Exhibit 10.1
EXECUTION VERSION

 
(CHASE LOGO) [c64402c6440200.gif]
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
April 27, 2011
among
FURNITURE BRANDS INTERNATIONAL, INC.,
BROYHILL FURNITURE INDUSTRIES, INC.,
HDM FURNITURE INDUSTRIES, INC.,
LANE FURNITURE INDUSTRIES, INC. and
THOMASVILLE FURNITURE INDUSTRIES, INC.,
MAITLAND-SMITH FURNITURE INDUSTRIES, INC.,
as Borrowers,
The Other Loan Parties Named Herein,
The Lenders Party Hereto,
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent,
and
BANK OF AMERICA, N.A.
and
WELLS FARGO CAPITAL FINANCE, LLC,
as Syndication Agents
 
J.P. MORGAN SECURITIES LLC,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, and
WELLS FARGO CAPITAL FINANCE, LLC,
as Joint Bookrunners and Joint Lead Arrangers
 

 

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TABLE OF CONTENTS

              Page  
ARTICLE I Definitions
    1    
SECTION 1.01 Defined Terms
    1  
SECTION 1.02 Classification of Loans and Borrowings
    26  
SECTION 1.03 Terms Generally
    26  
SECTION 1.04 Accounting Terms; GAAP
    26    
ARTICLE II The Credits
    27    
SECTION 2.01 Commitments
    27  
SECTION 2.02 Loans and Borrowings
    27  
SECTION 2.03 Requests for Revolving Borrowings
    28  
SECTION 2.04 Protective Advances
    28  
SECTION 2.05 Swingline Loans and Overadvances
    29  
SECTION 2.06 Letters of Credit
    30  
SECTION 2.07 Funding of Borrowings
    33  
SECTION 2.08 Interest Elections
    34  
SECTION 2.09 Termination, Reduction and Increase of Commitments
    35  
SECTION 2.10 Repayment of Loans; Evidence of Debt
    36  
SECTION 2.11 Prepayment of Loans
    37  
SECTION 2.12 Fees
    39  
SECTION 2.13 Interest
    39  
SECTION 2.14 Alternate Rate of Interest
    40  
SECTION 2.15 Increased Costs
    40  
SECTION 2.16 Break Funding Payments
    42  
SECTION 2.17 Taxes
    42  
SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Set-offs
    45  
SECTION 2.19 Mitigation Obligations; Replacement of Lenders
    47  
SECTION 2.20 Defaulting Lenders
    48  
SECTION 2.21 Returned Payments
    49  
SECTION 2.22 Banking Services and Swap Agreements
    49    
ARTICLE III Representations and Warranties
    50    
SECTION 3.01 Organization; Powers
    50  
SECTION 3.02 Authorization; Enforceability
    50  
SECTION 3.03 Governmental Approvals; No Conflicts
    50  
SECTION 3.04 Financial Condition; No Material Adverse Change
    50  
SECTION 3.05 Properties
    50  
SECTION 3.06 Litigation and Environmental Matters
    51  
SECTION 3.07 Compliance with Laws and Agreements
    51  
SECTION 3.08 Investment Company Status
    51  
SECTION 3.09 Taxes
    51  
SECTION 3.10 ERISA
    51  
SECTION 3.11 Disclosure
    52  
SECTION 3.12 Material Agreements
    52  
SECTION 3.13 Solvency
    52  
SECTION 3.14 Insurance
    52  
SECTION 3.15 Capitalization and Subsidiaries
    52  
SECTION 3.16 Security Interest in Collateral
    53  

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              Page  
SECTION 3.17 Employment Matters
    53  
SECTION 3.18 Common Enterprise
    53    
ARTICLE IV Conditions
    53    
SECTION 4.01 Restatement Date
    53  
SECTION 4.02 Each Credit Event
    55    
ARTICLE V Affirmative Covenants
    56    
SECTION 5.01 Financial Statements; Borrowing Base and Other Information
    56  
SECTION 5.02 Notices of Material Events
    60  
SECTION 5.03 Existence; Conduct of Business
    60  
SECTION 5.04 Payment of Obligations
    61  
SECTION 5.05 Maintenance of Properties
    61  
SECTION 5.06 Books and Records; Inspection Rights
    61  
SECTION 5.07 Compliance with Laws
    61  
SECTION 5.08 Use of Proceeds
    61  
SECTION 5.09 Insurance
    61  
SECTION 5.10 Casualty and Condemnation
    61  
SECTION 5.11 Appraisals and Field Examinations
    62  
SECTION 5.12 Depository Banks
    62  
SECTION 5.13 Additional Collateral; Further Assurances
    62    
ARTICLE VI Negative Covenants
    63    
SECTION 6.01 Indebtedness
    63  
SECTION 6.02 Liens
    66  
SECTION 6.03 Fundamental Changes
    67  
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
    67  
SECTION 6.05 Asset Sales
    70  
SECTION 6.06 Sale and Leaseback Transactions
    70  
SECTION 6.07 Swap Agreements
    71  
SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness
    71  
SECTION 6.09 Transactions with Affiliates
    72  
SECTION 6.10 Restrictive Agreements
    72  
SECTION 6.11 Amendment of Material Documents
    73  
SECTION 6.12 Financial Covenant
    73  
SECTION 6.13 Change in Fiscal Year
    73    
ARTICLE VII Events of Default
    73      
ARTICLE VIII The Administrative Agent
    76      
ARTICLE IX Miscellaneous
    78    
SECTION 9.01 Notices
    78  
SECTION 9.02 Waivers; Amendments
    79  
SECTION 9.03 Expenses; Indemnity; Damage Waiver
    80  
SECTION 9.04 Successors and Assigns
    82  
SECTION 9.05 Survival
    85  
SECTION 9.06 Counterparts; Integration; Effectiveness
    85  
SECTION 9.07 Severability
    86  
SECTION 9.08 Right of Setoff
    86  
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process
    86  

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              Page  
SECTION 9.10 WAIVER OF JURY TRIAL
    87  
SECTION 9.11 Headings
    87  
SECTION 9.12 Confidentiality
    87  
SECTION 9.13 Several Obligations; Nonreliance; Violation of Law
    88  
SECTION 9.14 USA PATRIOT Act
    88  
SECTION 9.15 Disclosure
    88  
SECTION 9.16 Appointment for Perfection
    88  
SECTION 9.17 Interest Rate Limitation
    88  
SECTION 9.18 Nature of Borrowers’ Obligations.
    89    
ARTICLE X Loan Guaranty
    89    
SECTION 10.01 Guaranty
    89  
SECTION 10.02 Guaranty of Payment
    89  
SECTION 10.03 No Discharge or Diminishment of Loan Guaranty
    90  
SECTION 10.04 Defenses Waived
    90  
SECTION 10.05 Rights of Subrogation
    91  
SECTION 10.06 Reinstatement; Stay of Acceleration
    91  
SECTION 10.07 Information
    91  
SECTION 10.08 Termination
    91  
SECTION 10.09 Taxes
    91  
SECTION 10.10 Maximum Liability
    92  
SECTION 10.11 Contribution
    92  
SECTION 10.12 Liability Cumulative
    92    
ARTICLE XI The Borrower Representative
    93    
SECTION 11.01 Appointment; Nature of Relationship
    93  
SECTION 11.02 Powers
    93  
SECTION 11.03 Employment of Agents
    93  
SECTION 11.04 Notices
    93  
SECTION 11.05 Successor Borrower Representative
    93  
SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate
    93  
SECTION 11.07 Reporting
    94    
ARTICLE XII Amendment and Restatement
    94      
ARTICLE XIII Consent and Affirmation
    94    

SCHEDULES:
Commitment Schedule
Exiting Lenders Schedule
EXHIBITS:

     
Exhibit A —
  Form of Assignment and Assumption
Exhibit B —
  Form of Borrowing Base Certificate
Exhibit C —
  Form of Compliance Certificate
Exhibit D —
  Form of Joinder Agreement
Exhibit E-1 —
  Form of U.S. Tax Certificate (for Non-U.S. Lenders or Participants That are
Not Partnerships)
Exhibit E-2 —
  Form of U.S. Tax Certificate (for Non-U.S. Lenders or Participants That are
Partnerships)

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     AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 27, 2011 (as it may
be amended or modified from time to time, this “Agreement”), among FURNITURE
BRANDS INTERNATIONAL, INC., a Delaware corporation (the “Company”), BROYHILL
FURNITURE INDUSTRIES, INC., a North Carolina corporation (“Broyhill”), HDM
FURNITURE INDUSTRIES, INC., a Delaware corporation (“HDM”), LANE FURNITURE
INDUSTRIES, INC., a Mississippi corporation (“Lane”), THOMASVILLE FURNITURE
INDUSTRIES, INC., a Delaware corporation (“Thomasville”), MAITLAND-SMITH
FURNITURE INDUSTRIES, INC., a Delaware corporation (“Maitland-Smith”, and,
together with the Company, HDM, Broyhill, Lane and Thomasville, each a
“Borrower,” and, collectively, the “Borrowers”), the other Loan Parties named
herein, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.
RECITALS
          WHEREAS, certain of the Borrowers, the financial institutions
designated as existing lenders on the Commitment Schedule hereto (the
“Continuing Lenders”), the financial institutions listed on the Exiting Lenders
Schedule (the “Exiting Lenders”) and the Administrative Agent entered into that
certain Credit Agreement dated as of August 9, 2007 (as heretofore amended, the
“Existing Credit Agreement”); and
          WHEREAS, the Borrowers, the Administrative Agent and the Continuing
Lenders wish to amend and restate the Existing Credit Agreement on the terms and
conditions set forth below.
          NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrowers, the
Lenders, and the Administrative Agent hereby agree to amend and restate the
Existing Credit Agreement as follows:
ARTICLE I
Definitions
          SECTION 1.01 Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
          “ABR”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
          “Accordion” means the Commitment increase mechanism set forth in
Section 2.09.
          “Account” has the meaning assigned to such term in the Security
Agreement.
          “Account Debtor” means any Person obligated on an Account.
          “Acquired Entity or Business” means either (a) the assets constituting
a business, division, facility, product line or line of business of any Person
not already a Subsidiary which are acquired by the Company or a direct or
indirect wholly-owned Subsidiary of the Company or (b) all of the capital stock
of any such Person, which Person shall, as a result of such acquisition or
merger, become a direct or indirect wholly-owned Subsidiary of the Company (or
shall be merged with and into the Company or another Loan Party, with the
Company or such other Loan Party being the surviving Person).

 

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          “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing
for any Interest Period, or for any ABR Borrowing (for any Interest Period if
such ABR Borrowing is based on clause (c) of the definition of Alternate Base
Rate), an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate. Notwithstanding the above, to the extent that
“LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing,
such rate shall be determined as modified by the definition of Alternate Base
Rate.
          “Administrative Agent” means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
          “Administrative Questionnaire” means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
          “Affiliate” means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
          “Alternate Base Rate” means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds
Effective Rate in effect on such day plus 0.5% and (c) the Adjusted LIBO Rate
for a one month interest period on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus 1%, provided that, for the
avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or
substitute page) at approximately 11:00 a.m. London time on such day (without
any rounding). Any change in the Alternate Base Rate due to a change in the
Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
          “Applicable Percentage” means, with respect to any Lender, a
percentage equal to a fraction the numerator of which is such Lender’s
Commitment and the denominator of which is the aggregate Commitments of all
Lenders (if the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon such Lender’s share of the aggregate
Revolving Exposures at that time); provided that, in accordance with
Section 2.20, so long as any Lender shall be a Defaulting Lender, such
Defaulting Lender’s Commitment shall be disregarded in the calculations above.
          “Applicable Rate” means, for any day, with respect to any ABR Loan or
Eurodollar Revolving Loan, or with respect to the commitment fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as
the case may be, based upon Average Availability:

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                          Average           Eurodollar         Availability  
ABR Spread     Spread     Commitment Fee Rate  
Category 1
    1.00 %     2.25 %     0.50 %
³ $165,000,000 (or, after giving effect to the first exercise of the Accordion,
$200,000,000)
                       
 
                       
Category 2
    1.25 %     2.50 %     0.50 %
< $165,000,000 (or, after giving effect to the first exercise of the Accordion,
$200,000,000) but ³ $125,000,000
                       
 
                       
Category 3
    1.50 %     2.75 %     0.375 %
< $125,000,000 but ³ $42,000,000
                       
 
                       
Category 4
    1.75 %     3.00 %     0.375 %
< $42,000,000
                       

          For purposes of the foregoing, (a) the Applicable Rate shall be
determined by reference to the Average Availability for the most recently
completed fiscal quarter and (b) each change in the Applicable Rate resulting
from a change in the Average Availability shall be effective during the period
commencing on and including the date five Business Days after delivery to the
Administrative Agent of a Compliance Certificate indicating such change and
ending on the date immediately preceding the effective date of the next such
change, provided that (i) subject to the following clause (ii), Average
Availability shall be deemed to be in Category 3 until adjusted pursuant hereto
for the fiscal quarter ending June 30, 2011 and (ii) Average Availability shall
be deemed to be in Category 4 (A) at any time that an Event of Default has
occurred and is continuing or (B) at the option of the Administrative Agent or
at the request of the Required Lenders if the Borrower fails to deliver a
Compliance Certificate required to be delivered by it pursuant to
Section 5.01(d), during the period from the expiration of the time for delivery
thereof until such Compliance Certificate is delivered.
          “Approved Fund” has the meaning assigned to such term in Section 9.04.
          “Assignment and Assumption” means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
          “Availability” means, at any time, an amount equal to (a) the lesser
of the Commitment and the Borrowing Base minus (b) the Revolving Exposure of all
Lenders.
          “Availability Period” means the period from and including the
Restatement Date to but excluding the earlier of the Maturity Date and the date
of termination of the Commitments.
          “Available Commitment” means, at any time, the aggregate Commitments
then in effect minus the Revolving Exposure of all Lenders at such time
(calculated, with respect to any Defaulting Lender, as if such Defaulting Lender
had funded its Applicable Percentage of all outstanding Borrowings).
          “Average Availability” means, with respect to any fiscal quarter, an
amount equal to the sum of the Daily Availability for each day in such fiscal
quarter divided by the number of days in such fiscal quarter. For purposes
hereof, “Daily Availability” for any day means the excess of the Borrowing Base
(as set forth on the most recent Borrowing Base Certificate delivered) over the
Revolving Exposure on such day (determined, in the case of days which are
Business Days, as of the close of business of each such day).

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          “Banking Services” means each and any of the following bank services
provided to any Loan Party by any Lender or any of its Affiliates: (a) credit
cards for commercial customers (including, without limitation, “commercial
credit cards” and purchasing cards), (b) stored value cards and (c) treasury
management services (including, without limitation, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).
          “Banking Services Obligations” of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
          “Banking Services Reserves” means all Reserves which the
Administrative Agent from time to time establishes in its Permitted Discretion
for Banking Services then provided or outstanding.
          “Bankruptcy Event” means, with respect to any Person, such Person
becomes the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, custodian, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business, appointed for it, or, in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment, provided that a Bankruptcy Event shall not result
solely by virtue of any ownership interest, or the acquisition of any ownership
interest, in such Person by a Governmental Authority or instrumentality thereof,
provided, further, that such ownership interest does not result in or provide
such Person 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 Person (or such Governmental Authority or instrumentality), to
reject, repudiate, disavow or disaffirm any contracts or agreements made by such
Person.
          “Board” means the Board of Governors of the Federal Reserve System of
the United States of America.
          “Borrower Representative” means the Company in its capacity as
contractual representative of the Borrowers pursuant to Article XI.
          “Borrowing” means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, (b) a Swingline Loan, and (c) a
Protective Advance and (d) an Overadvance.
          “Borrowing Base” means, at any time, the sum of (a) 85% of the
Eligible Accounts at such time, plus (b) the lesser of (i) 70% of the Eligible
Inventory, valued at the lower of cost or market value, determined on a
first-in-first-out basis, at such time and (ii) the product of 85% multiplied by
the Net Orderly Liquidation Value percentage identified in the most recent
inventory appraisal ordered by the Administrative Agent multiplied by the
eligible inventory (as specified by category in such appraisal), valued at the
lower of cost or market value, determined on a first-in-first-out basis, at such
time, minus (c) Reserves. The Administrative Agent may, in its Permitted
Discretion, adjust Reserves or reduce one or more of the other elements used in
computing the Borrowing Base and, after the occurrence and during the
continuance of a Default, reduce the advance rates set forth above.
          “Borrowing Base Certificate” means a certificate, signed and certified
as accurate and complete in all material respects by a Financial Officer of the
Company, in substantially the form of Exhibit C or another form which is
acceptable to the Administrative Agent in its Permitted Discretion.

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          “Borrowing Request” means a request by the Borrower Representative for
a Revolving Borrowing in accordance with Section 2.03.
          “Business Day” means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York, New York or Chicago, Illinois are
authorized or required by law to remain closed; provided that, when used in
connection with a Eurodollar Loan, the term “Business Day” shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
          “Capital Expenditures” means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on a consolidated balance
sheet of the Company and its Subsidiaries prepared in accordance with GAAP.
          “Capital Lease Obligations” of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
          “Change in Control” means (a) the acquisition of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act), directly
or indirectly, by any Person or group (within the meaning of the Exchange Act
and the rules of the SEC thereunder as in effect on the date hereof) (excluding,
for this purpose, the Company or its Subsidiaries or any employee benefit plan
(or related trust) of the Company or its Subsidiaries) of 25% of the combined
voting power of the Company’s then-outstanding voting securities entitled to
vote generally in the election of directors; (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Company by
Persons who were neither (i) nominated by a majority of the board of directors
of the Company then in office nor (ii) appointed by directors so nominated or
(c) the Company shall at any time cease to own directly or indirectly 100% of
the capital stock of any of Broyhill, Lane, HDM, Thomasville or Maitland-Smith.
          “Change in Law” means (a) the adoption of any law, rule, regulation or
treaty (including any rules or regulations issued under or implementing any
existing law) after the date of this Agreement, (b) any change in any law, rule,
regulation or treaty or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement; provided however, that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines, requirements and directives thereunder, issued
in connection therewith or in implementation thereof, and (ii) all requests,
rules, guidelines, requirements and directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
a “Change in Law” regardless of the date enacted, adopted, issued or
implemented.
          “Changeover Amount” means, at any time, the greater of $42,000,000 and
16.8% of the aggregate amount of the Commitments at such time.

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          “Chase” means JPMorgan Chase Bank, N.A., a national banking
association, in its individual capacity, and its successors.
          “Class”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Swingline Loans or Protective Advances or Overadvances.
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time.
          “Collateral” means any and all property owned, leased or operated by a
Person covered by the Collateral Documents and any and all other property of any
Loan Party, now existing or hereafter acquired, that is or at any time becomes
subject to a security interest or Lien in favor of the Administrative Agent, on
behalf of itself and the Lenders and other holders of the Secured Obligations,
to secure the Secured Obligations.
          “Collateral Access Agreement” has the meaning assigned to such term in
the Security Agreement.
          “Collateral Documents” means, collectively, the Security Agreement and
any other documents granting a Lien upon the Collateral as security for payment
of the Secured Obligations.
          “Collection Account” has the meaning assigned to such term in the
Security Agreement.
          “Commitment” means (a) with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit, Overadvances, Protective Advances and Swingline Loans
hereunder, expressed as an amount representing the maximum possible aggregate
amount of such Lender’s Revolving Exposure hereunder, as such commitment may be
(i) reduced from time to time pursuant to Section 2.09 and (ii) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04 and (b) with respect to all Lenders, the aggregate of
such commitments. The initial amount of each Lender’s Commitment is set forth on
the Commitment Schedule, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders’ Commitments is $250,000,000.
          “Commitment Schedule” means the Schedule attached hereto identified as
such.
          “Company” means Furniture Brands International, Inc., a Delaware
corporation.
          “Compliance Certificate” has the meaning assigned to such term in
Section 5.01(d).
          “Consolidated EBIT” means, for any period, the Consolidated Net Income
determined on a consolidated basis, before Consolidated Interest Expense (to the
extent deducted in arriving at Consolidated Net Income) and provisions for taxes
and non-cash impairment charges associated with closed facilities, sales of
assets other than inventory sold in the ordinary course of business, or
impairment of goodwill or intangible assets (including trade name write-downs),
in each case that were included in arriving at Consolidated Net Income.
          “Consolidated EBITDA” means, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period.

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          “Consolidated Interest Expense” means, for any period, the sum of the
total consolidated interest expense of the Company and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, that portion of Capital Lease Obligations of the
Company and its Subsidiaries representing the interest factor for such period.
          “Consolidated Net Income” means, for any period, the net after tax
income of the Company and its Subsidiaries determined on a consolidated basis,
without giving effect to any extraordinary gains or losses; provided that
(without duplication of exclusions) (i) the net income (to the extent positive)
of any Person that is not a Subsidiary of the Company or that is accounted for
by the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the Company or a
Wholly-Owned Subsidiary thereof, (ii) to the extent Consolidated Net Income
reflects amounts attributable to minority interests in Subsidiaries that are not
Wholly-Owned Subsidiaries of the Company, Consolidated Net Income shall be
reduced by the amounts attributable to such minority interests, (iii) the net
income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends and distributions by that Subsidiary of net income is not
at the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iv) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (v) the cumulative effect of a change in accounting principles
shall be excluded.
          “Continuing Lenders” has the meaning assigned to such term in the
Recitals hereto.
          “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.
          “Control Agreement” has the meaning assigned to such term in the
Security Agreement.
          “Covenant Period” has the meaning assigned to such term in
Section 6.12.
          “Default” means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
          “Defaulting Lender” means any Lender that (a) has failed, within three
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Loans, (ii) fund any portion of its participations in Letters of Credit,
Swingline Loans or Protective Advances or (iii) pay over to any Designated Party
any other amount required to be paid by it hereunder, unless, in the case of
clause (i) above, such Lender notifies the Administrative Agent in writing that
such failure is the result of such Lender’s good faith determination that a
condition precedent to funding (specifically identified and including the
particular Default, if any) has not been satisfied; (b) has notified any
Borrower or any Designated Party in writing, or has made a public statement, to
the effect that it does not intend or expect to comply with any of its funding
obligations under this Agreement (unless such writing or public statement
indicates that such position is based on such Lender’s good faith determination
that a condition precedent to funding a Loan under this Agreement (specifically
identified and including the particular Default, if any) cannot be satisfied) or
generally under other agreements in which it commits to extend credit; (c) has
failed, within three Business Days after request by a Designated Party, acting
in good faith, to provide a certification in writing from an authorized officer
of such Lender that it will comply with its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit, Swingline Loans
and Protective Advances under this Agreement, provided that such Lender shall
cease to be a

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Defaulting Lender pursuant to this clause (c) upon such Designated Party’s
receipt of such certification in form and substance satisfactory to it and the
Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
          “Designated Party” means the Administrative Agent, the Issuing Bank,
the Swingline Lender or any other Lender.
          “Disclosure Letter” means that letter dated the date hereof from the
Loan Parties to Lenders and the Administrative Agent.
          “Document” has the meaning assigned to such term in the Security
Agreement.
          “dollars” or “$” refers to lawful money of the United States of
America.
          “Electronic Delivery” has the meaning assigned to such term in
Section 5.01(a).
          “Eligible Accounts” means, at any time, the Accounts of the Loan
Parties which the Administrative Agent determines in its Permitted Discretion
are eligible as the basis for the extension of Revolving Loans, Swingline Loans
and the issuance of Letters of Credit hereunder. Without limiting the
Administrative Agent’s discretion provided herein, Eligible Accounts shall not
include any Account:
     (a) which is not subject to a first priority perfected security interest in
favor of the Administrative Agent;
     (b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance which does not have
priority over the Lien in favor of the Administrative Agent;
     (c) with respect to which the scheduled due date is more than 105 days
after the original invoice date, is unpaid more than 150 days after the date of
the original invoice therefor or more than 60 days after the original due date,
or which has been written off the books of the applicable Loan Party or
otherwise designated as uncollectible;
     (d) which is owing by an Account Debtor for which more than 50% of the
Accounts owing from such Account Debtor and its Affiliates are ineligible
hereunder;
     (e) which is owing by an Account Debtor to the extent the aggregate amount
of Accounts owing from such Account Debtor and its Affiliates to the Loan
Parties exceeds 10% of the aggregate Eligible Accounts;
     (f) with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Security Agreement has been breached or is
not true;
     (g) which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to the Administrative Agent which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon the applicable Loan Party’s completion of any further
performance, (v) represents a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment, cash-on-delivery or any other
repurchase or return basis or (vi) relates to payments of interest;

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     (h) for which the goods giving rise to such Account have not been shipped
to the Account Debtor or for which the services giving rise to such Account have
not been performed by the applicable Loan Party or if such Account was invoiced
more than once;
     (i) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;
     (j) which is owed by an Account Debtor which has (i) applied for, suffered,
or consented to the appointment of any receiver, custodian, trustee, or
liquidator of its assets, (ii) has had possession of all or a material part of
its property taken by any receiver, custodian, trustee or liquidator,
(iii) filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as bankrupt,
winding-up, or voluntary or involuntary case under any state or federal
bankruptcy laws, (iv) has admitted in writing its inability, or is generally
unable to, pay its debts as they become due, (v) become insolvent, or
(vi) ceased operation of its business;
     (k) which is owed by any Account Debtor which has sold all or a
substantially all of its assets;
     (l) which is owed by an Account Debtor which (i) does not maintain its
chief executive office in the U.S. or Canada or (ii) is not organized under
applicable law of the U.S., any state of the U.S., Canada, or any province of
Canada unless, in either case, such Account is backed by a Letter of Credit
acceptable to the Administrative Agent which is in the possession of, has been
assigned to and is directly drawable by the Administrative Agent;
     (m) which is owed in any currency other than U.S. dollars;
     (n) which is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S.
unless such Account is backed by a Letter of Credit acceptable to the
Administrative Agent which is in the possession of the Administrative Agent, or
(ii) the government of the U.S., or any department, agency, public corporation,
or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940,
as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other
steps necessary to perfect the Lien of the Administrative Agent in such Account
have been complied with to the Administrative Agent’s satisfaction;
     (o) which is owed by any Affiliate, employee, officer or director of any
Loan Party;
     (p) which, for any Account Debtor, exceeds a credit limit reasonably
determined by the Administrative Agent, to the extent of such excess;
     (q) which is owed by an Account Debtor or any Affiliate of such Account
Debtor to which any Loan Party is indebted, but only to the extent of such
indebtedness or is subject to any security, deposit, progress payment, retainage
or other similar advance made by or for the benefit of an Account Debtor, in
each case to the extent thereof;
     (r) which is subject to any counterclaim, deduction, defense, setoff or
dispute, in each case to the extent thereof;
     (s) which is evidenced by any promissory note, chattel paper, or
instrument;

