Facility; provided, that (w) any such
Incremental Credit Facility denominated in Dollars shall be a part of the
Revolving Loans and Commitments hereunder subject to the same terms and
conditions without distinction from the Revolving Loans and Commitments existing
prior to their establishment, except as may be expressly provided in connection
therewith (such as any upfront fees, different interest rate or different later
final maturity date); (x) any such increase will be in a minimum principal
amount of $10,000,000 and integral multiples of $1,000,000 in excess thereof,
(y) if any Revolving Loans are outstanding at the time of establishment of the
Incremental Credit Facility, the Borrowers will make such payments and
adjustments on the U.S Revolving Loans (including payment of any break-funding
amounts owing under Section 3.05) as may be necessary to give effect to the
revised commitment amounts and Pro Rata Shares, it being agreed that the
Administrative Agent shall, in consultation with the Borrowers, manage the
allocation of the revised Pro Rata Shares to the existing Eurodollar Rate Loans
in such a manner as to minimize the break-funding amounts so payable by the
Borrowers, and (z) the final maturity date of any such Incremental Credit
Facility shall be no earlier than the final maturity date of the then existing
Revolving Loans and Commitments.

(c) No Obligation to Arrange or Commit; Schedule 2.01. In connection with
establishment of any Incremental Credit Facility, (1) none of the Lenders or
their affiliates shall have any obligation to provide commitments or loans for
any Incremental Credit Facility without their prior written approval,
(2) neither the Administrative Agent nor any of the Arrangers shall have any
responsibility for arranging any such additional commitments without their prior
written consent and subject to such conditions, including fee arrangements, as
they may provide in connection therewith and (3) Schedule 2.01 will be deemed to
be revised to reflect the Lenders, Loans, Commitments and pro rata shares or
percentages after giving effect to the establishment of each such Incremental
Credit Facility.

(d) Additional Conditions for Establishment of Incremental Credit Facility. The
establishment of any Incremental Credit Facility is subject to the following
additional conditions:

(i) after giving effect to such Incremental Credit Facility, the Dollar
Equivalent of the aggregate amount of all loans and commitments under all the
Incremental Credit Facilities shall not exceed One Hundred Fifty Million Dollars
($150,000,000);

 

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(ii) any new lender providing loans and commitments for the Incremental Credit
Facilities in accordance with Section 2.01(b)(v) must be reasonably acceptable
to the L/C Issuer and the Swing Line Lender; and

(iii) (A) no Default or Event of Default shall exist immediately before or
immediately after giving effect thereto, (B) AFI shall be in compliance with the
financial covenant under Section 8.11 after giving effect thereto on a Pro Forma
Basis (assuming for purposes hereof that the entire amount of the Incremental
Credit Facility is fully drawn and funded), (C) the conditions for Credit
Extensions under subsections (a) and (b) of Section 5.02 are or can be satisfied
on such date, and (D) AFI shall demonstrate compliance with the sizing condition
for the Incremental Credit Facility in clause (i) hereinabove;

(iv) AFI will provide (A) a compliance certificate from a Responsible Officer
confirming satisfaction of the foregoing conditions in clause (iii) above, and
(B) supporting resolutions, legal opinions, promissory notes and other items as
may be reasonably required by the Administrative Agent;

(v) lenders providing loans and commitments for such Incremental Credit Facility
will provide a Lender Joinder Agreement and such other agreements reasonably
acceptable to the Administrative Agent;

(vi) upfront and/or arrangement fees, if any, in respect of the new commitments
or loans so established, shall be paid; and

(vii) to the extent necessary in the reasonable judgment of the Administrative
Agent, amendments to each of the Collateral Documents, if any, and related
documents or agreements shall have been made, in each case in a manner
reasonably satisfactory to the Administrative Agent.

(e) Advancing Loans Under Incremental Credit Facilities. Subject to the terms
and conditions hereof, loans with respect to any Incremental Credit Facility
established in accordance with Section 2.01(b)(v) shall be made in accordance
with Section 2.01(a) and all other loans with respect to any other Incremental
Credit Facilities shall be made in accordance with the amendment establishing
such Incremental Credit Facility.

Section 2.02 Borrowings, Conversions and Continuations of Loans.

 

  (a)

(i) (A) Revolving Loans. Whenever any Borrower desires funding of a Borrowing of
U.S. Revolving Loans, a conversion of Revolving Loans from one Type to the
other, or a continuation of Eurodollar Rate Loans, AFI shall give irrevocable
notice to the Administrative Agent, which may be given by telephone, email or
other electronic method approved by the Administrative Agent (each, an
“electronic notice”). Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (1) three Business Days prior to the requested
date of any Borrowing of Eurodollar Rate Loans, and (2) one Business Day prior
to the requested date of each Borrowing or conversion of Base Rate Loans (or, in
the case of Borrowings on the Closing Date, such shorter period as to which the
Administrative Agent may consent). Each electronic notice by AFI

 

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  pursuant to this Section 2.02(a)(i)(A) must be confirmed promptly by delivery
to the Administrative Agent of a written Loan Notice, appropriately completed
and signed by an authorized officer of the Applicable Borrower. Each Borrowing,
conversion or continuation of Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except
as provided in Sections 2.03(c) and 2.04(c), each Borrowing or conversion of
Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple
of $500,000 in excess thereof. Each Loan Notice (whether an electronic notice or
written notice) shall specify (1) the requested date of the Borrowing,
conversion or continuation (which shall be a Business Day), (2) the principal
amount of Loans to be borrowed, (3) the Type of Revolving Loans to be borrowed,
and (4) if applicable, the duration of the Interest Period with respect thereto.
If AFI fails to specify a Type of a Loan in a Loan Notice, then the applicable
Loans shall be made as Base Rate Loans. Any automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If AFI requests a
Borrowing, conversion or continuation of Eurodollar Rate Loans in any Loan
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

(B) Incremental Revolving Loans. The requirements for funding of loans under any
Australian Incremental Credit Facility, Canadian Incremental Credit Facility or
FILO Incremental Credit Facility, as the case may be, shall be set forth in the
amendment establishing such Incremental Credit Facility.

(ii) Following receipt of a Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Pro Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to the Administrative
Agent in immediately available funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable Loan
Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02
(and, if such Borrowing is the initial Credit Extension, Section 5.01), the
Administrative Agent shall make all funds so received available to the
Applicable Borrower in like funds as received by the Administrative Agent either
by (i) crediting the account of the Applicable Borrower on the books of Bank of
America with the amount of such funds or (ii) wire transfer of such funds, in
each case in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Applicable Borrower; provided, however, that
if, on the date of a Borrowing, there are L/C Borrowings outstanding, then the
proceeds of such Borrowing, first, shall be applied to the payment in full of
any such L/C Borrowings and second, shall be made available to the Applicable
Borrower as provided above.

(iii) The Administrative Agent shall promptly notify the Borrowers and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrowers and the Lenders of any change in
Bank of America’s prime rate used in determining the Base Rate promptly
following the public announcement of such change.

(b) The Borrowers shall have the option, on any Business Day, to extend existing
Loans into a subsequent permissible Interest Period or to convert Loans into
Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.05, Eurodollar Rate Loans may be converted into Base Rate
Loans or extended as Eurodollar Rate Loans for new Interest Periods only on the
last day of the Interest Period applicable thereto, (ii) Loans extended as, or
converted into, Eurodollar Rate Loans

 

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shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof and (iii) any request for continuation or conversion of a
Eurodollar Rate Loan which shall fail to specify an Interest Period shall be
deemed to be a request for an Interest Period of one month. Each such
continuation or conversion shall be effected by the Applicable Borrower by
giving a Notice of Extension/Conversion (or electronic notice promptly confirmed
in writing) to the office of the Administrative Agent specified in
Section 11.02, or at such other office as the Administrative Agent may designate
in writing, prior to 11:00 a.m., on the Business Day of, in the case of the
conversion of a Eurodollar Rate Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the continuation of a Eurodollar Rate Loan
as, or conversion of a Base Rate Loan into, a Eurodollar Rate Loan, the date of
the proposed continuation or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. In the event
the Applicable Borrower fails to request continuation or conversion of any
Eurodollar Rate Loan in accordance with this Section, or any such conversion or
continuation is not permitted or required by this Section, then such Eurodollar
Rate Loan shall be automatically converted into a Base Rate Loan at the end of
the Interest Period applicable thereto. The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed continuation or
conversion affecting any Revolving Loan.

(c) After giving effect to all Borrowings, conversions and continuations of
Revolving Loans, there shall not be more than five (5) Interest Periods in
effect with respect to Revolving Loans.

Section 2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) each L/C Issuer
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit denominated in Dollars for the account of the Applicable Borrower or its
Domestic Subsidiaries, and to amend or extend Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to honor drawings
under the Letters of Credit issued by it; and (B) the Revolving Lenders
severally agree to participate in Letters of Credit hereunder for the account of
the Applicable Borrower or its Subsidiaries and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (w) with regard to the Revolving Lenders collectively, the
Total Revolving Outstandings shall not exceed the Line Cap, (x) with regard to
each Revolving Lender individually, such Revolving Lender’s Pro Rata Share of
Total Revolving Outstandings shall not exceed such Revolving Lender’s Commitment
and (y) the Outstanding Amount of the L/C Obligations shall not exceed FIFTY
MILLION DOLLARS ($50,000,000) (the “Letter of Credit Sublimit”). Each request by
the Applicable Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by AFI that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the preceding
sentence. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrowers may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed. Existing Letters of Credit shall be deemed
to have been issued hereunder and shall be subject to and governed by the terms
and conditions hereof.

 

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(ii) An L/C Issuer shall not issue any Letter of Credit if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date;

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Revolving Lenders have approved
such expiry date; or

(C) any of the conditions set forth in Section 2.03(a)(i) and any of the L/C
Conditions are not satisfied.

(iii) An L/C Issuer shall be under no obligation to issue any Letter of Credit
if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such L/C Issuer from issuing
such Letter of Credit, or any Law applicable to such L/C Issuer or any request
or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such L/C Issuer shall prohibit, or request that
such L/C Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such L/C Issuer with
respect to such Letter of Credit any restriction, reserve or capital requirement
(for which such L/C Issuer is not otherwise compensated hereunder) not in effect
on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;

(B) the issuance of such Letter of Credit would violate any Laws or one or more
policies of such L/C Issuer;

(C) except (I) as otherwise agreed by the Administrative Agent and such L/C
Issuer or (II) in respect of an Existing Letter of Credit and any replacements
thereof, such Letter of Credit is in an initial face amount less than $100,000,
in the case of a commercial Letter of Credit, or $250,000, in the case of a
standby Letter of Credit;

(D) such Letter of Credit is to be denominated in a currency other than Dollars;
or

(E) any Lender is at such time a Defaulting Lender, whether on account of a
failure to fund its obligations under Section 2.03(c) or otherwise, unless
Adequate Assurance has been provided.

(iv) An L/C Issuer shall not amend any Letter of Credit if such L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

(v) An L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) such L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of
such Letter of Credit does not accept the proposed amendment to such Letter of
Credit.

(vi) An L/C Issuer shall be under no obligation to issue or amend any Letter of
Credit if such L/C Issuer has received written notice from any Lender, the
Administrative Agent or any

 

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Loan Party, on or prior to the Business Day prior to the requested date of
issuance or amendment of such Letter of Credit, that one or more applicable
conditions contained in Section 5.02 shall not then be satisfied.

(vii) Each L/C Issuer shall act on behalf of the Revolving Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith,
and such L/C Issuer shall have all of the benefits and immunities (i) provided
to the Administrative Agent in Article X with respect to any acts taken or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article X included such L/C Issuer with
respect to such acts or omissions, and (ii) as additionally provided herein with
respect to such L/C Issuer.

(viii) If an L/C Lender receives written notice from a Revolving Lender at least
two (2) Business Days before issuance of a Letter of Credit that any L/C
Condition has not been satisfied, such L/C Issuer shall have no obligation to
issue the requested U.S. Letter of Credit (or any other) until such notice is
withdrawn in writing by the Required Lenders or until the Required Lenders have
waived such condition in accordance with this Agreement. Prior to receipt of any
such notice, an L/C Issuer shall not be deemed to have knowledge of any failure
of L/C Conditions.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension
Letters of Credit.

(i) Requests for Issuance. Each Letter of Credit shall be issued or amended, as
the case may be, upon the request of a Borrower delivered to the applicable L/C
Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by an authorized officer
of the Applicable Borrower. Such Letter of Credit Application must be received
by the applicable L/C Issuer and the Administrative Agent not later than 11:00
a.m. at least five Business Days prior to the proposed issuance date or date of
amendment, as the case may be, or such later date and time as the Administrative
Agent and such L/C Issuer may agree in a particular instance in their sole
discretion. In the case of a request for an initial issuance of a Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as such L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the applicable L/C Issuer
(A) the Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as such L/C Issuer may require.
Additionally, the Applicable Borrower shall furnish to the applicable L/C Issuer
and the Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as such L/C Issuer or the Administrative Agent may require.

(ii) Issuance. Promptly after receipt of any Letter of Credit Application, the
applicable L/C Issuer will confirm with the Administrative Agent (by telephone
or in writing) that the Administrative Agent has received a copy of such Letter
of Credit Application from the Applicable Borrower and, if not, such L/C Issuer
will provide the Administrative Agent with a

 

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copy thereof. Unless the applicable L/C Issuer has received written notice from
any Lender, the Administrative Agent or any Loan Party, at least one
(1) Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in
Section 5.02 shall not then be satisfied, then, subject to the terms and
conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Applicable Borrower (or the applicable
Subsidiary) or enter into the applicable amendment, as the case may be, in each
case in accordance with such L/C Issuer’s usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from such L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Revolving Lender’s Pro Rata
Share times the amount of such Letter of Credit.

(iii) Auto-Extension Letters of Credit. If a Borrower so requests in any
applicable Letter of Credit Application, the applicable L/C Issuer may, in its
sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit such L/C
Issuer to prevent any such extension at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by giving prior
notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the time
such Letter of Credit is issued. Unless otherwise directed by the applicable L/C
Issuer, the Borrowers shall not be required to make a specific request to such
L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has
been issued, the Revolving Lenders shall be deemed to have authorized (but may
not require) the applicable L/C Issuer to permit the extension of such Letter of
Credit at any time to an expiry date not later than the Letter of Credit
Expiration Date; provided, however, that such L/C Issuer shall not permit any
such extension if (A) such L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clauses (ii) and (iii) of Section 2.03(a) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is seven Business Days before the Non-Extension Notice Date
(1) from the Administrative Agent that the Required Lenders have elected not to
permit such extension or (2) from the Administrative Agent, any Lender or any
Loan Party that one or more of the applicable conditions specified in
Section 5.02 is not then satisfied, and in each such case directing such L/C
Issuer not to permit such extension.

(iv) Reporting by L/C Issuer. Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the applicable L/C Issuer will also
deliver to the Borrowers and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment. On a monthly basis, each L/C Issuer shall
deliver to the Administrative Agent a complete list of all outstanding Letters
of Credit issued by such L/C Issuer as provided in Section 2.03(f).

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of
drawing under such Letter of Credit, the applicable L/C Issuer shall notify the
Applicable Borrower and the Administrative Agent thereof. The applicable L/C
Issuer shall notify the Applicable Borrower of the amount of the drawing
promptly following the determination thereof, and in any event no later than
9:00 a.m. on the Honor Date (as hereafter defined). Not later than 11:00 a.m. on
the date of any payment by the applicable L/C Issuer under a Letter of Credit
(each such date, an “Honor Date”), the Applicable Borrower shall reimburse such
L/C Issuer in an

 

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amount equal to the amount of such drawing. If the Applicable Borrower fails to
so reimburse the applicable L/C Issuer by such time, such L/C Issuer shall
promptly notify the Administrative Agent, whereupon the Administrative Agent
shall promptly notify each Revolving Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Revolving Lender’s Pro Rata Share thereof. In such event, the Applicable
Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, the amount of the unutilized portion of the
Aggregate Committed Amount or the conditions set forth in Section 5.02. Any
notice given by the applicable L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

(ii) Each Revolving Lender (including any Revolving Lender acting as L/C Issuer)
shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the
Administrative Agent for the account of the applicable L/C Issuer in Dollars at
the Administrative Agent’s Office in an amount equal to its Pro Rata Share of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.03(c)(iii), each Revolving Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Applicable Borrower in such
amount. The Administrative Agent shall remit the funds so received to the
applicable L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans for any reason, the Applicable Borrower shall be
deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing
shall be due and payable on demand (together with interest) and shall bear
interest at the Default Rate. In such event, each Revolving Lender’s payment to
the Administrative Agent for the account of the applicable L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of its participation
in such L/C Borrowing and shall constitute an L/C Advance from such Revolving
Lender in satisfaction of its participation obligation under this Section 2.03.

(iv) Until each Revolving Lender funds its Revolving Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the applicable L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such Revolving
Lender’s Pro Rata Share of such amount shall be solely for the account of such
L/C Issuer.

(v) Each Revolving Lender’s obligation to make Revolving Loans or L/C Advances
to reimburse the applicable L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Revolving
Lender may have against such L/C Issuer, the Applicable Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a
Default, (C) noncompliance with the conditions set forth in Section 5.02 or
(D) any other occurrence, event or condition, whether or not similar to any of
the foregoing. No such making of an L/C Advance shall relieve or otherwise
impair the obligation of the Applicable Borrower to reimburse the applicable L/C
Issuer for the amount of any payment made by such L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

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(vi) If any Revolving Lender fails to make available to the Administrative Agent
for the account of the applicable L/C Issuer any amount required to be paid by
such Revolving Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii), such L/C Issuer
shall be entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to such L/C Issuer at a rate per annum equal to the
applicable Overnight Rate from time to time in effect. A certificate of the
applicable L/C Issuer submitted to any Revolving Lender (through the
Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive, absent manifest error.

(d) Repayment of Participations.

(i) At any time after the applicable L/C Issuer has made a payment under any
Letter of Credit and has received from any Revolving Lender such Revolving
Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the account of such
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Applicable Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative Agent), the
Administrative Agent will distribute to such Revolving Lender its Pro Rata Share
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Revolving Lender’s L/C Advance was
outstanding) in Dollars and in the same funds as those received by the
Administrative Agent.

(ii) If any payment received by the Administrative Agent for the account of the
applicable L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned
under any of the circumstances described in Section 11.05 (including pursuant to
any settlement entered into by such L/C Issuer in its discretion), each
Revolving Lender shall pay to the Administrative Agent for the account of such
L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent,
plus interest thereon from the date of such demand to the date such amount is
returned by such Revolving Lender, at a rate per annum equal to the applicable
Overnight Rate from time to time in effect. The obligations of the Revolving
Lenders under this clause shall survive the payment in full of the Obligations
and the termination of this Agreement.

(e) Obligations Absolute. The obligation of the Applicable Borrower to reimburse
the applicable L/C Issuer for each drawing under each Letter of Credit and to
repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement or any other Loan Document;

(ii) the existence of any claim, counterclaim, set-off, defense or other right
that the Applicable Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), such L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit;

 

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(iv) any payment by such L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by such L/C Issuer under
such Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Applicable Borrower or
any Subsidiary.

The Applicable Borrower shall promptly examine a copy of each Letter of Credit
and each amendment thereto that is delivered to it and, in the event of any
claim of noncompliance with the Applicable Borrower’s instructions or other
irregularity, the Applicable Borrower will immediately notify the applicable L/C
Issuer. The Applicable Borrower shall be conclusively deemed to have waived any
such claim against the applicable L/C Issuer and its correspondents unless such
notice is given as aforesaid.

(f) Role of L/C Issuer. Each Lender and the Applicable Borrower agree that, in
paying any drawing under a Letter of Credit, the applicable L/C Issuer shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
L/C Issuers, the Administrative Agent, any of their respective Related Parties
nor any of the respective correspondents, participants or assignees of the L/C
Issuers shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. The Applicable Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Applicable Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuers, the
Administrative Agent, any of their respective Related Parties nor any of the
respective correspondents, participants or assignees of the L/C Issuers, shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Applicable Borrower may have a claim against the
applicable L/C Issuer, and such L/C Issuer may be liable to the Applicable
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Applicable Borrower which
the Applicable Borrower proves were caused by such L/C Issuer’s willful
misconduct or gross negligence or such L/C Issuer’s willful failure to pay under
any Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing, each
L/C Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and such L/C Issuer shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason. Each L/C Issuer shall provide to the

 

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Administrative Agent a list of outstanding Letters of Credit (together with
amounts) issued by it on a monthly basis (and upon the request of the
Administrative Agent); the Administrative Agent shall provide a copy of such
list to any Lender upon request.

(g) Cash Collateral. (i) Upon the request of the Administrative Agent, (A) if
the applicable L/C Issuer has honored any full or partial drawing request under
any Letter of Credit and such drawing has resulted in an L/C Borrowing, or
(B) if, as of the Letter of Credit Expiration Date, any Letter of Credit for any
reason remains outstanding and partially or wholly undrawn, the Applicable
Borrower shall immediately Cash Collateralize the then Outstanding Amount of all
L/C Obligations (in an amount equal to such Outstanding Amount determined as of
the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the
case may be).

(i) In addition, if the Administrative Agent notifies the Borrowers at any time
that the Outstanding Amount of all L/C Obligations at such time exceeds 105% of
the Letter of Credit Sublimit then in effect, then, within two Business Days
after receipt of such notice, the Applicable Borrower shall Cash Collateralize
the L/C Obligations in an amount equal to the amount by which the Outstanding
Amount of all L/C Obligations exceeds the Letter of Credit Sublimit.

(ii) Sections 2.05, 2.14, 9.02(c) and 9.03 set forth certain additional
requirements to deliver Cash Collateral hereunder.

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
applicable L/C Issuer and the Applicable Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of ISP shall apply to each standby Letter of Credit, and
(ii) the rules of the UCP shall apply to each commercial Letter of Credit.

(i) Letter of Credit Fees. The Applicable Borrower shall pay to the
Administrative Agent for the account of each Revolving Lender in accordance with
its Pro Rata Share, in Dollars, a Letter of Credit fee (the “Letter of Credit
Fee”) (i) for each commercial Letter of Credit equal to the Applicable Rate
times the daily amount available to be drawn under such Letter of Credit and
(ii) for each standby Letter of Credit equal to the Applicable Rate times the
daily amount available to be drawn under such Letter of Credit. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. Letter of Credit Fees shall be (i) computed on a monthly basis in
arrears and (ii) due and payable on the first (1st) Business Day occurring after
the end of each March, June, September and December, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any month, the daily maximum amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for
each period during such month that such Applicable Rate was in effect.
Notwithstanding anything to the contrary contained herein, (i) upon the request
of the Required Lenders, while any Event of Default exists, all Letter of Credit
Fees shall accrue at the Default Rate, and (ii) Defaulting Lenders shall not be
entitled to the Letter of Credit Fee as provided in Section 2.15.

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Applicable Borrower shall pay directly to the applicable L/C Issuer for its
own account, (i) a fronting fee for each commercial Letter of Credit issued by
it (other than Existing Letters of Credit) equal to one-eighth of one percent
(1/8%) times the amount of such commercial Letter of Credit, due and payable on
the first (1st) Business Day occurring after the end of each March, June,
September and December, commencing with the first such date to occur after the
issuance of such commercial Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand and (ii) a fronting fee with respect to each

 

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standby Letter of Credit issued by it in an amount equal to one-eighth of one
percent (1/8%) per annum on the daily amount available to be drawn thereunder,
due and payable on the first (1st) Business Day occurring after the end of each
March, June, September and December, commencing with the first such date to
occur after the issuance of such standby Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. For purposes of computing the
daily amount available to be drawn under any Letter of Credit, the amount of
such Letter of Credit shall be determined in accordance with Section 1.06. In
addition, the Applicable Borrower shall pay directly to the applicable L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.

(k) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary, the Applicable Borrower shall be obligated
to reimburse the applicable L/C Issuer hereunder for any and all drawings under
such Letter of Credit. The Applicable Borrower hereby acknowledges that the
issuance of Letters of Credit for the account of Subsidiaries inures to the
benefit of the Applicable Borrower, and that the Applicable Borrower’s business
derives substantial benefits from the businesses of such Subsidiaries.

(m) Existing Letters of Credit. Notwithstanding anything herein to the contrary,
each Existing Letter of Credit shall be deemed to have been issued hereunder.

Section 2.04 Swing Line Loans.

(a) Swing Line Facility. Subject to the terms and conditions set forth herein,
the Swing Line Lender, in reliance upon the agreements of the other Lenders set
forth in this Section 2.04, may in its sole discretion make loans (each such
loan, a “Swing Line Loan”) to the Applicable Borrower in Dollars from time to
time on any Business Day during the Availability Period in an aggregate amount
not to exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the “Swing Line
Sublimit”) at any time outstanding, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Revolving Loans and L/C Obligations of the Swing Line Lender in its capacity as
a Revolving Lender, may exceed the amount of such Revolving Lender’s Commitment;
provided, however, that after giving effect to any Swing Line Loan, (i) with
regard to the Revolving Lenders collectively, the Total Revolving Outstandings
shall not exceed the Line Cap, and (ii) with regard to each Revolving Lender
individually (other than the Swing Line Lender) such Revolving Lender’s Pro Rata
Share of Total Revolving Outstandings shall not exceed such Revolving Lender’s
Commitment. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.04, prepay
under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan
shall bear interest at such rate mutually agreed to between the Applicable
Borrower and the Swing Line Lender or, in the absence of such mutual agreement,
shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan,
each Revolving Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Revolving Lender’s Pro Rata Share times the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Borrowing of Swing Line Loans shall be made upon
a Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by electronic notice. Each such notice must be
received by the Swing Line Lender and the

 

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Administrative Agent not later than 1:00 p.m. on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum
principal amount of $250,000 and integral multiples of $100,000 in excess
thereof, and (ii) the requested borrowing date, which shall be a Business Day.
Each such electronic notice must be confirmed promptly by delivery to the Swing
Line Lender and the Administrative Agent of a written Swing Line Loan Notice,
appropriately completed and signed by an authorized officer of the Applicable
Borrower. Promptly after receipt by the Swing Line Lender of any electronic
Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by telephone
or in writing) from the Administrative Agent (including at the request of any
Lender) prior to 2:00 p.m. on the date of the proposed Borrowing of Swing Line
Loans (A) directing the Swing Line Lender not to make such Swing Line Loan as a
result of the limitations set forth in the proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Section 5.02 is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Applicable Borrower. The Swing Line Lender shall not be
under any obligation to make a Swing Line Loan if any Revolving Lender is at
such time a Defaulting Lender, whether on account of a failure to fund its
obligations under Section 2.04(b)(ii) or otherwise, unless such Revolving Lender
shall have provided Adequate Assurance.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion, may,
and in any event at least once every two weeks, shall request, on behalf of the
Applicable Borrower (which hereby irrevocably requests and authorizes the Swing
Line Lender to so request on its behalf), that each Revolving Lender make a Base
Rate Loan in an amount equal to such Revolving Lender’s Pro Rata Share of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.02, without regard
to the minimum and multiples specified therein for the principal amount of Base
Rate Loans, the unutilized portion of the Aggregate Committed Amount or the
conditions set forth in Section 5.02. The Swing Line Lender shall furnish the
Applicable Borrower with a copy of the applicable Loan Notice promptly after
delivering such notice to the Administrative Agent. Each Revolving Lender shall
make an amount equal to its Pro Rata Share of the amount specified in such Loan
Notice available to the Administrative Agent in immediately available funds for
the account of the Swing Line Lender at the Administrative Agent’s Office not
later than 1:00 p.m. on the day specified in such Loan Notice (which shall be at
least one Business Day after the receipt of such Loan Notice by the
Administrative Agent), whereupon, subject to Section 2.04(c)(ii), each Revolving
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Applicable Borrower in such amount. The Administrative Agent shall
remit the funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Borrowing of Revolving Loans in accordance with Section 2.04(c)(i), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein shall
be deemed to be a request by the Swing Line Lender that each of the Revolving
Lenders fund its risk participation in the relevant Swing Line Loan and each
Revolving Lender’s payment to the Administrative Agent for the account of the
Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in
respect of such participation.

