Exhibit 10.1

 

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

by and among

COLEMAN CABLE, INC.,

TECHNOLOGY RESEARCH CORPORATION

and

WOODS INDUSTRIES (CANADA) INC.

as Borrowers,

THE LENDERS THAT ARE SIGNATORIES HERETO

as the Lenders,

WELLS FARGO CAPITAL FINANCE, LLC

as the Administrative Agent, Joint Lead Arranger and Joint Bookrunner

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA

as the Canadian Administrative Agent

MERRILL LYNCH, PIERCE, FENNER AND SMITH INCORPORATED

as Joint Lead Arranger and Joint Bookrunner

JPMORGAN CHASE BANK, NA.

as Co-Syndication Agent

J.P. MORGAN SECURITIES LLC

as Joint Lead Arranger and Joint Bookrunner

BANK OF AMERICA, N.A.

as Co-Syndication Agent

and

REGIONS BANK

as Documentation Agent

Dated as of August 4, 2011

 

 

 

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

TABLE OF CONTENTS

 

               Page   1.    DEFINITIONS AND CONSTRUCTION      1       1.1.   
Definitions      1       1.2.    Accounting Terms      1       1.3.    Code;
PPSA      2       1.4.    Construction      2       1.5.    Schedules and
Exhibits      3       1.6.    Effect of Amendment and Restatement; No Novation
     3    2.    LOAN AND TERMS OF PAYMENT      4       2.1.    Revolver Advances
     4       2.2.    [Intentionally Omitted]      5       2.3.    Borrowing
Procedures and Settlements      6       2.4.    Payments; Reductions of
Commitments; Prepayments      17       2.5.    Overadvances      23       2.6.
   Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations   
  24       2.7.    Crediting Payments; Clearance Charge      26       2.8.   
Designated Accounts      26       2.9.    Maintenance of Loan Accounts;
Statements of Obligations      27       2.10.    Fees      27       2.11.    US
Letters of Credit      28       2.12.    Canadian Letters of Credit      34   
   2.13.    LIBOR Option      40       2.14.    Capital Requirements      42   
   2.15.    Joint and Several Liability of US Borrowers      44       2.16.   
Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of Interest     
46       2.17.    Currencies      47    3.    CONDITIONS; TERM OF AGREEMENT     
47       3.1.    Conditions Precedent to the Initial Extension of Credit      47
      3.2.    Conditions Precedent to all Extensions of Credit      47      
3.3.    Maturity      48       3.4.    Effect of Maturity      48   

 

-i-

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

TABLE OF CONTENTS

(continued)

 

               Page      3.5.    Early Termination by Borrowers      48    4.   
REPRESENTATIONS AND WARRANTIES      48       4.1.    Organization and
Qualification      49       4.2.    Solvency      49       4.3.    Liens;
Inventory      49       4.4.    No Conflict      49       4.5.    Enforceability
     50       4.6.    Financial Data; Projections; Material Adverse Change     
50       4.7.    Locations of Offices, Records and Inventory      51       4.8.
   [Intentionally Omitted]      51       4.9.    Subsidiaries      51      
4.10.    No Judgments or Litigation      51       4.11.    No Defaults      52
      4.12.    No Employee Disputes      52       4.13.    Compliance with Law
     52       4.14.    ERISA      52       4.15.    Compliance with
Environmental Laws      53       4.16.    [Intentionally Omitted]      53      
4.17.    Intellectual Property      53       4.18.    Licenses and Permits     
54       4.19.    Title to Property      55       4.20.    Labor Matters      55
      4.21.    Investment Company, Etc.      55       4.22.    Margin Security
     56       4.23.    [Intentionally Omitted]      56       4.24.    Taxes and
Tax Returns      56       4.25.    [Intentionally Omitted]      56       4.26.
   Status of Accounts      56       4.27.    [Intentionally Omitted]      56   
   4.28.    Material Contracts      57       4.29.    Survival of
Representations      57   

 

-ii-

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

TABLE OF CONTENTS

(continued)

 

               Page      4.30.    [Intentionally Omitted]      57       4.31.   
[Intentionally Omitted]      57       4.32.    [Intentionally Omitted]      57
      4.33.    Accuracy and Completeness of Information      57       4.34.   
Anti-Terrorism Laws      57       4.35.    Deposit Accounts      58       4.36.
   [Intentionally Omitted]      58       4.37.    [Intentionally Omitted]     
58       4.38.    [Intentionally Omitted]      58       4.39.    Compliance with
OFAC Rules and Regulations      58       4.40.    Compliance with FCPA      59
      4.41.    Canadian Employee Benefits      59       4.42.    Obligations
Constitute Permitted Indebtedness      61       4.43.    Withholdings and
Remittances      61    5.    AFFIRMATIVE COVENANTS      61       5.1.   
Financial Information      61       5.2.    Inventory      65       5.3.   
Corporate Existence      65       5.4.    ERISA      66       5.5.   
Proceedings or Adverse Changes      67       5.6.    Environmental Matters     
67       5.7.    Books and Records; Inspection      68       5.8.    Collateral
Records      69       5.9.    Security Interests      69       5.10.   
Insurance; Casualty Loss      70       5.11.    Taxes      71       5.12.   
Compliance With Laws      72       5.13.    Use of Proceeds      72       5.14.
   Fiscal Year; Accounting Policies      72       5.15.    Notification of
Certain Events      72       5.16.    Additional Guarantors      73   

 

-iii-

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

TABLE OF CONTENTS

(continued)

 

               Page      5.17.    [Intentionally Omitted]      73       5.18.   
Collection of Accounts; Cash Management      74       5.19.    Notice; Credit
Memoranda; and Returned Goods      75       5.20.    Acknowledgment Agreements
     76       5.21.    Trademarks      76       5.22.    Maintenance of Property
     76       5.23.    Revisions or Updates to Schedules      76       5.24.   
Anti-Terrorism Laws      77       5.25.    Canadian Employees      77      
5.26.    Post-Closing Obligations      78    6.    NEGATIVE COVENANTS      79   
   6.1.    Restrictions on Liens      79       6.2.    Restrictions on
Additional Indebtedness      79       6.3.    Restrictions on Sale of Assets   
  79       6.4.    No Corporate Changes      81       6.5.    No Guarantees     
82       6.6.    No Restricted Payments      82       6.7.    No Investments   
  83       6.8.    No Affiliate Transactions      83       6.9.    No Prohibited
Transactions Under ERISA      83       6.10.    No Additional Bank Accounts     
84       6.11.    Amendments of Material Contracts, Operative Documents      84
      6.12.    Additional Negative Pledges      84       6.13.    Other
Indebtedness      85       6.14.    Sale and Leaseback      86       6.15.   
[Intentionally Omitted]      86       6.16.    Limitations      86       6.17.
   [Intentionally Omitted]      87       6.18.    Hedge Transactions      87   
   6.19.    [Intentionally Omitted]      87       6.20.    Canadian Employees;
Canadian Employee Plans; Canadian Pension Plans      87   

 

-iv-

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

TABLE OF CONTENTS

(continued)

 

               Page      6.21.    Immaterial Subsidiaries      88    7.   
FINANCIAL COVENANTS      88    8.    EVENTS OF DEFAULT      88    9.    RIGHTS
AND REMEDIES      90       9.1.    Rights and Remedies      90       9.2.   
Remedies Cumulative      91    10.    WAIVERS; INDEMNIFICATION      91      
10.1.    Demand; Protest; etc      91       10.2.    The Lender Group’s
Liability for Collateral      92       10.3.    Indemnification      92    11.
   NOTICES      93    12.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER      94
   13.    ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS      95       13.1.   
Assignments and Participations      95       13.2.    Successors      99    14.
   AMENDMENTS; WAIVERS      99       14.1.    Amendments and Waivers      99   
   14.2.    Replacement of Certain Lenders      101       14.3.    No Waivers;
Cumulative Remedies      102    15.    AGENTS; THE LENDER GROUP      102      
15.1.    Appointment and Authorization of Agent      102       15.2.   
Delegation of Duties      103       15.3.    Liability of Agents      103      
15.4.    Reliance by Agents      104       15.5.    Notice of Default or Event
of Default      104       15.6.    Credit Decision      105       15.7.    Costs
and Expenses; Indemnification      105       15.8.    Agent in Individual
Capacity      106       15.9.    Successor Agents      106       15.10.   
Lender in Individual Capacity      107       15.11.    Collateral Matters     
108   