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     (t) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the applicable Loan Party to seek judicial enforcement
in such jurisdiction of payment of such Account, unless such Loan Party has
filed such report or qualified to do business in such jurisdiction;
     (u) with respect to which the applicable Loan Party has made any agreement
with the Account Debtor for any reduction thereof, other than discounts and
adjustments given in the ordinary course of business, or any Account which was
partially paid and such Loan Party created a new receivable for the unpaid
portion of such Account;
     (v) which does not comply in all material respects with the requirements of
all applicable laws and regulations, whether Federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board, in each case to the extent
applicable;
     (w) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than the applicable
Loan Party has an ownership interest in such goods, or which indicates any party
other than the applicable Loan Party as payee or remittance party;
     (x) which was created on cash on delivery terms; or
     (y) which the Administrative Agent determines in its Permitted Discretion
may not be paid by reason of the Account Debtor’s inability to pay or other
circumstances.
          In the event that an Account which was previously an Eligible Account
ceases to be an Eligible Account hereunder for any reason, including as a result
of the exclusion of such Account by the Administrative Agent in its Permitted
Discretion (unless the Administrative Agent shall have failed to deliver notice
to the Company of its election to exclude such Account), the Company shall
exclude such Account from Eligible Accounts in the next Borrowing Base
Certificate. In determining the amount of an Eligible Account, the face amount
of an Account may, in the Administrative Agent’s Permitted Discretion, be
reduced by, without duplication, to the extent not reflected in such face
amount, (i) the amount of all accrued and actual discounts, claims, credits or
credits pending, promotional program allowances, price adjustments, finance
charges or other allowances (including any amount that a Loan Party may be
obligated to rebate to an Account Debtor pursuant to the terms of any agreement
or understanding (written or oral)) and (ii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the applicable Loan
Party to reduce the amount of such Account. Notwithstanding the foregoing, no
Person which becomes a Loan Party after the date hereof shall be deemed a Loan
Party for purposes of this definition without the approval of the Administrative
Agent or until the Administrative Agent has conducted such appraisals and/or
field examinations with respect to the Accounts and Inventory of such Person as
it reasonably deems necessary or appropriate.
          “Eligible Inventory” means, at any time, the Inventory of the Loan
Parties which the Administrative Agent determines in its Permitted Discretion is
eligible as the basis for the extension of Revolving Loans, Swingline Loans and
the issuance of Letters of Credit hereunder. Without limiting the Administrative
Agent’s discretion provided herein, Eligible Inventory shall not include any
Inventory:
     (a) which is not subject to a first priority perfected Lien in favor of the
Administrative Agent;

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     (b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Encumbrance which does not have
priority over the Lien in favor of the Administrative Agent;
     (c) which is, in the Administrative Agent’s opinion, slow moving (i.e.,
more than one year old or in excess of a one year supply), obsolete,
unmerchantable, defective, used, unfit for sale, not salable at prices
approximating at least the cost of such Inventory in the ordinary course of
business or unacceptable due to age, type, category and/or quantity;
     (d) with respect to which any covenant, representation, or warranty
contained in this Agreement or the Security Agreement has been breached or is
not true and which does not conform in all material respects to all applicable
standards imposed by any Governmental Authority;
     (e) in which any Person other than the Loan Parties shall (i) have any
direct or indirect ownership, interest or title to such Inventory or (ii) be
indicated on any purchase order or invoice with respect to such Inventory as
having or purporting to have an interest therein;
     (f) which is spare or replacement parts, subassemblies, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or
display items, bill-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;
     (g) which is not located in the U.S. or is in transit with a common carrier
from vendors and suppliers, except that up to $35,000,000 of Inventory in
transit from vendors and suppliers may be included as eligible pursuant to this
clause (g) so long as (i)(1) a customs broker has delivered to the
Administrative Agent a Collateral Access Agreement and such other documentation
as the Administrative Agent may reasonably require with respect to such
Inventory or (2) an appropriate Reserve for customs charges and shipping charges
due or to become due has been established by the Administrative Agent in its
Permitted Discretion and (ii) the Administrative Agent shall have received (1) a
true and correct copy of the bill of lading and other shipping documents for
such Inventory (or alternate documentation or data satisfactory to the
Administrative Agent in its Permitted Discretion), (2) evidence of satisfactory
casualty insurance naming the Administrative Agent as loss payee and otherwise
covering such risks as the Administrative Agent may reasonably request, and
(3) if the bill of lading is negotiable, confirmation that the bill is issued in
the name of the applicable Loan Party and consigned to the order of the
Administrative Agent, and a reasonably acceptable agreement has been executed
with the applicable Loan Party’s customs broker, in which the customs broker
agrees that it holds the negotiable bill as agent for the Administrative Agent
and has granted the Administrative Agent access to the Inventory and (ii) the
common carrier is not an Affiliate of the applicable vendor or supplier;
     (h) which is located in any location leased by a Loan Party unless (i) the
lessor has delivered to the Administrative Agent a Collateral Access Agreement
or (ii) a Reserve for three month’s rent, charges, and other amounts due or to
become due with respect to such facility has been established by the
Administrative Agent in its Permitted Discretion;
     (i) which is located in any third party warehouse or is in the possession
of a bailee (other than a third party processor) and is not evidenced by a
Document (other than bills of lading to the extent permitted pursuant to clause
(g) above), unless (i) such warehouseman or bailee has

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delivered to the Administrative Agent a Collateral Access Agreement and such
other documentation as the Administrative Agent may reasonably require or
(ii) an appropriate Reserve for charges and other amounts due or to become due
has been established by the Administrative Agent in its Permitted Discretion;
     (j) which is being processed offsite at a third party location or outside
processor, or is in-transit to or from said third party location or outside
processor unless (i) the third party, outside processor or shipper has delivered
to the Administrative Agent a Collateral Access Agreement and such other
documentation as the Administrative Agent may reasonably require or (ii) a
Reserve for charges and other amounts due or to become due has been established
by the Administrative Agent in its Permitted Discretion;
     (k) which is a discontinued product or discontinued component thereof;
     (l) which is the subject of a consignment by a Loan Party as consignor;
     (m) which is perishable;
     (n) which contains or bears any intellectual property rights licensed to a
Loan Party unless the Administrative Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
     (o) which is not reflected in a current perpetual inventory report of a
Loan Party (unless such Inventory is reflected in a report to the Administrative
Agent as “in transit” Inventory);
     (p) for which reclamation rights have been asserted by the seller; or
     (q) which the Administrative Agent otherwise determines in its Permitted
Discretion is unacceptable.
          In the event that Inventory which was previously Eligible Inventory
ceases to be Eligible Inventory hereunder for any reason, including as a result
of the exclusion of such Inventory by the Administrative Agent in its Permitted
Discretion (unless the Administrative Agent shall have failed to deliver notice
to the Company of its election to exclude such Inventory), the Company shall
exclude such Inventory from Eligible Inventory in the next Borrowing Base
Certificate. Notwithstanding the foregoing, no Person which becomes a Loan Party
after the date hereof shall be deemed a Loan Party for purposes of this
definition without the approval of the Administrative Agent or until the
Administrative Agent has conducted such appraisals and/or field examinations
with respect to the Accounts and Inventory of such Person as it deems reasonably
necessary or appropriate.
          “Environmental Laws” means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
          “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the

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Company or any Subsidiary directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials,
(c) exposure to any Hazardous Materials, (d) the release or threatened release
of any Hazardous Materials into the environment or (e) any contract, agreement
or other consensual arrangement pursuant to which liability is assumed or
imposed with respect to any of the foregoing.
          “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
          “ERISA Affiliate” means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
          “ERISA Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
failure to make any minimum required contribution to any Plan or Multiemployer
Plan when due; (c) the filing pursuant to Section 412(d) of the Code or Section
303(d) of ERISA of an application for a waiver of the minimum funding standard
with respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Company or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
          “Eurodollar”, when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
          “Event of Default” has the meaning assigned to such term in
Article VII.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Excluded Taxes” means, with respect to any payment made by any Loan
Party under any Loan Document, any of the following Taxes imposed on or with
respect to a Recipient: (a) income or franchise Taxes imposed on (or measured
by) net income by the United States of America, or by the jurisdiction under the
laws of which such Recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits Taxes imposed by the United States of America or
any similar Taxes imposed by any other jurisdiction in which any Borrower is
located and (c) in the case of a Non-U.S. Lender (other than an assignee
pursuant to a request by a Borrower under Section 2.19(b)), any U.S. Federal
withholding Taxes resulting from any law in effect (including FATCA) on the date
such Non-U.S. Lender becomes a party to this Agreement

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(or designates a new lending office) or is attributable to such Non-U.S.
Lender’s failure to comply with Section 2.17(f), except to the extent that such
Non-U.S. Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding Taxes pursuant to
Section 2.17(a).
          “Existing Credit Agreement” has the meaning assigned to such term in
the Recitals hereto.
          “Existing Letter of Credit” means a letter of credit issued and
outstanding under the Existing Credit Agreement and listed on Schedule 2.06 of
the Disclosure Letter.
          “Exiting Lender Consent” has the meaning assigned to such term in
Section 4.01(m).
          “Exiting Lenders” has the meaning assigned to such term in the
Recitals hereto.
          “FATCA” means Sections 1471 through 1474 of the Code, as of the date
of this Agreement and any regulations promulgated thereunder or administrative
guidance implementing such sections or regulations (including any Revenue
Ruling, Revenue Procedure, Notice or similar guidance issued by the U.S.
Internal Revenue Service thereunder as a precondition to exemption from such
Taxes under such provisions).
          “Federal Funds Effective Rate” means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
          “Fee Letter” means the letter agreement, dated March 24, 2011, among
the Company, Chase and J.P. Morgan Securities LLC.
          “Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
          “Fixed Charges” means, with reference to any period, without
duplication, cash Consolidated Interest Expense during such period, plus
scheduled principal payments on Indebtedness and required payments on Guarantees
made by Loan Parties to the extent not duplicative of amounts already included
in the computation of Consolidated Net Income for such period, plus expense for
taxes paid in cash during such period, plus dividends or distributions paid in
cash during such period, plus Capital Lease Obligation payments during such
period, plus cash contributions to any Plan in excess of actual pension expense
during such period, all calculated for the Company and its Subsidiaries on a
consolidated basis.
          “Fixed Charge Coverage Ratio” means, the ratio, determined as of the
end of each fiscal month of the Company for the most-recently ended twelve
fiscal months, of (a) Consolidated EBITDA minus the unfinanced portion of
Capital Expenditures to (b) Fixed Charges, all calculated for the Company and
its Subsidiaries on a consolidated basis in accordance with GAAP.
          “Funding Account” means the account of the Company, as identified to
the Administrative Agent from time to time by the Company (and agreed to by the
Administrative Agent),

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maintained at Chase to which the Lenders are authorized by the Borrowers to
transfer the proceeds of any Borrowing requested or authorized pursuant to this
Agreement.
          “GAAP” means accounting principles generally accepted in the United
States of America.
          “Governmental Authority” means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
          “Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
          “Guaranteed Obligations” has the meaning assigned to such term in
Section 10.01.
          “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.
          “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (j) all obligations, contingent or otherwise, of such
Person in respect of bankers’ acceptances and (k) obligations under any
liquidated earn-out and (l) any other Off-Balance Sheet Liability. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
          “Indemnified Taxes” means (a) Taxes, other than Excluded Taxes,
imposed on or with respect to any payment made by any Loan Party under any Loan
Document and (b) Other Taxes.

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          “Information Memorandum” means the Confidential Information Memorandum
dated March 28, 2011 relating to the Company and the Transactions.
          “Interest Election Request” means a request by the Borrower to convert
or continue a Revolving Borrowing in accordance with Section 2.07.
          “Interest Payment Date” means (a) with respect to any ABR Loan (other
than a Swingline Loan), the first Business Day of each calendar month and the
Maturity Date, and (b) with respect to any Eurodollar Loan, the last day of the
Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three
months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such
Interest Period and the Maturity Date.
          “Interest Period” means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower Representative may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and, in the case of a Revolving
Borrowing, thereafter shall be the effective date of the most recent conversion
or continuation of such Borrowing.
          “Inventory” has the meaning assigned to such term in the Security
Agreement.
          “Issuing Bank” means Chase and each other Lender that agrees in
writing with the Company to issue Letters of Credit (provided that notice of
such agreement is given to the Administrative Agent), in each case in its
capacity as the issuer of Letters of Credit hereunder, and its successors in
such capacity as provided in Section 2.06(i). The Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of the Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate. With
respect to any Letter of Credit, “Issuing Bank” shall mean the issuer thereof.
          “Joinder Agreement” has the meaning assigned to such term in
Section 5.13.
          “LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).
          “LC Disbursement” means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrowers at such time. The LC Exposure of any Lender at any time shall
be its Applicable Percentage of the total LC Exposure at such time.
          “Lenders” means the Persons listed on the Commitment Schedule and any
other Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such

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Person that ceases to be a party hereto pursuant to an Assignment and
Assumption. Unless the context otherwise requires, the term “Lenders” includes
the Swingline Lender.
          “Letter of Credit” means any letter of credit issued pursuant to this
Agreement.
          “Leverage Ratio” means, on any date, the ratio of (a) Total
Indebtedness on such date to (b) Consolidated EBITDA for the period of twelve
consecutive fiscal months ended on such date (or, if such date is not the last
day of a fiscal month, ended on the last day of the fiscal month most recently
ended prior to such date).
          “LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Reuters Screen LIBOR01 (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period. In the event that such rate is not available at such time
for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO
Rate” is used in connection with an ABR Borrowing, such rate shall be determined
as modified by the definition of Alternate Base Rate.
          “Lien” means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
          “Loan” means a loan or advance made by the Lenders pursuant to this
Agreement, including Revolving Loans, Swingline Loans, Overadvances and
Protective Advances.
          “Loan Documents” means this Agreement, the Disclosure Letter, the Fee
Letter, the Reaffirmation Agreement, any promissory notes issued pursuant to
this Agreement, any Letter of Credit applications, the Collateral Documents, the
Loan Guaranty, the Collateral Access Agreements and all other agreements,
instruments, documents and certificates identified in Section 4.01 executed and
delivered to, or in favor of, the Administrative Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices and letter of credit agreements whether heretofore, now or
hereafter executed by or on behalf of any Loan Party, and delivered to the
Administrative Agent or any Lender in connection with this Agreement or the
transactions contemplated hereby. Any reference in this Agreement or any other
Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to this Agreement or such Loan Document
as the same may be in effect at any and all times such reference becomes
operative.
          “Loan Guarantor” means each Loan Party.

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          “Loan Guaranty” means Article X of this Agreement and each separate
Guarantee, in form and substance satisfactory to the Administrative Agent,
delivered by a Loan Guarantor, as it may be amended or modified and in effect
from time to time.
          “Loan Parties” means the Borrowers, the Borrower’s United States
Subsidiaries that are party to a Loan Guaranty and any other Person who becomes
a party to this Agreement pursuant to a Joinder Agreement or a Loan Guaranty or
otherwise and their successors and assigns.
          “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole, (b) the ability of the Loan
Parties, taken as a whole, to perform any of their obligations under the Loan
Documents, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of
itself and the Lenders and other holders of the Secured Obligations) on the
Collateral or the priority of such Liens, or (d) the rights of or benefits
available to the Administrative Agent, the Issuing Bank or the Lenders
thereunder.
          “Material Indebtedness” means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Company and its Subsidiaries in an aggregate principal
amount exceeding $15,000,000. For purposes of determining Material Indebtedness,
the “obligations” of the Company or any Subsidiary in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that the Company or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.
          “Maturity Date” means April 27, 2016 or any earlier date on which the
Commitments are reduced to zero or otherwise terminated pursuant to the terms
hereof.
          “Maximum Liability” has the meaning assigned to such term in
Section 10.10.
          “Moody’s” means Moody’s Investors Service, Inc.
          “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
          “Net Orderly Liquidation Value” means, with respect to Inventory of
any Person, the orderly liquidation value thereof as determined in a manner
reasonably acceptable to the Administrative Agent by an appraiser reasonably
acceptable to the Administrative Agent, net of all costs of liquidation thereof.
          “Net Proceeds” means, with respect to any event, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, net of (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) and the amount of any reserves established
to

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fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by a Financial Officer).
          “Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).
          “Non-Paying Guarantor” has the meaning assigned to such term in
Section 10.11.
          “Non-U.S. Lender” means a Lender that is not a U.S. Person.
          “Obligated Party” has the meaning assigned to such term in
Section 10.02.
          “Obligations” means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Exposure, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Administrative Agent, the Issuing Bank or
any indemnified party arising under or in connection with the Loan Documents
(including any fees or expenses that accrue after the commencement of an
insolvency proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in such insolvency proceeding).
          “Off-Balance Sheet Liability” of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or obligation
under any so-called “synthetic lease” transaction entered into by such Person,
or (c) any indebtedness, liability or obligation arising with respect to any
other transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases or guaranties of operating leases).
          “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 Taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction pursuant to, or enforced,
any Loan Document), or sold or assigned an interest in any Loan Document).
          “Other Taxes” means any present or future stamp, court, documentary,
intangible, recording, filing or similar excise or property Taxes that arise
from any payment made under, from the execution, delivery, performance,
enforcement or registration of, or from the registration, receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document,
except any such Taxes that are Excluded Taxes or Other Connection Taxes imposed
with respect to an assignment (other than an assignment under Section 2.19(b)).
          “Overadvance” has the meaning assigned to such term in
Section 2.05(b).
          “Parent” means, with respect to any Lender, the Person as to which
such Lender is, directly or indirectly, a subsidiary.
          “Participant” has the meaning assigned to such term in
Section 9.04(c).
          “Participant Register” has the meaning assigned to such term in
Section 9.04(c).
          “Paying Guarantor” has the meaning assigned to such term in
Section 10.11.

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          “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
          “Permitted Acquisition” means the acquisition by the Company or a
wholly-owned Subsidiary thereof of an Acquired Entity or Business (including by
way of merger of such Acquired Entity or Business with and into the Company (so
long as the Company is the surviving corporation) or a wholly-owned Subsidiary
thereof (so long as the wholly-owned Subsidiary is the surviving corporation));
provided that, in each case, (a) the consideration paid or to be paid by the
Company or such wholly-owned Subsidiary consists solely of cash, the issuance or
incurrence of Indebtedness otherwise permitted by Section 6.01 or the issuance
of common stock of the Company to the extent no Default exists pursuant to
clause (m) of Article VII or would result therefrom; (b) in the case of the
acquisition of the capital stock of any Person (including by way of merger),
such Person shall own no capital stock of any other Person (excluding de minimis
amounts) unless such Person directly or indirectly owns 100% of the capital
stock of such other Person; (c) the Acquired Entity or Business acquired
pursuant to the respective Permitted Acquisition is in a business permitted by
Section 6.03(b); (d) in the case of a stock acquisition, such acquisition shall
have been approved by the board of directors of the Acquired Entity or Business;
and (e) all applicable requirements of Section 6.04(l) applicable to Permitted
Acquisitions are satisfied.
          “Permitted Discretion” means a determination made in good faith and in
the exercise of commercially reasonable (from the perspective of a secured
asset-based lender) business judgment.
          “Permitted Encumbrances” means:
     (a) Liens imposed by law for taxes, assessments or governmental charges or
levies that are not yet due and payable or are being contested in compliance
with Section 5.04;
     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
     (c) pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;
     (d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
     (e) judgment liens in respect of judgments that do not constitute an Event
of Default under clause (k) of Article VII; and
     (f) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Company or any Subsidiary;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
          “Permitted Investments” means:
     (a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the

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extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of
acquisition thereof;
     (b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, a rating of A1
or better from S&P or P-1 or better from Moody’s;
     (c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
     (d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above or
an investment bank reasonably satisfactory to the Administrative Agent; and
     (e) investments in money market funds that comply with the criteria set
forth in SEC Rule 2a-7 under the Investment Company Act of 1940 so long as such
investments would not constitute more than 1% of any such fund’s portfolio
assets.
          “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
          “Plan” means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which the
Company or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.
          “Prepayment Event” means:
     (a) any sale, transfer or other disposition (including pursuant to a sale
and leaseback transaction) of any property or asset of any Loan Party, other
than dispositions described in Section 6.05(a), (b) or (f) except to the extent
covered by (b) below;
     (b) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of any Loan Party with a fair value immediately prior to such event equal
to or greater than $5,000,000; or
     (c) the incurrence by any Loan Party of any Indebtedness, other than
Indebtedness permitted under Section 6.01.
          “Prime Rate” means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate at its offices at 270 Park Avenue
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
          “Projections” has the meaning assigned to such term in
Section 5.01(f).
          “Protective Advance” has the meaning assigned to such term in
Section 2.04.

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          “Protective Advance Exposure” means, at any time, the aggregate
principal amount of all Protective Advances outstanding at such time. The
Protective Advance Exposure of any Lender at any time shall be its Applicable
Percentage of the total Protective Advance Exposure at such time.
          “Reaffirmation Agreement” means that certain Reaffirmation Agreement
dated as of the date hereof among the Loan Parties and the Administrative Agent.
          “Recipient” means, as applicable, (a) the Administrative Agent,
(b) any Lender and (c) the Issuing Bank.
          “Register” has the meaning set forth in Section 9.04.
          “Related Parties” means, with respect to any specified Person, such
Person’s Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person’s Affiliates.
          “Reports” means reports prepared by the Administrative Agent or
another Person showing the results of appraisals, field examinations or audits
pertaining to the Loan Parties’ assets from information furnished by or on
behalf of the Loan Parties, after the Administrative Agent has exercised its
rights of inspection pursuant to this Agreement, which Reports may be
distributed to the Lenders by the Administrative Agent.
          “Required Lenders” means, at any time, Lenders (other than Defaulting
Lenders) having Revolving Exposure and unused Commitments representing greater
than 50% of the sum of the total Revolving Exposure and unused Commitments
(excluding the Revolving Exposure and unused Commitments of Defaulting Lenders)
at such time.
          “Requirement of Law” means, as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
          “Reserves” means Swap Reserves and any and all reserves which the
Administrative Agent deems necessary, in its Permitted Discretion, to maintain
(including, without limitation, an availability reserve, reserves for accrued
and unpaid interest on the Secured Obligations, Banking Services Reserves,
reserves for rent at locations leased by any Loan Party and for consignee’s,
warehousemen’s and bailee’s charges, reserves for dilution of Accounts, reserves
for Inventory shrinkage, reserves for customs charges and shipping charges
related to any Inventory in transit, reserves for contingent liabilities of any
Loan Party, reserves for uninsured losses of any Loan Party, reserves for
uninsured, underinsured, un-indemnified or under-indemnified liabilities or
potential liabilities with respect to any litigation which is reasonably likely
to have a Material Adverse Effect, reserves for taxes, fees, assessments, and
other governmental charges) with respect to the Collateral or any Loan Party,
reserves for Restricted Payments as set forth in Section 6.08 and the Temporary
Field Examination Reserve.
          “Restatement Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
          “Restricted Amount” means, at any time, an amount equal to the sum at
such time of (a) the aggregate amount of investments made by Loan Parties after
the Restatement Date in the Equity Interests of Subsidiaries that are not Loan
Parties made pursuant to Section 6.04(c), (b) the outstanding principal amount
of intercompany loans and advances made by Loan Parties after the Restatement
Date to

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Subsidiaries which are not Loan Parties pursuant to Section 6.04(d) and (c) the
aggregate principal amount of Indebtedness of Subsidiaries which are not Loan
Parties which is guaranteed by Loan Parties after the Restatement Date pursuant
to Section 6.04(e) (in each case determined without regard to any write-downs or
write-offs).
          “Restricted Payment” means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
the Company or any Subsidiary, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Company, whether now or hereafter
outstanding, or any option, warrant or other right to acquire any such Equity
Interests in the Company.
          “Revolving Exposure” means, with respect to any Lender at any time,
the sum of (a) the outstanding principal amount of such Lender’s Revolving Loans
and its LC Exposure plus (b) an amount equal to its Applicable Percentage of the
aggregate principal amount of Swingline Loans at such time, plus (c) an amount
equal to its Applicable Percentage of the aggregate principal amount of
Overadvances outstanding at such time plus (d) an amount equal to its Applicable
Percentage of the aggregate principal amount of Protective Advances at such
time.
          “Revolving Loan” means a Loan made pursuant to Section 2.01.
          “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc.
          “SEC” means the Securities and Exchange Commission of the United
States, or any successor thereto.
          “Secured Creditors” has the meaning assigned to such term in the
Security Agreement.
          “Secured Obligations” means all Obligations, together with all
(i) Banking Services Obligations and (ii) Swap Obligations owing to one or more
Lenders or their respective Affiliates.
          “Security Agreement” means that certain Amended and Restated Security
Agreement, dated as of the date hereof, between the Loan Parties and the
Administrative Agent, for the benefit of the Administrative Agent and the other
Secured Creditors, and any other pledge or security agreement entered into,
after the date of this Agreement by any other Loan Party (as required by this
Agreement or any other Loan Document), or any other Person, as the same may be
amended, restated or otherwise modified from time to time.
          “Settlement” has the meaning assigned to such term in Section 2.05(d).
          “Settlement Date” has the meaning assigned to such term in
Section 2.05(d).
          “Specified Asset” means (a) any Equity Interest in any of the
Borrowers (other than the Company), (b) any material intellectual property
(including brandnames) owned by any of the foregoing Borrowers or (c) any other
material business properties of any of the foregoing Persons (other than plants
which have been determined by the applicable Person to be not needed in its
business); provided, however, that notwithstanding the foregoing, any asset of
HDM (including Equity Interests of subsidiaries of HDM, including without
limitation, Maitland-Smith) which, together with all other assets of HDM or its
subsidiaries previously sold, transferred or disposed of in the applicable
fiscal year of the Company, comprises as of the date of such disposition less
than 50% (in book value without regard to write-downs,

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other than with respect to write-downs of Inventory in the ordinary course of
business) of the consolidated assets of HDM and its subsidiaries as of December
31 of the previous year shall not constitute a Specified Asset as of such date.
          “Statutory Reserve Rate” means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
          “Subordinated Indebtedness” of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the reasonable written satisfaction of the Administrative Agent.
          “subsidiary” means, with respect to any Person (the “parent”) at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
          “Subsidiary” means any direct or indirect subsidiary of the Company or
a Loan Party, as applicable.
          “Supermajority Lenders” means, at any time, Lenders (other than
Defaulting Lenders) having Revolving Exposure and unused Commitments
representing at least 75% of the sum of the total Revolving Exposure and unused
Commitments (excluding the Revolving Exposure and unused Commitments of
Defaulting Lenders) at such time.
          “Swap Agreement” means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
          “Swap Obligations” of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Swap
Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.