 

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(iii) If any Revolving Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to be paid by
such Revolving Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line
Lender shall be entitled to recover from such Revolving Lender (acting through
the Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the applicable Overnight Rate from time to time in effect. A certificate of the
Swing Line Lender submitted to any Revolving Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (iii) shall be
conclusive, absent manifest error.

(iv) Each Revolving Lender’s obligation to make Revolving Loans or to purchase
and fund risk participations in Swing Line Loans pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment, defense
or other right that such Revolving Lender may have against the Swing Line
Lender, the Applicable Borrower or any other Person for any reason whatsoever,
(B) the occurrence or continuance of a Default, (C) non-compliance with the
conditions set forth in Section 5.02 or (D) any other occurrence, event or
condition, whether or not similar to any of the foregoing. No such purchase or
funding of risk participations shall relieve or otherwise impair the obligation
of the Applicable Borrower to repay Swing Line Loans, together with interest as
provided herein.

(d) Repayment of Participations.

(i) At any time after any Revolving Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Revolving Lender its Pro Rata Share of such payment
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Lender’s risk participation was funded) in
the same funds as those received by the Swing Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 11.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Revolving Lender shall pay to the Swing Line Lender its Pro
Rata Share thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the applicable Overnight Rate. The Administrative Agent will make
such demand upon the request of the Swing Line Lender. The obligations of the
Revolving Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Applicable Borrower for interest on the Swing Line
Loans. Until each Revolving Lender funds its Revolving Loans that are Base Rate
Loans or risk participation pursuant to this Section 2.04 to refinance such
Revolving Lender’s Pro Rata Share of any Swing Line Loan, interest in respect of
such Pro Rata Share shall be solely for the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Applicable Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.

 

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(g) Swing Line Notes. The Swing Line Loans made by each Swing Line Lender and
interest accruing thereon shall be evidenced by the records of the
Administrative Agent and such Swing Line Lender and need not be evidenced by any
promissory note.

Section 2.05 Prepayments.

(a) Voluntary Prepayments. Voluntary prepayments may be made on any Loans
hereunder selected by the Applicable Borrower on a pro rata basis to the Lenders
in accordance with their respective interests therein and, except as set forth
in clause (d) below, at par without premium or penalty (except, in the case of
Loans other than Base Rate Loans, amounts payable pursuant to Section 3.05);
provided that:

(i) (A) in the case of Loans other than Swing Line Loans, (x) notice thereof
must be received by 11:00 a.m. by the Administrative Agent at least three
Business Days prior to the date of prepayment, in the case of Eurodollar Rate
Loans and (y) one Business Day prior to the date of prepayment, in the case of
Base Rate Loans, and (B) any such prepayment shall be a minimum principal amount
of (x) $5,000,000 and integral multiples of $1,000,000 in excess thereof, in the
case of Eurodollar Rate Loans and (y) $1,000,000 and integral multiples of
$500,000 in excess thereof, in the case of Base Rate Loans, or, in each case,
the entire remaining principal amount thereof, if less; and

(ii) in the case of Swing Line Loans, (A) notice thereof must be received by the
Swing Line Lender by 1:00 p.m. on the date of prepayment (with a copy to the
Administrative Agent), and (B) any such prepayment shall be in the same minimum
principal amounts as for advances thereof (or any lesser amount that may be
acceptable to the Swing Line Lender).

Each such notice of voluntary prepayment hereunder shall be irrevocable and
shall specify the date and amount of prepayment and the Loans and Types of Loans
that are being prepaid and, if Eurodollar Rate Loans are to be prepaid, the
Interest Period(s) of such Loans; provided, however, that the Applicable
Borrower may rescind any notice of voluntary prepayment hereunder if such
prepayment would have resulted from a refinancing of all of the Loans and
Commitment, and such refinancing shall not have been consummated or shall
otherwise have been delayed. The Administrative Agent will give prompt notice to
the applicable Lenders of any prepayment on the Loans and the Lender’s interest
therein. Prepayments of Eurodollar Rate Loans hereunder shall be accompanied by
accrued interest on the amount prepaid and breakage amounts, if any, under
Section 3.05.

(b) Mandatory Prepayments. Revolving Loans shall be due and payable in full on
the Commitment Termination Date, unless payment is sooner required hereunder.
Overadvance Loans shall be repaid as and when required in accordance with
Section 2.17(a). If at any time the Total Revolving Outstandings exceed the
Aggregate Committed Amount, the amount of such excess shall be payable on demand
by the Administrative Agent.

(c) Application of Prepayments. Voluntary prepayments under Section 2.05(a)(i)
above shall be applied to such Loans and to such installments of such Loans as
specified by the Applicable Borrower.

Section 2.06 Termination or Reduction of Aggregate Committed Amount.

(a) Commitments. Unless sooner terminated in accordance with this Agreement, the
Commitments shall terminate on the Commitment Termination Date. Upon at least
three (3) Business Days’ prior written notice to the Administrative Agent from
AFI, the Borrowers may, at their option, terminate the Commitments in full
without premium or penalty (other than funding losses payable pursuant to
Section 3.06. If the Borrowers elect to reduce to zero or terminate the
Commitments pursuant to the previous sentence, any Incremental Credit Facility
Commitments shall automatically terminate concurrently with the termination of
the Commitments.

 

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(b) Partial Reductions. The Aggregate Committed Amount may be permanently
reduced in whole or in part by notice from the Borrowers to the Administrative
Agent; provided that (a) any such notice thereof must be received by 11:00 a.m.
at least three Business Days prior to the date of reduction or termination and
any such reduction or termination shall be in a minimum principal amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof (or the
remaining amount of the Aggregate Committed Amount); and (b) the Aggregate
Committed Amount may not be reduced to an amount less than the Total Revolving
Outstandings. The Administrative Agent will give prompt notice to the Revolving
Lenders of any such reduction in Aggregate Committed Amount. Any reduction of
the Aggregate Committed Amount shall be applied to the Commitments of the
Revolving Lenders ratably in accordance with their respective interests therein,
except as provided in Section 2.15. All commitment or other fees accrued until
the effective date of any termination of the Aggregate Committed Amount shall be
paid on the effective date of such termination.

Section 2.07 Repayment of Obligations.

(a) Revolving Loans. On the Commitment Termination Date, the Borrowers shall
repay to the Revolving Lenders all Revolving Obligations outstanding on such
date, unless payment of such Obligations is sooner required hereunder.

(b) Swing Line Loans. The Applicable Borrower shall repay each Swing Line Loan
on the earlier to occur of (i) demand by the Swing Line Lender and (ii) the
Maturity Date.

(c) Incremental Credit Facilities. Loans under any Australian Incremental Credit
Facility, Canadian Incremental Credit Facility or FILO Credit Facility shall be
repaid on the dates specified in the applicable amendment establishing any such
Incremental Credit Facility.

(d) Overadvance Loans. Notwithstanding anything herein to the contrary, if an
Overadvance exists, the Borrower owing such Overadvance shall, on the sooner of
the Administrative Agent’s demand or the first Business Day after such Borrower
has knowledge thereof (or, in the event such Overadvance is the result of
fluctuations in Spot Rates, within three (3) Business Days of the Administrative
Agent’s demand or of such Borrower’s knowledge thereof), repay the outstanding
Loans in an amount sufficient to reduce the principal balance of the related
Overadvance Loan to zero.

(e) Other Obligations. Obligations (other than principal and interest of Loans)
shall be paid by Borrowers as provided in the Loan Documents or, if no payment
date is specified, within ten (10) Business Days of demand by the Administrative
Agent therefor.

(f) General Payment Provisions. All payments of Obligations shall be made
without offset, counterclaim or defense of any kind, free of (and without
deduction for) any Taxes, and in immediately available funds, not later than
1:00 p.m. on the due date. Any payment after such time shall be deemed made on
the next Business Day. If any payment under the Loan Documents shall be stated
to be due on a day other than a Business Day, the due date shall be extended to
the next Business Day and such extension of time shall be included in any
computation of interest and fees. Any payment of a Eurodollar Rate Loan prior to
the end of its Interest Period shall be accompanied by all amounts due under
Section 3.05. Any prepayment of Loans made by a Borrower shall be applied first
to costs and expenses of the Administrative Agent and any security trustees
(including any Extraordinary Expenses) relating to such Borrower, second to Base
Rate Loans (and the Administrative Agent may, in its discretion, apply such
prepayment to Swingline Loans before other Revolving Loans) of such Borrower,
and then to Eurodollar

 

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Rate Loans of such Borrower; provided, however, that as long as no Default or
Event of Default exists, prepayments of Eurodollar Rate Loans may, at the option
of such Borrower and the Administrative Agent, be held by the Administrative
Agent as Cash Collateral and applied to such Loans at the end of their Interest
Periods (in which case no compensation under Section 3.05 hereof shall be
payable with respect to such prepayment). All payments with respect to any
Revolving Obligations shall be made in Dollars and all payments with respect to
any other Obligation shall be made in the currency of the underlying Obligation.

Section 2.08 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the sum of (A) the Eurodollar Rate
for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan
shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate; and (iii) unless otherwise mutually agreed between the
Applicable Borrower and the Swing Line Lender, each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.

(b) (i) If any amount of principal of any Loan is not paid when due (without
regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such overdue amount shall thereafter bear interest at
a fluctuating interest rate per annum at all times equal to the Default Rate to
the fullest extent permitted by applicable Laws.

(ii) If any amount (other than principal of any Loan) payable by the Applicable
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Required Lenders, such overdue amount
shall thereafter bear interest at a fluctuating interest rate per annum at all
times equal to the Default Rate to the fullest extent permitted by applicable
Laws.

(iii) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

Section 2.09 Fees.

In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

(a) Commitment Fee. AFI shall pay to the Administrative Agent for the account of
each Revolving Lender in accordance with its Pro Rata Share, a commitment fee in
Dollars equal to the amount set forth in clause (b) of the definition of
“Applicable Rate”. The commitment fee shall accrue at all times during the
Availability Period, including at any time during which one or more of the
conditions in Section 5.02 is not met, and shall be (i) computed on a quarterly
basis in arrears and (ii) due and payable on the first (1st) Business Day
occurring after the end of each March, June, September and December, commencing
with the first such date to occur after the Closing Date, and on the Maturity
Date. The commitment fee shall be calculated quarterly in arrears, and if there
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Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect. For purposes of clarification, Swing
Line Loans shall not be considered outstanding for purposes of determining the
unused portion of the Aggregate Committed Amount. Notwithstanding anything to
the contrary contained herein Defaulting Lenders shall not be entitled to the
commitment fee as provided in Section 2.15.

(b) Fee Letters. AFI shall pay to the Arrangers and the Administrative Agent for
their own respective accounts, in Dollars, fees in the amounts and at the times
specified in the applicable Fee Letter. Such fees shall be fully earned when
paid and shall be non-refundable for any reason whatsoever.

Section 2.10 Computation of Interest and Fees.

(a) All computations of interest for Base Rate Loans shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year).
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.12(a), bear interest for one
day. Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

(b) If, as a result of any restatement of or other adjustment to the financial
statements of AFI or for any other reason, AFI or the Lenders determine that
(i) Excess Availability as calculated by AFI as of any applicable date was
inaccurate and (ii) a proper calculation of Excess Availability would have
resulted in higher pricing for such period, Applicable Borrower shall
immediately and retroactively be obligated to pay to the Administrative Agent
for the account of the applicable Lenders and/or the L/C Issuer, as the case may
be, promptly on demand by the Administrative Agent (or, after the occurrence of
an actual or deemed entry of an order for relief with respect to AFI under the
Bankruptcy Code, automatically and without further action by the Administrative
Agent, any Lender or the L/C Issuer), an amount equal to the excess of the
amount of interest and fees that should have been paid for such period over the
amount of interest and fees actually paid for such period. This subsection shall
not limit the rights of the Administrative Agent, any Lender or the L/C Issuer,
as the case may be, under Section 2.03(c)(iii), 2.03(i), 2.08(b), 2.09 or under
Article IX. The Applicable Borrower’s obligations under this subsection shall
survive the termination of the Aggregate Commitments and the repayment of all
other Obligations hereunder.

Section 2.11 Evidence of Debt.

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive, absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Applicable
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Applicable Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon any Lender’s request,
the Applicable Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a promissory note, which shall evidence such Lender’s
Loans

 

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in addition to such accounts or records. Each such promissory note shall be
(i) in the case of Revolving Loans, in the form of Exhibit C-1 (a “Revolving
Note”), and (ii) in the case of Swing Line Loans, in the form of Exhibit C-2 (a
“Swing Line Note”). Each Lender may attach schedules to a Note and endorse
thereon the date, Type (if applicable), amount and maturity of its Loans and
payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

Section 2.12 Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made free and
clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrowers hereunder shall be made to the Administrative Agent,
for the account of the respective Lenders to which such payment is owed, at the
Administrative Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its pro rata share (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender’s Lending Office. All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue. Subject to the
definition of “Interest Period”, if any payment to be made by the Applicable
Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such 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
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the Applicable 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 the Applicable Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Applicable Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the Overnight
Rate, plus any administrative, processing or similar fees customarily charged by
the Administrative Agent in connection with the foregoing, and (B) in the case
of a payment to be made by the Applicable Borrower, the interest rate applicable
to Base Rate Loans. If the Applicable Borrower and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Applicable Borrower the amount
of such interest paid by the Applicable Borrower for such period. If such Lender
pays its share of the applicable Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Loan included in such Borrowing.
Any payment by the Applicable Borrower shall be without prejudice to any claim
the Applicable Borrower may have against a Lender that shall have failed to make
such payment to the Administrative Agent.

 

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(ii) Payments by Applicable Borrower; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the Applicable
Borrower prior to the time at which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Applicable Borrower will
not make such payment, the Administrative Agent may assume that the Applicable
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In such
event, if the Applicable Borrower has not in fact made such payment, then each
of the Lenders severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender in immediately available
funds 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 Overnight Rate.

A notice of the Administrative Agent to any Lender or the Applicable Borrower
with respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Applicable Borrower by the Administrative Agent because
the conditions to the applicable Credit Extension set forth in Section 5.02 are
not satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans, to fund participations in Letters of Credit and Swing Line Loans and
to make payments pursuant to Section 11.05 are several and not joint. The
failure of any Lender to make any Loan, to fund any such participation or to
make any payment under Section 11.05 on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan, to purchase its participation or to make its payment under
Section 11.05.

(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

Section 2.13 Sharing of Payments by Lenders.

If any Lender shall, by exercising any right of setoff pursuant to Section 11.08
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of the Loans made by it, or the participations in L/C
Obligations or in Swing Line Loans held by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of such Loans or
participations and accrued interest thereon greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Loans and subparticipations in L/C
Obligations and Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, 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 Loans and other amounts
owing them, provided that:

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

(ii) the provisions of this Section shall not be construed to apply to (A) any
payment made by or on behalf of the Borrowers pursuant to and in accordance with
the express terms of this Agreement (including the application of funds arising
from the existence of a Defaulting Lender), (B) any amounts applied by the Swing
Line Lender to outstanding Swing Line Loans, (C) any amounts applied to L/C
Obligations by the L/C Issuer or Swing Line Loans by the Swing Line Lender, as
appropriate, from cash collateral or other Adequate Assurance provided under
Section 2.15, or (D) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than an assignment to the Borrowers or any Subsidiary (as to
which the provisions of this Section shall apply).

 

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Each Loan Party 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
Loan Party rights of setoff pursuant to Section 11.08 and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor
of such Loan Party in the amount of such participation.

Section 2.14 Cash Collateral.

(a) Certain Credit Support Events. If (i) the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has resulted
in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C
Obligation for any reason remains outstanding, (iii) the Borrowers shall be
required to provide Cash Collateral pursuant to Section 9.02(c), or (iv) there
shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of
clause (iii) above) or within one Business Day (in all other cases) following
any request by the Administrative Agent or the L/C Issuer, provide Cash
Collateral in an amount not less than the applicable Minimum Collateral Amount
(determined in the case of Cash Collateral provided pursuant to clause
(iv) above, after giving effect to Section 2.15(a)(iv) and any Cash Collateral
provided by the Defaulting Lender.

(b) Grant of Security Interest. The Borrower, and to the extent provided by any
Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the
control of) the Administrative Agent, for the benefit of the Administrative
Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority
security interest in all such cash, deposit accounts and all balances therein,
and all other property so provided as collateral pursuant hereto, and in all
proceeds of the foregoing, all as security for the obligations to which such
Cash Collateral may be applied pursuant to Section 2.14(c). If at any time the
Administrative Agent determines that Cash Collateral is subject to any right or
claim of any Person other than the Administrative Agent or the L/C Issuer as
herein provided, or that the total amount of such Cash Collateral is less than
the Minimum Collateral Amount, the Borrowers or the relevant Defaulting Lender
will, promptly upon demand by the Administrative Agent, pay or provide to the
Administrative Agent additional Cash Collateral in an amount sufficient to
eliminate such deficiency. All Cash Collateral (other than credit support not
constituting funds subject to deposit) shall be maintained in blocked,
non-interest bearing deposit accounts at the Collateral Agent. The Borrowers
shall pay on demand therefor from time to time all customary account opening,
activity and other administrative fees and charges in connection with the
maintenance and disbursement of Cash Collateral.

 

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(c) Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under any of this Section 2.14 or Sections
2.03, 2.04, 2.05, 2.15 or 9.02 in respect of Letters of Credit shall be held and
applied to the satisfaction of the specific L/C Obligations, obligations to fund
participations therein (including, as to Cash Collateral provided by a
Defaulting Lender, any interest accrued on such obligation) and other
obligations for which the Cash Collateral was so provided, prior to any other
application of such property as may otherwise be provided for herein.

(d) Release. Cash Collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure or to secure other obligations shall be released
promptly following (i) the elimination of the applicable Fronting Exposure or
other obligations giving rise thereto (including by the termination of
Defaulting Lender status of the applicable Lender (or, as appropriate, its
assignee following compliance with Section 11.06(b)(vi))) or (ii) the
determination by the Administrative Agent and the L/C Issuer that there exists
excess Cash Collateral; provided, however, (x) any such release shall be without
prejudice to, and any disbursement or other transfer of Cash Collateral shall be
and remain subject to, any other Lien conferred under the Loan Documents and the
other applicable provisions of the Loan Documents, and (y) the Person providing
Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be
released but instead held to support future anticipated Fronting Exposure or
other obligations.

Section 2.15 Defaulting Lenders.

(a) Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
such Lender is no longer a Defaulting Lender, to the extent permitted by
applicable Law:

(i) Waivers and Amendments. Such Defaulting Lender shall not be entitled to vote
or participate in amendments, waivers or consents hereunder or in respect of the
other Loan Documents, except as expressly provided in the definition of
“Required Lenders” and Section 11.01;

(ii) Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Administrative Agent for the account of such
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article IX or otherwise) or received by the Administrative Agent from a
Defaulting Lender pursuant to Section 11.08 shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by such Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder;
third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to
such Defaulting Lender in accordance with Section 2.14; fourth, as the Borrowers
may request (so long as no Default or Event of Default exists), to the funding
of any Loan in respect of which such Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrowers, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the L/C
Issuer’s future Fronting Exposure with respect to such Defaulting Lender with
respect to future Letters of Credit issued under this Agreement, in accordance
with Section 2.14; sixth, to the payment of any amounts owing to the Lenders,
the L/C Issuer or Swing Line Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, the L/C Issuer or the Swing Line
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; seventh, so long as no Default
or Event of Default exists, to the payment of any amounts owing to the Borrowers
as a result of any judgment of a court of

 

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competent jurisdiction obtained by the Borrowers against such Defaulting Lender
as a result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a
court of competent jurisdiction; provided that if (x) such payment is a payment
of the principal amount of any Loans or L/C Borrowings in respect of which such
Defaulting Lender has not fully funded its appropriate share, and (y) such Loans
were made or the related Letters of Credit were issued at a time when the
conditions set forth in Section 5.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and L/C Obligations owed to, all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment
of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such
time as all Loans and funded and unfunded participations in L/C Obligations and
Swing Line Loans are held by the Lenders pro rata in accordance with the
Commitments hereunder without giving effect to Section 2.15(a)(iv). Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to this Section 2.15(a)(ii) shall be deemed paid to and
redirected by such Defaulting Lender, and each Lender irrevocably consents
hereto.

(iii) Certain Fees.

(A) No Defaulting Lender shall be entitled to receive any fee payable under
Section 2.09(a) for any period during which that Lender is a Defaulting Lender
(and the Borrowers shall not be required to pay any such fee that otherwise
would have been required to have been paid to that Defaulting Lender).

(B) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees
for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its pro rata share of the stated amount of Letters of Credit
for which it has provided Cash Collateral pursuant to Section 2.14.

(C) With respect to any fee payable under Section 2.09(a) or any Letter of
Credit Fee not required to be paid to any Defaulting Lender pursuant to clause
(A) or (B) above, the Borrowers shall (x) pay to each Non-Defaulting Lender that
portion of any such fee otherwise payable to such Defaulting Lender with respect
to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans
that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv)
below, (y) pay to the L/C Issuer and Swing Line Lender, as applicable, the
amount of any such fee otherwise payable to such Defaulting Lender to the extent
allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee.

(iv) Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or
any part of such Defaulting Lender’s participation in L/C Obligations and Swing
Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance
with their respective pro rata share (calculated without regard to such
Defaulting Lender’s Commitment) but only to the extent that (x) the conditions
set forth in Section 5.02 are satisfied at the time of such reallocation (and,
unless the Borrowers shall have otherwise notified the Administrative Agent at
such time, the Borrowers shall be deemed to have represented and warranted that
such conditions are satisfied at such time), and (y) such reallocation does not
cause any Non-Defaulting Lender’s share of the Outstanding Amount of Revolving
Obligations to exceed its Commitment. Subject to Section 11.19, no reallocation
hereunder shall constitute a waiver or release of any claim of any party
hereunder against a Defaulting Lender arising from that Lender having become a
Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of
such Non-Defaulting Lender’s increased exposure following such reallocation.

 

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(v) Cash Collateral, Repayment of Swing Line Loans. If the reallocation
described in clause (a)(iv) above cannot, or can only partially, be effected,
the Borrowers shall, without prejudice to any right or remedy available to it
hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an
amount equal to the Swing Line Lenders’ Fronting Exposure and (y) second, Cash
Collateralize the L/C Issuers’ Fronting Exposure in accordance with the
procedures set forth in Section 2.14.

(vi) Replacement. The Defaulting Lender may be replaced and its interests
assigned as provided in Section 11.13;

(vii) Termination of Commitments. So long as no Event of Default shall exist
immediately before or immediately after giving effect thereto, the Borrowers
may, with the consent of the Administrative Agent, in its discretion, elect to
terminate the commitments of the Defaulting Lender, and repay its share of
outstanding Loan Obligations (and reallocate its participation interests in L/C
Obligations and Swing Line Loans), on a non-pro rata basis.

(b) Defaulting Lender Cure. If the Borrowers (so long as no Default or Event of
Default exists), the Administrative Agent, Swing Line Lender and the L/C Issuer
agree in writing that a Lender is no longer a Defaulting Lender, the
Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any Cash Collateral),
that Lender will, to the extent applicable, purchase at par that portion of
outstanding Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Loans and funded
and unfunded participations in Letters of Credit and Swing Line Loans to be held
on a pro rata basis by the Lenders in accordance with their pro rata share
(without giving effect to Section 2.15(a)(iv)), whereupon such Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrowers while that Lender was a Defaulting Lender; and provided; further,
that except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

Section 2.16 Joint and Several Liability.

(a) Each Borrower accepts joint and several liability hereunder in consideration
of the financial accommodation to be provided by the Administrative Agent and
the Lenders under this Agreement and the other Loan Documents, for the mutual
benefit, directly and indirectly, of each Borrower and in consideration of the
undertakings of each Borrower to accept joint and several liability for the
obligations of each Borrower.

(b) Each Borrower shall be jointly and severally liable for all Obligations,
regardless of which Borrower actually receives Credit Extensions hereunder or
the amount of such Credit Extensions received or the manner in which the
Administrative Agent or any Lender accounts for such Credit Extensions on its
books and records. Each Borrower’s obligations with respect to Credit Extensions
made to it, and each Borrower’s obligations arising as a result of the joint and
several liability of such Borrower hereunder, with respect to Credit Extensions
made to and other Obligations owing by the other Borrower hereunder, shall be
separate and distinct obligations, but all such obligations shall be primary
obligations of each Borrower.

 

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(c) Each Borrower’s obligations arising as a result of the joint and several
liability of such Borrower hereunder with respect to Credit Extensions made to
and other Obligations owing by the other Borrower hereunder shall, to the
fullest extent permitted by law, be unconditional irrespective of (A) the
validity or enforceability, avoidance or subordination of the obligations of any
other Borrower or of any promissory note or other document evidencing all or any
part of the obligations of any other Borrower, (B) the absence of any attempt to
collect the Obligations from any other Borrower, any other guarantor, or any
other security therefor, or the absence of any other action to enforce the same,
(C) the waiver, consent, extension, forbearance or granting of any indulgence by
the Administrative Agent or any Lender with respect to any provision of any
instrument evidencing the obligations of any other Borrower, or any part
thereof, or any other agreement now or hereafter executed by any other Borrower
and delivered to the Administrative Agent or any Lender, (D) the failure by the
Administrative Agent or any Lender to take any steps to perfect and maintain its
security interest in, or to preserve its rights to, any security or collateral
for the obligations of any other Borrower, (E) the Administrative Agent’s or any
Lender’s election, in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code, (F) any borrowing
or grant of a security interest by any other Borrower, as Debtor In Possession
under Section 364 of the Bankruptcy Code, (G) the disallowance of all or any
portion of the Administrative Agent’s or any Lender’s claim(s) for the repayment
of the obligations of any other Borrower under Section 502 of the Bankruptcy
Code, or (H) any other circumstances which might constitute a legal or equitable
discharge or defense of a guarantor or of any other Borrower. With respect to
each Borrower’s obligations arising as a result of the joint and several
liability of such Borrower hereunder with respect to Credit Extensions made to
the other Borrower hereunder, such Borrower waives, until the Obligations shall
have been paid in full and this Agreement and the other Loan Documents shall
have been terminated, any right to enforce any right of subrogation or any
remedy which the Administrative Agent or any Lender now has or may hereafter
have against such Borrower, any endorser or any guarantor of all or any part of
the Obligations, and any benefit of, and any right to participate in, any
security or collateral given to the Administrative Agent or any Lender to secure
payment of the Obligations or any other liability of any Borrower to the
Administrative Agent or any Lender.