 

-v-

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

TABLE OF CONTENTS

(continued)

 

               Page      15.12.    Restrictions on Actions by Lenders; Sharing
of Payments      109       15.13.    Agency for Perfection      110       15.14.
   Payments by Agents to the Lenders      110       15.15.    Concerning the
Collateral and Related Loan Documents      110       15.16.    Audits and
Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and
Information      111       15.17.    Several Obligations; No Liability      112
   16.    WITHHOLDING TAXES      112    17.    GENERAL PROVISIONS      116      
17.1.    Effectiveness      116       17.2.    Section Headings      116      
17.3.    Interpretation      116       17.4.    Severability of Provisions     
117       17.5.    Bank Product Providers      117       17.6.   
Debtor-Creditor Relationship      118       17.7.    Counterparts; Electronic
Execution      118       17.8.    Revival and Reinstatement of Obligations     
118       17.9.    Confidentiality      118       17.10.    Lender Group
Expenses      120       17.11.    Survival      120       17.12.    Patriot Act
     120       17.13.    Anti-Money Laundering      120       17.14.   
Integration      121       17.15.    Coleman Cable as Agent for Borrowers     
121       17.16.    Determinations; Judgment Currency      122   

 

-vi-

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

EXHIBITS AND SCHEDULES

 

Exhibit A-1    Form of Assignment and Acceptance Exhibit B-1    Form of US
Borrowing Base Certificate Exhibit B-2    Form of Canadian Borrowing Base
Certificate Exhibit B-3    Form of Bank Product Provider Letter Agreement
Exhibit C-1    Form of Compliance Certificate Exhibit D    Form of
Acknowledgement Agreement Exhibit E    Form of Landlord Agreement Exhibit G   
Form of Licensor Consent Exhibit L-1    Form of LIBOR Notice Exhibit J-1    Form
of Joinder Agreement Schedule A-1    US Agent’s Account Schedule A-2    Canadian
Agent’s Account Schedule A-3    Authorized Persons Schedule C-1    Commitments
Schedule D-1    US Designated Account Schedule D-2    Canadian Designated
Account Schedule E-1    Eligible Inventory Locations Schedule E-2    Existing
Letters of Credit Schedule P-1    Permitted Investments Schedule P-2   
Permitted Liens Schedule R-1    Real Property Collateral Schedule 1.1   
Definitions Schedule 3.1    Conditions Precedent Schedule 4.1    Jurisdictions
for Foreign Qualification Schedule 4.7    States of Domicile; Principal Place of
Business and Chief Executive Office; Locations Schedule 4.9    Subsidiaries
Schedule 4.10    Judgments Schedule 4.14    Benefit Plans Schedule 4.15   
Environmental Matters Schedule 4.17    Intellectual Property Schedule 4.19   
Real Property Schedule 4.20    Labor Matters Schedule 4.28    Material Contracts
Schedule 4.35    Deposit Accounts Schedule 4.41    Canadian Employee Benefits
Schedule 5.1    Coleman Cable Website Schedule 5.26    Post-Closing Real Estate

 

-vii-

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

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”), is entered
into as of August 4, 2011, by and among the lenders identified on the signature
pages hereof (each of such lenders, together with their respective successors
and permitted assigns, are referred to hereinafter as a “Lender”, as that term
is hereinafter further defined), WELLS FARGO CAPITAL FINANCE, LLC, a Delaware
limited liability company, as an administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, “US
Agent”), WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, an Ontario corporation,
as an administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, “Canadian Agent”), COLEMAN CABLE, INC.,
a Delaware corporation (“Coleman Cable”), TECHNOLOGY RESOURCE CORPORATION, a
Florida corporation (“TRC”; together with Coleman, are referred to hereinafter
each individually as a “US Borrower”, and individually and collectively, jointly
and severally, as the “US Borrowers”), WOODS INDUSTRIES (CANADA) INC., an
Ontario corporation (“Canadian Borrower”; together with the US Borrowers, are
referred to hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”).

Coleman Cable, Wells Fargo Capital Finance, LLC, as Administrative Agent, and
certain lenders are party to that certain Credit Agreement dated as of
September 28, 2004, (the “Original Closing Date”) (as amended prior to the
Existing Closing Date (as defined below), the “Original Credit Agreement”).

The Original Credit Agreement was amended and restated in its entirety pursuant
to that certain Amended and Restated Credit Agreement dated as of April 2, 2007
(the “Existing Closing Date “) (as amended prior to the date hereof, the
“Existing Credit Agreement”) among Coleman Cable, Wells Fargo Capital Finance,
LLC, as Administrative Agent, and certain lenders. The parties to the Existing
Credit Agreement desire to amend and restate the Existing Credit Agreement in
its entirety pursuant to this Agreement and to add TRC and Canadian Borrower as
a Borrower.

The parties agree as follows:

 

1. DEFINITIONS AND CONSTRUCTION.

1.1. Definitions.

Capitalized terms used in this Agreement shall have the meanings specified
therefor on Schedule 1.1.

1.2. Accounting Terms.

All accounting terms not specifically defined herein shall be construed in
accordance with GAAP; provided, however, that if Administrative Borrower
notifies Agents that Borrowers request an amendment to any provision hereof to
eliminate the effect of any Accounting Change occurring after the Closing Date
or in the application thereof on the

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

operation of such provision (or if an Agent notifies Administrative Borrower
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
Accounting Change or in the application thereof, then Agents and Borrowers agree
that they will negotiate in good faith amendments to the provisions of this
Agreement that are directly affected by such Accounting Change with the intent
of having the respective positions of the Lenders and Borrowers after such
Accounting Change conform as nearly as possible to their respective positions as
of the date of this Agreement and, until any such amendments have been agreed
upon and agreed to by the Required Lenders and Borrowers, the provisions in this
Agreement shall be calculated as if no such Accounting Change had occurred. When
used herein, the term “financial statements” shall include the notes and
schedules thereto. Whenever the term “Coleman Cable” is used in respect of a
financial covenant or a related definition, it shall be understood to mean
Coleman Cable and its Subsidiaries on a consolidated basis, unless the context
clearly requires otherwise.

1.3. Code; PPSA.

Any terms used in this Agreement that are defined in (a) the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein;
provided, however, that to the extent that the Code is used to define any term
herein and such term is defined differently in different Articles of the Code,
the definition of such term contained in Article 9 of the Code shall govern and
(b) the PPSA shall be construed and defined as set forth in the PPSA.
Notwithstanding the foregoing, and where the context so requires, (i) any term
defined in this Agreement by reference to the “Code”, the “UCC” or the “Uniform
Commercial Code” shall also have any extended, alternative or analogous meaning
given to such term in applicable Canadian personal property security and other
laws (including, without limitation, the Personal Property Security Act of each
applicable province of Canada, the Bills of Exchange Act (Canada) and the
Depository Bills and Notes Act (Canada)), in all cases for the extension,
preservation or betterment of the security and rights of the Collateral,
(ii) all references in this Agreement to “Article 8” shall be deemed to refer
also to applicable Canadian securities transfer laws (including, without
limitation, the Securities Transfer Act, 2006 (Ontario) (the “STA”), (iii) all
references in this Agreement to a financing statement, continuation statement,
amendment or termination statement shall be deemed to refer also to the
analogous documents used under applicable Canadian personal property security
laws, (v) all references to the United States of America, or to any subdivision,
department, agency or instrumentality thereof shall be deemed to refer also to
Canada, or to any subdivision, department, agency or instrumentality thereof,
and (vi) all references to federal or state securities law of the United States
shall be deemed to refer also to analogous federal and provincial securities
laws in Canada.