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          “Swap Reserve” means the aggregate amount of reserves established by
the Administrative Agent in amounts set forth in the written notices to the
Administrative Agent from the Company (which amount may be established or
increased (by further written notice from the Company to the Administrative
Agent from time to time) as long as no Default or Event of Default exists and
establishment of a Swap Reserve for such amount and all other Swap Obligations
would not result in the total Revolving Exposures exceeding the lesser of
(x) the total Commitment or (y) the Borrowing Base then in effect), and as such
amount may be adjusted by the Administrative Agent based on such notices or
otherwise increased, in its Permitted Discretion, from time to time in respect
of Swap Obligations.
          “Swingline Exposure” means, at any time, the sum of the aggregate
amount of all outstanding Swingline Loans. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the aggregate Swingline
Exposure.
          “Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as
lender of Swingline Loans hereunder.
          “Swingline Loan” has the meaning assigned to such term in
Section 2.05(a).
          “Taxes” means any present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
          “Temporary Field Exam Reserve” means a minimum Availability reserve of
up to $12,000,000 that may be imposed on April 30, 2011 and maintained
thereafter by the Administrative Agent until such time as the field examination
of the Borrower that was commissioned by the Administrative Agent in
February 2011 has been completed and reviewed by the Administrative Agent and
the Company to the Administrative Agent’s satisfaction.
          “Total Indebtedness” means, at any date, the aggregate principal
amount of all Indebtedness of the Company and its Subsidiaries at such date
excluding Guarantees, determined on a consolidated basis in accordance with
GAAP.
          “Transactions” means the execution, delivery and performance by the
Borrowers of this Agreement, the borrowing of Loans and other credit extensions,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
          “Trigger Amount” has the meaning assigned to such term in
Section 6.12.
          “Type”, when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
          “UCC” means the Uniform Commercial Code as in effect from time to time
in the State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
          “Unliquidated Obligations” means, at any time, any Secured Obligations
(or portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

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          “U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.
          “Wholly-Owned Subsidiary” shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director’s qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
          “Withdrawal Liability” means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
          “Withholding Agent” means the Borrower Representative and the
Administrative Agent.
          SECTION 1.02 Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type
(e.g., a “Eurodollar Revolving Loan”). Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a
“Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving
Borrowing”).
          SECTION 1.03 Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
          SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

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ARTICLE II
The Credits
          SECTION 2.01 Commitments. (a) On August 9, 2007, the “Lenders” issued
“Commitments” (as each such term is defined in the Existing Credit Agreement) to
certain of the Borrowers (“Existing Commitments”). The aggregate outstanding
principal balance of the “Revolving Exposure” (as such term is defined in the
Existing Credit Agreement) outstanding under the Existing Commitments
immediately prior to giving effect to this Agreement was $85,502,688.00
(“Existing Revolving Exposure”). On the Restatement Date, each Continuing Lender
shall purchase from one another and from the Exiting Lenders an undivided
interest in such Existing Revolving Exposure in proportion to its Applicable
Percentage. Such purchases shall be at par and shall be payable by such
Continuing Lenders to the Administrative Agent for the respective accounts of
the Continuing Lenders and Exiting Lenders. Upon the terms and subject to the
conditions of this Agreement, such outstanding Existing Revolving Exposure shall
constitute Revolving Exposure under this Agreement from and after the
Restatement Date, and shall henceforth be governed by the terms and conditions
of this Agreement in all respects.
          (b) Subject to the terms and conditions set forth herein, each Lender
agrees to make Revolving Loans to the Borrowers from time to time during the
Availability Period in an aggregate principal amount that will not result in
(a) such Lender’s Revolving Exposure exceeding such Lender’s Commitment or
(b) the total Revolving Exposures exceeding the lesser of (x) the sum of the
total Commitments or (y) the Borrowing Base, subject to the Administrative
Agent’s authority, in its sole discretion, to make Protective Advances and
Overadvances pursuant to the terms of Section 2.04 and 2.05. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Revolving Loans.
          SECTION 2.02 Loans and Borrowings. (a) Each Loan (other than a
Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the
same Class and Type made by the Lenders ratably in accordance with their
respective Commitments of the applicable Class. Any Protective Advance, any
Overadvance and any Swingline Loan shall be made in accordance with the
procedures set forth in Section 2.04 and 2.05.
          (a) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
Representative may request in accordance herewith, provided that all Borrowings
made on the Restatement Date must be made as ABR Borrowings but may be converted
into Eurodollar Borrowings in accordance with Section 2.08. Each Swingline Loan
shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrowers to repay such Loan in accordance with the terms of this
Agreement.
          (b) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is not
less than $5,000,000. ABR Revolving Borrowings and Swingline Borrowings may be
in any amount. Borrowings of more than one Type and Class may be outstanding at
the same time; provided that there shall not at any time be more than a total of
6 Eurodollar Borrowings outstanding.
          (c) Notwithstanding any other provision of this Agreement, the
Borrower Representative shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.

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          SECTION 2.03 Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower Representative shall notify the Administrative Agent of
such request either in writing (delivered by hand or facsimile) in a form
approved by the Administrative Agent and signed by the Borrower Representative
or by telephone (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Chicago time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than noon, Chicago
time, on the date of the proposed Borrowing; provided that any such notice of an
ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e) shall be given not later than 9:00 a.m., Chicago
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower Representative.
Each such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.01:
     (i) the aggregate amount of the requested Borrowing and a breakdown of the
separate wires comprising such Borrowing;
     (ii) the date of such Borrowing, which shall be a Business Day;
     (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period.”
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrowers shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.
          SECTION 2.04 Protective Advances. (a) Subject to the limitations set
forth below, the Administrative Agent is authorized by the Borrowers and the
Lenders, from time to time in the Administrative Agent’s sole discretion (but
shall have absolutely no obligation to), to make Loans to the Borrowers, on
behalf of all Lenders, which the Administrative Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or protect the
Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or
(iii) to pay any other amount chargeable to or required to be paid by the
Borrowers pursuant to the terms of this Agreement, including payments of
reimbursable expenses (including costs, fees, and expenses as described in
Section 9.03) and other sums payable under the Loan Documents (any of such Loans
are herein referred to as “Protective Advances”); provided that, the aggregate
amount of Protective Advances outstanding at any time shall not at any time
exceed $15,000,000; provided further that, the aggregate Revolving Exposure
shall not exceed the aggregate Commitments; and provided further that no
Protective Advances shall be made unless a Default has occurred and is
continuing. Protective Advances may be made even if the conditions precedent set
forth in Section 4.02 have not been satisfied. The Protective Advances shall be
secured by the Liens in favor of the Administrative Agent in and to the
Collateral and shall constitute Obligations hereunder. All Protective Advances
shall be ABR Borrowings. The Administrative Agent’s authorization to make
Protective Advances may be revoked at any time by the Required Lenders. Any such
revocation must be in writing and shall become effective prospectively upon the
Administrative Agent’s receipt thereof. At any time that there is sufficient
Availability and the

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conditions precedent set forth in Section 4.02 have been satisfied, the
Administrative Agent may request the Lenders to make a Revolving Loan to repay a
Protective Advance. At any other time the Administrative Agent may require the
Lenders to fund their risk participations described in Section 2.04(b).
          (b) Upon the making of a Protective Advance by the Administrative
Agent, each 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 Applicable Percentage. From and after
the date, if any, on which any Lender is required to fund its participation in
any Protective Advance purchased hereunder, the Administrative Agent shall
promptly distribute to such Lender, such Lender’s Applicable Percentage of all
payments of principal and interest and all proceeds of Collateral received by
the Administrative Agent in respect of such Protective Advance.
          SECTION 2.05 Swingline Loans and Overadvances. (a) The Administrative
Agent, the Swingline Lender and the Lenders agree that in order to facilitate
the administration of this Agreement and the other Loan Documents, promptly
after the Borrower Representative requests an ABR Borrowing, the Swingline
Lender may elect to have the terms of this Section 2.05(a) apply to such
Borrowing Request by advancing, on behalf of the Lenders and in the amount
requested, same day funds to the Borrowers on the applicable Borrowing date to
the Funding Account (each such Loan made solely by the Swingline Lender pursuant
to this Section 2.05(a) is referred to in this Agreement as a “Swingline Loan”),
with settlement among them as to the Swingline Loans to take place on a periodic
basis as set forth in Section 2.05(d). Each Swingline Loan shall be subject to
all the terms and conditions applicable to other ABR Loans funded by the
Lenders, except that all payments thereon shall be payable to the Swingline
Lender solely for its own account. The aggregate amount of Swingline Loans
outstanding at any time shall not exceed $25,000,000. The Swingline Lender shall
not make any Swingline Loan if the requested Swingline Loan exceeds Availability
(before giving effect to such Swingline Loan). All Swingline Loans shall be ABR
Borrowings.
          (b) Any provision of this Agreement to the contrary notwithstanding,
at the request of the Borrower Representative, the Administrative Agent may in
its sole discretion (but with absolutely no obligation), make Revolving Loans to
the Borrowers, on behalf of the Lenders, in amounts that exceed Availability
(any such excess Revolving Loans are herein referred to collectively as
“Overadvances”); provided that, no Overadvance shall result in a Default due to
Borrowers’ failure to comply with Section 2.01 for so long as such Overadvance
remains outstanding in accordance with the terms of this paragraph, but solely
with respect to the amount of such Overadvance. In addition, Overadvances may be
made even if the condition precedent set forth in Section 4.02(c) has not been
satisfied. All Overadvances shall constitute ABR Borrowings. The authority of
the Administrative Agent to make Overadvances is limited to an aggregate amount
not to exceed $15,000,000 at any time, no Overadvance may remain outstanding for
more than thirty days and no Overadvance shall cause any Lender’s Revolving
Exposure to exceed its Commitment; provided that, the Required Lenders may at
any time revoke the Administrative Agent’s authorization to make Overadvances.
Any such revocation must be in writing and shall become effective prospectively
upon the Administrative Agent’s receipt thereof.
          (c) Upon the making of a Swingline Loan or an Overadvance (whether
before or after the occurrence of a Default and regardless of whether a
Settlement has been requested with respect to such Swingline Loan or
Overadvance), each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Swingline
Lender or the Administrative Agent, as the case may be, without recourse or
warranty, an undivided interest and participation in such Swingline Loan or
Overadvance in proportion to its Applicable Percentage of the Commitment. The
Swingline Lender or the Administrative Agent may, at any time, require the
Lenders

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to fund their participations. From and after the date, if any, on which any
Lender is required to fund its participation in any Swingline Loan or
Overadvance purchased hereunder, the Administrative Agent shall promptly
distribute to such Lender, such Lender’s Applicable Percentage of all payments
of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Loan.
          (d) The Administrative Agent, on behalf of the Swingline Lender, shall
request settlement (a “Settlement”) with the Lenders on at least a weekly basis
or on any date that the Administrative Agent elects, by notifying the Lenders of
such requested Settlement by facsimile, telephone, or e-mail no later than 12:00
noon Chicago time on the date of such requested Settlement (the “Settlement
Date”). Each Lender (other than the Swingline Lender, in the case of the
Swingline Loans) shall transfer the amount of such Lender’s Applicable
Percentage of the outstanding principal amount of the applicable Loan with
respect to which Settlement is requested to the Administrative Agent, to such
account of the Administrative Agent as the Administrative Agent may designate,
not later than 2:00 p.m., Chicago time, on such Settlement Date. Settlements may
occur during the existence of a Default and whether or not the applicable
conditions precedent set forth in Section 4.02 have then been satisfied. Such
amounts transferred to the Administrative Agent shall be applied against the
amounts of the Swingline Lender’s Swingline Loans and, together with Swingline
Lender’s Applicable Percentage of such Swingline Loan, shall constitute
Revolving Loans of such Lenders, respectively. If any such amount is not
transferred to the Administrative Agent by any Lender on such Settlement Date,
the Swingline Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon as specified in Section 2.07.
          SECTION 2.06 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower Representative may request the
issuance of Letters of Credit for its own account or for the account of another
Borrower (which, in either case may be for the benefit of a creditor of any Loan
Party), in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Availability Period.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrowers to, or entered into by
the Borrowers with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control. Upon the effectiveness of this
Agreement, each Existing Letter of Credit shall, without any further action by
any party, be deemed to have been issued as a Letter of Credit hereunder on the
date of such effectiveness and shall for all purposes hereof be treated as a
Letter of Credit under this Agreement.
          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower
Representative shall hand deliver or send by facsimile (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Administrative Agent (prior to 9:00
am, Chicago time, at least three Business Days prior to the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the applicable Borrower also
shall submit a letter of credit application on the Issuing Bank’s standard form
in connection with any request for a Letter of Credit. A Letter of Credit shall
be issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrowers shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $100,000,000 and

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(ii) the total Revolving Exposures shall not exceed the lesser of the total
Commitments and the Borrowing Base.
          (c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) except as
otherwise provided in the following proviso, the date that is five Business Days
prior to the Maturity Date; provided, however, that notwithstanding the
foregoing, a Letter of Credit may be issued with an expiry date up to one year
after the Maturity Date but, in such event, the Borrowers shall, at the request
of the Administrative Agent, at least five Business Days prior to the Maturity
Date, either provide to the Administrative Agent a back-up letter of credit
satisfactory in all respects to the Administrative Agent or else provide cash
collateral for such Letter of Credit in an amount equal to 105% of all LC
Exposure with respect thereto, which cash collateral shall be held and treated
in the manner set forth in Section 2.06(j).
          (d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrowers on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrowers for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrowers shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 11:00 a.m., Chicago time, on the date that such LC
Disbursement is made, if the Borrower Representative shall have received notice
of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if
such notice has not been received by the Borrower Representative prior to such
time on such date, then not later than 11:00 a.m., Chicago time, on the Business
Day immediately following the day that the Borrower Representative receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided that the Borrowers may, subject to the conditions to borrowing set
forth herein, request in accordance with Section 2.03 or 2.05 that such payment
be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the extent so financed, the Borrowers’ obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing or Swingline Loan. If the Borrowers fail to make such payment when
due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrowers in respect thereof and
such Lender’s Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrowers, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and
Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Lenders. Promptly following receipt by
the Administrative Agent of any payment from the Borrowers pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent

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that Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Borrowers of their obligation to reimburse such LC
Disbursement.
          (f) Obligations Absolute. The Borrowers’ joint and several obligation
to reimburse LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein or herein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrowers’ obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrowers to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law) suffered by any Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.
          (g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the applicable Borrower by telephone
(confirmed by facsimile) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrowers of their
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such LC Disbursement.
          (h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrowers shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrowers reimburse such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
provided that, if the Borrowers fail to

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reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph
(e) of this Section to reimburse the Issuing Bank shall be for the account of
such Lender to the extent of such payment.
          (i) Replacement of Issuing Bank. An Issuing Bank may be replaced at
any time by written agreement among the Borrower Representative, the
Administrative Agent, the replaced Issuing Bank and a successor Issuing Bank.
The Administrative Agent shall notify the Lenders of any such replacement of an
Issuing Bank. At the time any such replacement shall become effective, the
Borrowers shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of an Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
          (j) Cash Collateralization. Immediately upon (i) the Maturity Date,
(ii) the occurrence of any Event of Default with respect to any Borrower
described in clause (h) or (i) of Article VII or (iii) the declaration by the
Administrative Agent or the Required Lenders that the Loans are due and payable
pursuant to Article VII, then without demand or other notice of any kind, the
Borrowers shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders (the “LC
Collateral Account”), an amount in cash equal to 105% of the LC Exposure as of
such date plus accrued and unpaid interest thereon. The Borrowers’ obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable. Such deposit shall be held by
the Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account and the
Borrowers hereby grant the Administrative Agent a security interest in the LC
Collateral Account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrowers’ risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrowers for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other Secured Obligations. If the Borrowers
are required to provide an amount of cash collateral hereunder as a result of
the occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrowers within three Business Days after
all such Defaults have been cured or waived.
          SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Chicago time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders in an amount equal to such Lender’s Applicable Percentage;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the Borrower
Representative by promptly crediting the amounts so received, in like funds, to
the Funding Account(s); provided that ABR Revolving Loans made to finance the
reimbursement of (i) an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the

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Administrative Agent to the Issuing Bank and (ii) a Protective Advance or an
Overadvance shall be retained by the Administrative Agent (or, to the extent the
Lenders have funded their participations therein, remitted to the Lenders).
          (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the 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 Borrowers severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the applicable Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrowers, the interest rate applicable to ABR Loans. Without
prejudice to any cause of action the Borrowers may have against such Lender, if
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.
          SECTION 2.08 Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
Representative may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing,
may elect Interest Periods therefor, all as provided in this Section. The
Borrower Representative may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to Swingline Borrowings, Overadvances or
Protective Advances, which may not be converted or continued.
          (b) To make an election pursuant to this Section, the Borrower
Representative shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrowers were requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile to the Administrative Agent of
a written Interest Election Request in a form approved by the Administrative
Agent and signed by the Borrower Representative.
          (c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
     (i) the Borrowers and the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
     (ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

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     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.
          If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrowers shall be deemed to
have selected an Interest Period of one month’s duration.
          (d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.
          (e) If the Borrower Representative fails to deliver a timely Interest
Election Request with respect to a Eurodollar Revolving Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if a Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower
Representative, then, so long as a Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing
and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.
          SECTION 2.09 Termination, Reduction and Increase of Commitments.
(a) Unless previously terminated, the Commitments shall terminate on the
Maturity Date.
          (b) The Company may at any time terminate the Commitments upon (i) the
payment in full of all outstanding Loans, together with accrued and unpaid
interest thereon and on any LC Disbursement, (ii) the cancellation and return of
all outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the furnishing to the Administrative Agent of a cash deposit
(or a back up standby letter of credit satisfactory to the Administrative Agent
in its sole discretion) equal to 105% of the LC Exposure as of such date),
(iii) the payment in full of the accrued and unpaid fees payable to the Loan
Parties hereunder, including, without limitation, fees payable with respect to
Letters of Credit, and (iv) the payment in full of all reimbursable expenses and
other Obligations together with accrued and unpaid interest thereon.
          (c) The Company may from time to time reduce the Commitments; provided
that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $10,000,000, (ii) at no time shall the aggregate amount of
the Commitments be reduced to less than $150,000,000 unless they are terminated
in their entirety and (iii) the Company shall not reduce the Commitments if,
after giving effect to any concurrent prepayment of the Revolving Loans in
accordance with Section 2.10, the sum of the Revolving Exposures would exceed
the lesser of the total Commitments and the Borrowing Base.
          (d) The Borrower Representative shall notify the Administrative Agent
of any election to terminate or reduce the Commitments under paragraph (b) or
(c) of this Section at least three Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower Representative

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pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Borrower Representative may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower
Representative (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments shall be permanent. Each reduction of the
Commitments shall be made ratably among the Lenders in accordance with their
respective Commitments.
          (e) The Borrowers shall have the right to increase the Commitments by
obtaining additional Commitments, either from one or more of the Lenders or
another lending institution provided that (i) any such request for an increase
shall be in a minimum amount of $25,000,000, (ii) the Borrower Representative,
on behalf of the Borrowers, may make a maximum of four (4) such requests,
(iii) the Administrative Agent has approved the identity of any such new Lender,
such approval not to be unreasonably withheld, (iv) any such new Lender assumes
all of the rights and obligations of a “Lender” hereunder, and (v) the procedure
described in Section 2.09(f) have been satisfied.
          (f) Any amendment hereto for such an increase or addition shall be in
form and substance satisfactory to the Administrative Agent and shall only
require the written signatures of the Administrative Agent, the Borrowers and
each Lender being added or increasing its Commitment, subject only to the
approval of all Lenders if any such increase would cause the Commitments to
exceed $350,000,000. As a condition precedent to such an increase, the Borrowers
shall deliver to the Administrative Agent a certificate of each Loan Party (in
sufficient copies for each Lender) signed by an authorized officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (A) the
representations and warranties contained in Article III and the other Loan
Documents are true and correct, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they are
true and correct as of such earlier date, and (B) no Default exists.
          (g) Within a reasonable time after the effective date of any increase,
the Administrative Agent shall, and is hereby authorized and directed to, revise
the Commitment Schedule to reflect such increase and shall distribute such
revised Commitment Schedule to each of the Lenders and the Borrowers, whereupon
such revised Commitment Schedule shall replace the old Commitment Schedule and
become part of this Agreement. On the Business Day following any such increase,
all outstanding ABR Advances shall be reallocated among the Lenders (including
any newly added Lenders) in accordance with the Lenders’ respective revised
Applicable Percentages and the Lenders shall make adjustments among themselves
with respect to the Advances then outstanding and amounts of principal,
interest, commitment fees and other amounts paid or payable with respect thereto
as shall be necessary, in the opinion of the Administrative Agent, in order to
effect such reallocation. Eurodollar Advances shall not be reallocated among the
Lenders until the expiration of the applicable Interest Period in effect at the
time of any such increase, at which time any such Eurodollar Advances being
continued shall be reallocated, and any such Eurodollar Advances being converted
to ABR Advances shall be converted and allocated, among the Lenders (including
the newly added Lenders) at such time.
          SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrowers
hereby unconditionally, jointly and severally promise to pay (i) to the
Administrative Agent for the account of each Lender or the Swingline Lender, as
applicable, the then unpaid principal amount of each Revolving Loan and
Swingline Loan on the Maturity Date, (ii) to the Administrative Agent the then
unpaid amount of each Protective Advance on the earlier of the Maturity Date and
demand by the Administrative Agent, and (iii) to the Administrative Agent the
then unpaid principal amount of each Overadvance on the

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earliest of the Maturity Date, the 30th day after such Overadvance is made and
demand by the Administrative Agent.
          (b) At all times that full cash dominion is in effect pursuant to
Section 7.3 of the Security Agreement, on each Business Day, the Administrative
Agent shall apply all funds credited to the Collection Account the previous
Business Day (whether or not immediately available) first to prepay any
Protective Advances and Overadvances that may be outstanding, pro rata, and
second to prepay the Revolving Loans and Swing Line Loans and to cash
collateralize outstanding LC Exposure.
          (c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
          (d) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.
          (e) The entries made in the accounts maintained pursuant to paragraph
(c) or (d) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.
          (f) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to such Lender a promissory note payable to such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) and in a form approved
by the Administrative Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).
          SECTION 2.11 Prepayment of Loans. (a) The Borrowers shall have the
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to prior notice in accordance with paragraph (e) of this Section.
          (b) Except for Overadvances permitted under Section 2.05, in the event
and on such occasion that the total Revolving Exposure exceeds the lesser of
(A) the aggregate Commitments or (B) the Borrowing Base, the Borrowers shall
prepay the Revolving Loans, LC Exposure and/or Swingline Loans in an aggregate
amount equal to such excess.
          (c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of any Loan Party in respect of any Prepayment Event,
the Borrowers shall, immediately after such Net Proceeds are received by any
Loan Party, prepay the Obligations as set forth in Section 2.11(d) below in an
aggregate amount equal to 100% of such Net Proceeds, provided that, in the case
of any event described in clause (a) of the definition of the term “Prepayment
Event” (such event, an “Asset Sale”), no prepayment shall be required except to
the extent the Net Proceeds from such Asset Sale, taken together with any other
Asset Sales during the same fiscal year, exceed $10,000,000, and provided
further that, in the case of any event described in clause (a) or (b) of the
definition of the term “Prepayment Event”, if the

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Borrower Representative shall deliver to the Administrative Agent a certificate
of a Financial Officer to the effect that the Loan Parties intend to apply the
Net Proceeds from such event (or a portion thereof specified in such
certificate), within 365 days after receipt of such Net Proceeds, to acquire (or
replace or rebuild) real property, equipment or other tangible assets (excluding
inventory) to be used in the business of the Loan Parties, and certifying that
no Default has occurred and is continuing, then either (i) so long as full cash
dominion is not in effect, no prepayment shall be required pursuant to this
paragraph in respect of the Net Proceeds specified in such certificate or
(ii) if full cash dominion is in effect, if the Net Proceeds specified in such
certificate are to be applied by (A) the Borrowers, then such Net Proceeds shall
be applied by the Administrative Agent to reduce the outstanding principal
balance of the Revolving Loans (without a permanent reduction of the Commitment)
and upon such application, the Administrative Agent shall establish a Reserve
against the Borrowing Base in an amount equal to the amount of such proceeds so
applied and (B) any Loan Party that is not a Borrower, then such Net Proceeds
shall be deposited in a cash collateral account and in either case, thereafter,
such funds shall be made available to the applicable Loan Party as follows:
     (1) The Borrower Representative shall request a Revolving Loan (specifying
that the request is to use Net Proceeds pursuant to this Section) or the
applicable Loan Party shall request a release from the cash collateral account
be made in the amount needed;
     (2) so long as the conditions set forth in Section 4.02 have been met, the
Lenders shall make such Revolving Loan or the Administrative Agent shall release
funds from the cash collateral account; and
     (3) in the case of Net Proceeds applied against the Revolving Loan, the
Reserve established with respect to such proceeds shall be reduced by the amount
of such Revolving Loan;
provided that to the extent of any such Net Proceeds therefrom that have not
been so applied by the end of such 365-day period, a prepayment shall be
required at such time in an amount equal to such Net Proceeds that have not been
so applied; provided, further that the Borrowers shall not be permitted to make
elections to use Net Proceeds to acquire (or replace or rebuild) real property,
equipment or other tangible assets (excluding inventory) with respect to Net
Proceeds in any fiscal year in an aggregate amount in excess of $30,000,000.
          (d) All such amounts pursuant to Section 2.11(c) shall be applied,
first to prepay any Protective Advances and Overadvances that may be
outstanding, pro rata, and second to prepay the Revolving Loans (including Swing
Line Loans) without a corresponding reduction in the Commitment.
          (e) The Borrower Representative shall notify the Administrative Agent
(and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by facsimile) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Revolving Borrowing, not later than 10:00 a.m.,
Chicago time, two Business Days before the date of prepayment, or (ii) in the
case of prepayment of an ABR Revolving Borrowing, not later than 10:00 a.m.,
Chicago time, on the date of prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of each Borrowing
or portion thereof to be prepaid; provided that, if a notice of prepayment is
given in connection with a conditional notice of termination of the Commitments
as contemplated by Section 2.09, then such notice of prepayment may be revoked
if such notice of termination is revoked in accordance with Section 2.09.
Promptly following receipt of any such notice relating to a Revolving Borrowing,
the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section

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2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the
Revolving Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13.
          SECTION 2.12 Fees. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Rate on the average daily amount of the Available
Commitment of such Lender during the period from and including the Restatement
Date to but excluding the date on which the Lenders’ Commitments terminate.
Accrued commitment fees shall be payable in arrears on the first Business Day of
each calendar month and on the date on which the Commitments terminate,
commencing on the first such date to occur after the Restatement Date. All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed.
          (b) The Borrowers agree to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate used to
determine the interest rate applicable to Eurodollar Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Restatement Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall
accrue at the rate set forth in the Fee Letter on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Restatement Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as the Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of each calendar
quarter shall be payable on the first Business Day of each fiscal quarter
following such last day, commencing on the first such date to occur after the
Restatement Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed.
          (c) The Company agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon in
writing signed by the Company and the Administrative Agent.
          (d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
          SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Rate.
          (b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Rate.
          (c) Each Protective Advance and each Overadvance shall bear interest
at the Alternate Base Rate plus the Applicable Rate for Revolving Loans plus 2%.