(d) Upon the occurrence and during the continuation of any Event of Default, the
Administrative Agent and the Lenders may proceed directly and at once, without
notice, against any Borrower to collect and recover the full amount, or any
portion of the Obligations, without first proceeding against any other Borrower
or any other Person, or against any security or collateral for the Obligations.
Each Borrower consents and agrees that the Administrative Agent and the Lenders
shall be under no obligation to marshal any assets in favor of any Borrower or
against or in payment of any or all of the Obligations.

(e) Notwithstanding any provision to the contrary contained herein or in any
other of the Loan Documents, Swap Contracts or Treasury Management Agreements,
the obligations of AFI as Borrower under this Agreement and the other Loan
Documents shall be limited to an aggregate amount equal to the largest amount
that would not render such obligations subject to avoidance under the Debtor
Relief Laws or any comparable provisions of any applicable state law.

Section 2.17 Overadvances and Protective Advances.

(a) Overadvances.

(i) Mandatory Prepayment of Overadvance Loans. If at any time the aggregate
principal balance of all Revolving Loans exceeds the Borrowing Base (a
“Overadvance”), the excess amount shall, subject to Section 2.07(d), be payable
by the Borrowers on demand by the Administrative Agent. All Overadvance Loans
shall constitute Revolving Obligations secured by the Collateral and shall be
entitled to all benefits of the Loan Documents.

 

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(ii) Mandatory Prepayment of Incremental Credit Facility Overadvance Loans. If
at any time the aggregate principal balance of all Loans under any Incremental
Credit Facility (other than Revolving Loans) exceeds the borrowing base
established in the relevant amendment establishing such Incremental Credit
Facility (unless such amendment expressly provides otherwise), the excess amount
shall, subject to Section 2.07(d), be payable by the applicable Borrowers on
demand by the Administrative Agent.

(iii) Funding of Overadvance Loans. The Administrative Agent may require
Revolving Lenders to honor requests for Overadvance Loans and to forbear from
requiring the applicable Borrower(s) to cure an Overadvance as long as (A) such
Overadvance does not continue for more than 30 consecutive days and (B) the
aggregate amount of the Overadvances existing at any time, together with the
Protective Advances outstanding at any time pursuant to Section 2.17(b), do not
exceed ten percent (10.0%) of the Aggregate Commitments then in effect. In no
event shall Overadvance Loans be required that would (A) cause the Revolver
Usage to exceed the Aggregate Commitments or (B) violate the terms of any
applicable amendment establishing an Incremental Credit Facility. Required
Lenders may at any time revoke the Administrative Agent’s authority to make
further Overadvance Loans to any or all Borrowers by written notice to the
Administrative Agent. Any funding of an Overadvance Loan or sufferance of an
Overadvance shall not constitute a waiver by the Administrative Agent or Lenders
of the Event of Default caused thereby. In no event shall any Borrower or other
Loan Party be deemed a beneficiary of this Section 2.17(a) nor authorized to
enforce any of its terms.

(b) Protective Advances.

(i) The Administrative Agent shall be authorized by each Borrower and the
Revolving Lenders from time to time in the Administrative Agent’s discretion
(but shall have absolutely no obligation to), to make Base Rate Loans to the
Borrowers on behalf of the Revolving Lenders (any of such Loans are herein
referred to as “Protective Advances”) which the Administrative Agent deems
necessary or desirable to (A) preserve or protect Collateral or any portion
thereof or (B) to enhance the likelihood of, or maximize the amount of,
repayment of the Revolving Loans and other Revolving Obligations; provided that
no Protective Advance shall cause the aggregate amount of the Revolver Usage at
such time to exceed the Aggregate Commitments then in effect. All Protective
Advances made by the Administrative Agent constitute Obligations, secured by the
Collateral and shall be treated for all purposes as Base Rate Loans.

(ii) The aggregate amount of Protective Advances outstanding at any time
pursuant to this Section 2.17(b) shall not exceed ten percent (10.0% percent) of
the Aggregate Commitments then in effect, and such Protective Advances, together
with the aggregate amount of Overadvances existing at any time pursuant to
Section 2.17(a), shall not exceed ten percent (10.0%) of the Aggregate
Commitments then in effect. Protective Advances may be made even if the
conditions set forth in Section 5.02 have not been satisfied. Each Revolving
Lender shall participate in each Protective Advance on a ratable basis. Required
Lenders may at any time revoke the Administrative Agent’s authority to make
further Protective Advances to any or all Borrowers by written notice to the
Administrative Agent. Absent such revocation, the Administrative Agent’s
determination that funding of a Protective Advance is appropriate shall be
conclusive. At any time that there is sufficient Availability and the conditions
precedent set forth in Section 5.02 have been satisfied, the Administrative
Agent may request the Revolving Lenders to make a Loan to repay a Protective
Advance. At any other time, the Administrative Agent may require the Revolving
Lenders to fund their risk participations described in Section 2.17(d).

 

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(iii) Transfers. Upon the making of a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default or Event of Default),
each Revolving Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the
Administrative Agent without recourse or warranty, an undivided interest and
participation in such Protective Advance in proportion to its ratable share of
such Protective Advance. Each Revolving Lender shall transfer (a “Transfer”) the
amount of such Revolving Lender’s ratable share of the outstanding principal
amount of the applicable Protective Advance with respect to such purchased
interest and participation promptly when requested to the Administrative Agent,
to such account of the Administrative Agent as the Administrative Agent may
designate, but in any case not later than 3:00 p.m. on the Business Day notified
(if notice is provided by the Administrative Agent prior to 12:00 p.m. and
otherwise on the immediately following Business Day (the “Transfer Date”)).
Transfers may occur during the existence of a Default or Event of Default and
whether or not the applicable conditions precedent set forth in Section 5.02
have then been satisfied. Such amounts transferred to the Administrative Agent
shall be applied against the amount of the applicable Protective Advance and,
together with Revolving Lender’s ratable share of such Protective Advance, shall
constitute Loans of such Revolving Lenders, respectively. If any such amount is
not transferred to the Administrative Agent by any Revolving Lender on such
Transfer Date, the Administrative Agent shall be entitled to recover such amount
on demand from such Revolving Lender together with interest thereon as specified
in Section 2.08. From and after the date, if any, on which any Revolving Lender
is required to fund, and funds, its participation in any Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Revolving Lender, such Revolving Lender’s Pro Rata share of all payments of
principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Protective Advance.

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

Section 3.01 Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.

(i) Any and all payments by or on account of any obligation of any Loan Party
under any Loan Document shall be made without deduction or withholding for any
Taxes, except as required by applicable Laws. If any applicable Laws (as
determined in the good faith discretion of the Loan Parties or the
Administrative Agent, as applicable) require the deduction or withholding of any
Tax from any such payment by the Administrative Agent or a Loan Party, then the
Administrative Agent or such Loan Party shall be entitled to make such deduction
or withholding, upon the basis of the information and documentation to be
delivered pursuant to subsection (e) below.

(ii) If any Loan Party or the Administrative Agent shall be required by the Code
to withhold or deduct any Taxes, including both United States Federal backup
withholding and withholding taxes, from any payment, then (A) the Administrative
Agent shall withhold or make such deductions as are determined by the
Administrative Agent to be required based upon the information and documentation
it has received pursuant to subsection (e) below, (B) the

 

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Administrative Agent shall timely pay the full amount withheld or deducted to
the relevant Governmental Authority in accordance with the Code, and (C) to the
extent that the withholding or deduction is made on account of Indemnified
Taxes, the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section 3.01) the applicable Recipient receives an amount equal to the sum
it would have received had no such withholding or deduction been made.

(iii) If any Loan Party or the Administrative Agent shall be required by any
applicable Laws other than the Code to withhold or deduct any Taxes from any
payment, then (A) such Loan Party or the Administrative Agent, as required by
such Laws, shall withhold or make such deductions as are determined by it to be
required based upon the information and documentation it has received pursuant
to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount withheld or
deducted to the relevant Governmental Authority in accordance with such Laws,
and (C) to the extent that the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Loan Party shall be
increased as necessary so that after any required withholding or the making of
all required deductions (including deductions applicable to additional sums
payable under this Section 3.01) the applicable Recipient receives an amount
equal to the sum it would have received had no such withholding or deduction
been made.

(b) Payment of Other Taxes by the Loan Parties. Without limiting the provisions
of subsection (a) above, the Loan Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable Law, or at the option of
the Administrative Agent timely reimburse it for the payment of, any Other
Taxes.

(c) Tax Indemnification.

(i) Each of the Loan Parties shall, and does hereby, jointly and severally
indemnify each Recipient, and shall make payment in respect thereof within 10
days after demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 3.01) payable or paid by such Recipient or required
to be withheld or deducted from a payment to such Recipient, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified 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 Borrowers by a Lender or the L/C
Issuer (with a copy to the Administrative Agent), or by the Administrative Agent
on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive, absent manifest error. Each of the Loan Parties shall, and does
hereby, jointly and severally indemnify the Administrative Agent, and shall make
payment in respect thereof within 10 days after demand therefor, for any amount
which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the
Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

(ii) Each Lender and the L/C Issuer shall, and does hereby, severally indemnify,
and shall make payment in respect thereof within 10 days after demand therefor,
(x) the Administrative Agent against any Indemnified Taxes attributable to such
Lender or the L/C Issuer (but only to the extent that any Loan Party has not
already indemnified the Administrative Agent for such Indemnified Taxes and
without limiting the obligation of the Loan Parties to do so), (y) the
Administrative Agent and the Loan Parties, as applicable, against any Taxes
attributable to such Lender’s failure to comply with the provisions of
Section 11.06(d) relating to the maintenance of a Participant Register and
(z) the Administrative Agent and the Loan Parties, as

 

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applicable, against any Excluded Taxes attributable to such Lender or the L/C
Issuer, in each case, that are payable or paid by the Administrative Agent or a
Loan Party in connection with any Loan Document, and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive, absent manifest error.
Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender or the L/C
Issuer, as the case may be, under this Agreement or any other Loan Document
against any amount due to the Administrative Agent under this clause (ii).

(d) Evidence of Payments. Upon request by the Borrowers or the Administrative
Agent, as the case may be, after any payment of Taxes by any Loan Party or by
the Administrative Agent to a Governmental Authority as provided in this
Section 3.01, the Borrowers shall deliver (or cause the applicable Loan Party to
deliver) to the Administrative Agent or the Administrative Agent shall deliver
to the Borrowers, as the case may be, the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
any return required by Law to report such payment or other evidence of such
payment reasonably satisfactory to the Borrowers or the Administrative Agent, as
the case may be.

(e) Status of Lenders; Tax Documentation.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrowers and the Administrative Agent, at the time or times reasonably
requested by the Borrowers or the Administrative Agent, such properly completed
and executed documentation reasonably requested by the Borrowers or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrowers or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, if any Borrower is a U.S.
Person,

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

 

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

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

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

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

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

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

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrowers and the Administrative Agent at the time or times
prescribed by

 

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law and at such time or times reasonably requested by the Borrowers or the
Administrative Agent such documentation prescribed by applicable Law (including
as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrowers or the Administrative Agent
as may be necessary for the Borrowers and the Administrative Agent to comply
with their obligations under FATCA and to determine that such Lender has
complied with such Lender’s obligations under FATCA or to determine the amount
to deduct and withhold from such payment. Solely for purposes of this clause
(D), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

(iii) Each Lender agrees that if any form or certification it previously
delivered pursuant to this Section 3.01 expires or becomes obsolete or
inaccurate in any respect, it shall update such form or certification or
promptly notify the Borrowers and the Administrative Agent in writing of its
legal inability to do so.

(f) Treatment of Certain Refunds. Unless required by applicable Laws, at no time
shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to
any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from
funds paid for the account of such Lender or the L/C Issuer, as the case may be.
If any Recipient determines, that it has received a refund of any Taxes as to
which it has been indemnified by any Loan Party or with respect to which any
Loan Party has paid additional amounts pursuant to this Section 3.01, it shall
pay to the Loan Party an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by a Loan Party under this
Section 3.01 with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) incurred by such Recipient, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that the Loan Party, upon the request of
the Recipient, agrees to repay the amount paid over to the Loan Party (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Recipient in the event the Recipient is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this subsection, in no event will the applicable Recipient be required to pay
any amount to the Loan Party pursuant to this subsection the payment of which
would place the Recipient in a less favorable net after-Tax position than such
Recipient would have been in if the indemnification payments or additional
amounts giving rise to such refund had never been paid. At the request of the
applicable Loan Party, the Recipient shall take reasonable efforts to pursue any
refund of Taxes withheld or deducted from funds paid for the account such
Recipient, so long as such Recipient determines, in its sole discretion, that
such efforts would not result in any additional costs, expense or risks or be
otherwise disadvantageous to it. This subsection shall not be construed to
require any Recipient to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to any Loan Party
or any other Person.

(g) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender or the L/C Issuer, the termination of
the Commitments and the repayment, satisfaction or discharge of all other
Obligations.

Section 3.02 Illegality.

If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
Lending Office to make, maintain or fund Loans whose interest is determined by
reference to the Eurodollar Rate, or to determine or charge interest rates based
upon the Eurodollar Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank

 

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market, then, on notice thereof by such Lender to the Borrowers through the
Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrowers that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrowers shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all of such Lender’s Eurodollar Rate Loans to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrowers shall also pay accrued
interest on the amount so prepaid or converted.

Section 3.03 Inability to Determine Rates.

If in connection with any request for a Eurodollar Rate Loan or a conversion to
or continuation thereof (a) the Required Lenders determine that for any reason
that (i) Dollar deposits are not being offered to banks in the London interbank
eurodollar market for the applicable amount and Interest Period of such
Eurodollar Rate Loan, or (ii) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan (in each case with respect to clause (a)(i)
above, “Impacted Loans”), or (b) the Required Lenders determine for any reason
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrowers and each Lender. Thereafter, the obligation of the Lenders to make
or maintain Eurodollar Rate Loans shall be suspended until the Administrative
Agent (upon the instruction of the Required Lenders) revokes such notice. Upon
receipt of such notice, the Applicable Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of Base Rate Loans in the amount specified therein.

Notwithstanding the foregoing, if a determination shall have been made as
described in clause (a)(i) of this section, the Administrative Agent, in
consultation with the Borrowers and the affected Lenders, may establish an
alternative interest rate for the Impacted Loans that reflects the all-in-cost
of funds for such Loans, in which case, such alternative rate of interest shall
apply with respect to the Impacted Loans until (1) the Administrative Agent
revokes the notice delivered with respect to the Impacted Loans under clause
(a) of the first sentence of this section, (2) the Required Lenders notify the
Administrative Agent and the Borrowers that such alternative interest rate does
not adequately and fairly reflect the cost to such Lenders of funding the
Impacted Loans, or (3) any Lender determines that any Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for such
Lender or its applicable Lending Office to make, maintain or fund Loans whose
interest is determined by reference to such alternative rate of interest or to
determine or charge interest rates based upon such rate or any Governmental
Authority has imposed material restrictions on the authority of such Lender to
do any of the foregoing and provides the Administrative Agent and the Borrowers
written notice thereof.

Section 3.04 Increased Costs.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement reflected in the Eurodollar Rate) or the L/C
Issuer;

 

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(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or the L/C Issuer or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurodollar Rate
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, converting to, continuing or maintaining any Loan the interest
on which is determined by reference to the Eurodollar Rate (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
the L/C Issuer of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender or the L/C Issuer, the Applicable
Borrower will pay to such Lender or the L/C Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the L/C Issuer,
as the case may be, for such additional costs incurred or reduction suffered.

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

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrowers shall be
conclusive, absent manifest error. The Applicable Borrower shall pay such Lender
or the L/C Issuer, as the case may be, the amount shown as due on any such
certificate within ten days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Applicable Borrower shall not be
required to compensate a Lender or the L/C Issuer pursuant to the foregoing
provisions of this Section for any increased costs incurred or reductions
suffered more than nine (9) months prior to the date that such Lender or the L/C
Issuer, as the case may be, notifies the Applicable Borrower of the Change in
Law giving rise to such increased costs or reductions and of such Lender’s or
the L/C Issuer’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine-month period referred to above shall be extended to include the
period of retroactive effect thereof).

 

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(e) General Policy. Notwithstanding any other provision of this Section, no
Lender or L/C Issuer shall demand compensation for any increased cost or
reduction pursuant to this Section if it shall not at the time be the general
policy and practice of such Lender or L/C Issuer to demand such compensation in
similar circumstances under comparable provisions of other credit agreements.

Section 3.05 Compensation for Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to
time, the Applicable Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Applicable Borrower (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Applicable Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Applicable Borrower
pursuant to Section 11.13;

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Applicable Borrower shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Applicable Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

Section 3.06 Mitigation of Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Applicable Borrower is required to pay
any Indemnified Taxes or additional amount to any Lender, the L/C Issuer, or any
Governmental Authority for the account of any Lender or the L/C Issuer pursuant
to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then
at the request of the Borrowers, such Lender or the L/C Issuer shall, as
applicable, 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 or the L/C Issuer, as applicable, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice pursuant
to Section 3.02, as applicable, and (ii) in each case, would not subject such
Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the L/C
Issuer, as the case may be. The Applicable Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender or the L/C Issuer in
connection with any such designation or assignment.

 

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(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Applicable Borrower is required to pay any Indemnified
Taxes or additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01 and, in each case, such Lender
has declined or is unable to designate a different lending office in accordance
with Section 3.06(a), the Applicable Borrower may replace such Lender in
accordance with Section 11.13.

Section 3.07 Survival.

All of the Loan Parties’ obligations under this Article III shall survive
termination of the Aggregate Commitments, repayment of all other Obligations
hereunder, and resignation of the Administrative Agent.

ARTICLE IV.

GUARANTY

Section 4.01 The Guaranty.

(a) Each of the Guarantors hereby jointly and severally guarantees to the
Administrative Agent and each of the holders of all of the Obligations as
hereinafter provided, the prompt payment of the Obligations (the “Guaranteed
Obligations”) in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Guarantors hereby further
agree that if any of the Guaranteed Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether
at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal.

(b) Notwithstanding any provision to the contrary contained herein or in any
other of the Loan Documents, Swap Contracts, Treasury Management Agreements or
the other documents relating to the Guaranteed Obligations, (i) the obligations
of each Guarantor under this Agreement and the other Loan Documents shall be
limited to an aggregate amount equal to the largest amount that would not render
such obligations subject to avoidance under the Debtor Relief Laws or any
comparable provisions of any applicable state law and (ii) the Guaranteed
Obligations of a Guarantor shall exclude any Excluded Swap Obligations with
respect to such Guarantor.

Section 4.02 Obligations Unconditional.

The obligations of the Guarantors under Section 4.01 are joint and several,
absolute and unconditional, irrespective of the value, validity, or
enforceability of any of the Loan Documents or other documents relating to the
Guaranteed Obligations, or any other agreement or instrument referred to
therein, or any substitution, release, impairment or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable Law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 4.02 that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances. Each Guarantor agrees that
such Guarantor shall have no right of subrogation, indemnity, reimbursement or
contribution against the Borrowers or any other Guarantor for amounts paid under
this Article IV until such time as the

 

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Guaranteed Obligations have been paid in full and the commitments relating
thereto have expired or terminated. Without limiting the generality of the
foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder, which shall remain absolute and
unconditional as described above:

(a) at any time or from time to time, without notice to any Guarantor, the time
for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of any of the Loan
Documents or other documents relating to the Guaranteed Obligations, or any
other agreement or instrument referred to therein, shall be done or omitted;

(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or
any of the Guaranteed Obligations shall be modified, supplemented or amended in
any respect, or any right under any of the Loan Documents or other documents
relating to the Guaranteed Obligations, or any other agreement or instrument
referred to therein, shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released, impaired or
exchanged in whole or in part or otherwise dealt with; or

(d) any Lien granted to, or in favor of, the Administrative Agent or any other
holder of the Guaranteed Obligations as security for any of the Guaranteed
Obligations shall fail to attach or be perfected.

With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any other
holder of the Guaranteed Obligations exhaust any right, power or remedy or
proceed against any Person under any of the Loan Documents or other documents
relating to the Guaranteed Obligations, or any other agreement or instrument
referred to therein, or against any other Person under any other guarantee of,
or security for, any of the Guaranteed Obligations.

Section 4.03 Reinstatement.

The obligations of the Guarantors under this Article IV shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of any Person in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
each Guarantor agrees that it will indemnify the Administrative Agent and each
other holder of the Guaranteed Obligations on demand for all reasonable costs
and expenses (including fees, charges and disbursements of any law firm or other
counsel) incurred by the Administrative Agent or any other such holder of
Guaranteed Obligations in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

Section 4.04 Certain Additional Waivers.

Each Guarantor acknowledges and agrees that (a) the guaranty given hereby may be
enforced without the necessity of resorting to or otherwise exhausting remedies
in respect of any other security or collateral interests, and without the
necessity at any time of having to take recourse against the Borrowers hereunder
or against any collateral securing the Guaranteed Obligations or otherwise,
(b) it will not assert any right to require the action first be taken against
the Borrowers or any other Person (including any co-

 

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guarantor) or pursuit of any other remedy or enforcement any other right and
(c) nothing contained herein shall prevent or limit action being taken against
the Borrowers hereunder, under the other Loan Documents or the other documents
and agreements relating to the Guaranteed Obligations or from foreclosing on any
security or collateral interests relating hereto or thereto, or from exercising
any other rights or remedies available in respect thereof, if neither the
Borrowers nor the Guarantors shall timely perform their obligations, and the
exercise of any such rights and completion of any such foreclosure proceedings
shall not constitute a discharge of the Guarantors’ obligations hereunder unless
as a result thereof, the Guaranteed Obligations shall have been paid in full and
the commitments relating thereto shall have expired or been terminated, it being
the purpose and intent that the Guarantors’ obligations hereunder be absolute,
irrevocable, independent and unconditional under all circumstances.

Each Guarantor further agrees that such Guarantor shall have no right of
recourse to security for the Guaranteed Obligations, except through the exercise
of rights of subrogation pursuant to Section 4.02 and through the exercise of
rights of contribution pursuant to Section 4.06.

Section 4.05 Remedies.

The Guarantors agree that, to the fullest extent permitted by law, as between
the Guarantors, on the one hand, and the Administrative Agent and the other
holders of the Guaranteed Obligations, on the other hand, the Guaranteed
Obligations may be declared to be forthwith due and payable as provided in
Section 9.02 (and shall be deemed to have become automatically due and payable
in the circumstances provided in said Section 9.02) for purposes of Section 4.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Guaranteed Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or the Guaranteed Obligations being deemed to have
become automatically due and payable), the Guaranteed Obligations (whether or
not due and payable by any other Person) shall forthwith become due and payable
by the Guarantors for purposes of Section 4.01. The Guarantors acknowledge and
agree that their obligations hereunder are secured in accordance with the terms
of the Collateral Documents and that the holders of the Guaranteed Obligations
may exercise their remedies thereunder in accordance with the terms thereof.

Section 4.06 Rights of Contribution.

The Guarantors agree among themselves that, in connection with payments made
hereunder, each Guarantor shall have contribution rights against any other
Guarantors as permitted under applicable Law. Such contribution rights shall be
subordinate and subject in right of payment to the obligations of such
Guarantors under the Loan Documents and no Guarantor shall exercise such rights
of contribution until all Guaranteed Obligations have been paid in full and the
Commitments have terminated.

Section 4.07 Guarantee of Payment; Continuing Guarantee.

The guarantee in this Article IV is a guaranty of payment and not of collection,
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.

Section 4.08 Keepwell.

Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty in
this Article IV by any Loan Party that is not then an “eligible contract
participant” under the Commodity Exchange Act (a “Specified Loan Party”) or the
grant of a security interest under the Loan Documents by any such Specified Loan
Party, in either case, becomes effective with respect to any Swap Obligation,
hereby jointly and severally, absolutely, unconditionally and irrevocably
undertakes to provide such funds or

 

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other support to each Specified Loan Party with respect to such Swap Obligation
as may be needed by such Specified Loan Party from time to time to honor all of
its obligations under the Loan Documents in respect of such Swap Obligation
(but, in each case, only up to the maximum amount of such liability that can be
hereby incurred without rendering such Qualified ECP Guarantor’s obligations and
undertakings under this Article IV, or otherwise under this Agreement, voidable
under applicable Debtor Relief Laws, and not for any greater amount). The
obligations and undertakings of each applicable Loan Party under this Section
shall remain in full force and effect until the Guaranteed Obligations have been
paid in full and the commitments relating thereto have expired or terminated.
Each Loan Party intends this Section to constitute, and this Section shall be
deemed to constitute, a guarantee of the obligations of, and a “keepwell,
support, or other agreement” for the benefit of, each Specified Loan Party for
all purposes of the Commodity Exchange Act.

ARTICLE V.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

Section 5.01 Conditions of Initial Credit Extension.

The obligation of each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:

(a) Loan Documents. Receipt by the Administrative Agent of executed counterparts
of this Agreement, the Security Agreement and the Pledge Agreements, each
properly executed by a Responsible Officer of the signing Loan Party and, in the
case of this Agreement, by each Lender.

(b) Opinions of Counsel. Receipt by the Administrative Agent of favorable
opinions of Morgan, Lewis & Bockius LLP, legal counsel to the Loan Parties,
addressed to the Administrative Agent and each Lender, dated as of the Closing
Date, and in form and substance satisfactory to the Administrative Agent.

(c) Organization Documents, Resolutions, Etc. Receipt by the Administrative
Agent of the following, each of which shall be originals or facsimiles (followed
promptly by originals), in form and substance satisfactory to the Administrative
Agent and its legal counsel:

(i) copies of the Organization Documents of each Loan Party certified to be true
and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation or organization, where
applicable, and certified by a secretary or assistant secretary of such Loan
Party to be true and correct as of the Closing Date;

(ii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party; and

(iii) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and is validly existing, and in good standing in its state of organization or
formation.