1.4. Construction.

Unless the context of this Agreement or any other Loan Document clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.” The words “hereof,” “herein,”
“hereby,” “hereunder,” and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be. Section, subsection, clause, schedule,
and exhibit references herein are to this

 

-2-

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

Agreement unless otherwise specified. Any reference in this Agreement or in any
other Loan Document to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). 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. Any reference herein or in
any other Loan Document to the satisfaction, repayment, or payment in full of
the Obligations shall mean the repayment in full in cash or immediately
available funds (or, (a) in the case of contingent reimbursement obligations
with respect to Letters of Credit, providing Letter of Credit Collateralization,
and (b) in the case of obligations with respect to Bank Products (other than
Hedge Obligations), providing Bank Product Collateralization) of all of the
Obligations (including the payment of any Lender Group Expenses that have
accrued irrespective of whether demand has been made therefor and the payment of
any termination amount then applicable (or which would or could become
applicable as a result of the repayment of the other Obligations) under Hedge
Agreements provided by Hedge Providers) other than (i) unasserted contingent
indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge
Obligations) that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding without being required to be repaid or cash
collateralized, and (iii) any Hedge Obligations that, at such time, are allowed
by the applicable Hedge Provider to remain outstanding without being required to
be repaid. Any reference herein to any Person shall be construed to include such
Person’s successors and assigns. Any requirement of a writing contained herein
or in any other Loan Document shall be satisfied by the transmission of a
Record.

1.5. Schedules and Exhibits.

All of the schedules and exhibits attached to this Agreement shall be deemed
incorporated herein by reference.

1.6. Effect of Amendment and Restatement; No Novation.

Upon the effectiveness of this Agreement, the Existing Credit Agreement shall be
amended and restated in its entirety by this Agreement. The Existing Obligations
shall continue in full force and effect, and the effectiveness of this Agreement
shall not constitute a novation or repayment of the Existing Obligations. Such
Existing Obligations, together with any and all additional Obligations incurred
by Borrowers under this Agreement or under any of the other Loan Documents,
shall continue to be secured by, among other things, the Collateral, whether now
existing or hereafter acquired and wheresoever located, all in accordance with
the terms of and as more specifically set forth in the Loan Documents. Upon the
effectiveness of this Agreement, the Pro Rata Shares for each Lender shall be as
set forth on Schedule C-1. To effectuate the foregoing, Wells Fargo (which has
acquired all of the interests of the Lenders (other than Bank of America, N.A.)
under the Existing Credit Agreement prior to the effectiveness of this
Agreement) hereby sells and assigns to each of the other Lenders, and each of
the other Lenders hereby purchases, a portion of the Commitments and
Obligations, as applicable, such that the Pro Rata Share of each Lender is as
set forth on Schedule C-1. Each such purchase and sale is made without recourse,
representation or warranty except as expressly set forth herein. Wells Fargo
(i) represents that as of the Closing Date, that it is the legal and

 

-3-

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

beneficial owner of the Obligations or Commitments assigned above free and clear
of any adverse claim, (ii) makes no other representation or warranty and assumes
no responsibility with respect to any statement, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any other Person or the performance or
observance by any Borrower or any other Person of its obligations under the Loan
Documents. Borrowers hereby reaffirm their obligations, liabilities, grants of
security interests, pledges and the validity of all covenants by them contained
in any and all Loan Documents delivered on the Original Closing Date, the
Existing Closing Date or from time to time, as amended, supplemented or
otherwise modified by this Agreement and by the other Loan Documents delivered
on the Closing Date. Any and all references in any Loan Documents to the
Existing Credit Agreement or the Original Credit Agreement shall be deemed to be
amended to refer to this Agreement.

 

2. LOAN AND TERMS OF PAYMENT.

2.1. Revolver Advances.

(a) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a US Revolver Commitment agrees (severally,
not jointly or jointly and severally) to make revolving loans (“US Advances”) to
US Borrowers in an amount at any one time outstanding not to exceed the lesser
of:

(i) such Lender’s US Revolver Commitment, or

(ii) such Lender’s Pro Rata Share of an amount equal to the lesser of:

(A) the US Maximum Revolver Amount less the sum of (1) the US Letter of Credit
Usage at such time, plus (2) the principal amount of US Swing Loans outstanding
at such time, and

(B) the US Borrowing Base at such time less the sum of (1) the US Letter of
Credit Usage at such time, plus (2) the principal amount of US Swing Loans
outstanding at such time.

(b) Subject to the terms and conditions of this Agreement, and during the term
of this Agreement, each Lender with a Canadian Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make revolving loans
(“Canadian Advances”) to Canadian Borrower in an amount at any one time
outstanding not to exceed the lesser of:

(i) such Lender’s Canadian Revolver Commitment, or

(ii) such Lender’s Pro Rata Share of an amount equal to the lesser of:

(A) the Canadian Maximum Revolver Amount less the sum of (1) the Canadian Letter
of Credit Usage at such time, plus (2) the principal amount of Canadian Swing
Loans outstanding at such time, and

 

-4-

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

(B) the Canadian Borrowing Base at such time less the sum of (1) the Canadian
Letter of Credit Usage at such time, plus (2) the principal amount of Canadian
Swing Loans outstanding at such time.

(c) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to
the terms and conditions of this Agreement, reborrowed at any time during the
term of this Agreement. The outstanding principal amount of the Advances,
together with interest accrued and unpaid thereon, shall be due and payable on
the Maturity Date or, if earlier, on the date on which they are declared due and
payable pursuant to the terms of this Agreement.

(d) Notwithstanding anything contained herein to the contrary, the aggregate
Dollar Equivalent of the sum of the Canadian Revolver Usage and the US Revolver
Usage shall not exceed $250,000,000 at any time (except as such amount may be
increased pursuant to Section 2.1(e)).

(e) Coleman Cable may, by written notice to US Agent (whereupon US Agent shall
promptly deliver a copy to each of the Lenders), request that the amount of the
US Maximum Revolver Amount be increased by an amount of up to $50,000,000 (any
such increase, a “Revolver Increase”); provided, that no such Revolver Increase
shall be made if (i) at the time that such Revolver Increase is to be made (and
after giving effect thereto) a Default or Event of Default shall exist, or
(ii) US Agent has not received commitments (reasonably satisfactory to US Agent)
from Lenders (or their Affiliates) or other Persons reasonably acceptable to US
Agent, within a reasonable amount of time after receipt of US Borrowers’ request
and prior to such Revolver Increase, to provide US Revolver Commitments which,
in the aggregate, equal the amount of the requested Revolver Increase. Any such
Revolver Increase shall be in a minimum amount of $20,000,000. Notwithstanding
anything to the contrary herein, no Lender shall have any obligation to increase
its US Revolver Commitment to provide all or any portion of a Revolver Increase.
In the event US Agent receives US Revolver Commitments in excess of the
requested Revolver Increase, US Agent shall have the right, following
consultation with US Borrowers, to allocate the Revolver Increase among such US
Revolver Commitments as Agent shall elect. The notice from US Borrowers pursuant
to this Section shall set forth the requested amount of such Revolver Increase.
If US Borrowers’ request for the Revolver Increase satisfies all of the terms
and conditions set forth herein, US Agent shall notify US Borrowers and each
Lender of the date such Revolver Increase is to be made (which date shall be
within 10 days of the date each of the foregoing conditions have been satisfied
or waived). In connection with the Revolver Increase and as a further condition
to providing the Revolver Increase, any Person that becomes a Lender shall
execute a joinder to this Agreement as a Lender. Loan Parties, Agents and
Lenders shall execute such amendments, agreements, instruments and documents, if
any, as US Agent shall reasonably request to evidence the Revolver Increase.

2.2. [Intentionally Omitted].

 

-5-

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

2.3. Borrowing Procedures and Settlements.

(a) Procedure for Borrowing.

(i) Each US Borrowing shall be made by a written request by an Authorized Person
of a US Borrower delivered to US Agent. Unless US Swing Lender is not obligated
to make a US Swing Loan pursuant to Section 2.3(b)(i) below, such notice must be
received by US Agent no later than 12:00 noon (Chicago time) on the Business Day
that is the requested Funding Date specifying (i) the amount of such US
Borrowing, and (ii) the requested Funding Date, which shall be a Business Day;
provided, however, that if US Swing Lender is not obligated to make a US Swing
Loan as to a requested US Borrowing, such notice must be received by US Agent no
later than 10:00 a.m. (Chicago time) on the Business Day that is the requested
Funding Date. At US Agent’s election, in lieu of delivering the above-described
written request, any Authorized Person of a US Borrower may give US Agent
telephonic notice of such request by the required time. In such circumstances,
each US Borrower agrees that any such telephonic notice will be confirmed in
writing within 24 hours of the giving of such telephonic notice, but the failure
to provide such written confirmation shall not affect the validity of the
request.