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          (d) Notwithstanding the foregoing, (x) during the occurrence and
continuance of an Event of Default under subsection (a), (b), (h), (i) or (j) of
Article VII, or (y) during the occurrence and continuance of any other Event of
Default that shall be deemed material by either the Administrative Agent (in its
sole discretion) or the Required Lenders (in their sole discretion) pursuant to
a written notice to the Borrower Representative (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 9.02
requiring the consent of “each Lender affected thereby” for reductions in
interest rates), in either event, (i) all Loans shall bear interest at 2% plus
the rate otherwise applicable to such Loans as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount outstanding
hereunder, such amount shall accrue at 2% plus the rate applicable to such fee
or other obligation as provided hereunder.
          (e) Accrued interest on each Loan (for ABR Loans, accrued through the
last day of the prior calendar month) shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (d) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
          (f) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed.
The applicable Alternate Base Rate, Adjusted LIBO Rate and LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
          SECTION 2.14 Alternate Rate of Interest. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
     (a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
     (b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower
Representative and the Lenders by telephone or facsimile as promptly as
practicable thereafter and, until the Administrative Agent notifies the Borrower
Representative and the Lenders that the circumstances giving rise to such notice
no longer exist, (i) any Interest Election Request that requests the conversion
of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an
ABR Borrowing.
          SECTION 2.15 Increased Costs. (a) If any Change in Law shall:

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     (i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank;
     (ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition (other than Taxes) affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein; or
     (iii) subject any Recipient to any Taxes on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto (other than (A) Indemnified
Taxes, (B) Excluded Taxes and (C) Other Connection Taxes on gross or net income,
profits or receipts (including value-added or similar Taxes)); provided, for the
avoidance of doubt, without duplication of amounts payable under Section 2.17;
and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making or maintaining any Eurodollar Loan (or
of maintaining its obligation to make any such Eurodollar Loan) or to increase
the cost to such Lender, the Issuing Bank or such other Recipient of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender, the Issuing Bank or
such other Recipient hereunder (whether of principal, interest or otherwise),
then the Borrowers will pay to such Lender, the Issuing Bank or such other
Recipient, as the case may be, such additional amount or amounts as will
compensate such Lender, the Issuing Bank or such other Recipient, as the case
may be, for such additional costs incurred or reduction suffered.
          (b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s or the Issuing Bank’s capital or on the capital
of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Bank’s policies and the
policies of such Lender’s or the Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.
          (c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and showing the basis for the calculation thereof, shall be
delivered to the Borrower Representative and shall be conclusive absent manifest
error. The Borrowers shall pay such Lender or the Issuing Bank, as the case may
be, the amount shown as due on any such certificate within 10 Business Days
after receipt thereof.
          (d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or the Issuing Bank’s right to demand such compensation; provided
that the Borrowers shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower Representative of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
Issuing Bank’s intention to claim compensation therefor; provided further that,
if the

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Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.
          SECTION 2.16 Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.09(d) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower
Representative pursuant to Section 2.19, then, in any such event, the Borrowers
shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Eurodollar Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for
the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section and showing the basis for the
calculation thereof shall be delivered to the Borrower Representative and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within 10 Business Days after
receipt thereof.
          SECTION 2.17 Taxes. (a) Withholding of Taxes; Gross-Up. Each payment
by any Loan Party under any Loan Document shall be made without withholding for
any Taxes, unless such withholding is required by any law. If any Withholding
Agent determines, in its sole discretion exercised in good faith, that it is so
required to withhold Taxes, then such Withholding Agent may so withhold and
shall timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law. If such Taxes are Indemnified
Taxes, then the amount payable by such Loan Party shall be increased as
necessary so that, net of such withholding (including such withholding
applicable to additional amounts payable under this Section), the applicable
Recipient receives the amount it would have received had no such withholding
been made.
          (b) Payment of Other Taxes by the Borrowers. The Borrowers shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.
          (c) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes by any Loan Party to a Governmental Authority, the Borrower
Representative shall deliver to the Administrative Agent a copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
          (d) Indemnification by the Loan Parties. The Loan Parties shall
jointly and severally indemnify each Recipient for any Indemnified Taxes that
are withheld or deducted on payments to, or paid or payable by such Recipient in
connection with any Loan Document (including amounts paid or payable under this
Section 2.17(d)) and not covered by Section 2.17(a) above or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. The indemnity under this
Section 2.17(d) shall be paid within 10 days after the

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Recipient delivers to the Borrower Representative a certificate stating the
amount of any Indemnified Taxes so paid or payable by such Recipient and
describing the basis for the indemnification claim. Such certificate shall be
conclusive of the amount so paid or payable absent manifest error. Such
Recipient shall deliver a copy of such certificate to the Administrative Agent.
          (e) Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent for any Taxes (but, in the case of any
Indemnified Taxes, 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) attributable to such
Lender that are paid or payable by the Administrative Agent in connection with
any Loan Document and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. The indemnity under this Section 2.17(e)
shall be paid within 10 days after the Administrative Agent delivers to the
applicable Lender a certificate stating the amount of Taxes so paid or payable
by the Administrative Agent. Such certificate shall be conclusive of the amount
so paid or payable absent manifest error.
          (f) Status of Lenders. (i) Any Lender that is entitled to an exemption
from, or reduction of, any applicable withholding Tax with respect to any
payments under any Loan Document shall deliver to the Borrower Representative
and the Administrative Agent, at the time or times reasonably requested by the
Borrower Representative or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower Representative or
the Administrative Agent as will permit such payments to be made without, or at
a reduced rate of, withholding. In addition, any Lender, if requested by the
Borrower Representative or the Administrative Agent, shall deliver such other
documentation prescribed by law or reasonably requested by the Borrower
Representative or the Administrative Agent as will enable the Borrower
Representative or the Administrative Agent to determine whether or not such
Lender is subject to any withholding (including 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 Sections
2.17(f)(ii)(A) through (E) and 2.17(f)(iii) below) shall not be required if in
the Lender’s 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. Upon the reasonable
request of the Borrower Representative or the Administrative Agent, any Lender
shall update any form or certification previously delivered pursuant to this
Section 2.17(f). If any form or certification previously delivered pursuant to
this Section expires or becomes obsolete or inaccurate in any respect with
respect to a Lender, such Lender shall promptly (and in any event within 10 days
after such expiration, obsolescence or inaccuracy) notify the Borrower
Representative and the Administrative Agent in writing of such expiration,
obsolescence or inaccuracy and update the form or certification if it is legally
eligible to do so.
     (ii) Without limiting the generality of the foregoing, if any Borrower is a
U.S. Person, any Lender with respect to such Borrower shall, if it is legally
eligible to do so, deliver to the Borrower Representative and the Administrative
Agent (in such number of copies reasonably requested by the Borrower
Representative and the Administrative Agent) on or prior to the date on which
such Lender becomes a party hereto, duly completed and executed copies of
whichever of the following is applicable:
          (A) in the case of a Lender that is a U.S. Person, IRS Form W-9
certifying that such Lender is exempt from U.S. Federal backup withholding tax;
          (B) in the case of a Non-U.S. Lender claiming the benefits of an
income tax treaty to which the United States is a party (1) with respect to
payments of interest under any

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Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of,
U.S. Federal withholding Tax pursuant to the “interest” article of such tax
treaty and (2) with respect to any other applicable payments under this
Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S.
Federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;
          (C) in the case of a Non-U.S. Lender for whom payments under this
Agreement constitute income that is effectively connected with such Lender’s
conduct of a trade or business in the United States, IRS Form W-8ECI;
          (D) in the case of a Non-U.S. Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code both (1) IRS
Form W-8BEN and (2) a tax certificate substantially in the form of Exhibit E-1
to the effect that such Lender is not (a) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of such
Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
and (d) conducting a trade or business in the United States with which the
relevant interest payments are effectively connected;
          (E) in the case of a Non-U.S. Lender that is not the beneficial owner
of payments made under this Agreement (including a partnership or a
participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the
relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this
paragraph (f)(ii) that would be required of each such beneficial owner or
partner of such partnership if such beneficial owner or partner were a Lender;
provided, however, that if the Lender is a partnership and one or more of its
partners are claiming the exemption for portfolio interest under Section 881(c)
of the Code, such Lender may provide a tax certificate substantially in the form
of Exhibit E-2 on behalf of such partners; or
          (F) any other form prescribed by law as a basis for claiming exemption
from, or a reduction of, U.S. Federal withholding Tax together with such
supplementary documentation necessary to enable the Borrower Representative or
the Administrative Agent to determine the amount of Tax (if any) required by law
to be withheld.
     (iii) 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 Withholding Agent, at the time or times prescribed
by law and at such time or times reasonably requested by the Withholding 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 Withholding Agent as may be necessary for the
Withholding Agent to comply with its obligations under FATCA, to determine that
such Lender has or has not complied with such Lender’s obligations under FATCA
and, as necessary, to determine the amount to deduct and withhold from such
payment. Solely for purposes of this Section 2.17(f)(iii), “FATCA” shall include
any amendments made to FATCA after the date of this Agreement.
          (g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to Section 2.15 and this
Section 2.17 (including additional amounts paid pursuant to this Section 2.17),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section with respect to the
Taxes giving rise to such refund), net of all out-of-pocket expenses (including
any Taxes) of such indemnified party and without interest (other

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than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified
party, shall repay to such indemnified party the amount paid to such indemnified
party pursuant to the previous sentence (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) in the event such
indemnified party is required to repay such refund to such Governmental
Authority. This Section 2.17(g) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes which it deems confidential) to the indemnifying party or
any other Person.
          (h) Issuing Bank. For purposes of Section 2.17(e) and (f), the term
“Lender” includes any Issuing Bank.
          SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) The Borrowers shall make each payment required to be made by them
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 2:00 p.m., Chicago time, on the date when due, in
immediately available funds, without set off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 10 South Dearborn
Street, 22nd Floor, Chicago, Illinois, except payments to be made directly to
the Issuing Bank or Swingline Lender as expressly provided herein and except
that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars. At all times
that full cash dominion is in effect pursuant to Section 7.3 of the Security
Agreement, solely for purposes of determining the amount of Loans available for
borrowing purposes, checks (in addition to immediately available funds applied
pursuant to Section 2.10(b)) from collections of items of payment and proceeds
of any Collateral shall be applied in whole or in part against the Obligations,
on the Business Day after receipt, subject to actual collection.
          (b) Any proceeds of Collateral received by the Administrative Agent
(i) not constituting either (A) a specific payment of principal, interest, fees
or other sum payable under the Loan Documents (which shall be applied as
specified by the Borrowers), (B) a mandatory prepayment (which shall be applied
in accordance with Section 2.11) or (C) amounts to be applied from the
Collection Account when full cash dominion is in effect (which shall be applied
in accordance with Section 2.10(b)) or (ii) after an Event of Default has
occurred and is continuing and the Administrative Agent so elects or the
Required Lenders so direct, such funds shall be applied ratably first, to pay
any fees, indemnities, or expense reimbursements including amounts then due to
the Administrative Agent and the Issuing Bank from the Borrowers (other than in
connection with Banking Services or Swap Obligations), second, to pay any fees
or expense reimbursements then due to the Lenders from the Borrowers (other than
in connection with Banking Services or Swap Obligations), third, to pay interest
due in respect of the Overadvances and Protective Advances, fourth, to pay the
principal of the Overadvances and Protective Advances, fifth, to pay interest
then due and payable on the Loans (other than the Overadvances and Protective
Advances) ratably, sixth, to prepay principal on the Loans (other than the
Overadvances and Protective Advances) and unreimbursed LC Disbursements ratably,
seventh, on or after (i) the Maturity Date, (ii) the occurrence of any Event of
Default with respect to any Borrower described in clause (h) or (i) of
Article VII or (iii) the declaration by the Administrative Agent or the Required
Lenders that the Loans are due and payable pursuant to Article VII, to pay an
amount to the Administrative Agent equal to one hundred five percent (105%) of
the aggregate undrawn face amount of all outstanding Letters of Credit and the
aggregate

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amount of any unpaid LC Disbursements, to be held as cash collateral for such
Obligations, eighth, to pay any amounts owing with respect to Banking Services
and Swap Obligations, ratably, ninth, to pay any other Secured Obligation due to
the Administrative Agent or any Lender by the Borrowers, and tenth, to the
Borrowers or whomever a court of competent jurisdiction may order.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by the Borrower Representative, or unless a Default is in existence,
neither the Administrative Agent nor any Lender shall apply any payment which it
receives to any Eurodollar Loan of a Class, except (a) on the expiration date of
the Interest Period applicable to any such Eurodollar Loan or (b) in the event,
and only to the extent, that there are no outstanding ABR Loans of the same
Class and, in any such event, the Borrowers shall pay the break funding payment
required in accordance with Section 2.16. The Administrative Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Secured
Obligations.
          (c) At the election of the Administrative Agent, all payments of
principal, interest, LC Disbursements, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for fees and expenses pursuant
to Section 9.03), and other sums payable under the Loan Documents, may be paid
from the proceeds of Borrowings made hereunder whether made following a request
by the Borrower Representative pursuant to Section 2.03 or a deemed request as
provided in this Section or may be deducted from any deposit account of any
Borrower maintained with the Administrative Agent. Each Borrower hereby
irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the
purpose of paying each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents and agrees that all
such amounts charged shall constitute Loans (including Swingline Loans and
Overadvances, but such a Borrowing may only constitute a Protective Advance if
it is to reimburse costs, fees and expenses as described in Section 9.03) and
that all such Borrowings shall be deemed to have been requested pursuant to
Sections 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative Agent to
charge any deposit account of any Borrower maintained with the Administrative
Agent for each payment of principal, interest and fees as it becomes due
hereunder or any other amount due under the Loan Documents.
          (d) If, except as otherwise expressly provided herein, any Lender
shall, by exercising any right of set off or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of its Loans or
participations in LC Disbursements resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Loans and participations in
LC Disbursements and accrued interest thereon than the proportion received by
any other similarly situated Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by all such Lenders
ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Loans and participations in LC Disbursements;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.

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          (e) Unless the Administrative Agent shall have received notice from
the Borrower Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
          (f) If any Lender shall fail to make any payment required to be made
by it hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), (i) apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
for the benefit of the Administrative Agent, the Swingline Lender or the Issuing
Bank to satisfy such Lender’s obligations under the applicable Sections of this
Agreement until all such unsatisfied obligations are fully paid and/or (ii) hold
any such amounts in a segregated account as cash collateral for, and application
to, any future funding obligations of such Lender hereunder; application of
amounts pursuant to (i) and (ii) above shall be made in such order as may be
determined by the Administrative Agent in its discretion.
          SECTION 2.19 Mitigation Obligations; Replacement of Lenders. (a) If
any Lender requests compensation under Section 2.15, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
          (b) If any Lender requests compensation under Section 2.15, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender becomes 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 Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrowers shall have received
the prior written consent of the Administrative Agent (and if a Commitment is
being assigned, the Issuing Bank), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrowers (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such

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assignment and 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 2.20 Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary and without prejudice to any cause of action the
Borrowers may have against a Defaulting Lender, if any Lender becomes a
Defaulting Lender, then the following provisions shall apply for so long as such
Lender is a Defaulting Lender:
          (a) fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.12(a);
          (b) such Defaulting Lender shall not have the right to vote on any
issue on which voting is required (other than to the extent expressly provided
in Section 9.02(b)) and the Commitment and Revolving Exposure of such Defaulting
Lender shall not be included in determining whether the Required Lenders or the
Supermajority Lenders have taken or may take any action hereunder;
          (c) if any Swingline Exposure, LC Exposure or Protective Advance
Exposure exists at the time a Lender becomes a Defaulting Lender then:
     (i) as an initial matter, all or any part of the Swingline Exposure, LC
Exposure and Protective Advance Exposure of such Defaulting Lender shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentages but only to the extent the sum of all non-Defaulting
Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure,
LC Exposure and Protective Advance Exposure does not exceed the total of all
non-Defaulting Lenders’ Commitments;
     (ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall (x) first, within one Business Day
following notice by the Administrative Agent, prepay such Swingline Exposure and
Protective Advance Exposure, ratably, and (y) second, within the earlier of five
Business Day following notice by the Administrative Agent or the date of the
next date upon which a Letter of Credit is drawn, cash collateralize, for the
benefit of the Issuing Bank, the Borrowers’ obligations corresponding to such
Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation
pursuant to clause (i) above) in accordance with the procedures set forth in
Section 2.06(j) for so long as such LC Exposure is outstanding;
     (iii) if the Borrowers cash collateralize any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;
     (iv) if the LC Exposure of the non-Defaulting Lenders is reallocated
pursuant to clause (i) above, then the fees payable to the Lenders pursuant to
Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and
     (v) if all or any portion of such Defaulting Lender’s LC Exposure is
neither reallocated nor cash collateralized pursuant to clause (i) or
(ii) above, then, without prejudice to any rights or remedies of the Issuing
Bank or any Lender hereunder, all Letter of Credit fees payable under
Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be
payable to the Issuing Bank until such LC Exposure is reallocated and/or cash
collateralized; and

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          (d) so long as such Lender is a Defaulting Lender, the Issuing Bank
shall not be required to issue, amend or increase any Letter of Credit, unless
it is satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrowers in accordance with Section 2.20(c), and participating
interests in any such newly issued or increased Letter of Credit shall be
allocated among non-Defaulting Lenders in a manner consistent with
Section 2.20(c)(i) and in accordance with their respective Applicable
Percentages (and such Defaulting Lender shall not participate therein).
          If (i) a Bankruptcy Event with respect to the Parent of any Lender
shall occur following the date hereof and for so long as such event shall
continue or (ii) the Issuing Bank or the Swingline Lender has a good faith
belief that any Lender has defaulted in fulfilling its obligations under one or
more other agreements in which such Lender commits to extend credit, the Issuing
Bank shall not be required to issue, amend or increase any Letter of Credit,
unless the Issuing Bank shall have entered into arrangements with the Borrowers
or such Lender, satisfactory to the Issuing Bank, to defease any risk in respect
of such Lender hereunder.
          In the event that each of the Administrative Agent, the Borrowers, the
Issuing Bank and the Swingline Lender agrees that a Defaulting Lender has
adequately remedied all matters that caused such Lender to be a Defaulting
Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on the date
of such readjustment such Lender shall purchase at par such of the Loans of the
other Lenders (other than Swingline Loans) as the Administrative Agent shall
determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage.
          SECTION 2.21 Returned Payments. If after receipt of any payment which
is applied to the payment of all or any part of the Obligations, the
Administrative Agent or any Lender is for any reason compelled to surrender such
payment or proceeds to any Person because such payment or application of
proceeds is invalidated, declared fraudulent, set aside, determined to be void
or voidable as a preference, impermissible setoff, or a diversion of trust
funds, or for any other reason, then the Obligations or part thereof intended to
be satisfied shall be revived and continued and this Agreement shall continue in
full force as if such payment or proceeds had not been received by the
Administrative Agent or such Lender. The provisions of this Section 2.21 shall
be and remain effective notwithstanding any contrary action which may have been
taken by the Administrative Agent or any Lender in reliance upon such payment or
application of proceeds. The provisions of this Section 2.21 shall survive the
termination of this Agreement.
          SECTION 2.22 Banking Services and Swap Agreements. Each Lender or
Affiliate thereof providing Banking Services for, or having Swap Agreements
with, any Loan Party shall deliver to the Administrative Agent, promptly after
entering into such Banking Services or Swap Agreements, written notice setting
forth the aggregate amount of all Banking Services Obligations and Swap
Obligations of such Loan Party to such Lender or Affiliate (whether matured or
unmatured, absolute or contingent). In furtherance of that requirement, each
such Lender or Affiliate thereof shall furnish the Administrative Agent, from
time to time after a significant change therein or upon a request therefor, a
summary of the amounts due or to become due in respect of such Banking Services
Obligations and Swap Obligations. The most recent information provided to the
Administrative Agent shall be used in determining the amount of Banking Services
Obligations and/or Swap Obligations owed for purposes of Section 2.18(b).

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ARTICLE III
Representations and Warranties
          Each Loan Party represents and warrants to the Lenders that:
          SECTION 3.01 Organization; Powers. Each of the Loan Parties and each
of its Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
          SECTION 3.02 Authorization; Enforceability. The Transactions are
within each Loan Party’s organizational powers and have been duly authorized by
all necessary organizational actions and, if required, actions by equity
holders. The Loan Documents to which each Loan Party is a party have been duly
executed and delivered by such Loan Party and each of such Loan Documents
constitutes a legal, valid and binding obligation of such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
          SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except for filings
necessary to perfect Liens created pursuant to the Loan Documents, (b) will not
violate the Certificate of Incorporation, by-laws or other organizational
documents governing any Loan Party, (c) will not violate any Requirement of Law
applicable to any Loan Party or any of its Subsidiaries, (d) will not violate or
result in a default under any material indenture, material agreement or other
material instrument binding upon any Loan Party or any of its Subsidiaries or
its assets, or give rise to a right thereunder to require any material payment
to be made by any Loan Party or any of its Subsidiaries, and (e) will not result
in the creation or imposition of any Lien on any asset of any Loan Party or any
of its Subsidiaries, except Liens created pursuant to the Loan Documents.
          SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The
Company has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 31, 2010, reported on by KPMG LLP, independent
public accountants, and (ii) as of and for the fiscal month ended February 28,
2011, certified by its chief financial officer. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Company and its consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
          (b) No event, change or condition has occurred that has had, or could
reasonably be expected to have or cause, a Material Adverse Effect, since
December 31, 2010.
          SECTION 3.05 Properties. (a) As of the date of this Agreement,
Schedule 3.05 of the Disclosure Letter sets forth the address of each parcel of
real property that is owned or leased by each Loan Party at which Collateral
having a value of $1,000,000 or more is located. Each of such leases and
subleases is valid and enforceable in accordance with its terms and is in full
force and effect, and, to the

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knowledge of Borrowers, no default by any party to any such lease or sublease
exists. Each of the Loan Parties and its Subsidiaries has good and indefeasible
title to, or valid leasehold interests in, all its real and personal property,
free of all Liens other than those permitted by Section 6.02.
          (b) Each Loan Party and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted, a correct and complete list of
such trademarks, tradenames, copyrights, patents and other intellectual property
which are material, as of the date of this Agreement, is set forth on
Schedule 3.05 of the Disclosure Letter, and the use thereof by the Loan Parties
and its Subsidiaries does not infringe in any material respect upon the rights
of any other Person, and except as set forth on such Schedule, the Loan Parties’
rights thereto are not subject to any licensing agreement or similar
arrangement.
          SECTION 3.06 Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Loan Party, threatened in
writing against or directly affecting the Loan Parties or any of their
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or
(ii) that involve this Agreement or the Transactions.
          (b) (i) No Loan Party nor any of its Subsidiaries has received written
notice of any claim with respect to any material Environmental Liability or
knows of any basis for any material Environmental Liability and (ii) except with
respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, no Loan Party nor
any of its Subsidiaries (1) has failed to comply with any Environmental Law or
to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law or (2) has become subject to any
Environmental Liability.
          SECTION 3.07 Compliance with Laws and Agreements. Each Loan Party and
its Subsidiaries is in compliance with all Requirements of Law applicable to it
or its property and all indentures, agreements and other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Event of Default has occurred and is continuing.
          SECTION 3.08 Investment Company Status. No Loan Party nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.
          SECTION 3.09 Taxes. Each Loan Party and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all material Taxes required to have been
paid by it, except Taxes that are being contested in good faith by appropriate
proceedings and for which such Loan Party or such Subsidiary, as applicable, has
set aside on its books adequate reserves. No tax liens have been filed and no
claims are being asserted with respect to any such taxes.
          SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. Without qualification by the foregoing,
there has been no failure to make any minimum required contribution to any Plan
or Multiemployer Plan when due.