 

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(d) Perfection and Priority of Liens. Receipt by the Administrative Agent of the
following for each Loan Party: (A) completion of searches for Uniform Commercial
Code filings in the jurisdiction of organization or formation, (B) the
confirmation or filing of financing statements under the Uniform Commercial Code
in appropriate jurisdictions to perfect security interests in the personal
property collateral, and (C) receipt by the Collateral Agent of the original
certificates evidencing certificated Capital Stock (including those evidencing
Material First-Tier Foreign Subsidiaries) pledged as collateral to secure the
loans and obligations hereunder, together with undated stock powers executed in
blank.

(e) Evidence of Insurance. Receipt by the Administrative Agent of certificates
of insurance of the Loan Parties evidencing general liability and property
insurance meeting the requirements set forth in the Loan Documents, including,
but not limited to, naming the Collateral Agent as additional insured (in the
case of general liability insurance) or lender’s loss payee for claims in excess
of $10,000,000 (in the case of property insurance) on behalf of the Lenders.

(f) Closing Certificate. Receipt by the Administrative Agent of a certificate
signed by a Responsible Officer of AFI certifying that (i) the representations
and warranties in Article VI are true and correct in all material respects (or
in all respects in the case of any representation and warranty modified by
materiality or Material Adverse Effect), (ii) no Default or Event of Default
shall exist immediately after giving effect to the Credit Extensions on the
Closing Date and (iii) after giving pro forma effect to the Closing Date
Dividend, the Spin-Off and the other transactions contemplated hereby, the
Borrowers and the Guarantors, taken as a whole, are Solvent.

(g) Fees and Expenses. Receipt by the Administrative Agent and the Lenders of
any fees required to be paid on or before the Closing Date and all filing and
recording fees and Taxes shall have been duly paid or arrangements reasonably
satisfactory to the Administrative Agent shall have been made for the payment
thereof.

(h) Attorney Costs. Unless waived by the Administrative Agent, the Borrowers
shall have paid all Attorney Costs for the Administrative Agent), to the extent
invoiced prior to or on the Closing Date, plus such additional Attorney Costs
for the Administrative Agent as shall constitute its reasonable estimate of such
costs incurred or to be incurred by it through the closing proceedings (provided
that such estimate shall not thereafter preclude a final settling of accounts
between the Borrowers and the Administrative Agent).

(i) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate setting forth the Borrowing Base, effective as of
January 31, 2016.

(j) Related Transactions. The Administrative Agent shall have received evidence
that (i) AFI has obtained all Governmental Authority consents and other third
party approvals necessary, or in the reasonable opinion of the Administrative
Agent, advisable in connection with the Spin-Off, (ii) the Loan Parties have
been released from all Liens and obligations under the AWI Credit Facility, and
the Administrative Agent shall have received satisfactory payoff letters, lien
release documentation or similar agreements which evidence the foregoing,
(iii) the Closing Date Dividend will occur on the Closing Date (after initial
funding of Loans) and (iv) the Spin-Off will occur on April 1, 2016.

(k) Excess Availability. Upon giving pro forma effect to the Closing Date
Dividend, the Spin-Off, the initial funding of Loans and issuance (or deemed
issuance) of Letters of Credit on the Closing Date, and the payment by the
Borrowers of all fees and expenses incurred in connection herewith and due on
the Closing Date as well as the amount of any payables stretched beyond their
customary payment practices, (i) available, unrestricted cash (in Dollars and on
deposit in the United States) of the Loan Parties shall equal at least
$5,000,000 and (ii) Excess Availability shall be at least $100,000,000.

 

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(l) Deposit Account Control Agreements. The Administrative Agent shall have
received evidence of the establishment of each Dominion Account and related
lockboxes (or similar arrangements acceptable to the Administrative Agent),
together with fully-executed Deposit Account Control Agreements with respect
thereto and covering the other Deposit Accounts listed on Schedule 7.16(d)
hereto (other than Excluded Accounts).

(m) [Reserved].

(n) Lien Searches. The Administrative Agent shall have received UCC Lien
searches and other evidence reasonably satisfactory to the Administrative Agent
that its Liens are the only Liens upon the Collateral, except Liens permitted
under Section 8.01 and Liens being terminated on the Closing Date.

(o) Financial Statements. The Administrative Agent shall have received, in form
and substance satisfactory to it, (i) copies of the Audited Financial
Statements, and (ii) financial projections for AFI and its Subsidiaries, giving
effect to the Spin-Off and the other transactions contemplated hereby, prepared
by senior Responsible Officers of AFI.

(p) Transaction Documents. The Administrative Agent shall have received
certified copies of each Loan Party’s material agreements governing the
Spin-Off, including the Separation and Distribution Agreement, the Transition
Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement,
the Trademark License Agreement and the Campus Lease Agreement.

(q) Perfection Certificate. Each Loan Party shall deliver to the Administrative
Agent a completed Perfection Certificate, executed and delivered by a
Responsible Officer of such Loan Party, together with all attachments
contemplated thereby.

(r) Field Exams and Inventory Appraisals. The Administrative Agent shall have
received copies of new field exam reports and inventory appraisals with respect
to the Collateral.

(s) No Material Adverse Effect. There shall not have occurred since December 31,
2014, any event or condition that has had or could be reasonably expected,
either individually or in the aggregate, to have a Material Adverse Effect.

(t) No Litigation. There shall be no action, suit, investigation, litigation or
proceeding pending or, to the knowledge of any Loan Party, threatened in any
court or before any arbitrator or Governmental Authority that could reasonably
be expected to have a Material Adverse Effect or to materially and adversely
affect this Agreement or the transactions contemplated hereby.

(u) Third-Party Consents. The Administrative Agent shall have received a
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required or appropriate to be
obtained from any Governmental Authority or other third-party in connection with
the Spin-Off relating to AFI and its Subsidiaries and the execution, delivery
and performance by and the validity against each Loan Party of the Loan
Documents to which it is a party, and such consents, licenses and approvals
shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required.

(v) Know Your Customer. Any information reasonably required by a Lender and any
other Secured Party to enable it to meet its internal “know your customer”
compliance requirements and normal operating procedures shall have been
delivered.

 

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Without limiting the generality of the provisions of Section 10.04, for purposes
of determining compliance with the conditions specified in this Section 5.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

Section 5.02 Conditions to all Credit Extensions.

The obligation of each Lender to honor any Request for Credit Extension is
subject to the following conditions precedent:

(a) The representations and warranties of AFI and each other Loan Party
contained in Article VI or any other Loan Document, or which are contained in
any document furnished at any time under or in connection herewith or therewith,
shall be true and correct in all material respects (or in all respects in the
case of any representation and warranty modified by materiality or Material
Adverse Effect) on and as of the date of such Credit Extension, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct as of such earlier date.

(b) No Default shall exist, or would result from such proposed Credit Extension.

(c) The Administrative Agent and, if applicable, the applicable L/C Issuer or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof (other than with respect to the Existing
Letters of Credit);

(d) With respect to the issuance of a Letter of Credit, the applicable L/C
Conditions shall be satisfied;

(e) Upon giving effect to any such Request for Credit Extension, Excess
Availability shall not be less than $0.00.

Each Request for Credit Extension submitted by the Applicable Borrower (or any
deemed request, except a deemed request in connection with a Protective Advance)
shall be deemed to be a representation and warranty that the conditions
specified in Sections 5.02(a) and (b) have been satisfied on and as of the date
of the applicable Credit Extension.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

AFI represents and warrants to the Administrative Agent and the Lenders that the
following are, and after giving effect to the Closing Date Dividend and Spin-Off
will be, true, correct and complete:

Section 6.01 Existence, Qualification and Power.

Each Loan Party (a) is a corporation, partnership or limited liability company
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own its assets and carry on its business and
(ii) execute, deliver and perform its obligations under the Loan Documents to
which it is a party, and (c) is duly

 

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qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

Section 6.02 Authorization; No Contravention.

The execution, delivery and performance by each Loan Party of each Loan Document
to which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not (a) contravene the terms of
any of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under (i) any
Contractual Obligation to which such Person is a party or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law
(including, without limitation, Regulation U or Regulation X issued by the FRB);
except in each case referred to in clause (b) or (c), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.

Section 6.03 Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority or any other Person is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan Document
other than (i) those that have already been obtained and are in full force and
effect and (ii) filings to perfect the Liens created by the Collateral
Documents.

Section 6.04 Binding Effect.

This Agreement and each other Loan Document has been duly executed and delivered
by each Loan Party that is party thereto. This Agreement and each other Loan
Document constitutes a legal, valid and binding obligation of each Loan Party
that is party thereto, enforceable against each such Loan Party in accordance
with its terms.

Section 6.05 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of AFI and
its Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(iii) show all material indebtedness and other liabilities, direct or
contingent, of AFI and its Subsidiaries as of the date thereof, including
liabilities for taxes, commitments and Indebtedness, to the extent required to
be shown thereon under GAAP.

(b) From the date of the Audited Financial Statements to and including the
Closing Date, there has been no Disposition by AFI or any Subsidiary, or any
Involuntary Disposition, of any material part of the business or Property of AFI
and its Subsidiaries, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
AFI and its Subsidiaries, taken as a whole, in each case, which is not reflected
in the foregoing financial statements or in the notes thereto and has not
otherwise been disclosed in writing to the Lenders on or prior to the Closing
Date.

 

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(c) The financial statements delivered pursuant to Section 7.01(a) and (b) have
been prepared in accordance with GAAP (except as may otherwise be permitted
under Section 7.01(a) and (b)) and present fairly (on the basis disclosed in the
footnotes to such financial statements) the consolidated financial condition,
results of operations and cash flows of AFI and its Subsidiaries as of such date
and for such periods.

(d) Since the date of the Audited Financial Statements, there has been no event
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

Section 6.06 Litigation.

There are no actions, suits, proceedings, investigations, claims or disputes
pending or, to the knowledge of the Loan Parties, threatened or contemplated, at
law, in equity, in arbitration or before any Governmental Authority, by or
against the Borrowers or any of their respective Subsidiaries or against any of
their properties or revenues that could reasonably be expected to have a
Material Adverse Effect.

Section 6.07 No Default.

(a) Neither AFI nor any Subsidiary is in default under or with respect to any
Contractual Obligation that could reasonably be expected to have a Material
Adverse Effect.

(b) No Default has occurred and is continuing.

Section 6.08 Ownership of Property; Liens.

Each Borrower and Subsidiary has good and marketable title to (or valid
leasehold interests in) all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and good title to all of its personal Property, including all
Property reflected in any financial statements delivered to Administrative Agent
or Lenders, in each case free of Liens except Permitted Liens. All Liens of the
Administrative Agent in the Collateral are duly perfected, first priority Liens,
subject only to Permitted Liens that are expressly allowed to have priority over
the Administrative Agent’s Liens.

Section 6.09 Environmental Compliance.

Except as could not reasonably be expected to have a Material Adverse Effect:

(a) Each of the Facilities and all operations at the Facilities are in
compliance with all applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Facilities or the Businesses, and
there are no conditions relating to the Facilities or the Businesses that could
give rise to liability under any applicable Environmental Laws.

(b) None of the Facilities contains, or has previously contained, any Hazardous
Materials at, on or under the Facilities in amounts or concentrations that
constitute or constituted a violation of Environmental Laws.

(c) Neither AFI nor any Subsidiary has received any written or verbal notice of,
or inquiry from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Facilities or the Businesses, nor does any Responsible Officer of any
Loan Party have knowledge or reason to believe that any such notice will be
received or is being threatened.

 

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(d) Hazardous Materials have not been transported or disposed of from the
Facilities, or generated, treated, stored or disposed of at, on or under any of
the Facilities or any other location, in each case by or on behalf AFI or any
Subsidiary in violation of, or in a manner that would be reasonably likely to
give rise to liability under, any applicable Environmental Law.

(e) No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of the Responsible Officers of the Loan Parties,
threatened, under any Environmental Law to which AFI or any Subsidiary is or
will be named as a party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
AFI, any Subsidiary, the Facilities or the Businesses.

(f) There has been no release or, threat of release of Hazardous Materials at or
from the Facilities, or arising from or related to the operations (including,
without limitation, disposal) of AFI or any Subsidiary in connection with the
Facilities or otherwise in connection with the Businesses, in violation of or in
amounts or in a manner that could give rise to liability under Environmental
Laws.

Section 6.10 Insurance.

The properties of AFI and its Subsidiaries are insured with financially sound
and reputable insurance companies which may be Insurance Subsidiaries, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where AFI or the applicable Subsidiary operates. The insurance
coverage of the Loan Parties as in effect on the Closing Date is outlined as to
carrier, policy number, expiration date, type, amount and deductibles on
Schedule 6.10.

Section 6.11 Taxes.

AFI and its Subsidiaries have filed all federal, state and other material tax
returns and reports required to be filed, and have paid all federal, state and
other material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP and except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse Effect. There is
no proposed tax assessment against AFI or any Subsidiary that would, if made,
have a Material Adverse Effect.

Section 6.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Internal Revenue Code and other federal or state Laws,
except non-compliance that has not resulted or could not reasonably be expected
to result in a Material Adverse Effect. Each Pension Plan that is intended to
qualify under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Loan Parties, nothing has occurred which would prevent, or
cause the loss of, such qualification and has resulted or could reasonably be
expected to result in a Material Adverse Effect. Each Loan Party and each ERISA
Affiliate have timely made all required contributions to each Pension Plan
subject to Section 412 of the Internal Revenue Code, and no application for a
funding waiver or an extension of any amortization period pursuant to
Section 412 of the Internal Revenue Code has been made with respect to any
Pension Plan that has resulted or could reasonably be expected to result in a
Material Adverse Effect.

 

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(b) There are no pending or, to the best knowledge of the Loan Parties,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Pension Plan that could reasonably be expected to have a
Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.

(c) (i) No ERISA Event has occurred since the Closing Date or is reasonably
expected to occur which has resulted or could reasonably be expected to result
in a Material Adverse Effect; (ii) no Loan Party nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA) which has resulted or could reasonably be expected
to result in a Material Adverse Effect; and (iii) no Loan Party nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan, which has resulted or could reasonably be
expected to result in a Material Adverse Effect.

Section 6.13 Subsidiaries.

Set forth on Schedule 6.13 is a complete and accurate list as of the Closing
Date of each Subsidiary, together with (i) jurisdiction of formation, (ii) with
respect to the Loan Parties only, the number of shares of each class of Capital
Stock outstanding, (iii) percentage of outstanding shares of each class owned
(directly or indirectly) by AFI or any Subsidiary and (iv) number and effect, if
exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights with respect thereto. The outstanding
Capital Stock of each Subsidiary is validly issued, fully paid and
non-assessable and no such Capital Stock is subject to any Lien other than the
Lien under the Loan Documents. As of the Closing Date, there are no outstanding
purchase options, warrants, subscription rights, agreements to issue or sell,
convertible interests, phantom rights or powers of attorney relating to Equity
Interests of any Loan Party or Subsidiary.

Section 6.14 Margin Regulations; Investment Company Act.

(a) The Borrowers are not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Not more than 25% of the
value of the assets of the Borrowers and their respective Subsidiaries are
comprised of margin stock.

(b) None of the Borrowers, any Person Controlling the Borrowers, or any
Subsidiary is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

Section 6.15 Disclosure.

AFI has disclosed to the Administrative Agent and 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. No report, financial statement, certificate or other information
furnished in writing by or on behalf of any Loan Party to the Administrative
Agent or any Lender in connection with the transactions contemplated hereby and
the negotiation of this Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) 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

 

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which they were made, not misleading; provided that, with respect to projected
financial information, AFI represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

Section 6.16 Compliance with Laws; OFAC; PATRIOT Act, Etc.

(a) Each of AFI and each Subsidiary is in compliance with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (i) such requirements of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (ii) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

(b) Neither the Borrower nor any of its Subsidiaries, nor to the knowledge of
the Borrower and the other Loan Parties, any director, officer, employee, agent,
affiliate or representative thereof, is an individual or entity that is, or is
owned or controlled by, any individual or entity that is (i) currently the
subject or target of any Sanctions, (ii) included on OFAC’s List of Specially
Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and
the Investment Ban List, or any similar list enforced by any other relevant
sanctions authority or (iii) located, organized or resident in a Designated
Jurisdiction.

(c) The Borrower and each of its Subsidiaries, and their Affiliates, officers
and directors, have conducted their business in compliance with the United
States Foreign Corrupt Practices Act of 1977, the UK Bribery Act of 2010, and
other similar anti-corruption legislation in other jurisdictions, and have
instituted and maintained policies and procedures designed to promote and
achieve compliance with such laws.

(d) Each Loan Party is in compliance, in all material respects, with (i) the
Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Patriot Act.

(e) No Borrower nor any of the Loan Parties is an EEA Financial Institution.

(f) No part of the proceeds of the Loans will be used, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

Section 6.17 Intellectual Property; Licenses, Etc.

AFI and its Subsidiaries own, or possess the legal right to use, all of the
trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that, to the knowledge of the Responsible Officers of the Loan Parties,
are reasonably necessary for the operation of their respective businesses. Set
forth on Schedule 6.17 is a list of all material IP Rights registered or pending
registration with the United States Copyright Office or the United States Patent
and Trademark Office and owned by each Loan Party as of the Closing Date. Except
for such claims and infringements that could not reasonably be expected to have
a Material Adverse Effect, no claim has been asserted and is pending by any
Person challenging or questioning the use of any IP Rights or the validity or
effectiveness of any IP Rights, nor does any Loan Party know of any such claim,
and, to the knowledge of the Responsible Officers of the Loan Parties, the use
of any IP

 

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Rights by the Borrowers or any Subsidiary or the granting of a right or a
license in respect of any IP Rights from the Borrowers or any Subsidiary does
not infringe on the rights of any Person. As of the Closing Date, none of the
material IP Rights owned by any of the Loan Parties is subject to any licensing
agreement or similar arrangement except as set forth on Schedule 6.17.

Section 6.18 Solvency.

The Loan Parties are Solvent on a consolidated basis.

Section 6.19 Perfection of Security Interests in the Collateral.

(a) The Security Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the holders of the secured obligations
identified therein, a legal and valid security interest in the Collateral
identified therein, and, when Uniform Commercial Code financing statements (or
other appropriate notices) in appropriate form are duly filed at the office of
the secretary of state of the jurisdiction of incorporation or organization of
each Loan Party, the Security Agreement shall create a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in such Collateral, in each case prior and superior in right to any
other Lien other than Permitted Liens to the extent such security interest can
be perfected by filing under the Uniform Commercial Code.

(b) Each of the Pledge Agreements is effective to create in favor of the
Collateral Agent, for the ratable benefit of the holders of the secured
obligations identified therein, a legal and valid security interest in the
Collateral identified therein, and each such Pledge Agreement shall create a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Collateral, in each case
prior and superior in right to any other Lien (i) with respect to any such
Collateral that is a “security” (as such term is defined in the Uniform
Commercial Code) and is evidenced by a certificate, when such Collateral is
delivered to the Collateral Agent with duly executed stock powers with respect
thereto, (ii) with respect to any such Collateral that is a “security” (as such
term is defined in the Uniform Commercial Code) but is not evidenced by a
certificate, when Uniform Commercial Code financing statements in appropriate
form are filed in the appropriate filing offices in the jurisdiction of
organization of the pledgor or when “control” (as such term is defined in the
Uniform Commercial Code) is established by the Collateral Agent over such
interests in accordance with the provision of Section 8-106 of the Uniform
Commercial Code, or any successor provision, and (iii) with respect to any such
Collateral that is not a “security” (as such term is defined in the Uniform
Commercial Code), when Uniform Commercial Code financing statements in
appropriate form are filed in the appropriate filing offices in the jurisdiction
of organization of the pledgor to the extent such security interest can be
perfected by filing under the Uniform Commercial Code.

(c) [Reserved].

Section 6.20 Business Locations.

(a) Set forth on (i) Schedule 6.20(a)(i) is the exact legal name, jurisdiction
of organization, chief executive office and organizational identification number
of each Loan Party as of the Closing Date and (ii) Schedule 6.20(a)(ii) is a
true, correct and complete list of the real properties owned as of the Closing
Date by AFI or any Material Domestic Subsidiary with an individual net book
value in excess of $3 million.

(b) Except as set forth on Schedule 6.20(b), no Loan Party has during the four
(4) months preceding the Closing Date (i) changed its legal name, (ii) changed
its state of formation, or (iii) been party to a merger, consolidation or other
change in structure.

 

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Section 6.21 Labor Matters.

Except as set forth on Schedule 6.21, there are no collective bargaining
agreements or Multiemployer Plans covering the employees of AFI or any
Subsidiary as of the Closing Date. Neither AFI nor any Subsidiary has suffered
any strikes, walkouts, work stoppages or other material labor difficulty within
the last five years that could reasonably be expected to have a Material Adverse
Effect.

Section 6.22 Brokers. There are no brokerage commissions, finder’s fees or
investment banking fees payable in connection with any transactions contemplated
by the Loan Documents.

Section 6.23 Accounts. The Administrative Agent may rely, in determining which
Accounts are Eligible Accounts, on all statements and representations made by
Borrowers with respect thereto. Each Borrower warrants with respect to each of
its Accounts at the time it is shown as an Eligible Account in a Borrowing Base
Certificate, that:

(a) it is genuine and in all respects what it purports to be;

(b) it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;

(c) it is for a sum certain, maturing as stated in the applicable invoice, a
copy of which has been furnished or is available to the Administrative Agent on
request;

(d) it is not subject to any offset, Lien (other than the Administrative Agent’s
Lien), deduction, defense, dispute, counterclaim or other adverse condition
except as arising in the Ordinary Course of Business and disclosed to the
Administrative Agent or as to any amount thereof not included as an Eligible
Account; and it is absolutely owing by the Account Debtor, without contingency
in any respect;

(e) no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to the Administrative Agent (regardless of whether,
under the UCC or other Applicable Law, the restriction is ineffective), and the
applicable Borrower is the sole payee or remittance party shown on the invoice;

(f) no extension, compromise, settlement, modification, credit, deduction or
return has been authorized or is in process with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business for prompt
payment that are reflected on the face of the invoice related thereto and in the
reports submitted to the Administrative Agent hereunder; and

(g) to the best of Borrowers’ knowledge, (i) there are no facts or circumstances
that are reasonably likely to impair the enforceability or collectability of
such Account; (ii) the Account Debtor had the capacity to contract when the
Account arose, continues to meet the applicable Borrower’s customary credit
standards, is Solvent, is not contemplating or subject to an Insolvency
Proceeding, and has not failed, or suspended or ceased doing business; and
(iii) there are no proceedings or actions threatened or pending against any
Account Debtor that could reasonably be expected to have a material adverse
effect on the Account Debtor’s financial condition.

Section 6.24 Eligible Inventory. As to each item of Inventory that is identified
as Eligible Inventory or Eligible Supplies Inventory in a Borrowing Base
Certificate submitted to the Administrative Agent, as of the date of such
Borrowing Base Certificate, such Inventory is (a) of good and merchantable
quality, free

 

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from known defects, and (b) not excluded as ineligible by virtue of one or more
of the excluding criteria (other than any such criteria requiring the
Administrative Agent’s discretion) set forth in the relevant definitions of
Eligible Inventory or Eligible Supplies Inventory, as the case may be.

Section 6.25 Machinery and Equipment. As to each item of Equipment that is
identified as Eligible Machinery and Equipment in a Borrowing Base Certificate
submitted to the Administrative Agent, as of the date of such Borrowing Base
Certificate, such Equipment is (a) of good and merchantable quality, free from
known defects, and (b) not excluded as ineligible by virtue of one or more of
the excluding criteria (other than any such criteria requiring the
Administrative Agent’s discretion) set forth in the relevant definition of
Eligible Machinery and Equipment.

Section 6.26 Eligible Pledged Cash. As to any cash that is identified as
Eligible Pledged Cash in a Borrowing Base Certificate submitted to the
Administrative Agent, as of the date of such Borrowing Base Certificate, such
cash is (a) denominated in Dollars, and (b) satisfies all conditions set forth
in the definition of Eligible Pledged Cash.

Section 6.27 Burdensome Contracts. No Loan Party or Subsidiary of AFI is a party
or subject to any contract, agreement or charter restriction that could
reasonably be expected to have a Material Adverse Effect. No Loan Party or
Subsidiary is party or subject to any agreement that is, or with the passage of
time is reasonably expected to become, and agreement prohibited under
Section 8.09.

ARTICLE VII.

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, AFI shall and shall cause each Subsidiary (except in
the case of the covenants set forth in Sections 7.01, 7.02, and 7.03) to:

Section 7.01 Financial Statements.

Deliver to the Administrative Agent and each Lender:

(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of AFI, a consolidated balance sheet of AFI and its
Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by (i) financial projections (prepared on a
monthly basis) and (ii) a report and opinion of KPMG LLP or another independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared
in accordance with generally accepted auditing standards and shall not be
subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit; and

(b) as soon as available, but in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of each fiscal year of AFI, a
consolidated balance sheet of AFI and its Subsidiaries as at the end of such
fiscal quarter, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal quarter and for the portion
of AFI’s fiscal year then ended, setting forth in each case in comparative form
the figures for the corresponding fiscal

 

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quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of AFI as fairly presenting the financial condition, results of
operations, shareholders’ equity and cash flows of AFI and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes.

(c) during any Reporting Trigger Period, as soon as available, but in any event
within thirty (30) days after the end of each month each fiscal year of AFI, a
consolidated balance sheet of AFI and its Subsidiaries as at the end of such
month, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such month and for the portion of AFI’s
month then ended, setting forth in each case in comparative form the figures for
the previous month, all in reasonable detail and certified by a Responsible
Officer of AFI as fairly presenting the financial condition, results of
operations, shareholders’ equity and cash flows of AFI and its Subsidiaries in
accordance with GAAP, subject only to normal year-end audit adjustments and the
absence of footnotes

As to any information contained in materials furnished pursuant to
Section 7.02(d), the Borrowers shall not be separately required to furnish such
information under clause (a), (b) and (c) above, but the foregoing shall not be
in derogation of the obligation of the Borrowers to furnish the information and
materials described in clauses (a), (b) and (c) above at the times specified
therein.

Section 7.02 Certificates; Other Information.