(ii) Each Canadian Borrowing shall be made by a written request by an Authorized
Person of Canadian Borrower delivered to Canadian Agent. Unless Canadian Swing
Lender is not obligated to make a Canadian Swing Loan pursuant to
Section 2.3(b)(ii) below, such notice must be received by Canadian Agent no
later than 12:00 noon (Chicago time) on the Business Day that is the requested
Funding Date specifying (i) the amount of such Canadian Borrowing, and (ii) the
requested Funding Date, which shall be a Business Day; provided, however, that
if Canadian Swing Lender is not obligated to make a Canadian Swing Loan as to a
requested Canadian Borrowing, such notice must be received by Canadian Agent no
later than 10:00 a.m. (Chicago time) on the Business Day that is the requested
Funding Date. At Canadian Agent’s election, in lieu of delivering the
above-described written request, any Authorized Person of Canadian Borrower may
give Canadian Agent telephonic notice of such request by the required time. In
such circumstances, Canadian Borrower agrees that any such telephonic notice
will be confirmed in writing within 24 hours of the giving of such telephonic
notice, but the failure to provide such written confirmation shall not affect
the validity of the request.

(b) Making of Swing Loans.

(i) In the case of a request for a US Advance and so long as the aggregate
amount of US Swing Loans made since the last Settlement Date, minus the amount
of Collections or payments applied to US Swing Loans since the last Settlement
Date, plus the amount of the requested US Advance does not exceed $25,000,000,
US Swing Lender shall make a US Advance in the amount of such requested US
Borrowing (any such US Advance made solely by US Swing Lender pursuant to this
Section 2.3(b)(i) being referred to as a “US Swing Loan” and such US Advances
being referred to as “US Swing Loans”) available to US Borrowers on the Funding
Date applicable thereto by transferring immediately available funds to the US
Designated Account. Anything contained herein to the contrary notwithstanding,
the US Swing Lender may, but shall not be obligated to, make US Swing Loans at
any time that one or more of the Lenders is a Defaulting Lender, unless such US
Swing Loan is fully supported as a result of either or both of the following:
(i) such Defaulting Lender’s Pro

 

-6-

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

Rata Share of such US Swing Loan shall be reallocated among all other Lenders
with a US Revolver Commitment that are non-Defaulting Lenders in proportion with
their Pro Rata Shares of the US Revolver Commitment, but only to the extent
that, after giving effect to such reallocation, US Revolver Usage does not
exceed the sum of all such non-Defaulting Lenders’ Pro Rata Share of the US
Revolver Commitment; and/or (ii) to the extent that such US Swing Loan exceeds
the amount that is permitted to be reallocated pursuant to the immediately
preceding clause (i) or if there is no such reallocation, US Borrowers shall
have provided cash collateral to US Agent to hold on behalf of US Borrowers, on
terms and conditions reasonably satisfactory to US Swing Lender and US Agent, in
an amount equal to such excess. Any interest or fees otherwise payable under
this Agreement to a Defaulting Lender with respect to any portion of such
Defaulting Lender’s Pro Rata Share in any US Swing Loan reallocated pursuant to
the preceding sentence shall be payable instead to the non-Defaulting Lenders in
proportion to their Pro Rata Share of such non-Defaulting Lenders’ Pro Rata
Share in any US Swing Loan so allocated to them. In the event that a Defaulting
Lender ceases to be a Defaulting Lender then the portion of such Defaulting
Lender’s Pro Rata Share in any US Swing Loan reallocated to non-Defaulting
Lenders pursuant to this Section 2.3(b)(i) shall be reallocated to such
previously Defaulting Lender and, from and after (and in respect of fees or
interest payable with respect to such US Swing Loan accruing from and after) the
date of such reallocation, such previously Defaulting Lender shall be entitled
to receive any fees or interest payable in respect of such previously Defaulting
Lender’s Pro Rata Share in any US Swing Loan previously reallocated to the
non-Defaulting Lenders. Each US Swing Loan shall be deemed to be a US Advance
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other US Advances, except that all payments on any US
Swing Loan shall be payable to US Swing Lender solely for its own account.
Subject to the provisions of Section 2.3(d)(ii), US Swing Lender shall not make
and shall not be obligated to make any US Swing Loan if US Swing Lender has
actual knowledge that (i) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the
applicable US Borrowing, or (ii) the requested US Borrowing would exceed the US
Availability on such Funding Date. US Swing Lender shall not otherwise be
required to determine whether the applicable conditions precedent set forth in
Section 3 have been satisfied on the Funding Date applicable thereto prior to
making any US Swing Loan. The US Swing Loans shall be secured by US Agent’s
Liens, constitute US Advances and US Obligations hereunder, and bear interest at
the rate applicable from time to time to US Advances that are Base Rate Loans.

(ii) In the case of a request for a Canadian Advance and so long as the
aggregate amount of Canadian Swing Loans made since the last Settlement Date,
minus the amount of Collections or payments applied to Canadian Swing Loans
since the last Settlement Date, plus the amount of the requested Canadian
Advance does not exceed Cdn$2,000,000, Canadian Swing Lender shall make a
Canadian Advance in the amount of such requested Canadian Borrowing (any such
Canadian Advance made solely by Canadian Swing Lender pursuant to this
Section 2.3(b)(ii) being referred to as a “Canadian Swing Loan” and such
Canadian Advances being referred to as “Canadian Swing Loans”) available to
Canadian Borrower on the Funding Date applicable thereto by transferring
immediately available funds to the Canadian Designated Account.

 

-7-

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

Anything contained herein to the contrary notwithstanding, the Canadian Swing
Lender may, but shall not be obligated to, make Canadian Swing Loans at any time
that one or more of the Lenders is a Defaulting Lender, unless such Canadian
Swing Loan is fully supported as a result of either or both of the following:
(i) such Defaulting Lender’s Pro Rata Share of such Canadian Swing Loan shall be
reallocated among all other Lenders with a Canadian Revolver Commitment that are
non-Defaulting Lenders in proportion with their Pro Rata Shares of the Canadian
Revolver Commitment, but only to the extent that, after giving effect to such
reallocation, Canadian Revolver Usage does not exceed the sum of all such
non-Defaulting Lenders’ Pro Rata Share of the Canadian Revolver Commitment;
and/or (ii) to the extent that such Canadian Swing Loan exceeds the amount that
is permitted to be reallocated pursuant to the immediately preceding clause
(i) or if there is no such reallocation, Canadian Borrower shall have provided
cash collateral to Canadian Agent to hold on behalf of Canadian Borrower, on
terms and conditions reasonably satisfactory to Canadian Swing Lender and
Canadian Agent, in an amount equal to such excess. Any interest or fees
otherwise payable under this Agreement to a Defaulting Lender with respect to
any portion of such Defaulting Lender’s Pro Rata Share in any Canadian Swing
Loan reallocated pursuant to the preceding sentence shall be payable instead to
the non-Defaulting Lenders in proportion to their Pro Rata Share of such
non-Defaulting Lenders’ Pro Rata Share in any Canadian Swing Loan so allocated
to them. In the event that a Defaulting Lender ceases to be a Defaulting Lender
then the portion of such Defaulting Lender’s Pro Rata Share in any Canadian
Swing Loan reallocated to non-Defaulting Lenders pursuant to this
Section 2.3(b)(ii) shall be reallocated to such previously Defaulting Lender
and, from and after (and in respect of fees or interest payable with respect to
such Canadian Swing Loan accruing from and after) the date of such reallocation,
such previously Defaulting Lender shall be entitled to receive any fees or
interest payable in respect of such previously Defaulting Lender’s Pro Rata
Share in any Canadian Swing Loan previously reallocated to the non-Defaulting
Lenders. Each Canadian Swing Loan shall be deemed to be a Canadian Advance
hereunder and shall be subject to all the terms and conditions (including
Section 3) applicable to other Canadian Advances, except that all payments on
any Canadian Swing Loan shall be payable to Canadian Swing Lender solely for its
own account. Subject to the provisions of Section 2.3(d)(ii), Canadian Swing
Lender shall not make and shall not be obligated to make any Canadian Swing Loan
if Canadian Swing Lender has actual knowledge that (i) one or more of the
applicable conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Canadian Borrowing, or (ii) the
requested Canadian Borrowing would exceed the Canadian Availability on such
Funding Date. Canadian Swing Lender shall not otherwise be required to determine
whether the applicable conditions precedent set forth in Section 3 have been
satisfied on the Funding Date applicable thereto prior to making any Canadian
Swing Loan. The Canadian Swing Loans shall be secured by Canadian Agent’s Liens,
constitute Canadian Advances and Canadian Obligations hereunder, and bear
interest at the rate applicable from time to time to Canadian Advances that are
Base Rate Loans.