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          SECTION 3.11 Disclosure. The Company has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
Subsidiary is subject, and all other matters known to it, that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. Neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or any other Loan Document (as
modified or supplemented by other written factual information so furnished)
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time delivered and, if such projected financial information
was delivered prior to the Restatement Date, as of the Restatement Date.
          SECTION 3.12 Material Agreements. All material agreements and
contracts to which any Loan Party is a party or is bound as of the date of this
Agreement are referenced or otherwise listed on Schedule 3.12 of the Disclosure
Letter. No Loan Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(i) any material agreement to which it is a party or (ii) any agreement or
instrument evidencing or governing material Indebtedness.
          SECTION 3.13 Solvency. Immediately after the consummation of the
Transactions to occur on the Restatement Date, (i) the fair value of the assets
of each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted after
the Restatement Date.
          (b) No Loan Party intends to, or will permit any of its Subsidiaries
to, and no Loan Party believes that it or any of its Subsidiaries will, incur
debts beyond its ability to pay such debts as they mature, taking into account
the timing of and amounts of cash to be received by it or any such Subsidiary
and the timing of the amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
          SECTION 3.14 Insurance. Schedule 3.14 of the Disclosure Letter sets
forth a description of all insurance maintained by or on behalf of the Loan
Parties and the Subsidiaries as of the Restatement Date. As of the Restatement
Date, all premiums in respect of such insurance have been paid. The Company
believes that the insurance maintained by or on behalf of the Company and the
Subsidiaries is adequate. The expired insurance policies delivered to and
reviewed by the Administrative Agent and its representatives in connection with
entering into the Transactions are substantially similar to the Company’s
current insurance policies. The Company agrees to provide the Agent and its
representatives with copies of its current insurance policies upon receipt of
same.
          SECTION 3.15 Capitalization and Subsidiaries. As of the Restatement
Date, Schedule 3.15 of the Disclosure Letter sets forth (a) a correct and
complete list of the name and relationship to the Company of each and all of the
Company’s Subsidiaries and (b) the type of entity of the Company and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any
Loan Party have

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been (to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
          SECTION 3.16 Security Interest in Collateral. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Creditors, and such Liens constitute
perfected and continuing Liens on the Collateral, securing the Secured
Obligations, enforceable against the applicable Loan Party and all third
parties, and having priority over all other Liens on the Collateral except in
the case of (a) Permitted Encumbrances, to the extent any such Permitted
Encumbrances would have priority over the Liens in favor of the Administrative
Agent pursuant to any applicable law or agreement and (b) Liens perfected only
by possession or control (including possession of any certificate of title) to
the extent the Administrative Agent has not obtained or does not maintain
possession or control of such Collateral.
          SECTION 3.17 Employment Matters. As of the Restatement Date, there are
no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary
pending or, to the knowledge of the Borrowers, threatened. The hours worked by
and payments made to employees of the Loan Parties and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due
from any Loan Party or any Subsidiary, or for which any claim may be made
against any Loan Party or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Loan Party or such Subsidiary.
          SECTION 3.18 Common Enterprise. The successful operation and condition
of each of the Loan Parties is dependent on the continued successful performance
of the functions of the group of the Loan Parties as a whole and the successful
operation of each of the other Loan Parties. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of the other Loan Parties and (ii) the credit extended
by the Lenders to the Borrowers hereunder, both in their separate capacities and
as members of the group of companies. Each Loan Party has determined that
execution, delivery, and performance of this Agreement and any other Loan
Documents to be executed by such Loan Party is within its purpose, will be of
direct and indirect benefit to such Loan Party, and is in its best interest.
ARTICLE IV
Conditions
          SECTION 4.01 Restatement Date. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
     (a) Credit Agreement and Loan Documents. The Administrative Agent (or its
counsel) shall have received (i) from each party hereto either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as
the Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
including any promissory notes requested by a Lender pursuant to Section 2.10
payable to each such requesting Lender and a written opinion of

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the Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing
Bank and the Lenders in form reasonably satisfactory to the Administrative
Agent.
     (b) Financial Statements and Projections. The Lenders shall have received
(i) audited consolidated financial statements of the Borrower for the
December 31, 2009 and 2010 fiscal years, (ii) unaudited interim consolidated
financial statements of the Borrower for each fiscal quarter ended after the
date of the latest applicable financial statements delivered pursuant to clause
(i) of this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the
Administrative Agent, reflect any material adverse change in the consolidated
financial condition of the Borrower, as reflected in the financial statements or
projections contained in the Information Memorandum and (iii) satisfactory
projections through 2013.
     (c) Closing Certificates; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Restatement Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
Board of Directors, members or other body authorizing the execution, delivery
and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the Financial Officers and any other
officers of such Loan Party authorized to sign the Loan Documents to which it is
a party, and (C) contain appropriate attachments, including the certificate or
articles of incorporation or organization of each Loan Party certified by the
relevant authority of the jurisdiction of organization of such Loan Party and a
true and correct copy of its by-laws or operating, management or partnership
agreement, and (ii) a short form good standing certificate for each Loan Party
from its jurisdiction of organization.
     (d) Closing Certificate. The Administrative Agent shall have received a
certificate, signed by a Financial Officer of the Company and each other Loan
Party, on the initial Borrowing date (i) stating that no Default has occurred
and is continuing, (ii) stating that the representations and warranties
contained in Article III are true and correct in all material respects as of
such date, and (iii) certifying any other factual matters as may be reasonably
requested by the Administrative Agent.
     (e) Fees. The Lenders and the Administrative Agent shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on or
before the Restatement Date. All such amounts will be paid with proceeds of
Loans made on the Restatement Date and will be reflected in the funding
instructions given by the Borrower Representative to the Administrative Agent on
or before the Restatement Date.
     (f) Lien Searches. The Administrative Agent shall have received the results
of a recent lien search in each of the jurisdictions reasonably requested by the
Administrative Agent, and such searches shall reveal no liens on any of the
assets of the Loan Parties except for liens permitted by Section 6.02 or
discharged on or prior to the Restatement Date pursuant to a pay-off letter or
other documentation reasonably satisfactory to the Administrative Agent.
     (g) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer in form and substance satisfactory to the
Administrative Agent.
     (h) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate which calculates the Borrowing Base as of
a date reasonably acceptable to the Administrative Agent.

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     (i) Closing Availability. After giving effect to all Borrowings to be made
on the Restatement Date and the issuance of any Letters of Credit on the
Restatement Date and payment of all fees and expenses due hereunder, and with
all of the Loan Parties’ indebtedness, liabilities, and obligations current,
(i) the Borrowers’ Availability shall not be less than $70,000,000 and (ii) the
Borrowers’ Availability plus cash on hand shall not be less than $120,000,000.
Each of the foregoing shall be calculated without giving effect to the Temporary
Field Exam Reserve.
     (j) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Collateral
Documents or under law or reasonably requested by the Administrative Agent to be
filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Secured Creditors, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 6.02), shall be
in proper form for filing, registration or recordation.
     (k) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of Section 4.7
of the Security Agreement.
     (l) Existing Facility Payoff. All principal, interest, fees and other
amounts owing under the Existing Credit Agreement shall have been (or shall
substantially contemporaneously be) repaid in full (other than amounts
continuing hereunder).
     (m) Consent of Exiting Lenders. The Administrative Agent shall have
received a consent (an “Exiting Lender Consent”) to the Credit Agreement from
each Exiting Lender under the Existing Credit Agreement in form and substance
satisfactory to the Administrative Agent.
     (n) Other Documents. The Administrative Agent shall have received such
other documents as the Administrative Agent, the Issuing Bank, any Lender or
their respective counsel may have reasonably requested.
The Administrative Agent shall notify the Company and the Lenders of the
Restatement Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 2:00 p.m., Chicago time, on or prior to
April 27, 2011 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
          SECTION 4.02 Each Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
     (a) The representations and warranties of the Loan Parties set forth in the
Loan Documents shall be true and correct in all material respects on and as of
the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable (except that any
representation or warranty that relates to a specific date shall be true and
correct in all material respects as of such date), or, if they are not true and
correct in all material respects, neither the Administrative Agent nor the
Required Lenders shall have determined not to make any such Loan or instructed
the Issuing Bank not to issue Letters of Credit as a result of the fact that
such representation or warranty is untrue or incorrect.

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     (b) At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing, or, if a Default
shall have occurred and be continuing, neither the Administrative Agent nor the
Required Lenders shall have determined not to make a Loan on the occasion of
such Borrowing or instructed the Issuing Bank not to issue such Letter of Credit
as a result of such Default.
     (c) After giving effect to any Borrowing or the issuance of any Letter of
Credit, Availability (determined by reference to the most recently delivered
Borrowing Base Certificate) is not less than (x) the Trigger Amount at all times
that the Borrowers are making weekly financial deliveries pursuant to
Section 5.01(n) (unless the Borrowers have demonstrated in advance to the
Administrative Agent compliance with all requirements related to the Trigger
Amount) or (y) the Changeover Amount at all other times (unless the Borrowers
have demonstrated in advance to the Administrative Agent compliance with all
requirements related to the Changeover Amount).
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
ARTICLE V
Affirmative Covenants
          Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated, or
shall have been cash collateralized in accordance with Section 2.06(j), and all
LC Disbursements shall have been reimbursed, each Loan Party executing this
Agreement covenants and agrees, jointly and severally with all of the Loan
Parties, with the Lenders that:
          SECTION 5.01 Financial Statements; Borrowing Base and Other
Information. The Company will furnish to the Administrative Agent:
     (a) within 90 days after the end of each fiscal year of the Company, its
audited consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing reasonably acceptable to the Administrative Agent (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit other than any qualification regarding
the adoption of accounting pronouncements) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, provided that the delivery within the time period specified above of
the Company’s Form 10-K for such fiscal year (together with the Company’s annual
report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefore and filed
with the SEC shall be deemed to satisfy the requirements of this
Section 5.01(a); and provided further, that the Company shall be deemed to have
made such delivery of such Form 10-K if it shall have timely made such Form 10-K
available on “EDGAR” and on its home page on the worldwide web (at the date of
this Agreement located at www.furniturebrands.com) and shall have given
Administrative Agent prior notice of such availability on EDGAR and its home
page in

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connection with each delivery (such availability and notice thereof being
referred to as “Electronic Delivery”);
     (b) within 45 days after the end of each of the first three fiscal quarters
of the Company, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, provided that delivery within the time
period specified above of copies of the Company’s Form 10-Q prepared in
compliance with the requirements therefor and filed with the SEC shall be deemed
to satisfy the requirements of this Section 5.01(b); and provided further that
the Company shall be deemed to have made such delivery of such Form 10-Q if it
shall have timely made Electronic Delivery thereof;
     (c) within 30 days after the end of each fiscal month (other than a fiscal
month ending as of the end of a fiscal quarter of the Company), the Company’s
consolidated balance sheet and related statements of operations, and cash flows
as of the end of and for such fiscal month and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects (to the best knowledge of
such Financial Officer) the financial condition and results of operations of the
Company and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;
     (d) concurrently with any delivery of financial statements under clause
(a), (b) or (c) above, a certificate of a Financial Officer of the Company in
substantially the form of Exhibit C (a “Compliance Certificate”) (i) certifying,
in the case of the financial statements delivered under clause (b) or (c), as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, (ii) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (iii) setting forth reasonably detailed calculations demonstrating
compliance with Section 6.12, if applicable, (iv) stating whether any change in
GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate and (v) setting forth (only in the case of
certificates delivered concurrently with financial statements delivered pursuant
to (a) or (b) above) (1) a computation of Average Availability for the
applicable fiscal quarter end and (2) a summary of all guarantees, investments,
and loans or advances (as applicable) issued or made pursuant to
Sections 6.01(d), or 6.04(c) or (d) during the immediately preceding fiscal
quarter;
     (e) within 30 days immediately following the end of each fiscal year of the
Company, a copy of the plan and forecast (including a projected consolidated
balance sheet, income statement and funds flow statement) of the Company for
each quarter of the then current fiscal year (the “Projections”) in form
reasonably satisfactory to the Administrative Agent;

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     (f) as soon as available but in any event within 25 days of the end of each
calendar month (or, at any time Availability is less than the Changeover Amount,
at the end of each calendar week, and at the end of each calendar week
thereafter until Availability has exceeded the Changeover Amount for 90
consecutive days) and at such other times as may be necessary to re-determine
availability of Advances hereunder or as may be requested by the Administrative
Agent, as of the period then ended, a Borrowing Base Certificate and supporting
information in connection therewith, together with any additional reports with
respect to the Borrowing Base as the Administrative Agent may reasonably
request;
     (g) as soon as available but in any event within 25 days of the end of each
calendar month (or, at any time Availability is less than the Changeover Amount,
at the end of each calendar week, and at the end of each calendar week
thereafter until Availability has exceeded the Changeover Amount for 90
consecutive days) and at such other times as may be requested by the
Administrative Agent, as of the period then ended, all delivered electronically
in a text formatted file acceptable to the Administrative Agent:
     (i) a detailed schedule and aging of the Accounts (1) including all
invoices aged by invoice date and due date (with an explanation of the terms
offered) and (2) reconciled to the Borrowing Base Certificate delivered as of
such date prepared in a manner reasonably acceptable to the Administrative
Agent, together with a summary specifying the name and balance due for each
Account Debtor:
     (ii) a schedule detailing the Inventory, in form satisfactory to the
Administrative Agent, (1) by location (showing Inventory in transit, any
Inventory located with a third party under any consignment, bailee arrangement,
or warehouse agreement), by class (raw material, work-in-process and finished
goods), by product type, and by volume on hand, which Inventory shall be valued
at the lower of cost (determined on a first-in, first-out basis) or market and
adjusted for Reserves as the Administrative Agent has previously indicated to
the Company are deemed by the Administrative Agent to be appropriate,
(2) including a report of any variances or other results of Inventory counts
performed by the Loan Parties since the last Inventory schedule (including
information regarding sales or other reductions, additions, returns, credits
issued by the Loan Parties and complaints and claims made against the Loan
Parties), and (3) reconciled to the Borrowing Base Certificate delivered as of
such date;
     (iii) a worksheet of calculations prepared by the Company to determine
Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts
and Inventory excluded from Eligible Accounts and Eligible Inventory and the
reason for such exclusion;
     (iv) a reconciliation of the Accounts and Inventory between the amounts
shown in the Loan Parties’ general ledger and financial statements and the
reports delivered pursuant to clauses (i) and (ii) above; and
     (v) a reconciliation of the loan balance per the Loan Parties’ general
ledger to the loan balance under this Agreement.
     (h) promptly upon the Administrative Agent’s request:

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     (i) copies of invoices in connection with the invoices issued by the Loan
Parties in connection with any Accounts, credit memos, shipping and delivery
documents, and other information related thereto;
     (ii) copies of purchase orders, invoices, and shipping and delivery
documents in connection with any Inventory or Equipment purchased by any Loan
Party; and
     (iii) a schedule detailing the balance of all intercompany accounts of the
Loan Parties;
     (i) as soon as available but in any event within 25 days of the end of each
calendar month and at such other times as may be requested by the Administrative
Agent, as of the period then ended, the Loan Parties’ sales journal, cash
receipts journal (identifying trade and non-trade cash receipts) and debit
memo/credit memo journal;
     (j) upon request of Administrative Agent, copies of all tax returns filed
by any Loan Party with the U.S. Internal Revenue Service;
     (k) within 45 days after each June 30 starting June 30, 2011, an updated
customer list for the Borrower and its Subsidiaries as of June 30, which list
shall state the customer’s name, mailing address and phone number and shall be
certified as true and correct by a Financial Officer of the Company;
     (l) within 45 days after the last day of June of each year, a certificate
of good standing for each Loan Party from the appropriate governmental officer
in its jurisdiction of incorporation, formation, or organization;
     (m) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the SEC, provided that in each case the Company
shall be deemed to have made such delivery if it shall have made Electronic
Delivery thereof;
     (n) not later than 12:00 noon New York time on the Friday immediately
following the end of the second fiscal week of every fiscal month (or, to the
extent that (x) the Borrowers are at the applicable time subject to the
requirements of the Changeover Amount or (y) the Borrowers shall have
voluntarily elected to commence reporting on a weekly basis for purposes of this
clause (n), not later than 12:00 noon New York time on the Friday immediately
following the end of each fiscal week), accounts receivable roll-forwards and
inventory gross balances for the two fiscal week period (or, to the extent that
(x) the Borrowers are at the applicable time subject to the requirements of the
Changeover Amount or (y) the Borrowers shall have voluntarily elected to
commence reporting on a weekly basis for purposes of this clause (n), the one
fiscal week period) preceding such date, all calculated on a consolidated basis
and delivered in a format similar to the accounts receivable and inventory
reporting in a Borrowing Base Certificate; and
     (o) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent or any Lender may reasonably request.

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          SECTION 5.02 Notices of Material Events. The Borrowers will furnish to
the Administrative Agent prompt written notice of the following:
     (a) the occurrence of any Default;
     (b) receipt of any notice of any governmental investigation or any
litigation or proceeding commenced or threatened against any Loan Party that
(i) seeks damages in excess of $15,000,000, (ii) seeks injunctive relief which
could reasonably be expected to have a Material Adverse Effect, (iii) is
asserted or instituted against any Plan or Multiemployer Plan, its fiduciaries
or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges
the violation of any law regarding, or seeks remedies in connection with, any
Environmental Laws, (vi) contests any tax, fee, assessment, or other
governmental charge in excess of $15,000,000, or (vii) involves any product
recall;
     (c) any Lien (other than Permitted Encumbrances or Liens otherwise
permitted by Section 6.02) or claim made or asserted against any of the
Collateral;
     (d) any loss, damage, or destruction to the Collateral in the amount of
$5,000,000 or more, whether or not covered by insurance;
     (e) any and all written default notices received under or with respect to
any leased location or public warehouse where Collateral with an aggregate value
in excess of $5,000,000 is located (which shall be delivered within ten Business
Days after receipt thereof);
     (f) the fact that a Loan Party has entered into a Swap Agreement or an
amendment to a Swap Agreement, together with copies of all agreements evidencing
such Swap Agreement or amendments thereto (which shall be delivered within ten
Business Days);
     (g) the occurrence of (i) any ERISA Event described in clause (b) of the
definition thereof or (ii) any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount exceeding
$15,000,000; and
     (h) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
          SECTION 5.03 Existence; Conduct of Business. Each Loan Party will, and
will cause each Subsidiary to, (a) do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted except to the
extent the failure to maintain such authority would not reasonably be expected
to cause a Material Adverse Effect; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.03 and (b) carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

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          SECTION 5.04 Payment of Obligations. Each Loan Party will, and will
cause each Subsidiary to, pay or discharge all Material Indebtedness and all
other material liabilities and obligations, including Taxes, before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Loan Party or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
          SECTION 5.05 Maintenance of Properties. Each Loan Party will, and will
cause each Subsidiary to, keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted, provided that the foregoing shall not prohibit any disposition under
Section 6.05.
          SECTION 5.06 Books and Records; Inspection Rights. Each Loan Party
will, and will cause each Subsidiary to, (i) keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities and (ii) permit any
representatives designated by the Administrative Agent or any Lender (including
employees of the Administrative Agent, any Lender or any consultants,
accountants, lawyers and appraisers retained by the Administrative Agent), upon
reasonable prior notice during regular business hours and under guidance of
officers of the Borrowers, to visit and inspect its properties, to examine and
make extracts from their books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and intervals and as often as reasonably requested. After the
occurrence and during the continuance of any Event of Default, each Loan Party
shall provide the Administrative Agent with the names and contact information
for its suppliers. The Loan Parties acknowledge that the Administrative Agent,
after exercising its rights of inspection, may prepare and distribute to the
Lenders certain Reports pertaining to the Loan Parties’ assets for internal use
by the Administrative Agent and the Lenders.
          SECTION 5.07 Compliance with Laws. Each Loan Party will, and will
cause each Subsidiary to, comply with all Requirements of Law applicable to it
or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
          SECTION 5.08 Use of Proceeds. The proceeds of the Loans will be used
only for the general corporate purposes of the Company and its Subsidiaries in
the ordinary course of business, including the refinancing of existing
Indebtedness and for Permitted Acquisitions. No part of the proceeds of any Loan
and no Letter of Credit will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.
          SECTION 5.09 Insurance. Each Loan Party will, and will cause each
Subsidiary to, maintain with financially sound and reputable carriers
(a) insurance in such amounts (with no greater risk retention) and against such
risks (including loss or damage by fire and loss in transit; theft, burglary,
pilferage, larceny, embezzlement, and other criminal activities; business
interruption; and general liability) and such other hazards, as is customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations and (b) all insurance required pursuant to the
Collateral Documents. The Borrower will furnish to the Lenders, upon request of
the Administrative Agent, information in reasonable detail as to the insurance
so maintained.
          SECTION 5.10 Casualty and Condemnation. The Borrowers (a) will furnish
to the Administrative Agent prompt written notice of any casualty or other
insured damage to any material portion of the Collateral or the commencement of
any action or proceeding for the taking of any material

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portion of the Collateral or interest therein under power of eminent domain or
by condemnation or similar proceeding and (b) will ensure that the Net Proceeds
of any such event (whether in the form of insurance proceeds, condemnation
awards or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Collateral Documents.
          SECTION 5.11 Appraisals and Field Examinations. (a) The Company and
the Subsidiaries will provide the Administrative Agent with appraisals or
updates thereof of their Inventory from an appraiser selected and engaged by the
Administrative Agent following consultation with the Company, and prepared on a
basis reasonably satisfactory to the Administrative Agent, such appraisals and
updates to include, without limitation, information required by applicable law
and regulations; provided, however, that one such appraisal shall be conducted
per calendar year by the Administrative Agent; provided further that two such
appraisals may be conducted per calendar year at the discretion of the
Administrative Agent if Availability falls below $60,000,000 or the Fixed Charge
Coverage Ratio is less than 1.0 to 1.0; and provided further that the number or
frequency of inventory appraisals may increase (as determined by the
Administrative Agent in its sole discretion) if an Event of Default shall have
occurred and be continuing.
          (b) One field examination shall be conducted per year by the
Administrative Agent, to ensure the adequacy of Borrowing Base collateral and
related reporting and control systems; provided that two field examinations may
be conducted per year at the discretion of the Administrative Agent if
Availability falls below $60,000,000 or the Fixed Charge Coverage Ratio is less
than 1.0 to 1.0; and provided further that the number or frequency of field
examinations may increase (as determined by the Administrative Agent in its sole
discretion) if an Event of Default shall have occurred and be continuing.
          SECTION 5.12 Depository Banks. The Loan Parties each will maintain at
one or more of the Lenders, or such other bank(s) as may be reasonably
acceptable to Administrative Agent, as its principal depository bank, including
for the maintenance of operating, administrative, cash management, collection
activity, and other deposit accounts for the conduct of its business.
          SECTION 5.13 Additional Collateral; Further Assurances. (a) Subject to
applicable law, each Loan Party shall cause each of its domestic Subsidiaries
(other than such domestic Subsidiaries having less than $10,000 of assets)
formed or acquired after the date of this Agreement in accordance with the terms
of this Agreement to become a Loan Party by executing the Joinder Agreement set
forth as Exhibit E hereto (the “Joinder Agreement”). Upon execution and delivery
thereof, each such Person (i) shall automatically become a Loan Guarantor
hereunder and thereupon shall have all of the rights, benefits, duties, and
obligations in such capacity under the Loan Documents and (ii) will grant Liens
to the Administrative Agent, for the benefit of the Secured Creditors, in any
property of such Loan Party which constitutes Collateral.
          (b) Without limiting the foregoing, each Loan Party will, and will
cause each Subsidiary to, execute and deliver, or cause to be executed and
delivered, to the Administrative Agent such documents, agreements and
instruments, and will take or cause to be taken such further actions (including
the filing and recording of financing statements, and other documents and such
other actions or deliveries of the type required by Section 4.01, as
applicable), which may be required by law or which the Administrative Agent may,
from time to time, reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents and to ensure perfection and
priority of the Liens created or intended to be created by the Collateral
Documents, all at the expense of the Loan Parties.
          (c) If at any time Availability shall fall below the Changeover
Amount, then the Loan Parties shall promptly take the actions prescribed by the
Security Agreement to establish cash dominion in favor of the Administrative
Agent over the Loan Parties’ cash and Investment Property that

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constitutes Collateral. The obligation of the Loan Parties to comply with the
foregoing requirement shall continue until Availability has exceeded the
Changeover Amount for 90 consecutive days. The Administrative Agent shall
thereafter promptly take all necessary actions to terminate such cash dominion.
          (d) Notwithstanding anything to the contrary herein or in the Security
Agreement, the Administrative Agent may, in its Permitted Discretion, establish
a Reserve and require the applicable Loan Party(ies) to open and maintain new
deposit accounts as contemplated by Section 4.9 of the Security Agreement.
          (e) The Loan Parties shall deliver to the Administrative Agent each
item set forth on Schedule 5.13(e) to the Disclosure Letter in form and
substance reasonably satisfactory to the Administrative Agent within the time
periods set forth opposite each such item on such Schedule or such later date as
shall be acceptable to the Administrative Agent in its sole discretion.
ARTICLE VI
Negative Covenants
          Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document have been paid in full and all Letters of Credit have expired
or terminated, or shall have been cash collateralized in accordance with
Section 2.06(j), and all LC Disbursements shall have been reimbursed, the Loan
Parties covenant and agree, jointly and severally, with the Lenders that:
          SECTION 6.01 Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
     (a) the Secured Obligations;
     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01
of the Disclosure Letter and extensions, renewals and replacements of any such
Indebtedness in accordance with clause (f) hereof;
     (c) Indebtedness of any Borrower to any other Borrower, of any Borrower to
any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary,
provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to any
Borrower or any Subsidiary that is a Loan Party shall be subject to Section 6.04
and (ii) Indebtedness of any Borrower to any Subsidiary that is not a Borrower
and Indebtedness of any Subsidiary that is a Loan Party to any Subsidiary that
is not a Loan Party shall be subordinated to the Secured Obligations on terms
reasonably satisfactory to the Administrative Agent;
     (d) Guarantees by any Borrower of Indebtedness of any other Borrower or any
Subsidiary and by any Subsidiary of Indebtedness of any Borrower or any other
Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by
this Section 6.01, (ii) Guarantees by any Borrower or any Subsidiary that is a
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party issued on
or after the Restatement Date (A) shall be subject to Section 6.04, and
(B) shall only be permitted to the extent that (1) immediately prior to or
immediately after giving effect to such Guarantee the Restricted Amount is
$20,000,000 or less, without restriction, or (2) immediately prior to or
immediately after giving effect to such Guarantee the Restricted Amount is
greater than $20,000,000 but less than or equal to $50,000,000 and the average
daily