Deliver to the Administrative Agent and each Lender, in form and detail
reasonably satisfactory to the Administrative Agent:

(a) concurrently with the delivery of the financial statements referred to in
Sections 7.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of AFI (which delivery may, unless the Administrative Agent,
or a Lender requests executed originals, be by electronic communication,
including fax or email and shall be deemed to be an original authentic
counterpart thereof for all purposes);

(b) beginning with the fiscal year ending December 31, 2016, an annual business
plan and budget of AFI and its Subsidiaries containing, among other things, pro
forma financial statements for the fiscal year, when and as available, but in
any event within ninety (90) days after the beginning of the fiscal year;

(c) promptly after any request by the Administrative Agent or any Lender through
the Administrative Agent, copies of any detailed audit reports, management
letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of AFI by independent accountants in
connection with the accounts or books of AFI or any Subsidiary, or any audit of
any of them;

(d) promptly after the same are available, (i) copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of AFI, and copies of all annual, regular, periodic and special
reports and registration statements which AFI may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 or
to a holder of any Indebtedness owed by AFI or any Subsidiary in its capacity as
such a holder and not otherwise required to be delivered to the Administrative
Agent pursuant hereto and (ii) upon the request of the Administrative Agent, all
reports and written information to and from the United States Environmental
Protection Agency, or any state or local agency responsible for environmental
matters, the United States Occupational Health and Safety Administration, or any
state or local agency responsible for health and safety matters, or any
successor agencies or authorities concerning environmental, health or safety
matters;

 

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(e) promptly after any reasonable request of the Administrative Agent, a listing
of (i) all applications, if any, for material Copyrights, Patents or Trademarks
(each such term as defined in the Security Agreement) made by any Loan Party and
(ii) all issuances of registrations or letters on existing applications for
material Copyrights, Patents and Trademarks (each such term as defined in the
Security Agreement) received by any Loan Party, in each case, after the Closing
Date or any such later request by the Administrative Agent; and

(f) promptly, such additional information regarding the business, financial or
corporate affairs of AFI or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.

Documents required to be delivered pursuant to Section 7.01(a) or (b) or
Section 7.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which AFI
posts such documents, or provides a link thereto on AFI’s website on the
Internet at the website address listed on Schedule 11.02; (ii) on which such
documents are posted on AFI’s behalf on an Internet or intranet website, if any,
to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent) or (iii) on which such documents are filed with the SEC on EDGAR. The
Administrative Agent shall have no obligation to request the delivery of or to
maintain paper copies of the documents referred to above.

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting Borrower Materials on SyndTrak or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to AFI or its securities) (each, a “Public
Lender”). The Borrowers hereby agree that (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative
Agent, the Arrangers and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to AFI or its
securities for purposes of United States federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 11.07); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated as “Public Investor;” and (z) the
Administrative Agent and the Arrangers shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not marked as “Public Investor.” Notwithstanding the
foregoing, the Borrowers shall not be under any obligation to mark any Borrower
Materials “PUBLIC.”

Section 7.03 Notices.

(a) Promptly (and in any event, within two Business Days) notify the
Administrative Agent and each Lender of the occurrence of any Default.

(b) Promptly notify the Administrative Agent and each Lender of any matter that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

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(c) Promptly notify the Administrative Agent and each Lender of the occurrence
of any ERISA Event.

(d) Promptly notify the Administrative Agent and each Lender of any material
change in accounting policies or financial reporting practices by AFI or any
Subsidiary.

Each notice pursuant to this Section 7.03 shall be accompanied by a statement of
a Responsible Officer of AFI setting forth details of the occurrence referred to
therein and stating what action AFI has taken and proposes to take with respect
thereto. Each notice pursuant to Section 7.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.

Section 7.04 Payment of Obligations.

Pay and discharge as the same shall become due and payable, all its obligations
and liabilities, including (a) all federal and material state and local tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by AFI or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness; and (d) all applicable duties, freight, charges and like fees and
charges of the United States Customs and Border Protection, customs brokers,
shippers, NVOCCS, freight forwarders, carriers and warehousemen, except in each
case in clauses (b) through (d) to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

Section 7.05 Preservation of Existence, Etc.

(a) Preserve, renew and maintain in full force and effect its legal existence
under the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 8.04 or 8.05.

(b) Preserve, renew and maintain in full force and effect its good standing
under the Laws of the jurisdiction of its organization, except to the extent the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

(c) Take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(d) Preserve or renew all of its material registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

Section 7.06 Maintenance of Properties.

(a) Maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted.

(b) Make all necessary repairs thereto and renewals and replacements thereof,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

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(c) Use the standard of care typical in the industry in the operation and
maintenance of its facilities.

Section 7.07 Maintenance of Insurance.

In addition to insurance required hereunder with respect to Collateral, maintain
in full force and effect insurance with respect to the Property and business of
the Loan Parties and their Subsidiaries (including worker’s compensation
insurance, liability insurance, casualty insurance and business interruption
insurance) with financially sound and reputable insurance companies (with a
Best’s Financial Strength Rating of at least A-VII, unless otherwise approved by
the Administrative Agent or which may be Insurance Subsidiaries), in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where AFI or the applicable Subsidiary operate. Business
interruption insurance shall be subject to an insurance assignment satisfactory
to the Administrative Agent. The Collateral Agent shall be named as lender’s
loss payee, with respect to property insurance, and as additional insured, with
respect to general liability insurance.

Section 7.08 Compliance with Laws.

(a) Comply with the requirements of all Laws and orders, writs, injunctions and
decrees applicable to it and to its business or property, except in such
instances in which (i) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted; or (ii) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect; and

(b) Conduct its business in compliance with the United States Foreign Corrupt
Practices Act of 1977, the UK Bribery Act of 2010, and other similar
anti-corruption legislation in other jurisdictions, and maintain policies and
procedures designed to promote and achieve compliance with such laws.

Section 7.09 Books and Records.

(a) Maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of AFI or
such Subsidiary, as the case may be.

(b) Maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over AFI or such Subsidiary, as the case may be.

Section 7.10 Appraisals.

(a) The Borrowers will permit the Administrative Agent (including, without
limitation, the Administrative Agent’s employees, agents and designated
representatives) and, if reasonably requested by any Lender, each such Lender
(at each such Lender’s expense and only in connection with an examination or
appraisal by the Administrative Agent) to conduct, and will reimburse the
Administrative Agent for all charges, costs and expenses of the Administrative
Agent in connection with (i) examinations of any Loan Party’s books and records
or any other financial or Collateral matters as Agent deems appropriate; and
(ii) appraisals of Inventory, provided, that the Borrowers shall not be
obligated to pay the charges, costs and expenses of the Administrative Agent in
connection with more than one examination and one appraisal during any calendar
year; provided, however, that (x) if an additional examination or appraisal is
initiated at any time that Excess Availability under the U.S Revolver Facility
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greater of 20.0% of the Line Cap and $40,000,000 for any period of five days
during any twelve (12) month period, all charges, costs and expenses relating
thereto shall be reimbursed by the Borrowers without regard to such limits up to
one time per Loan Year or (y) additional examinations or appraisals may be
initiated at any time during a Default or Event of Default and all charges,
costs and expenses relating thereto shall be reimbursed by Borrowers without
regard to such limits.

(b) In addition, so long as no Default or Event of Default has occurred and is
continuing and the Loan Parties would be in compliance with Section 8.11 on a
Pro Forma Basis, the Borrower may request that the Administrative Agent
(including, without limitation, the Administrative Agent’s employees, agents and
designated representatives) conduct, and will reimburse the Administrative Agent
for all charges, costs and expenses of the Administrative Agent in connection
with, an updated appraisal of Equipment constituting Eligible Machinery and
Equipment; provided, that only one such request may be made prior to the
Maturity Date. If such Equipment appraisal, together with customary due
diligence delivered by the Borrowers to the Administrative Agent in connection
with such appraisal, shall be acceptable to the Administrative Agent in its
Reasonable Discretion, then the M&E Sublimit may be updated to reflect the
results of such appraisal and thereafter shall amortize quarterly on a
seven-year straight-line basis. Borrowers agree to pay Agent’s then standard
charges for examination activities, including charges for the Administrative
Agent’s internal examination and appraisal groups, as well as the charges of any
third party used for such purposes.

(c) No Borrowing Base calculation shall include Collateral acquired in a
Permitted Acquisition or otherwise outside the Ordinary Course of Business until
completion of applicable field examinations and appraisals (which shall not be
included in the limits provided above) satisfactory to the Administrative Agent.

Section 7.11 Use of Proceeds.

Use the proceeds of the Credit Extensions (a) to pay the Closing Date Dividend,
(b) to pay any other costs and expenses relating to the Spin-Off and (c) to
finance working capital, capital expenditures, Permitted Acquisitions and other
lawful corporate purposes; provided that in no event shall the proceeds of the
Credit Extensions be used in contravention of any Law or of any Loan Document.

Section 7.12 Additional Subsidiaries.

(a) Material Domestic Subsidiaries. Cause each wholly-owned Material Domestic
Subsidiary to become a Guarantor hereunder promptly, but in any event within
forty-five (45) days of the Subsidiary becoming a Material Domestic Subsidiary,
by execution and delivery of a Guaranty Joinder Agreement or such other
documents as the Administrative Agent may deem appropriate for such purpose,
together with certified copies of resolutions and Organization Documents and
favorable opinions of counsel (including, among other things, due authorization,
execution, delivery, and enforceability of the Guaranty Joinder Agreement and
related documents), all in form, scope and substance reasonably satisfactory to
the Administrative Agent.

(b) Other Domestic Subsidiaries. In addition, cause each Domestic Subsidiary
that gives a Guarantee in respect of any Public Notes to become a Guarantor
hereunder promptly, but within thirty (30) days of the Subsidiary giving such a
Guarantee, by execution and delivery of a Guaranty Joinder Agreement or such
other documents as the Administrative Agent may deem appropriate for such
purpose, together with certified copies of resolutions and Organization
Documents and favorable opinions of counsel (including, among other things, due
authorization, execution, delivery, and enforceability of the Guaranty Joinder
Agreement and related documents), all in form, scope and substance reasonably
satisfactory to the Administrative Agent.

 

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Section 7.13 ERISA Compliance.

Cause, and cause each of its ERISA Affiliates to cause, each Plan that is
qualified under Section 401(a) of the Internal Revenue Code to maintain such
qualification, and make all required contributions to any Plan subject to
Section 412 of the Internal Revenue Code, except where the failure to do so
would not result in a Material Adverse Effect.

Section 7.14 Pledged Assets.

(a) Capital Stock of Material Domestic Subsidiaries. Pledge all of the issued
and outstanding Capital Stock owned by it of each Loan Party’s Material Domestic
Subsidiaries promptly, but in any event within forty-five (45) days of the
formation or acquisition thereof, in each case pursuant to a Pledge Agreement or
Collateral Joinder Agreement reasonably acceptable to the Administrative Agent,
together with such filings and deliveries necessary or appropriate to perfect
the security interests therein, and opinions of counsel relating thereto, all in
form, scope and substance reasonably satisfactory to the Administrative Agent.

(b) Capital Stock of Material First-Tier Foreign Subsidiaries. Subject to
Section 7.15(b), pledge all of the issued and outstanding Capital Stock owned by
it of each Excluded Subsidiary that is a Material First-Tier Foreign Subsidiary
but in no event more than 65% of the issued and outstanding Capital Stock of
such Material First-Tier Foreign Subsidiaries, promptly, but in any event within
ninety (90) days of such Subsidiary becoming a Material First-Tier Foreign
Subsidiary, pursuant to a Pledge Agreement or Collateral Joinder Agreement
reasonably acceptable to the Administrative Agent, together with such filings
and deliveries necessary or appropriate to perfect the security interests
therein, and opinions of counsel (including, among other things, opinions
regarding execution, notarization and recordation of local pledge agreements,
parallel debt agreements and such other acts necessary or appropriate to give
effect to the pledge under local law) relating thereto, all in form, scope and
substance reasonably satisfactory to the Administrative Agent; provided that in
each such case the Administrative Agent will, in consultation with the
Borrowers, do an analysis of the relative benefits associated with the
prospective pledge and where, in its reasonable discretion, the Administrative
Agent shall make a determination, taking into account local custom and practice,
that the costs, circumstances and requirements under local law associated with
the pledge out-weigh the relative benefits of the pledge, then in any such case
local pledge agreements (and related local law requirements) will not be
required.

(c) Domestic Personal Property. Grant a security interest in all of each Loan
Party’s personal property (other than Excluded Property). In connection with any
grant of security interest under this subsection, the Loan Parties will deliver
to the Administrative Agent promptly, but in any event within thirty (30) days
(with extensions as deemed necessary by the Administrative Agent) (i) a security
agreement or Collateral Joinder Agreement in form and substance reasonably
satisfactory to the Administrative Agent, executed in multiple counterparts,
(ii) notices of grant of security interest in respect of material intellectual
property with the United States Copyright Office or the United States Patent and
Trademark Office reasonably satisfactory to the Administrative Agent, executed
in multiple counterparts, (iii) such opinions of counsel as the Administrative
Agent may deem necessary or appropriate, in form and substance reasonably
satisfactory to the Administrative Agent, (iv) evidence of property insurance
(consistent with the requirements for insurance hereunder) showing the
Collateral Agent as lender’s loss payee (if insurance is provided by a
commercial insurer), and (v) such other filings and deliveries as may be
necessary or appropriate as determined by the Administrative Agent in its
reasonable discretion.

(d) [Reserved].

 

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(e) Scope of Obligations. Subject to Section 9.03, the security interests
granted under this Section 7.14 will ratably secure the Obligations (including
obligations under Swap Contracts (other than Excluded Swap Obligations) between
AFI or any of its Subsidiaries and a Lender or its affiliates to the extent
permitted hereunder and obligations under Treasury Management Agreements between
AFI or any of its Subsidiaries and a Lender or its affiliates).

Section 7.15 Further Assurances. The Borrowers will provide or cause to be
provided, the following:

(a) [Reserved].

(b) Material First-Tier Foreign Subsidiaries. Within ninety (90) days of the
Closing Date (with extensions as deemed necessary by the Collateral Agent), AFI
will pledge, or cause to be pledged, the Capital Stock of those of its Material
First-Tier Foreign Subsidiaries that have not already been pledged by the
Closing Date in accordance with the provisions of Section 7.14(b).

Section 7.16 Collateral Administration.

(a) Borrowing Base Certificates. As soon as available, but in any event within
twenty (20) days after the end of each calendar month, AFI shall deliver to the
Administrative Agent Borrowing Base Certificates covering each Borrowing Base
and supporting information in connection therewith, provided that (A) AFI will
be required to furnish Borrowing Base Certificates and supporting information in
connection therewith within three (3) Business Days after the end of each
calendar week as of the end of such calendar week during which a Reporting
Trigger Period is continuing, (B) within three (3) Business Days after
consummation of any sale or disposition of Accounts or Inventory included in the
Borrowing Base not in the Ordinary Course of Business resulting in net proceeds
exceeding $5,000,000 (individually or in the aggregate for all such sales and
dispositions since the date of the most recent Borrowing Base Certificates), AFI
shall deliver an updated Borrowing Base Certificate giving effect to any such
sale or disposition, (C) AFI shall not be required to deliver to the
Administrative Agent the Borrowing Base Certificates for the calendar month
ending March 31, 2016 until May 15, 2016 and (D) AFI shall not be not be
required to deliver to the Administrative Agent the Borrowing Base Certificates
for the calendar months ending April 30, 2016, May 31, 2016, June 30,
2016, July 31, 2016 and August 31, 2016 until thirty (30) days after the end of
each such calendar month. All calculations of Availability in any Borrowing Base
Certificate shall originally be made by the Borrowers and certified by a Senior
Officer of the applicable Borrower, provided that the Administrative Agent may
from time to time review and adjust any such calculation (after giving prior
notice to the Borrowers of such adjustment) (1) to reflect its reasonable
estimate of declines in value of any Collateral, due to collections received in
the Dominion Account, any disposition of Accounts or Inventory (which shall
result in a reduction in the Borrowing Base equal to the net book value thereof
as of the date of such disposition) or Equipment (which shall result in a
reduction of the Borrowing Base by the net orderly liquidation value of such
Equipment as of the date of such disposition) or otherwise; (2) to adjust
advance rates and to impose additional reserves in its Permitted Discretion to
reflect changes in dilution, quality, mix and other factors affecting
Collateral; and (3) to the extent the calculation is not made in accordance with
this Agreement or does not accurately reflect the Reserves.

(b) Administration of Accounts.

(i) Records and Schedules of Accounts. Each Borrower shall keep accurate and
complete records of its Accounts, including all payments and collections
thereon, and shall submit to the Administrative Agent sales, collection,
reconciliation and other reports in form reasonably satisfactory to the
Administrative Agent, on such periodic basis as the Administrative Agent may
request. Each Borrower shall provide to the Administrative Agent, within thirty
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days after the end of each month, a detailed aged trial balance of all Accounts
as of the end of such month, specifying each Account’s Account Debtor name and
address, amount, invoice date and due date and, upon request by the
Administrative Agent, showing any discount, allowance, credit, authorized return
or dispute, and including such proof of delivery, copies of invoices and invoice
registers, copies of related documents, repayment histories, status reports and
other information as the Administrative Agent may reasonably request. If
Accounts of a Borrower in an aggregate face amount of $10,000,000 or more
included in the then existing Borrowing Base cease to be Eligible Accounts, then
such Borrower or AFI shall notify the Administrative Agent of such occurrence
promptly (and in any event within one Business Day) after such Borrower or AFI
has knowledge thereof.

(ii) Taxes. If an Account of any Borrower includes a charge for any Taxes, the
Administrative Agent is authorized, in its discretion, if such Borrower has not
paid such Taxes when due, to pay the amount thereof to the proper Governmental
Authority for the account of such Borrower and to charge the Loan Parties
therefor; provided, however, that neither the Administrative Agent nor any other
Secured Party shall be liable for any Taxes that may be due from the Loan
Parties or with respect to any Collateral.

(iii) Account Verification. During a Default, Event of Default or Cash Dominion
Event, the Administrative Agent shall have the right at any time, in the name of
the Administrative Agent, any designee of the Administrative Agent or any
Borrower, to verify the validity, amount or any other matter relating to any
Accounts of the Borrowers by mail, telephone or otherwise. Loan Parties shall
cooperate fully with the Administrative Agent in an effort to facilitate and
promptly conclude any such verification process.

(iv) Maintenance of Dominion Accounts. Within ninety (90) days (or such longer
period as the Administrative Agent may agree in its sole discretion) following
the Closing Date, the Loan Parties shall establish and maintain Dominion
Accounts pursuant to account control agreements, lockbox or other arrangements
with Bank of America or one or more of the other Lenders; provided that
lockboxes will not be required in Canada or any other jurisdiction where
lockboxes are not available. The Loan Parties shall obtain a Deposit Account
Control Agreement from each lockbox servicer (if applicable) and Dominion
Account bank, establishing the Administrative Agent’s control over and Lien in
the lockbox or Dominion Account, requiring immediate deposit of all remittances
received in the lockbox (or otherwise) to a Dominion Account and waiving offset
rights of such servicer or bank, except for customary administrative charges and
returned items. If a Dominion Account is not maintained with Bank of America,
the Administrative Agent may, during the existence of any Cash Dominion Event,
require immediate transfer of all cash receipts in such account to a Dominion
Account maintained with Bank of America. The Administrative Agent and Lenders
assume no responsibility to Loan Parties for any lockbox arrangement or Dominion
Account, including any claim of accord and satisfaction or release with respect
to any Payment Items accepted by any bank.

(v) Proceeds of Collateral. Loan Parties shall request in writing and otherwise
take all necessary steps to ensure that all payments on Accounts or otherwise
relating to Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account). If any Loan Party receives cash or Payment
Items with respect to any Collateral, it shall hold same in trust for the
Administrative Agent and the Security Trustees and within one Business Day
deposit same into a Dominion Account.

 

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(c) Administration of Inventory.

(i) Records and Reports of Inventory. Each Borrower shall keep accurate and
complete records of its Inventory, including costs and monthly withdrawals and
additions, and shall submit to the Administrative Agent inventory and
reconciliation reports in form reasonably satisfactory to the Administrative
Agent, on such periodic basis as the Administrative Agent may reasonably
request. Each Borrower shall conduct periodic cycle counts consistent with
historical practices, and shall provide to the Administrative Agent a report
based on each such count promptly upon completion thereof, together with such
supporting information as the Administrative Agent may reasonably request. The
Administrative Agent may participate in and observe each physical count at its
own expense or as part of an inspection, audit or field exam under Section 7.10.

(ii) Returns of Inventory. No Borrower shall return any Inventory to a supplier,
vendor or other Person, whether for cash, credit or otherwise, unless (A) such
return is in the Ordinary Course of Business; (B) no Default, Event of Default
or Overadvance exists or would result therefrom; (C) the Administrative Agent is
promptly notified if the aggregate value of all Inventory returned in any month
exceeds $15,000,000 in the aggregate for all Borrowers; and (D) during any Cash
Dominion Event, any payment received by a Borrower for a return is promptly
remitted to the Administrative Agent for application to the Obligations.

(iii) Acquisition, Sale and Maintenance. No Borrower shall acquire or accept any
Inventory on consignment or approval except in the Ordinary Course of Business
and disclosed to the Administrative Agent in writing (with such further
information as the Administrative Agent may reasonably request), and shall take
all steps to assure that all Inventory is produced in accordance with the FLSA
and otherwise in all material respects with Applicable Law. No Borrower shall
sell any Inventory on consignment or approval or any other basis under which the
customer may return or require a Borrower to repurchase such Inventory except in
the Ordinary Course of Business. Borrowers shall use, store and maintain all
Inventory with reasonable care, in accordance with applicable standards of any
insurance and in conformity in all material respects with all Applicable Law,
and shall make current rent payments (within applicable grace periods provided
for in leases) at all locations where any material Collateral is located.

(d) Administration of Deposit Accounts. Schedule 7.16(d) sets forth all Deposit
Accounts maintained by the Loan Parties as of the date hereof, including all
Dominion Accounts. Each Loan Party shall take all commercially reasonable
actions necessary to establish the Administrative Agent’s control of each
Deposit Account (other than Excluded Accounts) through a Deposit Account Control
Agreement. A Loan Party shall be the sole account holder of each Deposit Account
and shall not allow any other Person (other than the Administrative Agent) to
have control over a Deposit Account or any Property deposited therein. AFI shall
promptly notify the Administrative Agent of any opening or closing of a Deposit
Account and will amend Schedule 7.16(d) to reflect the same.

(e) Administration of Equipment.

(i) Records and Schedules of Equipment. Each Borrower shall keep accurate and
complete records of its Equipment, including kind, quality, quantity, cost,
acquisitions and dispositions thereof, and shall submit to the Administrative
Agent, on such periodic basis as Agent may request, a current schedule thereof,
in form satisfactory to the Administrative Agent. Promptly upon request,
Borrowers shall deliver to the Administrative Agent evidence of their ownership
or interests in any Equipment.

 

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(ii) Dispositions of Equipment. No Borrower shall sell, lease or otherwise
Dispose of any Equipment, without the prior written consent of Agent, other than
a Disposition permitted under Section 8.05.

(iii) Condition of Equipment. The Equipment is in good operating condition and
repair, and all necessary replacements and repairs have been made so that the
value and operating efficiency of the Equipment is preserved at all times,
reasonable wear and tear excepted. Each Borrower shall ensure that the Equipment
is mechanically and structurally sound, and capable of performing the functions
for which it was designed, in accordance with manufacturer specifications. No
Borrower shall permit any Equipment included in the Borrowing Base to become
affixed to real Property unless any landlord or mortgagee delivers a Lien
Waiver.

(f) General Provisions.

(i) Location of Collateral. All tangible items of Collateral, other than
Inventory in transit, shall at all times be kept by the Loan Parties at the Loan
Parties’ business locations set forth in Schedule 7.16(f), except that the Loan
Parties may (A) make sales or other Dispositions of Collateral in accordance
with Section 8.05; (B) move Collateral to another location in the United States.
AFI shall promptly notify the Administrative Agent of any new locations of
Collateral and (1) upon 15 Business Days’ prior written notice to the
Administrative Agent and (2) so long as all actions shall have been taken prior
to such move to ensure that the Administrative Agent has a perfected first
priority security interest in and Lien on such Collateral, will amend
Schedule 7.16(f) to reflect the same.

(ii) Certain Organizational Changes. No Loan Party may change its name or other
organizational number, form or jurisdiction of organization without at least 15
days prior written notice to the Administrative Agent (or such lesser period as
Agent may agree) and taking such actions (including entering into supplemental
documentation) as the Administrative Agent may reasonably request to maintain
the perfection and priority of its security interest in the Collateral.

(iii) Insurance of Collateral; Condemnation Proceeds.

(A) Each Loan Party shall maintain insurance with respect to the Collateral,
covering casualty, hazard, theft, malicious mischief, flood and other risks, in
amounts, with endorsements and with insurers (with a Best’s Financial Strength
Rating of at least A-VII, unless otherwise approved by the Administrative Agent)
reasonably satisfactory to the Administrative Agent. From time to time upon
request, Loan Parties shall deliver to the Administrative Agent the originals or
certified copies of their insurance policies. Unless the Administrative Agent
shall agree otherwise (giving due consideration to what is commercially
available in the insurance market for the applicable jurisdiction), each policy
shall include satisfactory endorsements (a) showing the Administrative Agent as
loss payee, as appropriate; (b) requiring 10 days prior written notice to the
Administrative Agent (or such shorter period as agreed to by the Administrative
Agent) in the event of cancellation of the policy for any reason whatsoever; and
(c) specifying that the interest of the Administrative Agent shall not be
impaired or invalidated by any act or neglect of any Loan Party or the owner of
the Property, nor by the occupation of the premises for purposes more hazardous
than are permitted by the policy. If any Loan Party fails to provide and pay for
any insurance, the Administrative Agent may, at its option, but shall not be
required to, procure the insurance and charge such Loan Party therefor. Each
Loan Party agrees to deliver to the Administrative Agent, promptly upon the
request of the Administrative Agent, copies of all reports made to insurance
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Event of Default exists, Loan Parties may settle, adjust or compromise any
insurance claim. If an Event of Default exists, only the Administrative Agent
shall be authorized to settle, adjust and compromise such claims.

(B) Any proceeds of insurance with respect to Collateral and any awards arising
from condemnation of any Collateral shall be paid to the Administrative Agent;
provided that if a Cash Dominion Event is not then in effect, the Administrative
Agent shall remit such proceeds as directed by the applicable Loan Party. During
a Cash Dominion Event, any such proceeds or awards that relate to Inventory
shall be applied to payment of the Revolving Loans, and then to any other
Obligations outstanding.

(iv) Protection of Collateral. All expenses of protecting, storing, warehousing,
insuring, handling, maintaining and shipping any Collateral, all Taxes payable
with respect to any Collateral (including any sale thereof), and all other
payments required to be made by the Administrative Agent to any Person to
realize upon any Collateral, shall be borne and paid by Loan Parties. The
Administrative Agent shall not be liable or responsible in any way for the
safekeeping of any Collateral, for any loss or damage thereto (except for
reasonable care in its custody while Collateral is in the Administrative Agent’s
actual possession), for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Loan Parties’ sole risk.

(v) Defense of Title to Collateral. Each Loan Party shall at all times
(vi) defend its title to Collateral and the Administrative Agent’s Liens therein
against all Persons, claims and demands whatsoever, except Permitted Liens.