 

-8-

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

(c) Making of Loans.

(i) In the event that US Swing Lender is not obligated to make a US Swing Loan,
then promptly after receipt of a request for a US Borrowing pursuant to
Section 2.3(a)(i), US Agent shall notify the Lenders, not later than 1:00 p.m.
(Chicago time) on the Funding Date applicable thereto, by telecopy, telephone,
or other similar form of transmission, of the requested US Borrowing. Each
Lender shall make the amount of such Lender’s Pro Rata Share of the requested US
Borrowing available to US Agent in immediately available funds, to US Agent’s
Account, not later than 2:00 p.m. (Chicago time) on the Funding Date applicable
thereto. After US Agent’s receipt of the proceeds of such US Advances, US Agent
shall make the proceeds thereof available to US Borrowers on the applicable
Funding Date by transferring immediately available funds equal to such proceeds
received by US Agent to the US Designated Account; provided, however, that,
subject to the provisions of Section 2.3(d)(ii), US Agent shall not request any
Lender to make any US Advance if it has knowledge that, and no Lender shall have
the obligation to make any US Advance, if (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable US Borrowing unless such condition has
been waived, or (2) the requested US Borrowing would exceed the US Availability
on such Funding Date.

(ii) In the event that Canadian Swing Lender is not obligated to make a Canadian
Swing Loan, then promptly after receipt of a request for a Canadian Borrowing
pursuant to Section 2.3(a)(ii), Canadian Agent shall notify the Lenders, not
later than 1:00 p.m. (Chicago time) on the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the requested
Canadian Borrowing. Each Lender shall make the amount of such Lender’s Pro Rata
Share of the requested Canadian Borrowing available to Canadian Agent in
immediately available funds, to Canadian Agent’s Account, not later than 2:00
p.m. (Chicago time) on the Funding Date applicable thereto. After Canadian
Agent’s receipt of the proceeds of such Canadian Advances, Canadian Agent shall
make the proceeds thereof available to Canadian Borrower on the applicable
Funding Date by transferring immediately available funds equal to such proceeds
received by Canadian Agent to the Canadian Designated Account; provided,
however, that, subject to the provisions of Section 2.3(d)(ii), Canadian Agent
shall not request any Lender to make any Canadian Advance if it has knowledge
that, and no Lender shall have the obligation to make any Canadian Advance, if
(1) one or more of the applicable conditions precedent set forth in Section 3
will not be satisfied on the requested Funding Date for the applicable Canadian
Borrowing unless such condition has been waived, or (2) the requested Canadian
Borrowing would exceed the Canadian Availability on such Funding Date.

(iii) Unless the US Agent or Canadian Agent, as applicable, receives notice from
a Lender prior to 2:00 p.m. (Chicago time) on the date of a Borrowing, that such
Lender will not make available as and when required hereunder to such Agent for
the account of US Borrowers or Canadian Borrower, as applicable, the amount of
that Lender’s Pro Rata Share of the Borrowing, such Agent may assume that each
Lender has made or will make such amount available to such Agent in immediately
available funds on the Funding Date and such Agent may (but shall not be so
required), in reliance upon

 

-9-

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

such assumption, make available to US Borrowers or Canadian Borrower, as
applicable, on such date a corresponding amount. If any Lender shall not have
made its full amount available to the applicable Agent in immediately available
funds and if such Agent in such circumstances has made available to US Borrowers
or Canadian Borrower, as applicable, such amount, that Lender shall on the
Business Day following such Funding Date make such amount available to such
Agent, together with interest at the Defaulting Lender Rate for each day during
such period. A notice submitted by either Agent to any Lender with respect to
amounts owing under this Section 2.3(c)(iii) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
applicable Agent shall constitute such Lender’s Advance on the date of Borrowing
for all purposes of this Agreement. If such amount is not made available to the
applicable Agent on the Business Day following the Funding Date, such Agent will
notify US Borrowers or Canadian Borrower, as applicable, of such failure to fund
and, upon demand by such Agent, US Borrowers or Canadian Borrower, as
applicable, shall pay such amount (in no event later than 5 Business Days after
such demand) to such Agent for such Agent’s account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Advances
composing such Borrowing. Nothing herein shall be deemed to relieve any Lender
from its obligations to fulfill its commitments hereunder or to prejudice any
rights which the Borrowers may have against any Lender as a result of any
default by such Lender hereunder, including, without limitation, the right of
the Borrowers to seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrower under this Section 2.3(c)(iii) on account of such
Defaulting Lender’s defaults.

(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, US Agent hereby is authorized by US Borrowers and the Lenders,
and Canadian Agent hereby is authorized by Canadian Borrower and the Lenders,
from time to time in such Agent’s sole discretion, (A) after the occurrence and
during the continuance of a Default or an Event of Default, or (B) at any time
that any of the other applicable conditions precedent set forth in Section 3 are
not satisfied, to make Advances to, or for the benefit of, US Borrowers or
Canadian Borrower, as applicable, on behalf of the Lenders (in an aggregate
amount for all such Advances taken together not exceeding $25,000,000
outstanding at any one time) that such Agent, in its Permitted Discretion deems
necessary or desirable (1) to preserve or protect the Collateral, or any portion
thereof, or (2) to enhance the likelihood of repayment of the Obligations (other
than the Bank Product Obligations) (any of the Advances described in this
Section 2.3(d)(i) made to a US Borrower shall be referred to as “US Protective
Advances” and any of the Advances described in this Section 2.3(d)(i) made to
Canadian Borrower shall be referred to as “Canadian Protective Advances”).

(ii) Any contrary provision of this Agreement or any other Loan Document
notwithstanding, the Lenders hereby authorize:

(A) US Agent or US Swing Lender, as applicable, may, but is not obligated to,
knowingly and intentionally, continue to make US

 

-10-

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

Advances (including US Swing Loans) to US Borrowers, notwithstanding that a US
Overadvance exists or would be created thereby, so long as (A) after giving
effect to such US Advances, the outstanding US Revolver Usage does not exceed
the US Borrowing Base by more than $10,000,000, and (B) after giving effect to
such US Advances, the outstanding US Revolver Usage (except for and excluding
amounts charged to the US Loan Account for interest, fees, or Lender Group
Expenses) does not exceed the US Maximum Revolver Amount. In the event US Agent
obtains actual knowledge that the US Revolver Usage exceeds the amounts
permitted by the immediately foregoing provisions, regardless of the amount of,
or reason for, such excess, US Agent shall notify the Lenders as soon as
practicable (and prior to making any (or any additional) intentional US
Overadvances (except for and excluding amounts charged to the Loan Accounts for
interest, fees, or Lender Group Expenses) unless US Agent determines that prior
notice would result in imminent harm to the Collateral or its value, in which
case US Agent may make such US Overadvances and provide notice as promptly as
practicable thereafter), and the Lenders with Revolver Commitments thereupon
shall, together with the US Agent, jointly determine the terms of arrangements
that shall be implemented with US Borrowers intended to reduce, within a
reasonable time, the outstanding principal amount of the US Advances to US
Borrowers to an amount permitted by the preceding sentence. In such
circumstances, if any Lender with a US Revolver Commitment objects to the
proposed terms of reduction or repayment of any US Overadvance, the terms of
reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders. The foregoing provisions are meant for
the benefit of the Lenders and US Agent and are not meant for the benefit of
Borrowers, which shall continue to be bound by the provisions of Section 2.5.
Each Lender with a US Revolver Commitment shall be obligated to settle with US
Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the
amount of such Lender’s Pro Rata Share of any unintentional US Overadvances by
US Agent reported to such Lender, any intentional US Overadvances made as
permitted under this Section 2.3(d)(ii)(A), and any US Overadvances resulting
from the charging to a Loan Account of interest, fees, or Lender Group Expenses.