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Availability during the ninety-day period prior to the date of incurrence of
such guaranteed Indebtedness (inclusive of the date of incurrence of such
guaranteed Indebtedness) is not less than $70,000,000 calculated on a pro forma
basis after giving effect to the applicable incurrence of guaranteed
Indebtedness, and (iii) Guarantees permitted under this clause (d) shall be
subordinated to the Secured Obligations of the applicable Subsidiary on the same
terms as the Indebtedness so Guaranteed is subordinated to the Secured
Obligations;
     (e) Indebtedness of any Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets (whether
or not constituting purchase money Indebtedness), including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness in
accordance with clause (f) hereof; provided that (i) such Indebtedness is
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) together with the aggregate principal
amount of Indebtedness permitted by clause 6.01(j) below shall not exceed
$80,000,000 (except as expressly set forth in clause (j) below with respect to
Indebtedness incurred in connection with an acquisition) at any time
outstanding;
     (f) Indebtedness which represents an extension, refinancing, or renewal of
any of the Indebtedness described in clauses (b), (e), (i) and (j) hereof;
provided that, (i) the principal amount or interest rate of such Indebtedness is
not increased, (ii) any Liens securing such Indebtedness are not extended to any
additional property of any Loan Party, (iii) no Loan Party that is not
originally obligated with respect to repayment of such Indebtedness is required
to become obligated with respect thereto, (iv) such extension, refinancing or
renewal does not result in a shortening of the average weighted maturity of the
Indebtedness so extended, refinanced or renewed, (v) the terms of any such
extension, refinancing, or renewal are not materially less favorable to the
obligor thereunder than the original terms of such Indebtedness and (iv) if the
Indebtedness that is refinanced, renewed, or extended was subordinated in right
of payment to the Secured Obligations, then the terms and conditions of the
refinancing, renewal, or extension Indebtedness must include subordination terms
and conditions that are at least as favorable to the Administrative Agent and
the Lenders as those that were applicable to the refinanced, renewed, or
extended Indebtedness;
     (g) Indebtedness owed to any person providing workers’ compensation,
health, disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
person, in each case incurred in the ordinary course of business;
     (h) Indebtedness of the Borrower or any Subsidiary in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business;
     (i) Indebtedness under Swap Agreements permitted hereunder;
     (j) Indebtedness of a Subsidiary existing at the time of acquisition
thereof by the Company or a Subsidiary not to exceed $80,000,000 (or
$125,000,000 if the Fixed Charge Coverage Ratio, determined as of the end of the
most recently ended fiscal month for which financial statements have been
delivered pursuant to Section 5.01 giving pro forma effect to the proposed
acquisition as if made at the start of the preceding twelve month period, is
greater than 1.2 to 1.0) at the time of such acquisition (or Indebtedness
assumed at the time of an acquisition

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of an asset that is subject to a Lien securing such Indebtedness), provided that
(i) such Indebtedness was not incurred in connection with, or in contemplation
of, such acquisition, (ii) any Lien securing such Indebtedness is permitted
under Section 6.02(e); and (iii) the aggregate principal amount of Indebtedness
permitted by this clause (j) together with the aggregate principal amount of
Indebtedness permitted by clause 6.01(e) above shall not exceed $80,000,000
(except as expressly set forth in this clause (j) with respect to Indebtedness
incurred in connection with an acquisition) at any time outstanding;
     (k) Guarantees (i) of the Borrowers or any of their Subsidiaries as a
guarantor of the lessee under any lease pursuant to which a Borrower or a
Subsidiary is the lessee so long as such lease is otherwise permitted hereunder,
(ii) of the Company constituting Guarantees by the Company of trade payables
owing by its Subsidiaries in the ordinary course of business, (iii) of the
Company and/or Thomasville consisting of Guarantees (with the maximum amount
guaranteed at any time pursuant to this clause (iii) not to exceed $7,500,000 in
the aggregate) of actual or potential claims under Environmental Laws, and
(iv) of any Borrower or any Subsidiary as a guarantor of the obligations of a
lessee under any lease pursuant to which a third party is the lessee not to
exceed $100,000,000 in the aggregate;
     (l) other unsecured Indebtedness in an aggregate principal amount not
exceeding (x) $80,000,000 (or $125,000,000 if the Fixed Charge Coverage Ratio,
determined as of the end of the most recently ended fiscal month for which
financial statements have been delivered pursuant to Section 5.01 giving pro
forma effect to the proposed Permitted Acquisition as if made at the start of
the preceding twelve month period, is greater than 1.2 to 1.0) to the extent
that the proceeds thereof are used to fund a Permitted Acquisition or (y) in all
other instances, $50,000,000, at any time outstanding; provided, that, if, at
the time of incurrence of any such other unsecured Indebtedness under this
clause (l), the Leverage Ratio does not exceed 5:1 (giving effect to such
incurrence), then such maximum amount shall be $125,000,000;
     (m) other Indebtedness, including Indebtedness pursuant to sale and
leaseback transactions permitted by the last sentence of Section 6.06; provided,
that the aggregate amount of such Indebtedness incurred in the same calendar
year, does not exceed $20,000,000 (or $50,000,000 if the Administrative Agent
shall so agree in its sole discretion); and
     (n) other Indebtedness incurred in connection with Permitted Acquisitions
not to exceed $80,000,000 (or $125,000,000 if the Fixed Charge Coverage Ratio,
determined as of the end of the most recently ended fiscal month for which
financial statements have been delivered pursuant to Section 5.01 giving pro
forma effect to the proposed Permitted Acquisition as if made at the start of
the preceding twelve month period, is greater than 1.2 to 1.0)in the aggregate
per calendar year.
Notwithstanding the foregoing, the aggregate principal amount of Indebtedness
permitted by clause 6.01(j) above incurred in connection with Permitted
Acquisitions, together with the aggregate principal amount of Indebtedness
permitted by clause 6.01(l) above incurred in connection with Permitted
Acquisitions, together with the aggregate principal amount of Indebtedness
permitted by clause 6.01(n) above incurred in connection with Permitted
Acquisitions, shall not exceed an aggregate amount of $80,000,000 (or
$125,000,000 if the Fixed Charge Coverage Ratio, determined as of the end of the
most recently ended fiscal month for which financial statements have been
delivered pursuant to Section 5.01 giving pro forma effect to the proposed
Permitted Acquisition as if made at the start of the preceding twelve month
period, is greater than 1.2 to 1.0) in the same calendar year.

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          SECTION 6.02 Liens. No Loan Party will, nor will it permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
     (a) Liens created pursuant to any Loan Document;
     (b) Permitted Encumbrances;
     (c) any Lien on any property or asset of any Borrower or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02 of the Disclosure
Letter; provided that (i) such Lien shall not apply to any other property or
asset of such Borrower or Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
     (d) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
such Borrower or Subsidiary or any other Borrower or Subsidiary;
     (e) any Lien existing on any property or asset (other than Accounts and
Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset (other than Accounts and Inventory) of any
Person that becomes a Loan Party after the date hereof prior to the time such
Person becomes a Loan Party; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Loan Party, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Loan Party and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Loan Party, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
     (f) Liens of a collecting bank arising in the ordinary course of business
under Section 4-208 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon;
     (g) Liens arising out of sale and leaseback transactions permitted by
Section 6.06 and other Indebtedness permitted under Section 6.01(m); provided,
that in no event shall any such Liens encumber the Collateral or any
intellectual property or tradenames of the Company and its Subsidiaries;
     (h) Liens granted by a Subsidiary that is not a Loan Party in favor of the
Borrower or another Loan Party in respect of Indebtedness owed by such
Subsidiary;
     (i) (i) licenses, leases or subleases granted to other Persons in the
ordinary course of business and not materially interfering with the conduct of
the business of the Company and its Subsidiaries taken as a whole, (ii) Liens
arising from precautionary UCC financing statements

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regarding operating leases and (iii) statutory and common law landlords’ liens
under leases to which any of the Company and/or its Subsidiaries is a party;
     (j) any interest or title of a lessor, sublessor, licensee or licensor
under any lease or license agreement not prohibited by this Agreement;
     (k) Liens in favor of customs and revenue authorities arising as a matter
of law to secure the payment of customs duties in connection with the
importation of goods; and
     (l) Liens securing Indebtedness permitted by Section 6.01(n); provided that
such Liens (i) shall encumber only the assets of an Acquired Entity or Business
and (ii) shall not encumber the Accounts or Inventory of any such Acquired
Entity or Business.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 6.02 may at any time attach to any Loan Party’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrances and
clause (a) above, (2) Inventory, other than those permitted under clause (a) or
(b) of the definition of Permitted Encumbrances and clause (a) above, or
(3) Equity Interests in any Subsidiary.
          SECTION 6.03 Fundamental Changes. (a) No Loan Party will, nor will it
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default shall have occurred and be continuing (i) any
Person may merge into any Borrower in a transaction in which the surviving
entity is any Borrower, (ii) any Person may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary and, if any party to
such merger is a Subsidiary that is a Loan Party, is or becomes a Subsidiary
that is Loan Party concurrently with such merger, and (iii) any Subsidiary that
is not a Loan Party may liquidate or dissolve if the Company determines in good
faith that such liquidation or dissolution is in the best interests of any
Borrower and is not materially disadvantageous to the Lenders; provided that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 6.04.
          (b) No Loan Party will, nor will it permit any of its Subsidiaries to,
engage in any business other than businesses of the type conducted by the
Borrowers and its Subsidiaries on the date of execution of this Agreement and
businesses reasonably related or complimentary thereto.
          SECTION 6.04 Investments, Loans, Advances, Guarantees and
Acquisitions. No Loan Party will, nor will it permit any Subsidiary to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a Loan Party and a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit (whether through
purchase of assets, merger or otherwise), except:
     (a) Permitted Investments, subject to control agreements in favor of the
Administrative Agent for the benefit of the Secured Creditors or otherwise
subject to a perfected security interest in favor of the Administrative Agent
for the benefit of the Secured Creditors;
     (b) investments in existence on the date of this Agreement and described in
Schedule 6.04 of the Disclosure Letter;

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     (c) investments by the Borrowers and the Subsidiaries in Equity Interests
in their respective Subsidiaries, provided that (i) at no time shall the
Restricted Amount exceed $125,000,000 (excluding the amount of investments
funded by the issuance of Equity Interests by the Company (subject to the
Administrative Agent’s receipt of written notice from the Company with respect
to such issuance not more than 30 days thereafter) not earlier than two years
prior to the applicable investment) and (ii) any investments (other than
investments funded by the issuance of Equity Interests by the Company (subject
to the Administrative Agent’s receipt of written notice from the Company with
respect to such issuance not more than 30 days thereafter) not earlier than two
years prior to the applicable investment) made by Loan Parties in Subsidiaries
which are not Loan Parties pursuant to this clause (c) shall be made only using
the proceeds of Indebtedness incurred pursuant to Section 6.01(l) with the
exception of (x) any investment made on or after the Restatement Date if
immediately prior to and immediately after giving effect to such investment the
Restricted Amount is $20,000,000 or less, (y) any investment made on or after
the Restatement Date if immediately prior to and immediately after giving effect
to such investment the Restricted Amount is greater than $20,000,000 but less
than or equal to $50,000,000 and the average daily Availability during the
ninety-day period prior to the date of any such investment (inclusive of the
date of such investment) is not less than $70,000,000 calculated on a pro forma
basis after giving effect to the applicable investment, and (z) investments in
an aggregate amount equal to the aggregate amount of proceeds received as of the
time of such investment from asset dispositions permitted by Section 6.05(g) to
the extent that such proceeds were received on or after the Restatement Date and
within two years of the date of the applicable investment;
     (d) loans or advances made by any Borrower to any Subsidiary or made by any
Subsidiary to any other Borrower or any other Subsidiary, provided that (i) any
such loans or advances made by a Loan Party shall be evidenced by a promissory
note pledged pursuant to the Security Agreement, (ii) at no time shall the
Restricted Amount exceed $125,000,000 (excluding the amount of loans and
advances funded by the issuance of Equity Interests by the Company (subject to
the Administrative Agent’s receipt of written notice from the Company with
respect to such issuance not more than 30 days thereafter) not earlier than two
years prior to the applicable loan or advance) and (iii) any loans or advances
(other than loans or advances funded by the issuance of Equity Interests by the
Company(subject to the Administrative Agent’s receipt of written notice from the
Company with respect to such issuance not more than 30 days thereafter) not
earlier than two years prior to the applicable loan or advance) made by Loan
Parties to Subsidiaries which are not Loan Parties pursuant to this clause
(d) shall be made only using the proceeds of Indebtedness incurred pursuant to
Section 6.01(l) with the exception of (x) any loan or advance made on or after
the Restatement Date if immediately prior to and immediately after giving effect
to such loan or advance the Restricted Amount is $20,000,000 or less, (y) any
investment made on or after the Restatement Date if immediately prior to and
immediately after giving effect to such investment the Restricted Amount is
greater than $20,000,000 but less than or equal to $50,000,000 and the average
daily Availability during the ninety-day period prior to the date of any such
loan or advance (inclusive of the date of such loan or advance) is not less than
$70,000,000 calculated on a pro forma basis after giving effect to the
applicable loans and advances, and (z) loans or advances made on or after the
Restatement Date in an aggregate amount equal to the aggregate amount of
proceeds received as of the time of such loans or advances from asset
dispositions permitted by Section 6.05(g) to the extent that such proceeds were
received on or after the Restatement Date and within two years of the date of
the applicable loans or advances);
     (e) Guarantees constituting Indebtedness permitted by Section 6.01,
provided that at no time shall the Restricted Amount exceed $125,000,000;

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     (f) loans or advances made by a Loan Party to its directors, officers and
other employees on an arms-length basis in the ordinary course of business
consistent with past practices for travel and entertainment expenses, relocation
costs and similar purposes up to a maximum of $1,000,000 in the aggregate at any
one time outstanding;
     (g) subject to Sections 4.2(a) and 4.4 of the Security Agreement, notes
payable, or stock or other securities issued by Account Debtors to a Loan Party
pursuant to plans of reorganization in bankruptcy cases or negotiated agreements
with respect to settlement of such Account Debtor’s Accounts in the ordinary
course of business, consistent with past practices;
     (h) investments in the form of Swap Agreements permitted by Section 6.07;
     (i) investments of any Person existing at the time such Person becomes a
Subsidiary of a Borrower or consolidates or merges with a Borrower or any of the
Subsidiaries (including in connection with a permitted acquisition) so long as
such investments were not made in contemplation of such Person becoming a
Subsidiary or of such merger;
     (j) investments received in connection with the dispositions of assets
permitted by Section 6.05;
     (k) investments constituting deposits described in clauses (c) and (d) of
the definition of the term “Permitted Encumbrances”; and
     (l) subject to the requirements contained in the definition of Permitted
Acquisition, the Company and its wholly-owned Subsidiaries may from time to time
make investments in the form of Permitted Acquisitions so long as such Permitted
Acquisitions are in compliance with the following restrictions: (i) no Default
shall have occurred and be continuing at the time of the consummation of the
proposed Permitted Acquisition or immediately after giving effect thereto;
(ii) the cash consideration used to fund such Permitted Acquisition pursuant to
this Section 6.04(l) consists of (A) the proceeds from the issuance of Equity
Interests (so long as the Company has issued such Equity Interests (subject to
the Administrative Agent’s receipt of written notice from the Company with
respect to such issuance not more than 30 days thereafter) not earlier than two
years prior to the applicable Permitted Acquisition); (B) the proceeds of
Indebtedness permitted by Section 6.01(l) incurred (subject to the
Administrative Agent’s receipt of written notice from the Company with respect
to such incurrence not more than 30 days thereafter) not earlier than two years
prior to the applicable Permitted Acquisition; (C) the proceeds of Indebtedness
permitted by Section 6.01(n) incurred concurrently with the applicable Permitted
Acquisition or (D) so long as the average daily Availability during the
ninety-day period prior to the date of any such Permitted Acquisition (inclusive
of the date of such Permitted Acquisition) shall not be less than the Changeover
Amount calculated on a pro forma basis after giving effect to the applicable
Permitted Acquisition, cash on hand (including the proceeds of any Loans) in an
aggregate amount in any calendar year not to exceed $30,000,000 (or $90,000,000
if the Fixed Charge Coverage Ratio, determined as of the end of the most
recently ended fiscal month for which financial statements have been delivered
pursuant to Section 5.01 giving pro forma effect to the proposed Permitted
Acquisition as if made at the start of the preceding twelve month period, is
greater than 1.2 to 1.0); (iii) non-cash consideration for such Permitted
Acquisition pursuant to this Section 6.04(l) consists of (x) Equity Interests in
the Company or (y) Indebtedness permitted to be assumed by Section 6.01(j);
(iv) if the proposed Permitted Acquisition is for aggregate consideration of
$30,000,000 or more, the Company shall have given to the Administrative Agent
written notice of such proposed Permitted Acquisition at least ten (10) Business
Days prior to consummation of such Permitted Acquisition (or such shorter period

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of time as may be reasonably acceptable to the Administrative Agent), which
notice shall be executed by a Financial Officer and (A) shall describe in
reasonable detail the principal terms and conditions of such Permitted
Acquisition and (B) include computations in reasonable detail reflecting that
after giving effect to such proposed Permitted Acquisition and any Indebtedness
to be incurred in connection therewith, the Company is in compliance with
Section 6.12, if applicable; and (v) at the time of any such Permitted
Acquisition involving the creation or acquisition of a Subsidiary, or the
acquisition of capital stock or other Equity Interest of any Person, the
Borrower and its Subsidiaries shall have complied with Section 5.13.
          SECTION 6.05 Asset Sales. No Loan Party will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest of another Person owned by it, nor will any
Borrower permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary (other than to any Borrower or another Subsidiary in compliance with
Section 6.04), except:
     (a) (i) sales, transfers and dispositions of inventory in the ordinary
course of business and (ii) sales, transfers, leases and other dispositions of
used, obsolete, worn out or surplus equipment or property in the ordinary course
of business;
     (b) sales, transfers, leases and other dispositions to any Borrower or any
Subsidiary, provided that any such sales, transfers, leases or other
dispositions involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;
     (c) sales, transfers and dispositions of accounts receivable in connection
with the compromise, settlement or collection thereof;
     (d) sales, transfers and dispositions of investments permitted by clauses
(i) and (k) of Section 6.04;
     (e) sale and leaseback transactions permitted by Section 6.06;
     (f) dispositions resulting from any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Borrower or any Subsidiary; and
     (g) so long as no Event of Default shall have occurred and is continuing,
sales, transfers and other dispositions of assets (other than Equity Interests
in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that
are not permitted by any other paragraph of this Section, provided that (i) the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $100,000,000
during any fiscal year of the Company or $300,000,000 over the term of this
Agreement and (ii) no sale, transfer or other disposition of a Specified Asset
shall be permitted by this clause (g) without the consent of the Required
Lenders;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b), (c) and (f) above) shall
be made for fair value and for at least 75% cash consideration.
          SECTION 6.06 Sale and Leaseback Transactions. Except as set forth in
the immediately following sentence, no Loan Party will, nor will it permit any
Subsidiary to, enter into any arrangement, directly or indirectly, whereby it
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

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property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred, except for any such sale of any fixed or
capital assets by any Borrower or any Subsidiary that is made for cash
consideration in an amount not less than the fair value of such fixed or capital
asset and is consummated within 180 days after any Borrower or such Subsidiary
acquires or completes the construction of such fixed or capital asset.
Notwithstanding the foregoing, the Loan Parties and their Subsidiaries may enter
into additional sale and leaseback transactions in addition to those described
in the immediately preceding sentence so long as: (i) no Default shall have
occurred and be continuing at the time of the consummation of the proposed sale
and leaseback transaction or immediately after giving effect thereto; and
(ii) the aggregate amount of proceeds from all such sale and leaseback
transactions in the same calendar year together with all Indebtedness incurred
pursuant to Section 6.01(m) in such calendar year does not exceed $20,000,000
(or $50,000,000 if the Administrative Agent shall so agree in its sole
discretion).
          SECTION 6.07 Swap Agreements. No Loan Party will, nor will it permit
any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which any Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of any
Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Borrower or
any Subsidiary.
          SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness.
(a) No Loan Party will, nor will it permit any Subsidiary to, declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except

  (i)   each Borrower may declare and pay dividends with respect to its common
stock payable solely in additional shares of its common stock, and, with respect
to its preferred stock, payable solely in additional shares of such preferred
stock or in shares of its common stock,

  (ii)   Subsidiaries may declare and pay dividends ratably with respect to
their Equity Interests,

  (iii)   so long as there exists no Event of Default either immediately before
or after giving effect to such Restricted Payment, if after giving effect to
such Restricted Payment and any Revolving Loan incurred to fund such Restricted
Payment, (a) the average daily Availability during the ninety-day period prior
to the date of any such Restricted Payment (inclusive of the date of such
Restricted Payment) shall not be less than $60,000,000 calculated on a pro forma
basis after giving effect to the applicable Restricted Payment and (b) the Fixed
Charge Coverage Ratio (computed giving effect to such Restricted Payment on a
pro forma basis as of the end of the twelve month period of the Company ending
on the most recent month end for which financial statements have been delivered
pursuant to Section 5.01) is at least 1.2:1.0, the Company may declare and pay
cash dividends and make repurchases of its common shares, which, when aggregated
with all cash dividends and share repurchases previously made in the same fiscal
year pursuant to this subsection (iii) do not exceed $20,000,000;

This Section 6.08 shall not prohibit (a) the payment of a Restricted Payment if
such Restricted Payment was, at the time of declaration of such Restricted
Payment, permitted by this Section 6.08 or (b) repurchases of common shares by
the Company in the open market to offset the issuance of shares of

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common stock pursuant to the exercise of employee stock options to the extent
any such transactions do not result in a net use of cash.
In addition to such other Reserves as the Administrative Agent may establish
against the Borrowing Base, if Availability is at any time less than the
Changeover Amount, the Administrative Agent may, in its Permitted Discretion,
establish Reserves in the amount of any Restricted Payment declared but not yet
paid pursuant to this Section 6.08. Any such Reserve shall remain in effect
until Availability exceeds the Changeover Amount or such earlier date as the
Administrative Agent shall determine.
          (b) No Loan Party will, nor will it permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Subordinated Indebtedness to the extent such payments are
prohibited by the subordination provisions thereof, and provided that no such
payment or distribution shall be permitted if at such time Availability is not
greater than the Changeover Amount.
          SECTION 6.09 Transactions with Affiliates. No Loan Party will, nor
will it permit any Subsidiary to, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to a Borrower
or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among any Borrowers and any
Subsidiary that is a Loan Party not involving any other Affiliate, (c) any
investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness
permitted under Section 6.01(c), (e) any Restricted Payment permitted by
Section 6.08, (f) loans or advances to directors, officers or other employees
permitted under Section 6.04, (g) the payment of reasonable fees to directors of
any Borrower or any Subsidiary who are not employees of the Borrower or any
Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of the
Company or its Subsidiaries in the ordinary course of business, (h) any
transactions permitted by Section 6.03 and (i) any issuances of securities or
other payments, awards or grants in cash, securities or otherwise pursuant to,
or the funding of, employment agreements, stock options and stock ownership
plans approved by the Borrower’s board of directors.
          SECTION 6.10 Restrictive Agreements. No Loan Party will, nor will it
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to any Borrower or any other Subsidiary or to Guarantee Indebtedness of
any Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 of the Disclosure Letter (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.