(vi) Lien Waivers. Each Loan Party will, upon request, provide Agent with copies
of all existing agreements and promptly after execution thereof provide Agent
with copies of all future agreements, between a Loan Party and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral may be kept or that otherwise may possess or handle any
Collateral. Each Loan Party shall use commercially reasonable efforts to obtain
a Lien Waiver with respect to Inventory which is located in any location leased
by such Loan Party, located in any third-party warehouse or otherwise in the
possession of a bailee or other third-party (including storage yards and mills).

(g) Power of Attorney. Each of the Loan Parties hereby irrevocably constitutes
and appoints the Administrative Agent (and all Persons designated by the
Administrative Agent) as such Loan Party’s true and lawful attorney (and
agent-in-fact), coupled with an interest, for the purposes provided in this
Section. The Agent, or the Administrative Agent’s designee, may, without notice
and in either its or a Loan Party’s name, but at the cost and expense of such
Loan Parties:

(i) Endorse a Loan Party’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into the Administrative
Agent’s possession or control; and

(ii) During the continuance of an Event of Default, (i) notify any Account
Debtors of a Loan Party of the assignment of their Accounts, demand and enforce
payment of such Accounts by legal proceedings or otherwise, and generally
exercise any rights and remedies with respect to such Accounts; (ii) settle,
adjust, modify, compromise, discharge or release any Accounts or other
Collateral of the Loan Parties, or any legal proceedings brought to collect
Accounts or Collateral of the Loan Parties; (iii) sell or assign any Accounts
and other Collateral of the Loan Parties upon such terms, for such amounts and
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collect, liquidate and receive balances in Deposit Accounts or Securities
Accounts of the Loan Parties, and take control, in any manner, of proceeds of
Collateral of the Loan Parties; (v) prepare, file and sign a Loan Party’s name
to a proof of claim or other document in a bankruptcy of an Account Debtor, or
to any notice, assignment or satisfaction of Lien or similar document;
(vi) receive, open and dispose of mail addressed to a Loan Party, and notify
postal authorities to deliver any such mail to an address designated by the
Administrative Agent; (vii) endorse any Chattel Paper, Document, Instrument,
bill of lading, or other document or agreement relating to any Accounts,
Inventory or other Collateral; (viii) use a Loan Party’s stationery and sign its
name to verifications of Accounts and notices to Account Debtors of the Loan
Parties; (ix) use information contained in any data processing, electronic or
information systems relating to Collateral; (x) make and adjust claims under
insurance policies of the Loan Parties; (xi) take any action as may be necessary
or appropriate to obtain payment under any letter of credit, banker’s acceptance
or other instrument for which a Loan Party is a beneficiary; and (xii) take all
other actions as the Administrative Agent reasonably deems appropriate to
fulfill any Loan Party’s obligations under the Loan Documents.

Section 7.17 Post-Closing Matters. The Closing Date Dividend will occur on the
Closing Date (as soon as practicable after the making of the initial Loans). The
Spin-Off will occur on April 1, 2016. In addition, each of the Loan Parties
will, and will cause each of their respective Subsidiaries to, complete each of
the actions applicable to it that is described in Schedule 7.17 as soon as
commercially reasonable, but in any event no later than the date set forth in
Schedule 7.17 with respect to such action, or such later date as the
Administrative Agent may agree.

ARTICLE VIII.

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, AFI shall not, nor shall it permit any Subsidiary to,
directly or indirectly:

Section 8.01 Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the
following:

(a) Liens securing the Obligations hereunder, including cash collateral and
other Adequate Assurance pledged to the L/C Issuer and the Swing Line Lender to
secure obligations of Defaulting Lenders as provided in Section 2.15;

(b) Liens existing on the date hereof and listed on Schedule 8.01 and any
renewals or extensions thereof, provided that the property covered thereby is
not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 8.03(b);

(c) Liens for taxes, assessments or governmental charges or levies that are not
yet due for a period of more than thirty (30) days and are being contested in
good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
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(d) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen, repairmen, construction contractors and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business,

(e) (i) pledges or deposits in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other social security
legislation, and (ii) pledges and deposits of cash in the ordinary course of
business securing liability for reimbursement or indemnification obligations of
(including obligations in respect of letters of credit or bank guarantees for
the benefit of) insurance carriers providing property, casualty or liability
insurance to AFI or any Subsidiary;

(f) deposits to secure the performance of bids, trade contracts, governmental
contracts and leases (other than Indebtedness for borrowed money), statutory
obligations, surety, stay, customs and appeal bonds, performance bonds and other
obligations of a like nature (including those to secure health, safety and
environmental obligations) incurred in the ordinary course of business;

(g) easements, rights-of-way, restrictions (including zoning restrictions),
encroachments, protrusions and other similar encumbrances and minor title
defects affecting real property that, in the aggregate, do not in any case
materially interfere with the ordinary conduct of the business of the applicable
Person, taken as a whole;

(h) Liens securing judgments for the payment of money (or appeal or other surety
bonds relating to such judgments) that do not result in an Event of Default
under Section 9.01(h);

(i) Liens (other than Liens on than Accounts and Inventory) securing
Indebtedness permitted under Section 8.03(e); provided that (i) such Liens do
not at any time encumber any Property other than the Property financed by such
Indebtedness, (ii) the Indebtedness secured thereby does not exceed the cost or
fair market value, whichever is lower, of the Property subject to such Lien and
(iii) such Liens attach to such Property concurrently with or within two hundred
seventy (270) days after the acquisition, construction, replacement, repair or
improvement thereof;

(j) leases, licenses, subleases or sublicenses granted to others not interfering
in any material respect with the business of AFI or any of its Subsidiaries,
taken as a whole;

(k) any interest or title of a lessor, sublessor, licensor or sublicensor or
secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under
leases or licenses entered into by AFI or any Subsidiary in the ordinary course
of business;

(l) [Reserved];

(m) normal and customary rights of setoff upon deposits of cash in favor of
banks or other depository institutions;

(n) Liens (i) of a collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection, (ii) attaching to
commodity trading accounts or other commodities brokerage accounts incurred in
the ordinary course of business and (iii) in favor of a banking or other
financial institution arising as a matter of law encumbering deposits or other
funds maintained with a financial institution (including the right of setoff)
and which are within the general parameters customary in the banking industry;

(o) Liens (i) of sellers of goods to AFI and any of its Subsidiaries arising
under Article 2 of the Uniform Commercial Code or similar provisions of
applicable Law in the ordinary course of business,

 

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covering only the goods sold and securing only the unpaid purchase price for
such goods and related expenses and (ii) on specific items of goods (but not
Inventory included in the Borrowing Base) and the proceeds thereof securing such
Person’s obligations in respect of documentary letters of credit or banker’s
acceptances issued or created for the account of such Person to facilitate the
purchase, shipment or storage of such goods in the ordinary course of business;

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

(q) Liens on property or assets acquired in connection with a Permitted
Acquisition, provided, that (i) the indebtedness secured by such Liens is
permitted under Section 8.03, and (ii) the Liens are not incurred in connection
with, or in contemplation or anticipation of, the acquisition and do not attach
or extend to any other property or assets;

(r) [Reserved];

(s) Liens securing Indebtedness or other obligations of (i) any Subsidiary in
favor of any Loan Party and (ii) any Subsidiary that is not a Loan Party in
favor of any other Subsidiary; provided, that any such Lien shall be expressly
junior in priority to the Liens granted to the secure the Obligations and all
documentation therefor shall be in form and substance reasonably satisfactory to
the Administrative Agent and the Collateral Agent;

(t) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale of goods entered into by AFI or any Subsidiary in
the ordinary course of business;

(u) reasonable customary initial deposits and margin deposits and similar Liens
attaching to commodity trading accounts or other brokerage accounts maintained
in the ordinary course of business and not for speculative purposes;

(v) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with banks or other financial institutions
not given in connection with the issuance of Indebtedness, (ii) relating to
pooled deposit or sweep accounts of AFI or its Subsidiaries to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of AFI and the Subsidiaries or (iii) relating to purchase orders and
other agreements entered into with customers of AFI or any of the Subsidiaries
in the ordinary course of business;

(w) Liens solely on any cash earnest money deposits made by AFI or any of the
Subsidiaries in connection with any letter of intent or purchase agreement
permitted hereunder;

(x) ground leases or subleases, licenses or sublicenses in respect of real
property on which facilities owned or leased by AFI or any of its Subsidiaries
are located;

(y) Liens arising from precautionary Uniform Commercial Code financing
statements or similar filings (or equivalent filings, registrations or
agreements in foreign jurisdictions);

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

(aa) any zoning or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property that
does not materially interfere with the ordinary conduct of the business of AFI
and the Subsidiaries, taken as a whole;

 

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(bb) [Reserved];

(cc) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 8.02 to be applied
against the purchase price for such Investment and (ii) consisting of an
agreement to Dispose of any property in a Disposition permitted under
Section 8.05, in each case, solely to the extent such Investment or Disposition,
as the case may be, would have been permitted on the date of the creation of
such Lien;

(dd) Liens arising in the ordinary course of business to secure accounts payable
or similar trade obligations of AFI or any Subsidiary not constituting
Indebtedness;

(ee) Liens deemed to exist by reason of (i) any encumbrance or restriction
(including put and call arrangements) with respect to the Capital Stock and
Capital Stock Equivalents of any joint venture or similar agreement pursuant to
any joint venture or similar arrangement or (ii) any encumbrance or restriction
imposed under any contract for the sale by AFI or any Subsidiary of the Capital
Stock and Capital Stock Equivalents of any Subsidiary, or any business unit or
division of AFI or any Subsidiary permitted under this Agreement; provided that
in each case such Liens shall extend only to the relevant Capital Stock and
Capital Stock Equivalents;

(ff) the modification, replacement, renewal or extension of any Lien permitted
of this Section 8.01; provided that (i) the Lien does not extend to any
additional property other than (A) after-acquired property that is affixed or
incorporated into the property covered by such Lien or financed by Indebtedness
permitted under Section 8.03(e), and (B) proceeds and products thereof, and
(ii) the renewal, extension or refinancing of the obligations secured or
benefited by such Liens is permitted by Section 8.03;

(gg) liens on property of Foreign Subsidiaries of AFI securing Indebtedness of
Foreign Subsidiaries permitted under Sections 8.03(s) and (t); and

(hh) other Liens not described above, provided that such Liens do not secure
obligations in excess of an amount equal to the greater of (i) one percent
(1.0%) of Consolidated Total Assets or (ii) $10,000,000, at any one time
outstanding.

Notwithstanding anything in this Section 8.01 to the contrary, in no event shall
Accounts or Inventory be pledged as collateral to secure any Indebtedness other
than the Obligations hereunder.

Section 8.02 Investments.

Make any Investments, except:

(a) Investments held by the Borrowers or such Subsidiary in the form of cash or
Cash Equivalents;

(b) Investments existing as of the Closing Date and set forth in Schedule 8.02;

(c) Investments (i) in any Person that is a Loan Party, (ii) by AFI and its
wholly-owned Domestic Subsidiaries in and to AFI and its wholly-owned Domestic
Subsidiaries (iii) by any Domestic Subsidiary that is not a Guarantor or any
Foreign Subsidiary in AFI or any Subsidiary, foreign or domestic, and (iv) by
any Loan Party in and to any Domestic Subsidiary that is not a Guarantor, any
Foreign Subsidiary or any joint venture to the extent permitted by
Section 8.02(g);

 

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(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled Account Debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 8.03;

(f) Permitted Acquisitions;

(g) Investments made after the Closing Date in Domestic Subsidiaries that are
not Guarantors, Foreign Subsidiaries and joint ventures, provided that the
aggregate principal amount outstanding of all such Investments made by Loan
Parties pursuant to this clause (g) shall not exceed on the date any such
Investment is made an amount equal to $30,000,000;

(h) to the extent not prohibited by applicable Law, loans or advances to
officers, directors and employees of AFI and its Subsidiaries made in the
ordinary course of business, (i) for travel, entertainment, relocation and other
ordinary business purposes, (ii) so long as no Default or Event of Default has
occurred and is continuing, in connection with such Person’s purchase of Capital
Stock and Capital Stock Equivalents of AFI in an aggregate principal amount
outstanding under this clause (ii) not to exceed $3,000,000 and (iii) for
purposes not described in the foregoing clauses (i) and (ii), in an aggregate
principal amount outstanding under this clause (iii) not to exceed $1,000,000;

(i) Investments by Foreign Subsidiaries in AFI and any of its Subsidiaries
(including other Foreign Subsidiaries);

(j) any Investment (other than an Acquisition) so long as (a) no Event of
Default exists prior to or after giving effect to such event, (b) either
(i) both (A) pro forma Excess Availability for the thirty (30) day period ending
on and including the date of such event is not less than the greater of
(x) 12.5% of the Line Cap and (y) $25,000,000 and (B) the Loan Parties are in
pro forma compliance with the Financial Covenants, or (ii) pro forma Excess
Availability for the thirty (30) day period ending on and including the date of
such event is not less than the greater of (x) 20% of the Line Cap and
(y) $40,000,000 and (c) AFI delivers to the Administrative Agent a compliance
certificate confirming the foregoing, in form and detail reasonably satisfactory
to the Administrative Agent;

(k) Investments representing non-cash consideration received in connection with
any Disposition permitted hereunder;

(l) Investments by any Foreign Subsidiaries that are not Loan Parties in any
joint venture outside of the United States;

(m) Investments in Swap Contracts permitted under Section 8.03;

(n) Investments (including debt obligations, Capital Stock and Capital Stock
Equivalents) received in connection with the bankruptcy or reorganization of
suppliers and customers or in settlement of delinquent obligations of, or other
disputes with, customers and suppliers arising in the ordinary course of
business or upon the foreclosure with respect to any secured Investment or other
transfer of title with respect to any secured Investment;

(o) advances of payroll payments to employees in the ordinary course of
business;

 

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(p) Investments to the extent that payment for such Investments is made solely
with Capital Stock and Capital Stock Equivalents of AFI;

(q) Investments made to repurchase or retire Capital Stock and Capital Stock
Equivalents of AFI owned by any employee stock ownership plan or key employee
stock ownership plan of AFI;

(r) in the event AFI or any of its Subsidiaries shall establish any Insurance
Subsidiary, Investments in an aggregate amount that does not exceed the minimum
amount of capital required under the Laws of the jurisdiction in which the
Insurance Subsidiary is formed (or any greater amount as may be reasonable and
prudent), plus the amount of any reasonable general corporate and overhead
expense of such Insurance Subsidiary; and

(s) Investments consisting of Liens, Indebtedness, fundamental changes,
Dispositions and Restricted Payments permitted under Sections 8.01, 8.03, 8.04,
8.05 and 8.06, respectively.

Section 8.03 Indebtedness.

Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness under the Loan Documents;

(b) Indebtedness of AFI and its Subsidiaries existing on the date hereof and
listed on Schedule 8.03 (and renewals, refinancings and extensions thereof on
terms and conditions not materially less favorable to the applicable debtor(s)
or at then prevailing market terms);

(c) intercompany Indebtedness among AFI and its Subsidiaries to the extent
permitted under Section 8.02; provided that, if secured, any such Indebtedness
shall be expressly subordinated in right of payment to the Obligations, and if
evidenced by an intercompany note, such note shall be pledged to the Collateral
Agent to secure the Obligations;

(d) obligations (contingent or otherwise) of AFI or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a “market view” and (ii) such Swap Contract is
not for speculative purposes;

(e) purchase money Indebtedness (including obligations in respect of Capital
Leases or Synthetic Leases, but excluding Indebtedness, if any, with respect to
Inventory) hereafter incurred by AFI or any of its Subsidiaries to finance the
purchase, acquisition, construction, repair, replacement or improvement of fixed
or capital assets, and renewals, refinancings and extensions thereof, provided,
that (i) such Indebtedness when incurred shall not exceed the purchase price of
the asset(s) financed, (ii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing, and (iii) at the time of and immediately after giving
effect to such incurrence, AFI will be in compliance with the financial covenant
in Section 8.11 on a Pro Forma Basis;

 

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(f) [Reserved];

(g) so long as no Event of Default has occurred and is continuing and the Loan
Parties are in compliance with Section 8.11 on a Pro Forma Basis, other
unsecured Indebtedness of the Borrowers in an aggregate principal amount
outstanding at any time not to exceed $25,000,000;

(h) other unsecured Indebtedness of the Borrowers, provided, that (i) the
weighted average life to maturity for such Indebtedness is at least 91 days
beyond the Maturity Date hereunder, (ii) such Indebtedness will be issued on
terms not more onerous that the terms hereof, (iii) no Default or Event of
Default shall exist immediately before or immediately after giving effect
thereto, (iv) the Borrowers will be in compliance with the financial covenant
under Section 8.11 after giving effect thereto on Pro Forma Basis and (v) the
Borrowers shall deliver to the Administrative Agent a compliance certificate
confirming the foregoing, in form and detail reasonably satisfactory to the
Administrative Agent;

(i) Indebtedness acquired or assumed pursuant to a Permitted Acquisition,
including such Indebtedness that was incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, and, in each case,
renewals, refinancings and extensions thereof, provided that (i) no Default or
Event of Default shall exist immediately before or immediately after giving
effect thereto, (ii) the Borrowers will be in compliance with the financial
covenant under Section 8.11 after giving effect thereto on Pro Forma Basis and
(iii) the Borrowers shall deliver to the Administrative Agent a compliance
certificate confirming the foregoing, in form and detail reasonably satisfactory
to the Administrative Agent;

(j) Indebtedness arising under any performance, bid, appeal or surety bond or
under any performance or completion guarantee or similar obligations entered
into in the ordinary course of business;

(k) [Reserved];

(l) Indebtedness to current or former officers, directors, managers, consultants
and employees (or their respective spouses, former spouses, successors,
executors, administrators, heirs, legatees or distributees) to finance the
purchase or redemption of Capital Stock and Capital Stock Equivalents of AFI or
its Subsidiaries permitted by Section 8.06;

(m) Indebtedness incurred by AFI or any of its Subsidiaries in a Permitted
Acquisition or any other Investment expressly permitted hereunder or any
Disposition, in each case to the extent constituting indemnification obligations
or obligations in respect of purchase price (including earn-outs) or other
similar adjustments;

(n) obligations under any Treasury Management Agreement and other Indebtedness
in respect of netting services, automatic clearinghouse arrangements, overdraft
protections, employee credit card programs and other cash management and similar
arrangements in the ordinary course of business;

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

(p) Indebtedness incurred by AFI or any Subsidiary in respect of letters of
credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar
instruments issued or created in the ordinary course of business, including in
respect of workers compensation claims, health, disability or other employee
benefits or property, casualty or liability insurance or self-insurance or other
Indebtedness with respect to reimbursement-type obligations regarding workers
compensation claims, provided that upon the drawing of such letter of credit,
the reimbursement of obligations in respect of bankers’ acceptances and the
incurrence of such Indebtedness, such obligations are reimbursed within thirty
(30) days following such drawing, reimbursement obligation or incurrence;

 

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(q) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges and additional or contingent interest on obligations described
in clauses (a) through (o) above and (q) through (u) below;

(r) Indebtedness incurred in the ordinary course of business in respect of
obligations of AFI or any Subsidiary consisting of the deferred purchase price
of goods or services or progress payments in connection with such goods and
services;

(s) [Reserved];

(t) [Reserved];

(u) Indebtedness of Foreign Subsidiaries of AFI in an aggregate amount not in
excess of ten percent (10.0%) of Consolidated Total Assets; and

(v) Guarantees with respect to Indebtedness permitted under this Section 8.03.

Section 8.04 Fundamental Changes.

Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person; provided that, notwithstanding the foregoing provisions
of this Section 8.04 but subject to the terms of Sections 7.12 and 7.14, (a) a
Borrower may merge or consolidate with any of its Subsidiaries provided that, in
the case of a Borrower merging or consolidating with any entity that is not a
Borrower, such Borrower shall be the continuing or surviving corporation,
(b) subject to the proviso in clause (a), any Loan Party may merge or
consolidate with any other Loan Party, (c) any Foreign Subsidiary may be merged
or consolidated with or into any Loan Party provided that such Loan Party shall
be the continuing or surviving corporation, (d) any Foreign Subsidiary may be
merged or consolidated with or into any other Foreign Subsidiary, (e) AFI or any
Subsidiary may merge with any Person that is not a Loan Party in connection with
a Permitted Acquisition provided that, if such Permitted Acquisition involves
any entity that is a Borrower, such Borrower shall be the continuing or
surviving corporation, (f) any Subsidiary may dissolve, liquidate or wind up its
affairs at any time provided that such dissolution, liquidation or winding up,
as applicable, could not have a Material Adverse Effect, (g) any Loan Party and
any Subsidiary may make any Permitted Investments and (h) any Loan Party and any
Subsidiary may make any Disposition permitted under Section 8.05.

Section 8.05 Dispositions.

Make any Disposition (other than an Involuntary Disposition) other than the
following:

(a) any Disposition (i) for which the total consideration shall be in an amount
not less than the fair market value of the Property disposed of, (ii) that does
not involve a sale or other disposition of receivables, and (iii) for which the
aggregate net book value of all of the assets sold or otherwise disposed of by
AFI and its Subsidiaries in such Disposition, taken together with all other
Dispositions (other than Involuntary Dispositions and the Disposition(s) set
forth in clause (a) above) in any fiscal year of AFI shall not exceed an amount
equal to fifteen percent (15%) of the total assets of AFI and its Subsidiaries
on a consolidated basis determined in accordance with GAAP as of the last day of
the fiscal quarter immediately preceding the date of determination; provided,
that no disposition of assets included in the

 

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Borrowing Base outside the Ordinary Course of Business shall be permitted in
accordance with this Section 8.05(a) unless (i) no Default or Event of Default
shall exist immediately before or immediately after giving effect thereto and
(ii) if the net book value of Borrowing Base assets being disposed of in a
single transaction or series of related transactions exceeds (A) $25,000,000, if
Excess Availability is greater than 50% of the Line Cap or (B) $15,000,000
otherwise, AFI shall have delivered an updated Borrowing Base Certificate to the
Administrative Agent giving effect to such disposition prior to the consummation
of such disposition; and

(b) Dispositions permitted by Sections 8.02, 8.04, 8.06 and Liens permitted by
Section 8.01.

Section 8.06 Restricted Payments.

Declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that:

(a) The Borrowers may declare and make the Closing Date Dividend;

(b) each Subsidiary may make Restricted Payments (directly or indirectly) to its
parent or to any Loan Party (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to each owner of Capital Stock in such Subsidiary
on a pro rata basis based on such owner’s respective ownership interests);

(c) AFI and each Subsidiary may (i) declare and make dividend payments or other
distributions payable solely in the Capital Stock of such Person or (ii) redeem
in whole or in part any of its Capital Stock for another class of Capital Stock
or rights to acquire its Capital Stock or with proceeds from substantially
concurrent equity contributions or issuances of new Capital Stock;

(d) to the extent constituting Restricted Payments, AFI and the Subsidiaries may
enter into and consummate transactions expressly permitted by any provision of
Section 8.02, 8.03, 8.04, 8.05, or 8.08;

(e) repurchases of Capital Stock in AFI deemed to occur upon exercise of stock
options or warrants if such Capital Stock represent a portion of the exercise
price of such options or warrants;

(f) AFI may pay for the repurchase, retirement or other acquisition or
retirement for value of Capital Stock of AFI by any future, present or former
employee, director or consultant (or any spouses, former spouses, successors,
executors, administrators, heirs, legatees or distributees of any of the
foregoing) of AFI or any Subsidiary so long as such purchase is pursuant to and
in accordance with the terms of any employee or director equity plan, employee
or director stock option plan or any other employee or director benefit plan or
any agreement (including any stock subscription or shareholder agreement) with
any employee, director or consultant of AFI or any Subsidiary;

(g) AFI or any of the Subsidiaries may (a) pay cash in lieu of fractional equity
interests in connection with any dividend, split or combination thereof or any
Permitted Acquisition and (b) honor any conversion request by a holder of
convertible Indebtedness and make cash payments in lieu of fractional shares in
connection with any such conversion and may make payments on convertible
Indebtedness in accordance with its terms; and

(h) AFI may declare and make other Restricted Payments on and after the Closing
Date; provided that (A) no Default or Event of Default shall exist immediately
before or immediately after giving effect thereto, (B) either (1) both (I) pro
forma Excess Availability for the 30 day period ending on

 

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and including the date of such event is not less than the greater of (x) 15.0%
of the Line Cap and (y) $30,000,000, and (II) the Borrowers are in pro forma
compliance with the financial covenant under Section 8.11 after giving effect
thereto on a Pro Forma Basis, or (2) Excess Availability calculated on a Pro
Forma Basis for the 30 day period ending on and including the date of such event
is not less than the greater of (x) 20% of the Line Cap and (y) $40,000,000
after giving effect thereto, and (C) AFI shall deliver to the Administrative
Agent a compliance certificate confirming the foregoing, in form and detail
reasonably satisfactory to the Administrative Agent;

provided, in each case, that payment of any dividend or distribution pursuant to
this Section 8.06 may be made within sixty (60) days after the date of
declaration thereof, if at the date of declaration (i) such payment would have
complied with the provisions of this Agreement and (ii) no Event of Default
occurred and was continuing.

Section 8.07 Change in Nature of Business.

Engage in any material line of business substantially different from those lines
of business conducted by AFI and its Subsidiaries on the Closing Date or any
business related, incidental, complementary or ancillary thereto or reasonable
developments or extensions thereof.

Section 8.08 Transactions with Affiliates.

Enter into or permit to exist any transaction or series of transactions with any
Affiliate of such Person other than (a) advances of working capital to any Loan
Party, (b) transactions among Loan Parties, (c) intercompany transactions
expressly permitted by Section 8.02, Section 8.03, Section 8.04, Section 8.05 or
Section 8.06, (d) transactions among AFI and its wholly-owned Domestic
Subsidiaries and (e) except as otherwise specifically limited in this Agreement,
other transactions which are entered into in the ordinary course of such
Person’s business on terms and conditions substantially as favorable to such
Person as would be obtainable by it in a comparable arms-length transaction with
a Person other than an officer, director or Affiliate.

Section 8.09 Burdensome Agreements.