(B) Canadian Agent or Canadian Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Canadian Advances
(including Canadian Swing Loans) to Canadian Borrower, notwithstanding that a
Canadian Overadvance exists or would be created thereby, so long as (A) after
giving effect to such Canadian Advances, the outstanding Canadian Revolver Usage
does not exceed the Canadian Borrowing Base by more than $2,000,000, and
(B) after giving effect to such Canadian Advances, the outstanding Canadian
Revolver Usage (except for and excluding amounts charged to the Canadian Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the

 

-11-

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

Canadian Maximum Revolver Amount. In the event Canadian Agent obtains actual
knowledge that the Canadian Revolver Usage exceeds the amounts permitted by the
immediately foregoing provisions, regardless of the amount of, or reason for,
such excess, Canadian Agent shall notify the Lenders as soon as practicable (and
prior to making any (or any additional) intentional Canadian Overadvances
(except for and excluding amounts charged to the Loan Accounts for interest,
fees, or Lender Group Expenses) unless Canadian Agent determines that prior
notice would result in imminent harm to the Collateral or its value, in which
case Canadian Agent may make such Canadian Overadvances and provide notice as
promptly as practicable thereafter), and the Lenders with Revolver Commitments
thereupon shall, together with the Canadian Agent, jointly determine the terms
of arrangements that shall be implemented with Canadian Borrower intended to
reduce, within a reasonable time, the outstanding principal amount of the
Canadian Advances to Canadian Borrower to an amount permitted by the preceding
sentence. In such circumstances, if any Lender with a Canadian Revolver
Commitment objects to the proposed terms of reduction or repayment of any
Canadian Overadvance, the terms of reduction or repayment thereof shall be
implemented according to the determination of the Required Lenders. The
foregoing provisions are meant for the benefit of the Lenders and Canadian Agent
and are not meant for the benefit of Borrowers, which shall continue to be bound
by the provisions of Section 2.5. Each Lender with a Canadian Revolver
Commitment shall be obligated to settle with Canadian Agent as provided in
Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such
Lender’s Pro Rata Share of any unintentional Canadian Overadvances by Canadian
Agent reported to such Lender, any intentional Canadian Overadvances made as
permitted under this Section 2.3(d)(ii)(B), and any Canadian Overadvances
resulting from the charging to a Loan Account of interest, fees, or Lender Group
Expenses.

(iii) Each Protective Advance and each Overadvance shall be deemed to be an
Advance hereunder, except that no Protective Advance or Overadvance shall be
eligible to be a LIBOR Rate Loan and, prior to Settlement therefor, all payments
on the US Protective Advances shall be payable to US Agent solely for its own
account and all payments on the Canadian Protective Advances shall be payable to
Canadian Agent solely for its own account. The Protective Advances and
Overadvances shall be repayable on demand, secured by Agents’ Liens, constitute
Obligations hereunder, and bear interest at the rate applicable from time to
time to Advances that are Base Rate Loans. The ability of each Agent to make
Protective Advances is separate and distinct from its ability to make
Overadvances and its ability to make Overadvances is separate and distinct from
its ability to make Protective Advances. For the avoidance of doubt, the
limitations on each Agent’s ability to make Protective Advances do not apply to
Overadvances and the limitations on each Agent’s ability to make Overadvances do
not apply to Protective Advances. The provisions of this Section 2.3(d) are for
the exclusive benefit of Agents, Swing Lenders, and the Lenders and are not
intended to benefit Borrowers in any way.

 

-12-

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

(e) Settlement. It is agreed that each Lender’s funded portion of the Advances
is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share
of the outstanding Advances. Such agreement notwithstanding, Agents, Swing
Lenders, and the other Lenders agree (which agreement shall not be for the
benefit of Borrowers) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the
Advances, the Swing Loans, and the Protective Advances shall take place on a
periodic basis in accordance with the following provisions:

(i) US Agent or Canadian Agent, as applicable, shall request settlement
(“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis
if so determined by such Agent (1) on behalf of US Swing Lender, with respect to
the outstanding US Swing Loans, (2) on behalf of Canadian Swing Lender, with
respect to the outstanding Canadian Swing Loans, (3) for itself, with respect to
its outstanding Protective Advances or Overadvances, and (4) with respect to
Borrowers’ or their Subsidiaries’ Collections or payments received, as to each
by notifying the Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 4:00 p.m. (Chicago
time) on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the “Settlement Date”).
Such notice of a Settlement Date shall include a summary statement of the amount
of outstanding Advances, Swing Loans, Overadvances and Protective Advances for
the period since the prior Settlement Date. Subject to the terms and conditions
contained herein (including Section 2.3(g)): (w) if the amount of the US
Advances (including US Swing Loans, US Overadvances, and US Protective Advances)
made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata
Share of the US Advances (including US Swing Loans, US Overadvances, and US
Protective Advances) as of a Settlement Date, then US Agent shall, by no later
than 2:00 p.m. (Chicago time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the US Advances
(including US Swing Loans, US Overadvances and US Protective Advances), (x) if
the amount of the Canadian Advances (including Canadian Swing Loans, Canadian
Overadvances, and Canadian Protective Advances) made by a Lender that is not a
Defaulting Lender exceeds such Lender’s Pro Rata Share of the Canadian Advances
(including Canadian Swing Loans, Canadian Overadvances, and Canadian Protective
Advances) as of a Settlement Date, then Canadian Agent shall, by no later than
2:00 p.m. (Chicago time) on the Settlement Date, transfer in immediately
available funds to a Deposit Account of such Lender (as such Lender may
designate), an amount such that each such Lender shall, upon receipt of such
amount, have as of the Settlement Date, its Pro Rata Share of the Canadian
Advances (including Canadian Swing Loans, Canadian Overadvances and Canadian
Protective Advances), (y) if the amount of the US Advances (including US Swing
Loans, US Overadvances, and US Protective Advances) made by a Lender is less
than such Lender’s Pro Rata Share of the US Advances (including US Swing Loans,
US Overadvances, and US Protective Advances) as of a Settlement Date, such
Lender shall no later than 2:00 p.m. (Chicago time) on the Settlement Date
transfer

 

-13-

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

in immediately available funds to US Agent’s Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its Pro Rata Share of the US Advances (including US Swing Loans, US
Overadvances, and US Protective Advances) and (z) if the amount of the Canadian
Advances (including Canadian Swing Loans, Canadian Overadvances, and Canadian
Protective Advances) made by a Lender is less than such Lender’s Pro Rata Share
of the Canadian Advances (including Canadian Swing Loans, Canadian Overadvances,
and Canadian Protective Advances) as of a Settlement Date, such Lender shall no
later than 2:00 p.m. (Chicago time) on the Settlement Date transfer in
immediately available funds to Canadian Agent’s Account, an amount such that
each such Lender shall, upon transfer of such amount, have as of the Settlement
Date, its Pro Rata Share of the Canadian Advances (including Canadian Swing
Loans, Canadian Overadvances, and Canadian Protective Advances). Such amounts
made available to US Agent under clause (y) and Canadian Agent under clause
(z) of the immediately preceding sentence shall be applied against the amounts
of the applicable Swing Loans, Overadvances, or Protective Advances and,
together with the portion of such Swing Loans, Overadvances, or Protective
Advances representing the applicable Swing Lender’s Pro Rata Share thereof,
shall constitute Advances of such Lenders. If any such amount is not made
available to the applicable Agent by any Lender on the Settlement Date
applicable thereto to the extent required by the terms hereof, such Agent shall
be entitled to recover for its account such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Advances, Swing Loans,
Overadvances, and Protective Advances is less than, equal to, or greater than
such Lender’s Pro Rata Share of the Advances, Swing Loans, Overadvances, and
Protective Advances as of a Settlement Date, US Agent or Canadian Agent, as
applicable, shall, as part of the relevant Settlement, apply to such balance the
portion of payments actually received in good funds by such Agent with respect
to principal, interest, fees payable by Borrowers and allocable to the Lenders
hereunder, and proceeds of Collateral.