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          SECTION 6.11 Amendment of Material Documents. No Loan Party will, nor
will it permit any Subsidiary to, amend, modify or waive any of its rights under
(a) agreement relating to any Subordinated Indebtedness or (b) its certificate
of incorporation, by-laws, operating, management or partnership agreement or
other organizational documents, to the extent any such amendment, modification
or waiver would be adverse to the Lenders.
          SECTION 6.12 Financial Covenant. The Borrowers will not permit the
Fixed Charge Coverage Ratio, determined for any period of twelve consecutive
months ending on the last day of any such period, to be less than 1.10 to 1.00;
provided, however, that the foregoing covenant shall be applicable only during
the Covenant Period. “Covenant Period” means, relative to each day on which
Availability is less than the Trigger Amount (as defined below), the period
commencing on and including the last day of the most recent twelve month period
for which financial statements have been delivered pursuant to Section 5.01 (a),
(b), (c) or (n) and ending on the first day thereafter on which Availability has
exceeded the Trigger Amount for 90 consecutive days. Determinations under this
covenant shall be made on a trailing twelve month basis. “Trigger Amount” means
an amount equal to the greater of (a) $35,000,000 and (b) 14% of the aggregate
amount of the Commitments at such time.
          SECTION 6.13 Change in Fiscal Year. The Company shall not change its
fiscal year to end on any date other than December 31 of each year.
ARTICLE VII
Events of Default
          If any of the following events (“Events of Default”) shall occur:
     (a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
     (b) any Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
     (c) any representation or warranty made or deemed made by or on behalf of
any Loan Party or any Subsidiary in this Agreement or any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to this
Agreement or any Loan Document or any amendment or modification thereof or
waiver thereunder, shall prove to have been materially incorrect when made or
deemed made;
     (d) any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02(a), 5.03 (with respect to a Loan Party’s
existence) or 5.08 or in Article VI;
     (e) any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those which constitute a
default under another Section of this Article), and such failure shall continue
unremedied for a period of (i) 5 days after the earlier of knowledge of such
breach or notice thereof from the Administrative Agent (which notice will be
given at the request of any Lender) if such breach relates to terms or
provisions of

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Section 5.01, 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.09, 5.10,
5.12 or 5.13(c) of this Agreement or (ii) 30 days after the earlier of knowledge
of such breach or notice thereof from the Administrative Agent (which notice
will be given at the request of any Lender) if such breach relates to terms or
provisions of any other Section of this Agreement;
     (f) any Loan Party or any Subsidiary shall fail (beyond any applicable
grace or cure period) to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and as the
same shall become due and payable;
     (g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
     (h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of a Loan Party or any Subsidiary of any Loan Party or its debts, or of
a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Loan Party or any Subsidiary of any Loan
Party or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered;
     (i) any Loan Party or any Subsidiary of any Loan Party shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for such Loan Party or
Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the foregoing;
     (j) any Loan Party or any Subsidiary of any Loan Party shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
     (k) one or more judgments for the payment of money in an aggregate amount
in excess of $15,000,000 shall be rendered against any Loan Party, any
Subsidiary of any Loan Party or any combination thereof and the same shall
remain undischarged for a period of 60 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of any Loan Party or any
Subsidiary of any Loan Party to enforce any such judgment or any Loan Party or
any Subsidiary of any Loan Party shall fail within 60 days to discharge one or
more non-monetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which judgments
or orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;

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     (l) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect;
     (m) a Change in Control shall occur;
     (n) the occurrence of any “default”, as defined in any Loan Document (other
than this Agreement) or the breach of any of the terms or provisions of any Loan
Document (other than this Agreement), which default or breach continues beyond
any period of cure or grace therein provided;
     (o) the Loan Guaranty shall fail to remain in full force or effect or any
Loan Party shall take any action to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to
comply with any of the terms or provisions of the Loan Guaranty to which it is a
party, or any Loan Guarantor shall deny that it has any further liability under
the Loan Guaranty to which it is a party, or shall give notice to such effect;
     (p) any Collateral Document shall for any reason fail to create a valid and
perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of this Agreement or any
Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any Loan Party shall take any action to discontinue or to
assert the invalidity or unenforceability of any Collateral Document, or any
Loan Party shall fail to comply with any of the terms or provisions of any
Collateral Document; or
     (q) any material provision of any Loan Document for any reason ceases to be
valid, binding and enforceable in accordance with its terms (or any Loan Party
shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower Representative,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers; and in case of any event with respect to the Borrowers described
in clause (h) or (i) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Borrowers accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrowers. Upon the occurrence and the continuance of an Event of Default,
the Administrative Agent may, and at the request of the Required Lenders shall,
exercise any rights and remedies provided to the Administrative Agent under the
Loan Documents or at law or equity, including all remedies provided under the
UCC.

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ARTICLE VIII
The Administrative Agent
          Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.
          The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Loan Parties or any Subsidiary of a Loan Party
or other Affiliate thereof as if it were not the Administrative Agent hereunder.
          The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not 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
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Loan Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
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 believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrowers), 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.

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          The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
          Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower
Representative. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor Administrative Agent hereunder which shall be a
commercial bank reasonably acceptable to the Borrowers (which consent shall not
be unreasonably withheld or delayed and shall not be required at any time when a
Default exists). If no 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, then the retiring
Administrative Agent, with the consent of the Borrowers (which consent shall not
be unreasonably withheld or delayed and shall not be required at any time when a
Default exists) may, on behalf of the Lenders and the Issuing Bank, appoint a
successor Administrative Agent which shall be a commercial bank or an Affiliate
of any such commercial bank. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by 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 Administrative Agent’s resignation hereunder, the
provisions of this Article, Section 2.17(d) and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Administrative Agent.
          Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or related agreement or any document furnished hereunder
or thereunder.
          Each Lender hereby agrees that (a) it has requested a copy of each
Report prepared by or on behalf of the Administrative Agent; (b) the
Administrative Agent (i) makes no representation or warranty, express or
implied, as to the completeness or accuracy of any Report or any of the
information contained therein or any inaccuracy or omission contained in or
relating to a Report and (ii) shall not be liable for any information contained
in any Report; (c) the Reports are not comprehensive audits or examinations, and
that any Person performing any field examination will inspect only specific
information regarding the Loan Parties and will rely significantly upon the Loan
Parties’ books and records, as well as on representations of the Loan Parties’
personnel and that the Administrative Agent undertakes no obligation to update,
correct or supplement the Reports; (d) it will keep all Reports confidential and
strictly for its internal use, not share the Report with any Person except as
otherwise permitted pursuant to this Agreement; and (e) without limiting the
generality of any other indemnification provision contained in this Agreement,
it will pay and protect, and indemnify, defend, and hold the Administrative
Agent and any such other Person preparing a Report harmless from and against,
the claims, actions, proceedings, damages, costs, expenses, and other amounts
(including reasonable attorney

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fees) incurred by the Administrative Agent or such other Person as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
          The Syndication Agents shall not have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such.
ARTICLE IX
Miscellaneous
          SECTION 9.01 Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows:

  (i)   if to any Loan Party, to the Company at:         Furniture Brands
International, Inc.
1 North Brentwood Boulevard, 15th Floor
St. Louis, MO 63105
Attention: Francis X. Ward, Vice President and Treasurer
Facsimile No: 314-863-5306
    (ii)   if to the Administrative Agent, the Issuing Bank, the Swingline
Lender, or to Chase at:         JPMorgan Chase Bank, N.A.
c/o Chase Business Credit
10 S. Dearborn, Floor 22
Chicago, IL 60603
Attention: Bradford R. Kuhn
Facsimile No: (312) 732-7593
    (iii)   if to any other Lender, to it at its address or facsimile number set
forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received or (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours for the
recipient on a Business Day, shall be deemed to have been given at the opening
of business on the next Business Day for the recipient.
          (b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications (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
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower Representative
(on behalf of the Loan Parties) may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. All such notices and other
communications (i) sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the

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intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided that if not
given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) 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
(b)(i) of notification that such notice or communication is available and
identifying the website address therefor.
          (c) Any party hereto may change its address or facsimile number for
notices and other communications hereunder by notice to the other parties
hereto.
          SECTION 9.02 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under any other Loan Document are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of any Loan Document or consent to any departure by
any Loan Party therefrom shall in any event be effective unless the same shall
be permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
          (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except (i) in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrowers and the Required Lenders or, (ii) in the case of
any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender (including any such Lender that is a Defaulting
Lender), (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce or forgive any
interest or fees payable hereunder, without the written consent of each Lender
(including any such Lender that is a Defaulting Lender) directly affected
thereby, (iii) postpone any scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any date for the payment of any interest, fees
or other Obligations payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender (including any such
Lender that is a Defaulting Lender) directly affected thereby, (iv) change
Section 2.18(b) or (d) in a manner that would alter the manner in which payments
are shared, without the written consent of each Lender (including any such
Lender that is a Defaulting Lender), (v) increase the advance rates set forth in
the definition of Borrowing Base or add new categories of eligible assets,
without the written consent of each Lender (other than any Defaulting Lenders),
(vi) change any of the provisions of this Section or the definitions of
“Required Lenders” or “Supermajority Lenders” or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (including any such Lender that is a Defaulting Lender) directly
affected thereby, (vii) change Section 2.20, without the consent of each Lender
(other than any Defaulting Lender), (viii) release any Loan Guarantor from its
obligation under its Loan Guaranty (except as otherwise permitted herein or

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in the other Loan Documents), without the written consent of each Lender (other
than any Defaulting Lender), or (ix) except as provided in clauses (c) and
(d) of this Section or in any Collateral Document, release all or substantially
all of the Collateral, without the written consent of each Lender (other than
any Defaulting Lender); provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, the
Issuing Bank or the Swingline Lender hereunder without the prior written consent
of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the
case may be (it being understood that any change to Section 2.20 shall require
the consent of the Administrative Agent, the Issuing Bank and the Swingline
Lender). The Administrative Agent may also amend the Commitment Schedule to
reflect assignments entered into pursuant to Section 9.04
          (c) The Lenders hereby irrevocably authorize the Administrative Agent,
at its option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (i) upon the
termination of the all Commitments, payment and satisfaction in full in cash of
all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner reasonably
satisfactory to each affected Lender, (ii) constituting property being sold or
disposed of if the Loan Party disposing of such property certifies to the
Administrative Agent that the sale or disposition is made in compliance with the
terms of this Agreement (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry), (iii) constituting property
leased to a Loan Party under a lease which has expired or been terminated in a
transaction permitted under this Agreement, or (iv) as required to effect any
sale or other disposition of such Collateral in connection with any exercise of
remedies of the Administrative Agent and the Lenders pursuant to Article VII.
Except as provided in the preceding sentence, the Administrative Agent will not
release any Liens on Collateral without the prior written authorization of the
Required Lenders; provided that, the Administrative Agent may in its discretion,
release its Liens on Collateral valued in the aggregate not in excess of
$10,000,000 during any calendar year without the prior written authorization of
the Required Lenders. Any such release shall not in any manner discharge,
affect, or impair the Obligations or any Liens (other than those expressly being
released) upon (or obligations of the Loan Parties in respect of) all interests
retained by the Loan Parties, including the proceeds of any sale, all of which
shall continue to constitute part of the Collateral.
          (d) If, in connection with any proposed amendment, waiver or consent
requiring the consent of “each Lender” or “each Lender affected thereby,” the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but not
obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrowers may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrowers and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 9.04, and (ii) the Borrowers shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and
(2) an amount, if any, equal to the payment which would have been due to such
Lender on the day of such replacement under Section 2.16 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.
          SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) The Borrowers
shall pay (i) 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

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with the syndication and distribution (including, without limitation, via the
internet or through a service such as Intralinks) of the credit facilities
provided for herein, the preparation and administration of the Loan Documents or
any actual or proposed amendments, modifications or waivers of the provisions of
the Loan Documents (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement, collection or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
Expenses being reimbursed by the Borrowers under this Section include, without
limiting the generality of the foregoing, costs and expenses incurred in
connection with:
     (i) appraisals and insurance reviews;
     (ii) field examinations and the preparation of Reports based on the fees
charged by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect
to each field examination (which currently equal $1,000 per day per examiner
plus out of pocket expenses);
     (iii) background checks regarding senior management, as deemed necessary or
appropriate in the commercially reasonable discretion of the Administrative
Agent;
     (iv) taxes, fees and other charges for (A) lien searches and (B) filing
financing statements and continuations, and other actions to perfect, protect,
and continue the Administrative Agent’s Liens;
     (v) sums paid or incurred to take any action required of any Loan Party
under the Loan Documents that such Loan Party fails to pay or take; and
     (vi) forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the accounts and lock boxes, and costs
and expenses of preserving and protecting the Collateral.
All of the foregoing costs and expenses may be charged to the Borrowers as
Revolving Loans or to another deposit account, all as described in
Section 2.18(c).
          (b) The Borrowers shall jointly and severally indemnify the
Administrative Agent, the Issuing Bank and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, incremental taxes, liabilities and related expenses,
including the reasonable out-of-pocket fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of the Loan Documents or any agreement or instrument contemplated
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from

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any property owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, penalties, liabilities or related
expenses are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. This Section 9.03(b) shall not apply with respect
to Taxes other than Taxes that represent losses or damages arising from any
non-Tax claim provided that the calculation of Taxes that represent losses or
damages arising from any non-Tax claim shall take into account whether and to
what extent the payment of such indemnity is taxable income to such indemnified
party and whether and to what extent the indemnified party receives a tax
deduction in respect of the underlying payment that is the subject of such
non-Tax claim.
          (c) To the extent that any Borrower fails to pay any amount required
to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as
the case may be, such Lender’s Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, penalty, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent, the Issuing Bank or
the Swingline Lender in its capacity as such.
          (d) To the extent permitted by applicable law, no Loan Party 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 or any agreement or instrument contemplated hereby,
the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
          (e) All amounts due under this Section shall be payable not later than
10 Business Days after written demand therefor.
          SECTION 9.04 Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that
(i) the Borrowers may not assign or otherwise transfer any of their rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
          (b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

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          (A) the Borrower Representative, provided that the Borrower
Representative shall be deemed to have consented to any such assignment unless
it shall object thereto by written notice to the Administrative Agent within
five (5) Business Days after having received notice thereof, and provided
further that no consent of the Borrower Representative shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee;
          (B) the Administrative Agent; and
          (C) the Issuing Bank.
     (ii) Assignments shall be subject to the following additional conditions:
          (A) except in the case of an assignment to a Lender or an Affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each of
the Company and the Administrative Agent otherwise consent, provided that no
such consent of the Company shall be required if an Event of Default has
occurred and is continuing;
          (B) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement;
          (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 provided that Borrowers are not obligated to pay
or reimburse such fee; and
          (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Company, the Loan
Parties and their Related Parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state
securities laws.
          For the purposes of this Section 9.04(b), the term “Approved Fund” has
the following meaning:
          “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
          (iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering

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all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.
          (iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
          (v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.05, 2.06(d)
or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the information
therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
          (c) (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrowers, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrowers agree that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) (it being understood
that the documentation required under Section 2.17(f) shall be delivered to the
participating Lender)) 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 subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Section 2.15 or 2.17, with respect to any participation, than its participating
Lender would have been entitled to receive; provided, however, that such
participation shall be entitled to receive a greater payment than its
participating Lender would have been entitled to

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receive to the extent such entitlement to receive such greater payment results
from a Change in Law that occurs after the Participant acquired the applicable
participation and the Borrower was provided with notice of the participation and
consented thereto, such consent not to be unreasonably withheld.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender. 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 this Agreement
(the “Participant Register”); provided that no Lender shall have any obligation
to disclose all or any portion of the Participant Register to any Person
(including the identity of any Participant or any information relating to a
Participant’s interest in any Commitments, Loans, Letters of Credit or its other
obligations under any Loan Document) except to the extent that such disclosure
is necessary to establish that such 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.
     (d) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
          SECTION 9.05 Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
          SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their

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respective successors and permitted assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or other electronic
transmission shall be effective as delivery of a manually executed counterpart
of this Agreement.
          SECTION 9.07 Severability. Any provision of any Loan Document held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
          SECTION 9.08 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrowers or a Loan Guarantor against any of and all the Secured Obligations
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under the Loan Documents and although such obligations may be
unmatured. The applicable Lender shall notify the Borrower Representative and
the Administrative Agent of such set-off or application, provided that any
failure to give or any delay in giving such notice shall not affect the validity
of any such set-off or application under this Section. The rights of each Lender
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
          SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of
Process. (a) The Loan Documents (other than those containing a contrary express
choice of law provision) shall be governed by and construed in accordance with
laws of the State of New York, but giving effect to federal laws applicable to
national banks.
          (b) Each Loan Party hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any U.S.
Federal or New York State court sitting in New York, New York in any action or
proceeding arising out of or relating to any Loan Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Loan Party or its
properties in the courts of any jurisdiction.
          (c) Each Loan Party hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
          (d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

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          SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
          SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
          SECTION 9.12 Confidentiality. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by Requirement of Law or by any subpoena or similar legal
process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Loan Parties and
their obligations, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a non-confidential basis from a source other than the
Borrowers. For the purposes of this Section, “Information” means all information
received from the Borrowers relating to the Borrowers or their business, other
than any such information that is available to the Administrative Agent, the
Issuing Bank or any Lender on a non-confidential basis prior to disclosure by
the Borrowers; provided that, in the case of information received from the
Borrowers after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
          EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWERS AND THEIR AFFILIATES AND THEIR RELATED
PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

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          ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS,
FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE
COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION,
WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWERS, THE LOAN
PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWERS AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.
          SECTION 9.13 Several Obligations; Nonreliance; Violation of Law. The
respective obligations of the Lenders hereunder are several and not joint and
the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.
Anything contained in this Agreement to the contrary notwithstanding, neither
the Issuing Bank nor any Lender shall be obligated to extend credit to the
Borrowers in violation of any Requirement of Law.
          SECTION 9.14 USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) hereby notifies the Borrowers that pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of the Borrowers and other information that will allow such Lender
to identify the Borrowers in accordance with the Act.
          SECTION 9.15 Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that the Administrative Agent and/or its Affiliates from
time to time may hold investments in, make other loans to or have other
relationships with any of the Loan Parties and their respective Affiliates.
          SECTION 9.16 Appointment for Perfection. Each Lender hereby appoints
each other Lender as its agent for the purpose of perfecting Liens, for the
benefit of the Administrative Agent and the other Secured Creditors, in assets
which, in accordance with Article 9 of the UCC or any other applicable law can
be perfected only by possession. Should any Lender (other than the
Administrative Agent) obtain possession of any such Collateral, such Lender
shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.
          SECTION 9.17 Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount,

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together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
          SECTION 9.18 Nature of Borrowers’ Obligations.
          (a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, it is understood and agreed by the various parties to this
Agreement that all Obligations to repay principal of, interest on, and all other
amounts with respect to, all Revolving Loans, Swingline Loans, LC Disbursements,
Protective Advances and Overadvances and all other Obligations pursuant to this
Agreement and under any Note (including, without limitation, all fees,
indemnities, taxes and other Obligations in connection therewith or in
connection with the related Commitments) shall constitute the joint and several
obligations of the Company, Broyhill, HDM, Lane, Thomasville and Maitland-Smith.
In addition to the direct (and joint and several) obligations of the Borrowers
with respect to Obligations as described above, all such Obligations shall be
guaranteed pursuant to, and in accordance with the terms of, the Loan Guaranty.
          (b) The obligations of each Borrower with respect to the Obligations
are independent of the obligations of the other Borrowers or any guarantor, and
a separate action or actions may be brought and prosecuted against each
Borrower, whether or not any other Borrower or any guarantor is joined in any
such action or actions. Each Borrower waives, to the fullest extent permitted by
law, the benefit of any statute of limitations affecting its liability hereunder
or the enforcement thereof. Any payment by any Borrower or other circumstance
which operates to toll any statute of limitations as to any Borrower shall, to
the fullest extent permitted by law, operate to toll the statute of limitations
as to each Borrower.
ARTICLE X
Loan Guaranty
          SECTION 10.01 Guaranty. Each Loan Guarantor (other than those that
have delivered a separate Guaranty) hereby agrees that it is jointly and
severally liable for, and, as primary obligor and not merely as surety,
absolutely and unconditionally guarantees to the Lenders the prompt payment when
due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all costs and expenses
including, without limitation, all court costs and attorneys’ and paralegals’
fees (including allocated costs of in-house counsel and paralegals) and expenses
paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders
in endeavoring to collect all or any part of the Secured Obligations from, or in
prosecuting any action against, any Borrower, any Loan Guarantor or any other
guarantor of all or any part of the Secured Obligations (such costs and
expenses, together with the Secured Obligations, collectively the “Guaranteed
Obligations”). Each Loan Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its Guarantee
notwithstanding any such extension or renewal. All terms of this Loan Guaranty
apply to and may be enforced by or on behalf of any domestic or foreign branch
or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations.
          SECTION 10.02 Guaranty of Payment. This Loan Guaranty is a guaranty of
payment and not of collection. Each Loan Guarantor waives any right to require
the Administrative Agent, the Issuing Bank or any Lender to sue any Borrower,
any Loan Guarantor, any other guarantor, or any other person obligated for all
or any part of the Guaranteed Obligations (each, an “Obligated Party”), or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.

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          SECTION 10.03 No Discharge or Diminishment of Loan Guaranty.
(a) Except as otherwise provided for herein, the obligations of each Loan
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of any Borrower or any other guarantor of or other person liable for
any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party, or
their assets or any resulting release or discharge of any obligation of any
Obligated Party; or (iv) the existence of any claim, setoff or other rights
which any Loan Guarantor may have at any time against any Obligated Party, the
Administrative Agent, the Issuing Bank, any Lender, or any other person, whether
in connection herewith or in any unrelated transactions.
          (b) The obligations of each Loan Guarantor hereunder are not subject
to any defense or setoff, counterclaim, recoupment, or termination whatsoever by
reason of the invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.
          (c) Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the
Administrative Agent, the Issuing Bank or any Lender to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations; (ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection, or invalidity of any indirect or direct security for
the obligations of any Borrower for all or any part of the Guaranteed
Obligations or any obligations of any other guarantor of or other person liable
for any of the Guaranteed Obligations; (iv) any action or failure to act by the
Administrative Agent, the Issuing Bank or any Lender with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Loan Guarantor
or that would otherwise operate as a discharge of any Loan Guarantor as a matter
of law or equity (other than the indefeasible payment in full in cash of the
Guaranteed Obligations).
          (d) In connection with any asset sale, transfer or other disposition
permitted by this Agreement that results in the sale, transfer or other
disposition of all of the Equity Interests issued by any Loan Guarantor, the
Administrative Agent is authorized to release such Loan Guarantor from its
obligations under the Loan Guaranty and the other Loan Documents upon
consummation of such sale or disposition if the Company certifies to the
Administrative Agent that the applicable sale or disposition is made in
compliance with the terms of this Agreement (and the Administrative Agent may
rely conclusively on any such certificate, without further inquiry).
          SECTION 10.04 Defenses Waived. To the fullest extent permitted by
applicable law, each Loan Guarantor hereby waives any defense based on or
arising out of any defense of the Borrower or any Loan Guarantor or the
unenforceability of all or any part of the Guaranteed Obligations from any
cause, or the cessation from any cause of the liability of any Borrower or any
Loan Guarantor, other than the indefeasible payment in full in cash of the
Guaranteed Obligations. Without limiting the generality of the foregoing, each
Loan Guarantor irrevocably waives acceptance hereof, presentment, demand,
protest and, to the fullest extent permitted by law, any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
person against any Obligated Party, or any other person. The Administrative
Agent may, at its election, foreclose on any Collateral held by it by one or
more judicial or nonjudicial sales, accept an assignment of any such Collateral
in lieu of foreclosure or otherwise act or

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fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Loan Guarantor under
this Loan Guaranty except to the extent the Guaranteed Obligations have been
fully and indefeasibly paid in cash. To the fullest extent permitted by
applicable law, each Loan Guarantor waives any defense arising out of any such
election even though that election may operate, pursuant to applicable law, to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of any Loan Guarantor against any Obligated Party or any security.
          SECTION 10.05 Rights of Subrogation. No Loan Guarantor will assert any
right, claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification that it has against any Obligated
Party, or any collateral, until the Loan Parties and the Loan Guarantors have
fully performed all their obligations to the Administrative Agent, the Issuing
Bank and the Lenders.
          SECTION 10.06 Reinstatement; Stay of Acceleration. If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or otherwise, each Loan Guarantor’s obligations
under this Loan Guaranty with respect to that payment shall be reinstated at
such time as though the payment had not been made and whether or not the
Administrative Agent, the Issuing Bank and the Lenders are in possession of this
Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of any
Borrower, all such amounts otherwise subject to acceleration under the terms of
any agreement relating to the Guaranteed Obligations shall nonetheless be
payable by the Loan Guarantors forthwith on demand by the Lender.
          SECTION 10.07 Information. Each Loan Guarantor assumes all
responsibility for being and keeping itself informed of the Borrowers’ financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and
agrees that neither the Administrative Agent, the Issuing Bank nor any Lender
shall have any duty to advise any Loan Guarantor of information known to it
regarding those circumstances or risks.
          SECTION 10.08 Termination. Each of the Lenders and the Issuing Bank
may continue to make loans or extend credit to the Borrowers based on this Loan
Guaranty until five days after it receives written notice of termination from
any Loan Guarantor. Notwithstanding receipt of any such notice, each Loan
Guarantor will continue to be liable to the Lenders for any Guaranteed
Obligations created, assumed or committed to prior to the fifth day after
receipt of the notice, and all subsequent renewals, extensions, modifications
and amendments with respect to, or substitutions for, all or any part of that
Guaranteed Obligations.
          SECTION 10.09 Taxes. Each payment of the Guaranteed Obligations will
be made by each Loan Guarantor without withholding for any Taxes, unless such
withholding is required by law. If any Loan Guarantor determines, in its sole
discretion exercised in good faith, that it is so required to withhold Taxes,
then such Loan Guarantor may so withhold and shall timely pay the full amount of
withheld Taxes to the relevant Governmental Authority in accordance with
applicable law. If such Taxes are Indemnified Taxes, then the amount payable by
such Loan Guarantor shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section), the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives the amount it would have received had no such withholding
been made.

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          SECTION 10.10 Maximum Liability. The provisions of this Loan Guaranty
are severable, and in any action or proceeding involving any state corporate
law, or any state, federal or foreign bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if the obligations of any
Loan Guarantor under this Loan Guaranty would otherwise be held or determined to
be avoidable, invalid or unenforceable on account of the amount of such Loan
Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other
provision of this Loan Guaranty to the contrary, the amount of such liability
shall, without any further action by the Loan Guarantors or the Administrative
Agent, the Issuing Bank or any Lender, be automatically limited and reduced to
the highest amount that is valid and enforceable as determined in such action or
proceeding (such highest amount determined hereunder being the relevant Loan
Guarantor’s “Maximum Liability”). This Section with respect to the Maximum
Liability of each Loan Guarantor is intended solely to preserve the rights of
the Administrative Agent, the Issuing Bank or any Lender to the maximum extent
not subject to avoidance under applicable law, and no Loan Guarantor nor any
other Person shall have any right or claim under this Section with respect to
such Maximum Liability, except to the extent necessary so that the obligations
of any Loan Guarantor hereunder shall not be rendered voidable under applicable
law. Each Loan Guarantor agrees that the Guaranteed Obligations may at any time
and from time to time exceed the Maximum Liability of each Loan Guarantor
without impairing this Loan Guaranty or affecting the rights and remedies of the
Administrative Agent, the Issuing Bank or the Lenders hereunder, provided that,
nothing in this sentence shall be construed to increase any Loan Guarantor’s
obligations hereunder beyond its Maximum Liability.
          SECTION 10.11 Contribution. In the event any Loan Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Loan Guaranty, each other Loan Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such
payment or payments made, or losses suffered, by such Paying Guarantor. For
purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage”
with respect to any such payment or loss by a Paying Guarantor shall be
determined as of the date on which such payment or loss was made by reference to
the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has
not been determined, the aggregate amount of all monies received by such
Non-Paying Guarantor from the Borrowers after the date hereof (whether by loan,
capital infusion or by other means) to (ii) the aggregate Maximum Liability of
all Loan Guarantors hereunder (including such Paying Guarantor) as of such date
(without giving effect to any right to receive, or obligation to make, any
contribution hereunder), or to the extent that a Maximum Liability has not been
determined for any Loan Guarantor, the aggregate amount of all monies received
by such Loan Guarantors from the Borrowers after the date hereof (whether by
loan, capital infusion or by other means). Nothing in this provision shall
affect any Loan Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability). Each of
the Loan Guarantors covenants and agrees that its right to receive any
contribution under this Loan Guaranty from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to the payment in full in cash of the
Guaranteed Obligations. This provision is for the benefit of all of the Secured
Creditors and the Loan Guarantors and may be enforced by any one, or more, or
all of them in accordance with the terms hereof.
          SECTION 10.12 Liability Cumulative. The liability of each Loan Party
as a Loan Guarantor under this Article X is in addition to and shall be
cumulative with all liabilities of each Loan Party to the Administrative Agent,
the Issuing Bank and the Lenders under this Agreement and the other Loan
Documents to which such Loan Party is a party or in respect of any obligations
or liabilities of the other Loan Parties, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.