(a) Enter into, or permit to exist, any Contractual Obligation that
(i) encumbers or restricts on the ability of any such Person to (A) pay
dividends or make any other distributions to any Loan Party on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (B) pay any Indebtedness or other obligation owed to any Loan Party, or
(C) make loans or advances to any Loan Party or (ii) prohibits or otherwise
restricts the existence of any Lien upon the Property, whether now owned or
hereafter acquired, of any Material Domestic Subsidiary in favor of the
Administrative Agent (for the benefit of the Lenders) for the purpose of
securing the Obligations; provided that the foregoing clauses (i) and (ii) shall
not apply to Contractual Obligations which:

(4) arise in connection with this Agreement, the other Loan Documents and any
Public Indenture;

(5) arise pursuant to customary restrictions and conditions contained in any
agreement relating to the sale of any Property permitted under Section 8.05
pending the consummation of such sale;

(6) are customary restrictions on leases, subleases, licenses or sublicenses or
sales otherwise permitted hereby so long as such restrictions relate to the
assets subject thereto;

 

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(7) are customary provisions in joint venture agreements and other similar
agreements applicable to joint ventures permitted under this Agreement;

(8) are customary provisions restricting assignment of any agreement entered
into in the ordinary course of business;

(9) are restrictions on cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business;

(10) relate to cash or other deposits permitted under this Agreement;

(11) (x) exist on the date hereof and (to the extent not otherwise permitted by
this Section 8.09) are listed on Schedule 8.09 hereto and (y) to the extent
Contractual Obligations permitted by clause (x) are set forth in an agreement
evidencing Indebtedness, are set forth in any agreement evidencing any permitted
modification, replacement, renewal, extension or refinancing of such
Indebtedness so long as such modification, replacement, renewal, extension or
refinancing does not expand the scope of such Contractual Obligation;

(12) are binding on a Subsidiary at the time such Subsidiary first becomes a
Subsidiary, so long as such Contractual Obligations were not entered into in
contemplation of such Person becoming a Subsidiary;

(13) arise in connection with restrictions and conditions on any Foreign
Subsidiary organized under the laws of the People’s Republic of China or any
state or other political subdivision thereof;

(14) arise in connection with any document or instrument governing Indebtedness
incurred pursuant to Sections 8.03(b), (d), (e), (g), (h), (j), (m), (q) or (r),
provided that any such restriction contained therein relates only to the asset
to which such Indebtedness is related;

(15) arise in connection with any Indebtedness of a Subsidiary which is not a
Loan Party which is permitted by Section 8.03; and

(16) impose (x) restrictions described in clause (i) above, but only to the
extent that such restrictions do not materially adversely effect the
consolidated cash position of the Borrowers and Guarantors or (y) restrictions
described in clause (ii) above, but only to the extent that such restrictions do
not materially adversely effect the value of the Collateral granted to secure
the Obligations.

Section 8.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly,

(a) whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose;

(b) to fund any activities of or business with any individual or entity, or in
any Designated Jurisdiction, that, at the time of such funding, is the subject
of Sanctions, or in any other manner that will result in a violation of by any
individual or entity (including any individual or entity participating in the
transaction, whether as Lender, Arranger, Administrative Agent, L/C Issuer,
Swing Line Lender or otherwise) of Sanctions, or to lend, contribute or
otherwise make available such proceeds to any Subsidiary, joint venture partner
or other individual or entity for any such purposes; or

 

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(c) for any purpose which would breach the United States Foreign Corrupt
Practices Act of 1977, the UK Bribery Act of 2010, or other similar
anti-corruption legislation in other jurisdictions.

Section 8.11 Financial Covenant. Permit the Fixed Charge Coverage Ratio for each
trailing four quarter period to be less than 1.0 to 1.0 while a Financial
Covenant Trigger Period is in effect, measured for the most recent period for
which financial statements were delivered hereunder prior to the Financial
Covenant Trigger Period and each period ending thereafter until the Financial
Covenant Trigger Period is no longer in effect.

Section 8.12 Prepayment of Other Indebtedness, Etc.

If any Default has occurred and is continuing or shall exist immediately after
giving effect thereto, make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due), refund, refinance or exchange of any Indebtedness of AFI or any Subsidiary
(other than Indebtedness arising under the Loan Documents).

Section 8.13 Organization Documents; Fiscal Year; Legal Name, State of Formation
and Form of Entity.

(a) Amend, modify or change its Organization Documents in a manner materially
adverse to the Lenders.

(b) Change its fiscal year.

(c) With respect to any Loan Party, without providing five days’ prior written
notice to the Administrative Agent, change its name, state of formation or form
of organization.

(d) The Loan Parties will not, and will not permit any of the Subsidiaries to,
make any material change in accounting treatment or reporting practices, except
as required by GAAP and in accordance with Section 1.03.

ARTICLE IX.

EVENTS OF DEFAULT AND REMEDIES

Section 9.01 Events of Default.

Any of the following shall constitute an Event of Default:

(a) Non-Payment. The Borrowers or any other Loan Party fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or any L/C
Obligation, or (ii) so long as no Cash Dominion Event exists, within three
Business Days after the same becomes due, any interest on any Loan or on any L/C
Obligation, or any fee due hereunder, or (iii) so long as no Cash Dominion Event
exists, within five Business Days after written notice thereof to the defaulting
party by the Administrative Agent of the same becoming due, any other amount
payable hereunder or under any other Loan Document; or

 

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(b) Specific Covenants. AFI fails to perform or observe any term, covenant or
agreement contained in any of Section 7.01, 7.03(a), 7.05, 7.07, 7.10, 7.11,
7.16(a), 7.16(b)(iv), 7.16(f)(iii), 7.17 or Article VIII, or any term, covenant
or agreement relating to creation, priority, perfection or maintenance of Liens,
delivery of physical Collateral or voting rights under Capital Stock contained
in the Security Agreement or Pledge Agreement; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for thirty (30) days after written notice to the defaulting party by
the Administrative Agent; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of either of the
Borrowers or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading in any material respect (or in all respects in the case of any
representation and warranty modified by materiality or Material Adverse Effect)
when made or deemed made; or

(e) Cross-Default. (i) Either of the Borrowers or any Subsidiary (A) fails to
make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder, Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $30,000,000, or (B) fails to observe or perform any
other agreement or condition relating to any such Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise)
prior to its stated maturity, or such Guarantee to become payable or cash
collateral in respect thereof to be demanded (other than an event which permits
the Loans hereunder to be prepaid prior to or as an alternative to the purchase,
payment, defeasance or redemption of such Indebtedness and, in any such case,
the Loans hereunder are prepaid prior thereto); or (ii) there occurs under any
Swap Contract an early termination resulting from resulting from any default by
a Borrower or any Subsidiary under such Swap Contract and the Swap Termination
Value owed by such Borrower or such Subsidiary as a result thereof is greater
than $30,000,000; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for sixty calendar days; or any proceeding under any Debtor Relief
Law relating to any such Person or to all or any material part of its property
is instituted without the consent of such Person and continues undismissed or
unstayed for sixty (60) calendar days, or an order for relief is entered in any
such proceeding; or

 

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(g) Inability to Pay Debts; Attachment. (i) Any of the Borrowers or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within thirty (30) days after its issue or levy; or

(h) Judgments. There is entered against any of the Borrowers or any Subsidiary
(i) one or more final judgments or orders for the payment of money in an
aggregate amount exceeding $30,000,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of ten consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of any of the Borrowers under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$30,000,000, or (ii) any of the Borrowers or any ERISA Affiliate fails to pay
when due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of $30,000,000; or

(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document or the perfection or
priority of an Lien under the Loan Documents; or any Loan Party denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or

(k) Change of Control. There occurs any Change of Control.

Section 9.02 Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of an
L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers;

(c) require Loan Parties to Cash Collateralize L/C Obligations, Secured Bank
Product Obligations and other Obligations that are contingent or not yet due and
payable, and, if Loan Parties fail promptly to deposit such Cash Collateral, the
Administrative Agent may (and shall upon the direction of Required Lenders)
advance the required Cash Collateral as Revolving Loans (whether or not an
Overadvance exists or is created thereby, or the conditions in Section 5.02 are
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(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable Law; such
rights and remedies include the rights to (A) take possession of any Collateral;
(B) require Loan Parties to assemble Collateral, at Loan Parties’ expense, and
make it available to the Administrative Agent and security trustees at a place
designated by any of them; (C) enter any premises where Collateral is located
and store Collateral on such premises until sold (and if the premises are owned
or leased by a Loan Party, the Loan Parties agree not to charge for such
storage); and (D) sell or otherwise dispose of any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale, with such notice as may be required by applicable Law, in lots
or in bulk, at such locations, all as the Administrative Agent and any security
trustees, in their discretion, deem advisable. Each Loan Party agrees that ten
(10) days’ notice of any proposed sale or other disposition of Collateral by the
Administrative Agent or any security trustees shall be reasonable, and that any
sale conducted on the internet or to a licensor of Intellectual Property shall
be commercially reasonable. The Administrative Agent and any security trustees
may conduct sales on any Loan Party’s premises, without charge, and any sale may
be adjourned from time to time in accordance with applicable Law. The
Administrative Agent and any security trustees shall have the right to sell,
lease or otherwise dispose of any Collateral for cash, credit or any combination
thereof, and the Administrative Agent and any security trustees may purchase any
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of the purchase price, may credit bid and set off the amount of
such price against the Obligations;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrowers under the Bankruptcy Code, the
obligation of each Lender to make Loans and any obligation of each L/C Issuer to
make L/C Credit Extensions shall automatically terminate, the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable, and the obligation of the Borrowers
to Cash Collateralize the L/C Obligations as aforesaid shall automatically
become effective, in each case without further act of the Administrative Agent
or any Lender.

Section 9.03 Application of Funds.

(a) Order of Application. Notwithstanding anything herein to the contrary, after
the exercise of any remedies provided for in Section 9.02 (or after the Loans
have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the
proviso to Section 9.02), subject to the provisions of Sections 2.14 and 2.15
any amounts received on account of the Obligations, whether arising from
payments by or on behalf of any Loan Party, realization on Collateral, setoff or
otherwise, shall be allocated as follows:

(i) first, to all costs and expenses, including Extraordinary Expenses, owing to
the Administrative Agent, to the extent owing by any Loan Party;

(ii) second, to all amounts owing to Swingline Lender on Swingline Loans;

(iii) third, to all amounts owing to any L/C Issuer on L/C Obligations;

(iv) fourth, to all Revolving Obligations constituting fees owing by the Loan
Parties (exclusive of any Obligations under any Australian Incremental Credit
Facility or Canadian Incremental Credit Facility which are guaranteed by the
Loan Parties);

(v) fifth, to all Revolving Obligations constituting interest owing by the Loan
Parties (exclusive of any Obligations under any Australian Incremental Credit
Facility or Canadian Incremental Credit Facility which are guaranteed by the
Loan Parties);

 

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(vi) sixth, to Cash Collateralization of L/C Obligations;

(vii) seventh, to (i) the principal amount of all Revolving Loans and (ii) all
Qualified Secured Bank Product Obligations of any Loan Party to the extent a
Bank Product Reserve has been established with respect thereto up to and
including (with respect to Secured Bank Product Providers other than Bank of
America and its Affiliates) the amount most recently specified to the
Administrative Agent pursuant to the terms hereof;

(viii) eighth, to all other Obligations (exclusive of any Obligations described
in clause (ix) below); and

(ix) ninth, to be applied ratably to outstanding Obligations under any
Australian Incremental Credit Facility or Canadian Incremental Credit Facility,
to the extent there are insufficient funds for the Full Payment of all
Obligations thereunder.

(b) Application of Funds. Amounts shall be applied to each category of
Obligations set forth within subsection (a) above, as applicable, until Full
Payment thereof and then to the next category. If amounts are insufficient to
satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. Amounts distributed with respect to any Secured
Bank Product Obligations or Qualified Secured Bank Product Obligations shall be
the lesser of the maximum Secured Bank Product Obligations or Swap Termination
Value of such Qualified Secured Bank Product Obligations, as the case may be,
last reported to the Administrative Agent or the actual Secured Bank Product
Obligations or Qualified Secured Bank Product Obligations, as the case may be,
as calculated by the methodology reported to the Administrative Agent for
determining the amount due. The Administrative Agent shall have no obligation to
calculate the amount to be distributed with respect to any Secured Bank Product
Obligations or Qualified Secured Bank Product Obligations, and may request a
reasonably detailed calculation of such amount from the applicable Secured
Party. If a Secured Party fails to deliver such calculation within five days
following request by the Administrative Agent, the Administrative Agent may
assume the amount to be distributed is zero. The allocations set forth in this
Section 9.03 are solely to determine the rights and priorities of the
Administrative Agent and Secured Parties as among themselves, and any allocation
within subsection (a) of proceeds of the realization of Collateral may be
changed by agreement among them without the consent of any Loan Party. This
Section 9.03 is not for the benefit of or enforceable by any Borrower.

(c) Erroneous Application. The Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been made shall be to recover the amount
from the Person that actually received it (and, if such amount was received by
any Lender, such Lender hereby agrees to return it).

Section 9.04 License.

The Administrative Agent and any security trustees are hereby granted an
irrevocable, non-exclusive license or other right, effective only upon and
during an Event of Default, to use, license or sub-license (without payment of
royalty or other compensation to any Loan Party) any or all Intellectual
Property of Loan Parties, computer hardware and software, trade secrets,
brochures, customer lists, promotional and advertising materials, labels,
packaging materials and other property, in advertising for sale, marketing,
selling, collecting, completing manufacture of, or otherwise exercising any
rights or remedies with respect to, any Collateral. Each Loan Party’s rights and
interests under Intellectual Property shall inure to the Administrative Agent’s
and such security trustees’ benefit.

 

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Section 9.05 Remedies Cumulative; No Waiver.

(a) Cumulative Rights. All agreements, warranties, guaranties, indemnities and
other undertakings of Loan Parties under the Loan Documents are cumulative and
not in derogation of each other. The rights and remedies of the Administrative
Agent, any security trustees and Lenders are cumulative, may be exercised at any
time and from time to time, concurrently or in any order, and are not exclusive
of any other rights or remedies available by agreement, by law, at equity or
otherwise. All such rights and remedies shall continue in full force and effect
until Full Payment of all Obligations.

(b) Waivers. No waiver or course of dealing shall be established by (i) the
failure or delay of the Administrative Agent, any security trustee or any Lender
to require strict performance by Loan Parties with any terms of the Loan
Documents, or to exercise any rights or remedies with respect to Collateral or
otherwise; (ii) the making of any Loan or issuance of any Letter of Credit
during a Default, Event of Default or other failure to satisfy any conditions
precedent; or (iii) acceptance by the Administrative Agent or any Lender of any
payment or performance by a Loan Party under any Loan Documents in a manner
other than that specified therein. It is expressly acknowledged by Loan Parties
that any failure to satisfy a financial covenant on a measurement date shall not
be cured or remedied by satisfaction of such covenant on a subsequent date.

ARTICLE X.

ADMINISTRATIVE AGENT

Section 10.01 Appointment and Authority.

(a) Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of
America to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Borrowers nor any other Loan Party shall have rights as
a third party beneficiary of any of such provisions. It is understood and agreed
that the use of the term “agent” herein or in any other Loan Documents (or any
other similar term) with reference to the Administrative Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead such term is used as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between contracting parties.

(b) Each of the Lenders hereby irrevocably appoints, designates and authorizes
the Collateral Agent to take such action on its behalf under the provisions of
this Agreement and each Collateral Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any Collateral Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any Collateral Document, the Collateral Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or therein, nor shall the Collateral Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any Collateral Document or otherwise exist against the
Collateral Agent. Without limiting the generality of the foregoing sentence, the
use of the term “agent” herein and in the Collateral Documents with reference to
the Collateral Agent is not intended to connote any fiduciary or other implied
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arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. The
Collateral Agent shall act on behalf of the Lenders with respect to any
Collateral and the Collateral Documents, and the Collateral Agent shall have all
of the benefits and immunities (i) provided to the Administrative Agent under
the Loan Documents with respect to any acts taken or omissions suffered by the
Collateral Agent in connection with any Collateral or the Collateral Documents
as fully as if the term “Administrative Agent” as used in such Loan Documents
included the Collateral Agent with respect to such acts or omissions, and
(ii) as additionally provided herein or in the Collateral Documents with respect
to the Collateral Agent.

Section 10.02 Rights as a Lender.

The Person 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 the term
“Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the
context otherwise requires, include the Person serving as the Administrative
Agent hereunder in its individual capacity. Such Person and its Affiliates may
accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with any Loan Party or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.

Section 10.03 Exculpatory Provisions.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents, and its duties
hereunder shall be administrative in nature. Without limiting the generality of
the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders or
Super-Majority Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or applicable Law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any Debtor Relief Law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Loan Party or any of its Affiliates
that is communicated to or obtained by the Person serving as the 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 (i) with the consent or at the request of the Required Lenders or
Super-Majority Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Administrative Agent shall believe in good faith
shall be necessary, under the circumstances as provided in Sections 11.01 and
9.02) or (ii) in the absence of its own gross negligence or willful misconduct
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final and nonappealable judgment. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such Default
is given in writing to the Administrative Agent by a Loan Party, a Lender or the
L/C Issuer.

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 or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

Section 10.04 Reliance by Administrative Agent.

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 (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated 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 have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the
issuance, extension, renewal or increase of a Letter of Credit, that by its
terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or L/C Issuer unless the Administrative Agent shall have received notice
to the contrary from such Lender or L/C Issuer prior to the making of such Loan
or the issuance of such Letter of Credit. The Administrative Agent may consult
with legal counsel (who may be counsel for the Loan Parties), 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.

Section 10.05 Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document 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 of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article 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. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents except to the extent that a court of
competent jurisdiction determines in a final and nonappealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agents.

Section 10.06 Resignation of Administrative Agent.

(a) The Administrative Agent may at any time give notice of its resignation to
the Lenders, the L/C Issuer and the Borrowers. Upon receipt of any such notice
of resignation, the Required Lenders shall have the right, with the consent of
the Borrowers (except if an Event of Default has occurred and is

 

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continuing), to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation (or such earlier
day as shall be agreed by the Required Lenders) (the “Resignation Effective
Date”), then the retiring Administrative Agent may (but shall not be obligated
to) on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above. Whether or not
a successor has been appointed such resignation shall become effective in
accordance with such notice on the Resignation Effective Date.

(b) If the Person serving as Administrative Agent is a Defaulting Lender
pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by applicable Law, by notice in writing to the Borrowers
and such Person remove such Person as Administrative Agent and, with the consent
of the Borrowers (except if an Event of Default has occurred and is continuing),
appoint a successor. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days (or
such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date.

(c) With effect from the Resignation Effective Date or the Removal Effective
Date (as applicable) (1) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the
Loan Documents, the retiring or removed Administrative Agent shall continue to
hold such collateral security until such time as a successor Administrative
Agent is appointed) and (2) except for any indemnity payments or other amounts
then owed to the retiring or removed Administrative Agent, all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided for above. Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or removed) Administrative Agent (other than as provided
in Section 3.01(g) and other than any rights to indemnity payments or other
amounts owed to the retiring or removed Administrative Agent as of the
Resignation Effective Date or the Removal Effective Date, as applicable), and
the retiring or removed Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not
already discharged therefrom as provided above in this Section). The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed between the
Borrowers and such successor. After the retiring or removed Administrative
Agent’s resignation or removal hereunder and under the other Loan Documents, the
provisions of this Article and Section 10.04 shall continue in effect for the
benefit of such retiring or removed 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 the retiring or removed Administrative Agent was
acting as Administrative Agent.

(d) Any resignation by Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as L/C Issuer and Swing Line
Lender. If Bank of America resigns as an L/C Issuer, its shall retain all the
rights and powers, privileges and duties of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant Section 2.03(c). If Bank of
America resigns as Swing Line Lender, it shall retain shall retain all the
rights of the Swing Line Lender provided for hereunder with respect to Swing
Line Loans made by it and outstanding as of the effective

 

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date of such resignation, including the right to require the Lenders to make
Base Rate Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c). Upon the appointment by the Borrowers of a
successor L/C Issuer or Swing Line Lender hereunder (which successor shall in
all cases be a Lender other than a Defaulting Lender), (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the
retiring L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in substitution
for the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangements satisfactory to Bank of America to effectively assume
the obligations of Bank of America with respect to such Letters of Credit.

Section 10.07 Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and the L/C Issuer acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties 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 and the L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties 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 other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

Section 10.08 No Other Duties; Etc.

Anything herein to the contrary notwithstanding, none of the bookrunners,
arrangers, syndication agents, documentation agents or co-agents shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent,
the Collateral Agent, a Lender or the L/C Issuer hereunder.

Section 10.09 Administrative Agent May File Proofs of Claim.

In case of the pendency of any proceeding under any Debtor Relief Law or any
other judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrowers) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations arising under the Loan Documents that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the L/C Issuer and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuer and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders, the L/C Issuer and the
Administrative Agent under Sections 2.03(i) and (j), 2.09 and 11.04) allowed in
such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and L/C Issuer to make such payments to the

 

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Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and L/C Issuer,
to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under Sections 2.09 and 11.04.

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

Section 10.10 Collateral and Guaranty Matters.

It is acknowledged that Subsidiaries will be automatically released from their
guaranty obligations hereunder and from the security interests pledged by them
under the Collateral Documents upon consummation of transactions permitted
hereunder (including a merger, consolidation or liquidation or a permitted
disposition) and Liens to secure Obligations hereunder will be automatically
released upon sales, dispositions or other transfers by Loan Parties permitted
hereunder. In the event that any action is required to evidence any such
release, the Lenders and L/C Issuer irrevocably authorize the Administrative
Agent and the Collateral Agent to take any such action, including,

(a) to release any Lien on any property granted to or held by the Collateral
Agent under any Loan Document (i) upon termination of all Commitments and
payment in full of all Obligations arising under the Loan Documents (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit (other than Letters of Credit as to which other arrangements
satisfactory to the Administrative Agent and the L/C Issuer shall have been
made), (ii) that is transferred or to be transferred as part of or in connection
with any Disposition not prohibited hereunder or under any other Loan Document,
or (iii) if approved, authorized or ratified in writing in accordance with
Section 11.01;

(b) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary or a Guarantor as a result of a transaction
permitted hereunder; and

(c) to subordinate any Lien on any property granted to or held by the Collateral
Agent under any Loan Document to the holder of any Lien on such property that is
permitted by Section 8.01(i).

Upon request by the Administrative Agent or the Collateral Agent at any time,
the Required Lenders will confirm in writing the Collateral Agent’s authority to
release or subordinate its interest in particular types or items of property,
and of the Administrative Agent to release any Guarantor from its obligations
under the Guaranty, pursuant to this Section 10.10. In each case as specified in
this Section 10.10, the Collateral Agent will, at the Borrowers’ expense,
execute and deliver to the applicable Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral Documents
or to subordinate its interest in such item, or to release such Guarantor from
its obligations under the Guaranty, in each case in accordance with the terms of
the Loan Documents and this Section 10.10.

The Administrative Agent shall not be responsible for or have a duty to
ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Loan Party in connection therewith, nor shall the Administrative
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral.

 

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Section 10.11 Swap Contracts and Treasury Management Agreements. No Lender or
any Affiliate of a Lender that is party to any Swap Contract or any Treasury
Management Agreement permitted hereunder that obtains the benefits of
Section 9.03 or any Collateral by virtue of the provisions hereof or of any
Collateral Document shall have any right to notice of any action or to consent
to, direct or object to any action hereunder or under any other Loan Document or
otherwise in respect of the Collateral (including the release or impairment of
any Collateral) other than in its capacity as a Lender and, in such case, only
to the extent expressly provided in the Loan Documents. Notwithstanding any
other provision of this Article X to the contrary, the Administrative Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Obligations arising under Swap
Contracts and Treasury Management Agreements unless the Administrative Agent has
received written notice of such Obligations, together with such supporting
documentation as the Administrative Agent may request, from the applicable
Lender or Affiliate of a Lender that is party to such Swap Contract or such
Treasury Management Agreement, as the case may be. The Lenders irrevocably
authorize the Administrative Agent and the Collateral Agent, in each case at its
option and in its discretion, to secure obligations under Swap Contracts and
Treasury Management Agreements between a Subsidiary that is not a Loan Party and
a Lender or its Affiliate with the Collateral, to the same extent as if such
obligations were Obligations.

Section 10.12 Secured Bank Product Providers. Each Secured Bank Product Provider
that is not a Lender, by delivery of a joinder agreement in form and substance
reasonably satisfactory to the Administrative Agent and AFI, or as otherwise
agreed by the Administrative Agent and AFI, shall agree to be bound by
Section 9.03 and this Article 10. Each Secured Bank Product Provider shall
indemnify and hold harmless Administrative Agent Indemnitees, to the extent not
reimbursed by Loan Parties, against all Claims that may be incurred by or
asserted against any Agent Indemnitee in connection with such provider’s Secured
Bank Product Obligations (except those Claims determined in a final,
non-appealable judgment by a court of competent jurisdiction to result from the
gross negligence or willful misconduct of such Administrative Agent Indemnitee).

Section 10.13 Loan Party Representative. Each Loan Party hereby designates AFI
as its representative and agent (in such capacity, the “Loan Party
Representative”) for all purposes under the Loan Documents, including requests
for Loans and Letters of Credit, designation of interest rates, delivery or
receipt of communications, preparation and delivery of any Borrowing Base and
financial reports, receipt and payment of Obligations, requests for waivers,
amendments or other accommodations, actions under the Loan Documents (including
in respect of compliance with covenants), and all other dealings with the
Administrative Agent, any L/C Issuer or any Lender. AFI hereby accepts such
appointment. The Administrative Agent, each L/C Issuer and each Lender shall be
entitled to rely upon, and shall be fully protected in relying upon, any notice
or communication (including any Notice of Borrowing) delivered by AFI on behalf
of any Loan Party and, unless otherwise expressly provided in any Australian
Incremental Amendment or Canadian Incremental Amendment, any other Loan Party.
The Administrative Agent, any L/C Issuer and any Lender may give any notice or
communication with a Loan Party and, unless otherwise expressly provided in any
Australian Incremental Amendment or Canadian Incremental Amendment, any other
Loan Party hereunder to AFI on behalf of such Loan Party. Each of the
Administrative Agent, any L/C Issuer and any Lender shall have the right, in its
discretion, to deal exclusively with AFI for any or all purposes under the Loan
Documents. Each Loan Party agrees that, unless otherwise expressly provided in
any Australian Incremental Amendment or Canadian Incremental Amendment, any
notice, election, communication, representation, agreement or undertaking made
on its behalf by AFI shall be binding upon and enforceable against it.

 

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ARTICLE XI.

MISCELLANEOUS

Section 11.01 Amendments, Etc.