(iii) Between Settlement Dates, (A) US Agent, to the extent US Protective
Advances, US Overadvances, or US Swing Loans are outstanding, may pay over to US
Agent or US Swing Lender, as applicable, any Collections or payments received by
US Agent, that in accordance with the terms of this Agreement would be applied
to the reduction of the US Advances, for application to the US Protective
Advances, US Overadvances, or US Swing Loans and (B) Canadian Agent, to the
extent Canadian Protective Advances, Canadian Overadvances, or Canadian Swing
Loans are outstanding, may pay over to Canadian Agent or Canadian Swing Lender,
as applicable, any Collections or payments received by Canadian Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of
the Canadian Advances, for application to the Canadian Protective Advances,
Canadian Overadvances, or Canadian Swing Loans. Between Settlement Dates, (Y) US
Agent, to the extent no US Protective Advances, US Overadvances, or US Swing
Loans are outstanding, may pay over to US Swing Lender any Collections or
payments received by US Agent, that in accordance with the terms of this
Agreement would be applied to the reduction of the US Advances, for application
to US Swing Lender’s Pro Rata Share of the US Advances and (Z) Canadian Agent,
to the extent no Canadian Protective Advances, Canadian

 

-14-

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

Overadvances, or Canadian Swing Loans are outstanding, may pay over to Canadian
Swing Lender any Collections or payments received by Canadian Agent, that in
accordance with the terms of this Agreement would be applied to the reduction of
the Canadian Advances, for application to Canadian Swing Lender’s Pro Rata Share
of the Canadian Advances. If, as of any Settlement Date, Collections or payments
of Borrowers or their Subsidiaries received since the then immediately preceding
Settlement Date have been applied to either Swing Lender’s Pro Rata Share of the
Advances other than to Swing Loans, as provided for in the previous sentence,
such Swing Lender shall pay to the applicable Agent for the accounts of the
Lenders, and such Agent shall pay to the Lenders (other than a Defaulting Lender
if Agent has implemented the provisions of Section 2.3(g)), to be applied to the
outstanding Advances of such Lenders, an amount such that each such Lender
shall, upon receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Advances. During the period between Settlement Dates, each
Swing Lender with respect to Swing Loans, each Agent with respect to Protective
Advances and Overadvances, and each Lender with respect to the Advances other
than Swing Loans, Overadvances, and Protective Advances, shall be entitled to
interest at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lenders, Agents, or the Lenders, as
applicable.

(iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the
event that a Lender is a Defaulting Lender, each Agent shall be entitled to
refrain from remitting settlement amounts to the Defaulting Lender and, instead,
shall be entitled to elect to implement the provisions set forth in
Section 2.3(g).

(f) Notation. US Agent, as a non-fiduciary agent for US Borrowers, shall
maintain a register showing the principal amount of the US Advances, owing to
each Lender, including the US Swing Loans owing to US Swing Lender, and US
Protective Advances and US Overadvances owing to US Agent, and the interests
therein of each Lender, from time to time. Canadian Agent, as a non-fiduciary
agent for Canadian Borrower, shall maintain a register showing the principal
amount of the Canadian Advances, owing to each Lender, including the Canadian
Swing Loans owing to Canadian Swing Lender, and Canadian Protective Advances and
Canadian Overadvances owing to Canadian Agent, and the interests therein of each
Lender, from time to time. Each such register shall, absent manifest error,
conclusively be presumed to be correct and accurate.

(g) Defaulting Lenders. Neither Agent shall be obligated to transfer to a
Defaulting Lender any payments made by any Borrower to such Agent for the
Defaulting Lender’s benefit or any Collections or proceeds of Collateral that
would otherwise be remitted hereunder to the Defaulting Lender, and, in the
absence of such transfer to the Defaulting Lender, such Agent shall transfer any
such payments (A) first, to the applicable Swing Lender to the extent of any
Swing Loans that were made by such Swing Lender and that were required to be,
but were not, paid by the Defaulting Lender, (B) second, to the applicable
Issuing Lender, to the extent of the portion of a Letter of Credit Disbursement
that was required to be, but was not, paid by the Defaulting Lender, (C) third,
to each non-Defaulting Lender ratably in accordance with their Commitments (but,
in each case, only to the extent that such Defaulting Lender’s portion of an
Advance (or other funding obligation) was funded by such other non-Defaulting

 

-15-

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

Lender), (D) to a suspense account maintained by such Agent, the proceeds of
which shall be retained by such Agent and may be made available to be
re-advanced to or for the benefit of the US Borrowers of Canadian Borrower, as
applicable, as if such Defaulting Lender had made its portion of Advances (or
other funding obligations) hereunder, and (E) from and after the date on which
all other Obligations have been paid in full, to such Defaulting Lender in
accordance with tier (M) of Section 2.4(b)(ii) and tier (L) of
Section 2.4(b)(iii), as applicable. Subject to the foregoing, each Agent may
hold and, in its discretion, re-lend to US Borrowers and Canadian Borrower, as
applicable, for the account of such Defaulting Lender the amount of all such
payments received and retained by such Agent for the account of such Defaulting
Lender. Solely for the purposes of voting or consenting to matters with respect
to the Loan Documents (including the calculation of Pro Rata Share in connection
therewith) and for the purpose of calculating the fee payable under
Section 2.10(b) or (c), such Defaulting Lender shall be deemed not to be a
“Lender” and such Lender’s Commitment shall be deemed to be zero. The provisions
of this Section 2.3(g) shall remain effective with respect to such Defaulting
Lender until the earlier of (y) the date on which all of the non-Defaulting
Lenders, Agents, Issuing Lenders, and Borrowers shall have waived, in writing,
the application of this Section 2.3(g) to such Defaulting Lender, or (z) the
date on which such Defaulting Lender makes payment of all amounts that it was
obligated to fund hereunder, pays to the applicable Agent all amounts owing by
Defaulting Lender in respect of the amounts that it was obligated to fund
hereunder, and, if requested by the applicable Agent, provides adequate
assurance of its ability to perform its future obligations hereunder and is not
otherwise a Defaulting Lender. The operation of this Section 2.3(g) shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agents, Issuing
Lenders, or to the Lenders other than such Defaulting Lender. Any failure by a
Defaulting Lender to fund amounts that it was obligated to fund hereunder shall
constitute a material breach by such Defaulting Lender of this Agreement and
shall entitle Borrowers, at their option, upon written notice to Agents, to
arrange for a substitute Lender to assume the Commitment of such Defaulting
Lender, such substitute Lender to be reasonably acceptable to each Agent. In
connection with the arrangement of such a substitute Lender, the Defaulting
Lender shall have no right to refuse to be replaced hereunder, and agrees to
execute and deliver a completed form of Assignment and Acceptance in favor of
the substitute Lender (and agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject only to being paid its
share of the outstanding Obligations (other than Bank Product Obligations, but
including (1) all interest, fees, and other amounts that may be due and payable
in respect thereof, and (2) an assumption of its Pro Rata Share of its
participation in the Letters of Credit); provided, however, that any such
assumption of the Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups’ or any Borrower’s rights or
remedies against any such Defaulting Lender arising out of or in relation to
such failure to fund. In the event of a direct conflict between the priority
provisions of this Section 2.3(g) and any other provision contained in this
Agreement or any other Loan Document, it is the intention of the parties hereto
that such provisions be read together and construed, to the fullest extent
possible, to be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 2.3(g) shall control and govern.

 

-16-

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

(h) Independent Obligations. All Advances (other than Swing Loans, Overadvances
and Protective Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.

2.4. Payments; Reductions of Commitments; Prepayments.

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by US Borrowers
shall be made to US Agent’s Account for the account of the Lender Group and
shall be made in immediately available funds, no later than 1:00 p.m. (Chicago
time) on the date specified herein. Except as otherwise expressly provided
herein, all payments by Canadian Borrower shall be made to Canadian Agent’s
Account for the account of the Lender Group and shall be made in immediately
available funds, no later than 1:00 p.m. (Chicago time) on the date specified
herein. Any payment received by the applicable Agent later than 1:00 p.m.
(Chicago time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue until such
following Business Day.