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ARTICLE XI
The Borrower Representative
          SECTION 11.01 Appointment; Nature of Relationship. The Company is
hereby appointed by each of the Borrowers as its contractual representative
(herein referred to as the “Borrower Representative”) hereunder and under each
other Loan Document, and each of the Borrowers irrevocably authorizes the
Borrower Representative to act as the contractual representative of such
Borrower with the rights and duties expressly set forth herein and in the other
Loan Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article XI.
Additionally, the Borrowers hereby appoint the Borrower Representative as their
agent to receive all of the proceeds of the Loans in the Funding Account(s), at
which time the Borrower Representative shall promptly disburse such Loans to the
appropriate Borrower. The Administrative Agent and the Lenders, and their
respective officers, directors, agents or employees, shall not be liable to the
Borrower Representative or any Borrower for any action taken or omitted to be
taken by the Borrower Representative or the Borrowers pursuant to this
Section 11.01.
          SECTION 11.02 Powers. The Borrower Representative shall have and may
exercise such powers under the Loan Documents as are specifically delegated to
the Borrower Representative by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Borrower Representative shall
have no implied duties to the Borrowers, or any obligation to the Lenders to
take any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Borrower Representative.
          SECTION 11.03 Employment of Agents. The Borrower Representative may
execute any of its duties as the Borrower Representative hereunder and under any
other Loan Document by or through a Financial Officer.
          SECTION 11.04 Notices. Each Borrower shall immediately notify the
Borrower Representative of the occurrence of any Default hereunder referring to
this Agreement describing such Default and stating that such notice is a “notice
of default.” In the event that the Borrower Representative receives such a
notice, the Borrower Representative shall give prompt notice thereof to the
Administrative Agent and the Lenders. Any notice provided to the Borrower
Representative hereunder shall constitute notice to each Borrower on the date
received by the Borrower Representative.
          SECTION 11.05 Successor Borrower Representative. Upon the prior
written consent of the Administrative Agent, the Borrower Representative may
resign at any time, such resignation to be effective upon the appointment of a
successor Borrower Representative. The Administrative Agent shall give prompt
written notice of such resignation to the Lenders.
          SECTION 11.06 Execution of Loan Documents; Borrowing Base Certificate.
The Borrowers hereby empower and authorize the Borrower Representative, on
behalf of the Borrowers, to execute and deliver to the Administrative Agent and
the Lenders, the Loan Documents (except that each of the Loan Parties executed
and delivered each of the Loan Documents to which such Loan Parties are
signatories) and all related agreements, certificates, documents, or instruments
as shall be necessary or appropriate to effect the purposes of the Loan
Documents, including without limitation, the Borrowing Base Certificates, the
Compliance Certificates and the Borrowing Requests. Each Borrower agrees that
any action taken by the Borrower Representative or the Borrowers in accordance
with the terms of this Agreement or the other Loan Documents, and the exercise
by the Borrower Representative of its powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Borrowers.

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          SECTION 11.07 Reporting. Each Borrower hereby agrees that such
Borrower shall furnish promptly after each fiscal month to the Borrower
Representative a copy of its Borrowing Base Certificate and any other
certificate or report required hereunder or requested by the Borrower
Representative on which the Borrower Representative shall rely to prepare the
Borrowing Base Certificates and Compliance Certificates required pursuant to the
provisions of this Agreement.
ARTICLE XII
Amendment and Restatement
          On the Restatement Date the Existing Credit Agreement shall be
amended, restated and superseded in its entirety hereby. The parties hereto
acknowledge and agree that (i) this Agreement, any promissory notes delivered
pursuant hereto and the other Loan Documents executed and delivered in
connection herewith do not constitute a novation or termination of the “Secured
Obligations” (as defined in the Existing Credit Agreement) under the Existing
Credit Agreement as in effect prior to the Restatement Date and (ii) such
“Secured Obligations” are in all respects continuing with only the terms thereof
being modified as provided in this Agreement.
          Notwithstanding the modifications effected by this Agreement of the
representations, warranties and covenants of the Borrowers contained in the
Existing Credit Agreement, the Borrowers acknowledge and agree that any causes
of action or other rights created in favor of the Administrative Agent or any
Lender or its successors arising out of the representations and warranties of
the Borrowers contained in or delivered in connection with the Existing Credit
Agreement shall survive the execution, delivery and effectiveness of this
Agreement.
          The Administrative Agent hereby waives the requirement pursuant to
Section 2.09 of the Existing Credit Agreement that the Borrowers deliver prior
notice of their election to terminate or reduce the “Commitments” under the
Existing Credit Agreement.
ARTICLE XIII
Consent and Affirmation
          By its execution hereof, each Continuing Lender confirms its consent
to the payment on the Restatement Date of the outstanding “Obligations” (as
defined in the Existing Credit Agreement) owed to the Exiting Lenders under the
Existing Credit Agreement without a corresponding payment to the Continuing
Lenders.
          To the extent that any Continuing Lender (such Continuing Lender, an
“Assignor Lender”) assigned any Existing Revolving Exposure (such interests, the
“Assigned Interests”) to any other Lender (such other Lender, an “Assignee
Lender”) in connection with the transactions contemplated hereby, (i) such
Assignor Lender represents to such Assignee Lender with respect to the Assigned
Interests assigned by such Assignor Lender that (x) it is the legal and
beneficial owner of such Assigned Interests, (y) such Assigned Interests are
free and clear of any lien, encumbrance or other adverse claim, and (z) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby,
and (ii) such Assignee Lender represents to such Assignor Lender with respect to
the Assigned Interests assigned to such Assignee Lender that (x) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Agreement and to consummate the transactions contemplated hereby and to
become a Lender hereunder, and (y) it satisfies the requirements that are
required to be satisfied by it in order to acquire the Assigned Interests and
become a Lender.

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

            LOAN PARTIES:

FURNITURE BRANDS INTERNATIONAL, INC.
BROYHILL FURNITURE INDUSTRIES, INC.
LANE FURNITURE INDUSTRIES, INC.
THOMASVILLE FURNITURE INDUSTRIES, INC.
ACTION TRANSPORT, INC.
BROYHILL TRANSPORT, INC.
BROYHILL RETAIL, INC.
BROYHILL HOME FURNISHINGS, INC.
THOMASVILLE RETAIL, INC.
HDM RETAIL, INC.
FAYETTE ENTERPRISES, INC.
HDM FURNITURE INDUSTRIES, INC.
HDM TRANSPORT, INC.
LANEVENTURE, INC.
MAITLAND-SMITH FURNITURE INDUSTRIES, INC.
THE LANE COMPANY, INCORPORATED
LANE HOME FURNISHINGS RETAIL, INC.
THOMASVILLE HOME FURNISHINGS, INC.
FURNITURE BRANDS RESOURCE COMPANY, INC.
FURNITURE BRANDS HOLDINGS, INC.
FURNITURE BRANDS OPERATIONS, INC.
      By   /s/ Steven G. Rolls         Name:   Steven G. Rolls        Title:  
Senior Vice President and Chief Financial Officer of the Company and Senior Vice
President — Finance of each other Loan Party On behalf of each of the above Loan
Parties   

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            JPMORGAN CHASE BANK, N.A., individually, as
Administrative Agent, Issuing Bank and Swingline
Lender
      By   /s/ Bradford R. Kuhn         Name:   Bradford R. Kuhn        Title:  
Duly Authorized Signatory        BANK OF AMERICA, N.A.
      By   /s/ Marina Kheylik         Name:   Marina Kheylik        Title:  
AVP, AB Portfolio Specialist        WELLS FARGO BANK, NATIONAL ASSOCIATION
      By   /s/ Reza Sabahi         Name:   Reza Sabahi        Title:  
Authorized Signatory        PNC BANK, NATIONAL ASSOCIATION
      By   /s/ Emmet Wong         Name:   Emmet Wong        Title:   Vice
President        GENERAL ELECTRIC CAPITAL CORP.
      By   /s/ Dwayne Coker         Name:   Dwayne Coker        Title:   Duly
Authorized Signatory        CAPITAL ONE LEVERAGE FINANCE CORP.
      By   /s/ Jon Oldham         Name:   Jon Oldham        Title:   SVP   

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COMMITMENT SCHEDULE

          Lender   Commitment  
JPMorgan Chase Bank, N.A.
  $ 57,000,000.00  
Bank of America, N.A.
  $ 57,000,000.00  
Wells Fargo Bank, National Association
  $ 57,000,000.00  
PNC Bank, National Association
  $ 34,000,000.00  
General Electric Capital Corporation
  $ 25,000,000.00  
Capital One Leverage Finance Corp.
  $ 20,000,000.00  
Total
  $ 250,000,000.00  

Commitment Schedule

 

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EXITING LENDERS SCHEDULE

  Lender
The CIT Group / Commercial Services, Inc.
Fifth Third Bank
RBS Business Capital, a Division of RBS Asset Finance, Inc.
UPS Capital Corporation

Exiting Lenders Schedule

 

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EXHIBIT A
ASSIGNMENT AND ASSUMPTION
          This Assignment and Assumption (the “Assignment and Assumption”) is
dated as of the Restatement Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee]
(the “Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Amended and Restated Credit Agreement identified
below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.
          For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Restatement Date inserted by
the Administrative Agent as contemplated below, (i) all of the Assignor’s rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees and
swingline loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and other
rights of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

         
1.
  Assignor:   ____________________
 
       
2.
  Assignee:   ____________________
[and is an Affiliate/Approved Fund of [identify Lender]]
 
       
3.
  Borrower(s):   Furniture Brands International, Inc. and certain of its
Subsidiaries
 
       
4.
  Administrative Agent:   JPMorgan Chase Bank, N.A., as the administrative agent
under the Credit Agreement
 
       
5.
  Credit Agreement:   The $250,000,000 Amended and Restated Credit Agreement
dated as of April 27, 2011 among Furniture Brands International, Inc., the other
Loan Parties named therein, the Lenders parties thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent, and the other agents parties thereto

Exhibit A

 

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6. Assigned Interest:

                              Aggregate Amount of   Amount of     Facility
Assigned   Commitment/Loans for   Commitment/Loans   Percentage Assigned of
Commitment   all Lenders   Assigned   Commitment/Loans1
 
  $       $           %
 
  $       $           %
 
  $       $           %

Restatement Date: _____________ ___, 2011 [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more Credit
Contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the Loan Parties and their Related
Parties or their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s compliance procedures
and applicable laws, including Federal and state securities laws.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR

            [NAME OF ASSIGNOR]
      By:           Title:             

ASSIGNEE

            [NAME OF ASSIGNEE]
      By:           Title:             

 

1   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

Exhibit A

 

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[Consented to and]2 Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent

            By           Title:           

[Consented to:]3
[NAME OF RELEVANT PARTY]

            By           Title:             

 

2   To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.   3   To be added only if the consent of the
Borrower and/or other parties (e.g. Swingline Lender, Issuing Bank) is required
by the terms of the Credit Agreement.

Exhibit A

 

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ANNEX 1
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
          1. Representations and Warranties.
          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.
          1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements, if any, specified in the Credit Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Restatement Date, it shall be bound by
the provisions of the Credit Agreement as a Lender thereunder and, to the extent
of the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.01 thereof, as
applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Non-U.S.
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
          2. Payments. From and after the Restatement Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Restatement Date and to the
Assignee for amounts which have accrued from and after the Restatement Date.
          3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by facsimile shall be effective as delivery of a manually executed counterpart
of this Assignment and Assumption. This Assignment and Assumption shall be
governed by, and construed in accordance with, the law of the State of New York.
Exhibit A

 

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EXHIBIT B
BORROWING BASE CERTIFICATE
[See Attached]

Exhibit B

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          (CHASE LOGO) [c64402c6440201.gif]   BORROWING BASE REPORT      
Furniture Brands — Combined   Rpt # 46
Obligor Number:
      Date:
Loan Number:
      Period Covered:

                                                                               
      Raw             Finished                                         Materials
    WIP     Goods     In-Transit     Total         COLLATERAL CATEGORY   A/R    
Inventory     Inventory     Inventory     Inventory     Inventory     Total
Eligible Collateral   Description
                                                          1    
Beginning Balance ( Previous report — Line 8)
                                                          2    
Additions to Collateral (Gross Sales or Purchases)
                                                          3    
Other Additions (Add back any non-A/R cash in line 3)
                                                          4    
Deductions to Collateral (Cash Received)
                                                          5    
Deductions to Collateral (Discounts, other)
                                                          6    
Deductions to Collateral (Credit Memos, all)
                                                          7    
Other non-cash credits to A/R
                                                          8    
Total Ending Collateral Balance
                                                          9    
Less Ineligible — Extended Terms
                                                          10    
Less Ineligible — Past Due
                                                          11    
Less Ineligible — Federal Government
                                                          12    
Less Ineligible — Chargebacks (Current)
                                                          13 a  
Less Ineligible — Credits in Prior
                                                          13 b  
Less Ineligible — Crossage
                                                          13 c  
Less Ineligible — Contras
                                                          13 d  
Less Ineligible — Foreign not covered by L/C
                                                          13 e  
Less Ineligible — Intercompany /Affiliates
                                                          13 f  
Less Ineligible — Notes Receivable
                                                          13 g  
Less Ineligible — Deductions (Shortpays)
                                                          13 h  
Less Ineligible — Employee/Officers/Sales Reps
                                                          13 i  
Less Ineligible — Finance Charges
                                                          13 j  
Less Ineligible — Miscellaneous Account
                                                          13 k  
Less Ineligible — Cash in Advance / Unapplied Cash
                                                          13 l  
Less Ineligible — Interest Due on Notes
                                                          13 m  
Less Ineligible — Unclaimed Freight
                                                          13 n  
Less Ineligible — Other
                                                          13 o  
Less Ineligible — Dilution Reserve
                                                          14    
Total Ineligibles — Accounts Receivable
                                                          15    
Less Ineligible — Packaging Supplies
                                                          16    
Less Ineligible — Inventory Offsite not covered
                                                          17    
Less Ineligible — Inventory WIP
                                                          18    
Less Ineligible — Freight
                                                          19 a  
Less Ineligible — Outlet Stores
                                                          19 b  
Less Ineligible — Located Offsite (Foreign)
                                                          19 c  
Less Ineligible — Intercompany Profit Elimination
                                                          19 d  
Less Ineligible — Other — Fuel Inventory / Accessories
                                                          19 e  
Less Ineligible — Inv in Repair / Showroom w/o Landlord Waiver
                                                          19 f  
Less Ineligible — Unreconciled Variance (Perpetual & GL) / Consigned
                                                          20    
Total Ineligibles Inventory Appraisal-subtotal LINE 15 to 19e
                                                          21    
Total Eligible Collateral
                                                          22    
In Transit Inventory Cap ($40MM)
                                                          23    
Advance Rate Percentage
    85.0 %                                                   24    
Net Available — Appraisal Borrowing Base Value
                                                               
In Transit-without inventory cap (to determine Adv.Rate %)
                                                          25    
Reserves — Rent
                                                          26    
Total Borrowing Base Value — Appraisal
                                                          27    
Less Ineligible — Estate Sales
                                                          28    
Less Ineligible — Shrinkage / Discontinued Reserve GL
                                                          29    
Less Ineligible — Slow Moving Inventory
                                                          29 a  
Less Ineligible — Discontinued Reserve
                                                          30    
Total Ineligibles Inventory per exam
                                                          31    
Total Eligible Collateral — Exam
                                                          32    
Advance Rate Percentage
    85 %     70 %     70 %     70 %     70 %     70 %           33    
Net Available — Borrowing Base Value
                                                          34    
Royalty Reserve
                                                          35    
Total Borrowing Base Value — Per Exam
                                                          36    
Lower of Apprasial Calculation or Exam Calculation
                                                          37    
Total Availability/ CAPS
                                                          38    
Revolver Line
                                                  Total Revolver Line     39    
Maximum Borrowing Limit (Lesser of 37. or 38.)*
                                                  Total Available     40    
Suppressed Availability
                                                               
LOAN STATUS
                                                          41    
Previous Loan Balance (Previous Report Line 44)
                                                          42    
Less: A. Net Collections (Same as line 4)
                                                               
B. Adjustments / Other                     
                                                          43    
Add: A. Request for Funds
                                                               
B. Adjustments / Other                     
                                                          44    
New Loan Balance
                                                    Total New Loan Balance:    
45    
Rent Reserve
                                                          46    
Custom Broker Fee Reserve
                                                          47    
Inventory at Vendor Reserve
                                                          48    
Letters of Credit/Bankers Acceptance Outstanding
                                                          49    
Availability Not Borrowed (Lines 39 less 44,45 & 46)
                                                       

Pursuant to, and in accordance with, the terms and provisions of that certain
Credit Agreement (“Agreement”), between JPMorgan Chase Bank, N.A. (“Chase”), [as
administrative agent for the Lenders,] the Loan Parties and Furniture Brands
International (“Borrower”), Borrower is executing and delivering to Chase this
Collateral Report accompanied by supporting data (collectively referred to as
the “Report”). Borrower warrants and represents to Chase that this Report is
true and correct, and is based on information contained in Borrower’s own
financial accounting records. Borrower, by the execution of this Report, hereby
ratifies, confirms and affirms all of the terms, conditions and provisions of
the Agreement, and further certifies on this 27th day of December, 2010, that
the Borrower is in compliance with said Agreement.

     
BORROWER NAME:
  AUTHORIZED SIGNATURE:

FURNITURE BRANDS INTERNATIONAL

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EXHIBIT C
COMPLIANCE CERTIFICATE

To:   The Lenders parties to the
Credit Agreement Described Below

     This Compliance Certificate is furnished pursuant to that certain Amended
and Restated Credit Agreement dated as of April 27, 2011 (as amended, modified,
renewed or extended from time to time, the “Agreement”) among Furniture Brands
International, Inc. (the “Company”), the other Loan Parties, the Lenders party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders
and as the Issuing Bank. Unless otherwise defined herein, capitalized terms used
in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
     THE UNDERSIGNED HEREBY CERTIFIES THAT:
     1. I am the duly elected of the Company;
     2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements [for quarterly financial statements
add: and such financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes];
     3. The examinations described in paragraph 2 did not disclose, except as
set forth below, and I have no knowledge of (i) the existence of any condition
or event which constitutes a Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate or (ii) any material change in GAAP or in the application thereof
that has occurred since the date of the audited financial statements referred to
in Section 3.04 of the Agreement;
     4. I hereby certify that no Loan Party has changed (i) its name, (ii) its
chief executive office, (iii) principal place of business, (iv) the type of
entity it is or (v) its state of incorporation or organization without having
given the Agent the notice required by Section 4.10 of the Security Agreement;
     5. If applicable, Schedule I attached hereto sets forth financial data and
computations evidencing the Borrowers’ compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct;
and
     6. If applicable, Schedule II hereto sets forth the computation of Average
Availability for the fiscal quarter ended ___________, 20_.
     Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the (i) nature of the condition or event, the period during which it has
existed and the action which the Loan Parties have taken, are taking, or propose
to take with respect to each such condition or event or (i) the material change
in GAAP or the application thereof and the effect of such change on the attached
financial statements:
Exhibit C

 

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     The foregoing certifications, together with the computations set forth in
Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this day of ______,
_____.

                  By:           Name:           Title:        

Exhibit C

 

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SCHEDULE I
Compliance as of _________, ____ with
Provisions of Section ____ and ____ of
the Agreement
Exhibit C

 

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SCHEDULE II
Borrower’s Applicable Rate Calculation
Exhibit C

 

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EXHIBIT D
JOINDER AGREEMENT
     THIS JOINDER AGREEMENT (this “Agreement”), dated as of ___________, 2011,
is entered into between ______________________, a _________________ (the “New
Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative
agent (the “Administrative Agent”) under that certain Amended and Restated
Credit Agreement, dated as of April 27, 2011 among Furniture Brands
International, Inc. (the “Company”), the other Loan Parties party thereto, the
Lenders party thereto and the Administrative Agent (as the same may be amended,
modified, extended or restated from time to time, the “Credit Agreement”). All
capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Credit Agreement.
     The New Subsidiary and the Administrative Agent, for the benefit of the
Secured Creditors, hereby agree as follows:
     1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the
Credit Agreement and shall have all of the obligations of a Loan Party and a
Loan Guarantor thereunder as if it had executed the Credit Agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by,
all of the terms, provisions and conditions contained in the Credit Agreement,
including without limitation (a) all of the representations and warranties of
the Loan Parties set forth in Article III of the Credit Agreement, (b) all of
the covenants set forth in Articles V and VI of the Credit Agreement and (c) all
of the guaranty obligations set forth in Article X of the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
New Subsidiary, subject to the limitations set forth in Section 10.10 of the
Credit Agreement, hereby guarantees, jointly and severally with the other Loan
Guarantors, to the Administrative Agent and the Lenders, as provided in
Article X of the Credit Agreement, the prompt payment and performance of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise) strictly in accordance with
the terms thereof and agrees that if any of the Guaranteed Obligations are not
paid or performed in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and
severally together with the other Loan Guarantors, promptly pay and perform 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 or otherwise) in accordance with the
terms of such extension or renewal. *[The New Subsidiary has delivered to the
Administrative Agent an executed Loan Guaranty.]*
     2. If required, the New Subsidiary is, simultaneously with the execution of
this Agreement, executing and delivering such Collateral Documents (and such
other documents and instruments) as requested by the Administrative Agent in
accordance with the Credit Agreement.
     3. The address of the New Subsidiary for purposes of Section 9.01 of the
Credit Agreement is as follows:
     4. The New Subsidiary hereby waives acceptance by the Administrative Agent
and the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.
Exhibit D

 

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     5. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.
     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
     IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Secured Creditors, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.

            [NEW SUBSIDIARY]
      By:           Name:           Title:           Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A., as Administrative Agent
      By:           Name:           Title:        

Exhibit D

 

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EXHIBIT E-1
U.S. TAX CERTIFICATE
(For Non-U.S. [Lenders][Participants]1 That Are Not Partnerships For U.S.
Federal Income Tax Purposes)
          Reference is hereby made to the Amended and Restated Credit Agreement
dated as of April 27, 2011 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Furniture Brands International,
Inc., Broyhill Furniture Industries, Inc, Lane Furniture Industries, Inc., the
Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.
          Pursuant to the provisions of Section 2.17 of the Credit Agreement,
the undersigned hereby certifies that (i) it is the sole record and beneficial
owner of the [Loan(s) (as well as any Note(s) evidencing such
Loan(s))][participation] in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code and (v) the interest payments in question are not effectively connected
with the undersigned’s conduct of a U.S. trade or business.
          The undersigned has furnished [the Administrative Agent and the
Borrower Representative][its participating Lender] with a certificate of its
non-U.S. person status on IRS Form W-8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform [the Borrower Representative
and the Administrative Agent][such Lender] and (2) the undersigned shall have at
all times furnished [the Borrower Representative and the Administrative
Agent][such Lender] with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.
          Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER OR PARTICIPANT]

            By:           Name:           Title:        

Date: ________ __, 20[ ]
 

1   This form can be used for Lenders or Participants. Select the appropriate
bracketed phrases.

Exhibit E-1

 

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EXHIBIT E-2
U.S. TAX CERTIFICATE
(For Non-U.S. [Lenders][Participants]1 That Are Partnerships For U.S. Federal
Income Tax Purposes)
          Reference is hereby made to the Amended and Restated Credit Agreement
dated as of April 27, 2011 (as amended, supplemented or otherwise modified from
time to time, the “Credit Agreement”) among Furniture Brands International,
Inc., Broyhill Furniture Industries, Inc, Lane Furniture Industries, Inc., the
Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.
          Pursuant to the provisions of Section 2.17 of the Credit Agreement,
the undersigned hereby certifies that (i) it is the sole record owner of the
[Loan(s) (as well as any Note(s) evidencing such Loan(s))][participation] in
respect of which it is providing this certificate, (ii) its partners/members are
the sole beneficial owners of such [Loan(s) (as well as any Note(s) evidencing
such Loan(s))][participation], (iii) with respect to [the extension of credit
pursuant to this Credit Agreement][participation], neither the undersigned nor
any of its partners/members is a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or business within
the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its
partners/members is a ten percent shareholder of any Borrower within the meaning
of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a
controlled foreign corporation related to any Borrower as described in
Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are
not effectively connected with the undersigned’s or its partners/members’
conduct of a U.S. trade or business.
          The undersigned has furnished [the Administrative Agent and the
Borrower Representative][its participating Lender] with IRS Form W-8IMY
accompanied by an IRS Form W-8BEN from each of its partners/members claiming the
portfolio interest exemption. By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform [the Borrower Representative and the
Administrative Agent][such Lender] and (2) the undersigned shall have at all
times furnished [the Borrower Representative and the Administrative Agent][such
Lender] with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.
          Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
[NAME OF LENDER OR PARTICIPANT]

            By:           Name:           Title:        

Date: ________ __, 20[ ]
 

1   This form can be used for Lenders and Participants. Select the appropriate
bracketed phrases.

Exhibit E-2