(a) Amendments Generally. Except as expressly provided herein below, no
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrowers or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders (or by the Administrative Agent on behalf of the Required Lenders upon
receipt of a consent and direction letter from the Required Lenders) and the
Borrowers or the applicable Loan Party, as the case may be, and acknowledged by
the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that:

(i) No such amendment, waiver or consent shall be effective without the written
consent of all Lenders where the effect would be to:

(A) amend the definition of “Pro Rata Share” or change any provision of this
Agreement regarding pro rata sharing or pro rata funding with respect to (i) the
making of advances (including participations), (ii) the manner of application of
payments or prepayments of principal, interest or fees, (iii) the manner of
application of reimbursement obligations from drawings under Letters of Credit,
or (iv) the manner of reduction of Commitments and committed amounts, except
that nothing contained herein shall limit (A) an “amend and extend” of some, but
not all, of the Commitments under a credit facility hereunder and the
establishment of differing interest rates or maturities in respect thereof,
(B) a termination of Commitments held by a Defaulting Lender, (C) any changes
resulting solely from increases or other changes in the Aggregate Commitments
permitted hereunder or otherwise approved pursuant to this Section 11.01 and to
reflect the addition of any Loans or extensions of credit permitted hereunder or
(D) a purchase by the Borrowers at a discount of the loans and obligations
hereunder as herein provided or otherwise on terms and conditions acceptable to
the Required Lenders;

(B) amend the definitions of “Required Lenders” or “Super-Majority Lenders” to
reduce the percentages set forth in such defined terms or amend any provision of
this Section 11.01(a) to reduce the percentages of Lenders required to provide
any amendment, waiver or consent; and

(C) release all or substantially all of the Collateral, or release all or
substantially all of the Guarantors from their guaranty obligations, except as
expressly provided herein or in the other Loan Documents, or otherwise
appropriate in connection with transactions permitted hereunder, provided that
it is understood and agreed that additional tranches or additional extensions of
credit established pursuant to the terms of this Agreement may be equally and
ratably secured (or secured on a junior basis) by the Collateral securing the
loans and obligations hereunder;

 

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(ii) no such amendment, waiver or consent shall be effective without the written
consent of each Lender directly affected thereby (whose consent shall be
sufficient therefor without the consent of the Required Lenders) where the
effect would be to:

(A) extend the scheduled final maturity of any Loan of such Lender;

(B) waive, reduce or postpone any scheduled repayment (but not prepayment) in
respect of such Lender’s Loans;

(C) reduce the rate of interest on any Loan or any fee payable hereunder or
prepayment of any premium payable hereunder to such Lender, provided that for
purposes hereof, neither the amendment or waiver of application of the Default
Rate nor the amendment, modification or waiver of the financial covenants or the
financial covenant definitions hereunder shall be considered to constitute a
reduction in the rate of interest or fees, even if the effect thereof would be
to reduce the rate of interest or fees otherwise payable hereunder;

(D) extend the time for payment of any interest or fees or prepayment premium
owing to such Lender;

(E) reduce or forgive the principal amount of any Loan of such Lender or any
reimbursement obligation in respect of any Letter of Credit (except by virtue of
any waiver of a prepayment owing to such Lender);

(F) increase the Commitment of such Lender hereunder; provided that in no event
shall an amendment, modification, termination, waiver or consent with respect to
any mandatory prepayment, condition precedent, covenant, Default or Event of
Default be considered an increase in Commitments and that an increase in the
available portion of any Commitment of any Lender or any rescission of the
acceleration of the Loans shall not constitute an increase in Commitments;

(G) amend, modify, terminate or waive any provision of, Section 9.03 or clause
(a) of this Section 11.01 as to such Lender (except as expressly provided herein
with respect to any Incremental Credit Facility, including technical amendments
with respect to the establishment of additional tranches or additional
extensions of credit pursuant to this Agreement to provide protective provisions
hereunder of substantially the type afforded those tranches and extensions of
credit on the Closing Date and except for, solely in respect of clause (a) of
this Section 11.01, technical amendments which do not adversely affect the
rights of any Lender);

(H) amend the definition of “Required Lenders”, “Super-Majority Lenders” or “Pro
Rata Share” (except for technical amendments with respect to the establishment
of additional tranches or additional extensions of credit pursuant to this
Agreement to provide for substantially the same kind of treatment afforded those
tranches and extensions of credit on the Closing Date); or

(iii) [Reserved];

(iv) unless also signed by the Super-Majority Lenders, no such amendment, waiver
or consent shall be effective that would (A) amend any definition of a Borrowing
Base (and the defined terms used in such definitions) if the effect of such
amendment is to increase any advance

 

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rate or otherwise make more credit available or to add new types of Collateral
thereunder, or (B) amend the definition of Excess Availability or any definition
of Availability or any defined term used in such definitions;

(v) unless also consented to in writing by an L/C Issuer, no such amendment,
waiver or consent shall affect the rights or duties of such L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit issued or
to be issued by it;

(vi) unless also consented to in writing by the Swing Line Lender, no such
amendment, waiver or consent shall affect the rights or duties of the Swing Line
Lender under this Agreement;

(vii) unless also consented to in writing by the Administrative Agent, no such
amendment, waiver or consent shall affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and

(viii) unless also consented to in writing by the Collateral Agent, no such
amendment, waiver or consent shall affect the rights or duties of the Collateral
Agent under this Agreement or any other Loan Document;

and provided further that, notwithstanding anything to the contrary contained
herein, (i) no Defaulting Lender shall have any right to approve or disapprove
any amendment, waiver or consent hereunder, except that:

(A) the Commitment of a Defaulting Lender may not be increased or extended and
the principal amount of the Loans or L/C Borrowings of the Defaulting Lender may
not be reduced or forgiven, and

(B) the rate of interest for the Defaulting Lender may not be reduced (except as
expressly provided in clause (a)(i)(C) above) in a way that would affect a
Defaulting Lender more adversely than the other affected Lenders,

without, in any such case, the consent of the Defaulting Lender,

(ix) each Lender is entitled to vote as such Lender sees fit on any bankruptcy
or insolvency reorganization plan that affects the Loans, (iii) each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersede the unanimous consent provisions set forth herein, (iv) the Required
Lenders may consent to allow a Loan Party to use cash collateral in the context
of a bankruptcy or insolvency proceeding, and (v) the Fee Letters may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.

(b) Incremental Credit Facilities. For the avoidance of doubt and
notwithstanding provisions to the contrary in this Section 11.01 or elsewhere in
this Agreement, this Agreement may be amended (or amended and restated) with the
written consent of the applicable Loan Parties, the Administrative Agent and the
Lenders providing Incremental Credit Facilities for the purpose of effecting one
or more Incremental Credit Facilities as contemplated in Section 2.01(b)-(e),
including by (i) increasing the aggregate amount of Commitments under any of the
respective facilities, and (ii) adding one or more additional borrowing tranches
hereunder and to provide for the ratable sharing of the benefits of this
Agreement and the other Loan Documents with the other commitments and
Obligations contemplated herein and therein.

 

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(c) Corrections. Notwithstanding anything in this Section 11.01 to the contrary,
if the Administrative Agent shall have identified from time to time an obvious
error or any error or omission of a technical nature in any provision of the
Loan Documents, then the Administrative Agent shall be permitted to amend such
provision, and, in each case, such amendment shall become effective without any
further action or consent of any other party to any Loan Document if the same is
not objected to in writing by the Required Lenders to the Administrative Agent
within ten (10) Business Days following receipt of notice thereof.

Section 11.02 Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (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 transmission as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

(i) if to the Borrowers and other Loan Parties, the Administrative Agent, an L/C
Issuer or the Swing Line Lender, to the address, facsimile number, electronic
mail address or telephone number specified for such Person on Schedule 11.02;
and

(ii) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by facsimile transmission shall
be deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices and
other communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
and L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or L/C Issuer pursuant to Article II if
such Lender or L/C Issuer, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent, the Swing Line Lender, the L/C Issuer
or the Borrowers (on behalf of itself and the other Loan Parties) each may, in
their 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.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and

 

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identifying the website address therefor; provided that, for both clauses
(i) and (ii), if such notice, email or other communication is not sent during
the normal business hours of the recipient, such notice, email or communication
shall be deemed to have been sent at the opening of business on the next
business day for the recipient.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any Loan Party, Lender, L/C Issuer or
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrowers’, any Loan
Party’s or the Administrative Agent’s transmission of Borrower Materials through
the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent Party; provided, however, that in no event
shall any Agent Party have any liability to any Loan Party, Lender, L/C Issuer
or other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

(d) Change of Address, Etc. Each Loan Party, Administrative Agent, L/C Issuer
and Swing Line Lender may change its address, facsimile or telephone number for
notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the Borrowers, the
Administrative Agent, the L/C Issuers and the Swing Line Lender. In addition,
each Lender agrees to notify the Administrative Agent from time to time to
ensure that the Administrative Agent has on record (i) an effective address,
contact name, telephone number, facsimile number and electronic mail address to
which notices and other communications may be sent and (ii) accurate wire
instructions for such Lender. Furthermore, each Public Lender agrees to cause at
least one individual at or on behalf of such Public Lender to at all times have
selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its
delegate, in accordance with such Public Lender’s compliance procedures and
applicable Law, including United States Federal and state securities Laws, to
make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to the Loan Parties or their securities for
purposes of United States Federal or state securities laws.

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuers and the Lenders shall be entitled to rely and act upon
any notices (including electronic notices of Loan Notices, Letter of Credit
Applications and Swing Line Loan Notices) purportedly given by or on behalf of
the Borrowers even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Loan Parties shall
indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of the Borrowers, except to the extent such losses, costs, expenses
or liabilities resulted from the gross negligence or willful misconduct of the
applicable Person. All telephonic notices to and other telephonic communications
with the Administrative Agent may be recorded by the Administrative Agent, and
each of the parties hereto hereby consents to such recording.

 

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Section 11.03 No Waiver; Cumulative Remedies; Enforcement.

No failure by any Lender, L/C Issuer or the Administrative Agent to exercise,
and no delay by any such Person in exercising, any right, remedy, power or
privilege hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under any other Loan Document (including the imposition
of the Default Rate) preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and provided in each other Loan Document,
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 9.02 for the benefit of all the
Lenders and the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the
rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C
Issuer or the Swing Line Lender from exercising the rights and remedies that
inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender,
as the case may be) hereunder and under the other Loan Documents, (c) any Lender
from exercising setoff rights in accordance with Section 11.08 (subject to the
terms of Section 2.13), or (d) any Lender from filing proofs of claim or
appearing and filing pleadings on its own behalf during the pendency of a
proceeding relative to any Loan Party under any Debtor Relief Law; and provided
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Section 9.02 and (ii) in addition to the matters set forth in clauses (b),
(c) and (d) of the preceding proviso and subject to Section 2.13, any Lender
may, with the consent of the Required Lenders, enforce any rights and remedies
available to it and as authorized by the Required Lenders.

Section 11.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers shall pay (i) on the date of the
disbursements of any Loan pursuant to Article II all reasonable out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent), in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof, (ii) all reasonable out-of-pocket
expenses incurred by the L/C Issuer in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder and (iii) all out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the L/C Issuer (including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Lender or L/C
Issuer), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Loan Documents, including its
rights under this Section 11.04, or (B) 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
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(b) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, 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 any Indemnitee or asserted against any Indemnitee by any third party or by
either of the Borrowers or any other Loan Party arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto of their respective obligations
hereunder or thereunder, the consummation of the transactions contemplated
hereby or thereby, or, in the case of the Administrative Agent (and any
sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents (including in respect of any matters
addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the L/C Issuer
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 either of the
Borrowers or any of their respective Subsidiaries, or any Environmental
Liability related in any way to either of the Borrowers or any of their
respective 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, whether brought by a third party or by
either of the Borrowers or any other Loan Party, 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 (x) 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 or (y) result from a claim
brought by either of the Borrowers or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if either of the Borrowers or such other Loan Party has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction. Without limiting the provisions
of Section 3.01(e), this Section 11.04(b) shall not apply with respect to Taxes
other than any Taxes that represent losses, claims, damages, etc. arising from
any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by them to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer, the Swing Line Lender or any Related Party of any of
the foregoing, each Lender severally agrees to pay to the Administrative Agent
(or any such sub-agent), the L/C Issuer or such Related Party, as the case may
be, such Lender’s pro rata share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount
(including any such amount in respect of a claim asserted by such Lender), such
payment to be made severally among them based on their respective pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought); provided, further, 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 (or any such
sub-agent), L/C Issuer or Swing Line Lender in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent), L/C Issuer or Swing Line Lender in connection with such
capacity. The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.12(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, none of the Loan Parties shall assert, and each hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
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Document or any agreement or instrument contemplated hereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

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

(f) Survival. The agreements in this Section and the indemnity provisions of
Section 11.02(e) shall survive the resignation of the Administrative Agent, the
Collateral Agent, the L/C Issuer and the Swing Line Lender, the replacement of
any Lender, the termination of the Commitments hereunder and the repayment,
satisfaction or discharge of all the other Obligations.

Section 11.05 Payments Set Aside.

To the extent that any payment by or on behalf of any Loan Party is made to the
Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent,
the L/C Issuer or any Lender exercises its right of set-off, and such payment or
the proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Administrative Agent, the L/C
Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender and L/C Issuer severally agrees to pay to the
Administrative Agent upon demand its applicable share (without duplication) of
any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the applicable Overnight Rate from time to time in
effect. The obligations of the Lenders and the L/C Issuer under clause (b) of
the preceding sentence shall survive payment in full of the Obligations and the
termination of this Agreement.

Section 11.06 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of the
parties hereto and thereto and their respective successors and assigns permitted
hereby, except that neither the Borrowers nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder or thereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). 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, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
and the other Loan Documents (including all or a portion of its Commitment and
the Loans (including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that (in
each case with respect to any facility) any such assignment shall be subject to
the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s revolving commitment under any facility and related revolving loans or,
respectively, at the time owing to it under such facility, or contemporaneous
assignments to related Approved Funds that equal at least the amount specified
in paragraph (b)(i)(B) of this Section in the aggregate, or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the commitment (which for this purpose includes loans
outstanding thereunder) or, if the commitment is not then in effect, the
principal outstanding balance of the 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 or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than, for any facility, $5,000,000, in the case of any
assignment of revolving commitments (and related revolving loans and obligations
thereunder) unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrowers otherwise consent (each
such consent not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met.

(ii) Proportionate Amounts. 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 with respect to the loans or the commitment
assigned, except that this clause (ii) shall not (A) apply the Swing Line
Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit
any Lender from assigning all or a portion of its rights and obligations in
respect of its revolving commitments (and related revolving loans and
obligations thereunder) on a non-pro rata basis;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrowers (such consent not to be unreasonably withheld
or delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrowers shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five Business Days
after having received notice thereof;

 

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(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
revolving commitments (and related revolving loans and obligations thereunder)
if such assignment is to a Person that is not a Lender with a Commitment in
respect of the applicable facility, an Affiliate of such Lender or an Approved
Fund with respect to such Lender;

(C) the consent of the L/C Issuer for a revolving credit facility (such consent
not to be unreasonably withheld or delayed) shall be required for any assignment
in respect of revolving commitments (and related revolving loans and obligations
thereunder) in respect thereof; and

(D) the consent of the Swing Line Lender for a revolving credit facility (such
consent not to be unreasonably withheld or delayed) shall be required for any
assignment in respect of revolving commitments (and related revolving loans and
obligations thereunder) in respect thereof.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
any of the Borrowers, other Loan Parties, or any of their respective
Subsidiaries or Affiliates, (B) to any Defaulting Lender or any of its
Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (B), or (C) to
a natural person.

(vi) Certain Additional Payments. In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate (which may be outright payment, purchases by the assignee
of participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrowers and the Administrative Agent, the
applicable pro rata share of loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer
or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund
as appropriate) its full pro rata share of all loans and participations in
Letters of Credit and Swing Line Loans in accordance with its pro rata share of
the revolving commitments relating thereto. Notwithstanding the foregoing, in
the event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable Law without compliance with
the provisions of this paragraph, then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
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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 3.01, 3.04, 3.05, and 11.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment; provided, that except to the extent otherwise expressly agreed by
the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, a Borrower (at its expense) shall
execute and deliver a Note to the assignee Lender. Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers (and such agency being solely for tax purposes), shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts (and stated interest) of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive, absent
manifest error, and the Borrowers, the Administrative Agent and the Lenders
shall 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. In addition, the Administrative Agent
shall maintain on the Register information regarding the designation, and
revocation of designation, of any Lender as a Defaulting Lender. The Register
shall be available for inspection by the Borrowers and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender or the Borrowers or any
of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or
a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrowers,
the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. For the avoidance of doubt, each Lender shall
be responsible for the indemnity under Section 11.04(c) without regard to the
existence of any participation.

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, waiver or other modification described in the first proviso of
Section 11.01(a) that affects such Participant. The Borrowers agree that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05
(it being understood that the documentation required under Section 3.01(e) shall
be delivered to the Lender who sells the participation) to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section; provided that such Participant (A) agrees to be
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under paragraph (b) of this Section and (B) shall not be entitled to receive any
greater payment under Sections 3.01 or 3.04, with respect to any participation,
than the Lender from whom it acquired the applicable participation would have
been entitled to receive. Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrowers to effectuate the provisions of Section 3.06 with respect to any
Participant. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 11.08 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.13 as though it were a
Lender. Each Lender that sells a participation shall, acting solely for this
purpose as an agent of the Borrowers, maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Lender shall
have any obligation to disclose all or any portion of the Participant Register
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Loan Document) to any Person except to the extent that
such disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations. The entries in the Participant Register
shall be conclusive, absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrowers’ prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.01 unless the Borrowers are notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 3.01(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank or any
central bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

(g) Resignation as L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its revolving commitments (and related revolving loans
and obligations thereunder) pursuant to subsection (b) above, Bank of America
may, (i) upon thirty (30) days’ notice to the Borrowers and the Lenders, resign
as L/C Issuer and/or (ii) upon thirty (30) days’ notice to the Borrowers, resign
as Swing Line Lender. In the event of any such resignation as L/C Issuer or
Swing Line Lender, the Borrowers shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrowers to appoint any such successor shall
affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as
the case may be. If Bank of America resigns as L/C Issuer, it shall retain all
the rights, powers, privileges and duties of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Loans or fund risk
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in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the
appointment of a successor L/C Issuer and/or Swing Line Lender, (1) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (2) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.

Section 11.07 Treatment of Certain Information; Confidentiality.

Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its Related Parties
(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 required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable Laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any 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 any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights and obligations under this Agreement or any Eligible Assignee invited to
become a Lender as provided herein, (g) on a confidential basis to (i) any
rating agency in connection with rating the Borrowers or their Subsidiaries or
the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any
similar agency in connection with the issuance and monitoring of CUSIP numbers
or other market identifiers with respect to the credit facilities provided
hereunder, (h) with the consent of the Borrowers or (j) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
the L/C Issuer or any of their respective Affiliates on a nonconfidential basis
from a source other than the Borrowers.

For purposes of this Section, “Information” means all information received from
the Borrowers or any Subsidiary relating to the Borrowers or any Subsidiary or
any of their respective businesses, other than (x) any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrowers or any Subsidiary and
(y) any such information received from the Borrowers or any Subsidiary after the
date hereof which is clearly identified at the time of delivery as
nonconfidential. 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.

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
the Borrowers or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable Law, including United States federal and state securities Laws.

Section 11.08 Set-off.

If an Event of Default shall have occurred and be continuing, each Lender, the
L/C Issuer and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable Law,
to set off and apply any and all deposits (general or special, time or

 

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demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of the
Borrowers or any other Loan Party against any and all of the obligations of the
Borrowers or such Loan Party now or hereafter existing under this Agreement or
any other Loan Document to such Lender or the L/C Issuer or their respective
Affiliates, irrespective of whether or not such Lender, the L/C Issuer or
Affiliate shall have made any demand under this Agreement or any other Loan
Document and although such obligations of such Loan Party may be contingent or
unmatured or are owed to a branch, office or Affiliate of such Lender or the L/C
Issuer different from the branch, office or Affiliate holding such deposit or
obligated on such indebtedness; provided, that in the event that any Defaulting
Lender shall exercise any such right of setoff, (x) all amounts so set off shall
be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.15 and, pending such payment, shall
be segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent, the L/C Issuer and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff.
The rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have. Each Lender and the L/C Issuer agrees to notify the
Borrowers and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. If any payment by or on behalf of any
Borrower or Borrowers is made to the Administrative Agent, any L/C Issuer, or
any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises
a right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, such L/C Issuer or such Lender in its discretion) to be
repaid to any Person, then to the extent of such recovery, the Obligation
originally intended to be satisfied, and all Liens, rights and remedies relating
thereto, shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred.

Section 11.09 Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the
interest paid or agreed to be paid under the Loan Documents shall not exceed the
maximum rate of non-usurious interest permitted by applicable Law (the “Maximum
Rate”). If the Administrative Agent or any Lender shall receive interest in an
amount that exceeds the Maximum Rate, the excess interest shall be applied to
the principal of the Loans or, if it exceeds such unpaid principal, refunded to
the Borrowers. In determining whether the interest contracted for, charged, or
received by the Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.

Section 11.10 Counterparts; Integration; Effectiveness.

This Agreement may be executed in counterparts (and by different parties hereto
in 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 or the L/C Issuer, 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 5.01, this Agreement
shall become effective when it shall have been executed by the

 

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Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile or other electronic imaging means (e.g.
“pdf” or “tif”) shall be effective as delivery of a manually executed
counterpart of this Agreement.

Section 11.11 Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

Section 11.12 Severability.

If any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and enforceability
of the remaining provisions of this Agreement and the other Loan Documents shall
not be affected or impaired thereby and (b) the parties shall endeavor in good
faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Without limiting the
foregoing provisions of this Section 11.12, if and to the extent that the
enforceability of any provisions in this Agreement relating to Defaulting
Lenders shall be limited by Debtor Relief Laws, as determined in good faith by
the Administrative Agent, the L/C Issuer or the Swing Line Lender, as
applicable, then such provisions shall be deemed to be in effect only to the
extent not so limited.

Section 11.13 Replacement of Lenders.

If (i) any Lender requests compensation under Section 3.04, (ii) the Borrowers
are required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, (iii) a Lender
(a “Non-Consenting Lender”) does not consent to a proposed change, waiver,
discharge or termination with respect to any Loan Document that has been
approved by the Required Lenders as provided in Section 11.01, or (iv) any
Lender is a Defaulting Lender, then the Borrowers may, at their 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, and consents required by, Section 11.06), all
of its interests, rights (other than its existing rights to payments pursuant to
Sections 3.01 and 3.04) and obligations under this Agreement and the related
Loan Documents to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that:

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 11.06(b)(iv), unless waived by the Administrative Agent in
its discretion;

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.05) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

 

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(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter;

(d) such assignment does not conflict with applicable Laws; and

(e) in the case of any such assignment resulting from a Non-Consenting Lender’s
failure to consent to a proposed change, waiver, discharge or termination with
respect to any Loan Document, the applicable replacement bank, financial
institution or Fund consents to the proposed change, waiver, discharge or
termination; provided that the failure by such Non-Consenting Lender to execute
and deliver an Assignment and Assumption shall not impair the validity of the
removal of such Non-Consenting Lender and the mandatory assignment of such
Non-Consenting Lender’s Commitments and outstanding Loans and participations in
L/C Obligations and Swing Line Loans pursuant to this Section 11.13 shall
nevertheless be effective without the execution by such Non-Consenting Lender of
an Assignment and Assumption.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

Section 11.14 Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY CLAIMS,
CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR
OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH
THEREIN) AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. TO THE EXTENT
PERMITTED BY APPLICABLE LAW EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. EACH PARTY HERETO WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.

 

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Section 11.15 Waiver of Right to Trial by Jury.

EACH PARTY HERETO HEREBY IRREVOCABLY 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 OR 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 PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 11.16 USA PATRIOT Act Notice.

Each Lender that is subject to the PATRIOT Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Loan Parties that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”), it is required to obtain, verify and record information that
identifies the Loan Parties, which information includes the name and address of
the Loan Parties and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify such Loan Party in accordance
with the Act. The Loan Parties shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Loan Party requests in order
to comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act.

Section 11.17 No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), the Borrowers and each other Loan Party
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:
(i) (A) the arranging and other services regarding this Agreement provided by
the Administrative Agent, the Arrangers and the Lenders are arm’s-length
commercial transactions between the Borrowers, each other Loan Party and their
respective Affiliates, on the one hand, and the Administrative Agent, the
Arrangers and the Lenders, on the other hand, (B) each of the Borrowers and the
other Loan Parties has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) each of the Borrowers
and other Loan Parties is capable of evaluating, and understands and accepts,
the terms, risks and conditions of the transactions contemplated hereby and by
the other Loan Documents; (ii) (A) the Administrative Agent, the Arrangers and
each Lender is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for any of the Borrowers,
the other Loan Parties or their respective Affiliates, or any other Person and
(B) neither the Administrative Agent, any of the Arrangers nor any of the
Lenders has any obligation to any of the Borrowers, the other Loan Parties or
their respective Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent, the Arrangers and the Lenders and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrowers, the other Loan
Parties and their respective Affiliates, and neither the Administrative Agent,
any of the Arrangers nor any of the Lenders has any obligation to disclose any
of such interests to any of the Borrowers, the other Loan Parties or their

 

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respective Affiliates. To the fullest extent permitted by law, each of the
Borrowers and the other Loan Parties hereby waives and releases any claims that
it may have against the Administrative Agent, any of the Arrangers or any of the
Lenders with respect to any breach or alleged breach of agency or fiduciary duty
in connection with any aspect of any transaction contemplated hereby.

Section 11.18 Electronic Execution of Assignments and Certain Other Documents.

The words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures, the electronic matching of assignment terms and contract formations
on electronic platforms approved by the Administrative Agent or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

Section 11.19 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions.

Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Lender that is an EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any Lender that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

 

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

 

BORROWERS: ARMSTRONG FLOORING, INC., By:  

/s/ John W. Thompson

Name:   John W. Thompson Title:   Senior Vice President and   Chief Financial
Officer ARMSTRONG HARDWOOD FLOORING COMPANY By:  

/s/ Douglas B. Bingham

Name:   Douglas B. Bingham Title:   Vice President and Treasurer

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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

GUARANTORS: ARMSTRONG WOOD PRODUCTS, INC., a Delaware corporation By:  

/s/ John W. Thompson

Name:   Douglas B. Bingham Title:   Vice President and Treasurer AFI LICENSING
LLC, a Delaware limited liability company By:  

/s/ Douglas B. Bingham

Name:   Douglas B. Bingham Title:   Vice President and Treasurer

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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

BANK OF AMERICA, N.A.,

as Administrative Agent and Collateral Agent

By:  

/s/ William J. Wilson

Name:   William J. Wilson Title:   Senior Vice President

BANK OF AMERICA, N.A.,

as a Lender

By:  

/s/ William J. Wilson

Name:   William J. Wilson Title:   Senior Vice President

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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JPMORGAN CHASE BANK, N.A., as a Lender By:  

/s/ Salvatore P. Demma

Name:   Salvatore P. Demma Title:   Authorized officer

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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SUNTRUST BANK, as a Lender By:  

/s/ Amanda Watkins

Name:   Amanda Watkins Title:   Director

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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HSBC BANK USA, N.A., as a Lender By:  

/s/ Peter Martin

Name:   Peter Martin Title:   Vice President

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page

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MANUFACTURERS AND TRADERS TRUST COMPANY, as a Lender By:  

/s/ Sarah Lesser

Name:   Sarah Lesser Title:   Assistant Vice President

 

Armstrong Flooring, Inc.

CREDIT AGREEMENT

Signature page