(ii) Unless the applicable Agent receives notice from US Borrowers or Canadian
Borrower prior to the date on which any payment is due to the Lenders that such
Borrowers will not make such payment in full as and when required, such Agent
may assume that such Borrowers have made (or will make) such payment in full to
such Agent on such date in immediately available funds and such Agent may (but
shall not be so required), in reliance upon such assumption, distribute to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent such Borrowers do not make such payment in full to such Agent
on the date when due, each Lender severally shall repay to such Agent on demand
such amount distributed to such Lender, together with interest thereon at the
Defaulting Lender Rate for each day from the date such amount is distributed to
such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as
otherwise provided herein with respect to Defaulting Lenders, all principal and
interest payments received by Agents shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Obligations to which
such payments relate held by each Lender) and all payments of fees and expenses
received by Agents (other than fees or expenses that are for an Agent’s separate
account or for the separate account of an Issuing Lender) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee or expense relates. All payments to be made
hereunder by US Borrowers in respect of US Obligations shall be remitted to the
US Agent and all (subject to Section 2.4(b)(v),

 

-17-

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

Section 2.4(d), and Section 2.4(e)) such payments, and all proceeds of
Collateral securing the US Obligations received by US Agent, shall be applied,
so long as no Application Event has occurred and is continuing, to reduce the
balance of the US Advances outstanding and, thereafter, to US Borrowers (to be
wired to the US Designated Account) or such other Person entitled thereto under
applicable law. All payments to be made hereunder by Canadian Borrower in
respect of Canadian Obligations shall be remitted to the Canadian Agent and all
(subject to Section 2.4(b)(v), Section 2.4(d), and Section 2.4(e)) such
payments, and all proceeds of Collateral securing the Canadian Obligations
received by Canadian Agent, shall be applied, so long as no Application Event
has occurred and is continuing, to reduce the balance of the Canadian Advances
outstanding and, thereafter, to Canadian Borrower (to be wired to the Canadian
Designated Account) or such other Person entitled thereto under applicable law.

(ii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to US Agent in respect of the US Obligations and all proceeds
of Collateral securing the US Obligations received by US Agent shall be applied
as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to either Agent under the Loan Documents
in respect of the US Obligations, until paid in full,

(B) second, to pay any fees or premiums then due to either Agent in respect of
the US Obligations under the Loan Documents until paid in full,

(C) third, to pay interest due in respect of all US Protective Advances until
paid in full,

(D) fourth, to pay the principal of all US Protective Advances until paid in
full,

(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders in respect of the
US Obligations under the Loan Documents, until paid in full,

(F) sixth, ratably, to pay any fees or premiums then due to any of the Lenders
in respect of the US Obligations under the Loan Documents until paid in full,

(G) seventh, to pay interest accrued in respect of the US Swing Loans until paid
in full,

(H) eighth, to pay the principal of all US Swing Loans until paid in full,

 

-18-

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

(I) ninth, ratably, to pay interest accrued in respect of the US Advances (other
than US Protective Advances) until paid in full,

(J) tenth, ratably (i) to pay the principal of all US Advances until paid in
full and (ii) to US Agent, to be held by US Agent, for the benefit of US Issuing
Bank (and for the ratable benefit of each of the Lenders that have an obligation
to pay to US Agent, for the account of the US Issuing Bank, a share of each US
Letter of Credit Disbursement), as cash collateral in an amount up to 105% of
the US Letter of Credit Usage (to the extent permitted by applicable law, such
cash collateral shall be applied to the reimbursement of any US Letter of Credit
Disbursement as and when such disbursement occurs and, if a US Letter of Credit
expires undrawn, the cash collateral held by US Agent in respect of such US
Letter of Credit shall, to the extent permitted by applicable law, be reapplied
pursuant to this Section 2.4(b)(ii), beginning with tier (A) hereof),

(K) eleventh, to pay any Obligations of US Loan Parties under any Guaranty of
any Canadian Obligations,

(L) twelfth, to pay any other US Obligations other than US Obligations owed to
Defaulting Lenders (including the provision of amounts to US Agent, to be held
by US Agent, for the benefit of the US Bank Product Providers, as cash
collateral in an amount up to the amount determined by US Agent in its Permitted
Discretion as the amount necessary to secure US Loan Parties’ obligations in
respect of Bank Products) (which cash collateral may be released by US Agent to
the applicable US Bank Product Provider and applied by such US Bank Product
Provider to the payment or reimbursement of any amounts due and payable with
respect to US Bank Product Obligations owed to the applicable US Bank Product
Provider as and when such amounts first become due and payable and, if and at
such time as all such US Bank Product Obligations are paid or otherwise
satisfied in full, the cash collateral held by US Agent in respect of such US
Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(ii),
beginning with tier (A) hereof),

(M) thirteenth, ratably to pay any US Obligations owed to Defaulting Lenders;
and

(N) fourteenth, to US Borrowers (to be wired to the US Designated Account) or
such other Person entitled thereto under applicable law.

(iii) At any time that an Application Event has occurred and is continuing and
except as otherwise provided herein with respect to Defaulting Lenders, all
payments remitted to Canadian Agent in respect of the Canadian Obligations and
all proceeds of Collateral securing the Canadian Obligations received by
Canadian Agent shall be applied as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to either Agent under the Loan Documents
in respect of the Canadian Obligations, until paid in full,

 

-19-

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

(B) second, to pay any fees or premiums then due to either Agent in respect of
the Canadian Obligations under the Loan Documents until paid in full,

(C) third, to pay interest due in respect of all Canadian Protective Advances
until paid in full,

(D) fourth, to pay the principal of all Canadian Protective Advances until paid
in full,

(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders in respect of the
Canadian Obligations under the Loan Documents, until paid in full,

(F) sixth, ratably, to pay any fees or premiums then due to any of the Lenders
in respect of the Canadian Obligations under the Loan Documents until paid in
full,

(G) seventh, to pay interest accrued in respect of the Canadian Swing Loans
until paid in full,

(H) eighth, to pay the principal of all Canadian Swing Loans until paid in full,

(I) ninth, ratably, to pay interest accrued in respect of the Canadian Advances
(other than Canadian Protective Advances) until paid in full,

(J) tenth, ratably (i) to pay the principal of all Canadian Advances until paid
in full and (ii) to Canadian Agent, to be held by Canadian Agent, for the
benefit of Canadian Issuing Lender (and for the ratable benefit of each of the
Lenders that have an obligation to pay to Canadian Agent, for the account of the
Canadian Issuing Lender, a share of each Canadian Letter of Credit
Disbursement), as cash collateral in an amount up to 105% of the Canadian Letter
of Credit Usage (to the extent permitted by applicable law, such cash collateral
shall be applied to the reimbursement of any Canadian Letter of Credit
Disbursement as and when such disbursement occurs and, if a Canadian Letter of
Credit expires undrawn, the cash collateral held Canadian US Agent in respect of
such

 

-20-

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

Canadian Letter of Credit shall, to the extent permitted by applicable law, be
reapplied pursuant to this Section 2.4(b)(iii), beginning with tier (A) hereof),

(K) eleventh, to pay any other Canadian Obligations other than Canadian
Obligations owed to Defaulting Lenders (including the provision of amounts to
Canadian Agent, to be held by Canadian Agent, for the benefit of the Canadian
Bank Product Providers, as cash collateral in an amount up to the amount
determined by Canadian Agent in its Permitted Discretion as the amount necessary
to secure Canadian Loan Parties’ obligations in respect of Bank Products) (which
cash collateral may be released by Canadian Agent to the applicable Canadian
Bank Product Provider and applied by such Canadian Bank Product Provider to the
payment or reimbursement of any amounts due and payable with respect to Canadian
Bank Product Obligations owed to the applicable Canadian Bank Product Provider
as and when such amounts first become due and payable and, if and at such time
as all such Canadian Bank Product Obligations are paid or otherwise satisfied in
full, the cash collateral held by Canadian Agent in respect of such Canadian
Bank Product Obligations shall be reapplied pursuant to this
Section 2.4(b)(iii), beginning with tier (A) hereof),

(L) twelfth, ratably to pay any Canadian Obligations owed to Defaulting Lenders;
and

(M) thirteenth, to Canadian Borrower (to be wired to the Canadian Designated
Account) or such other Person entitled thereto under applicable law.

(iv) The applicable Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided in Section 2.3(e).

(v) In each instance, so long as no Application Event has occurred and is
continuing, Section 2.4(b)(i) shall not apply to any payment made by any
Borrower to the applicable Agent and specified by such Borrower to be for the
payment of specific Obligations then due and payable (or prepayable) under any
provision of this Agreement or any other Loan Document.

(vi) For purposes of Section 2.4(b)(ii) and Section 2.4(b)(iii), “paid in full”
of a type of Obligation means payment in full (subject to Section 1.4(a)) in
cash or immediately available funds of all amounts owing on account of such type
of Obligation, including interest accrued after the commencement of any
Insolvency Proceeding, default interest, interest on interest, and expense
reimbursements, irrespective of whether any of the foregoing would be or is
allowed or disallowed in whole or in part in any Insolvency Proceeding.

 

-21-

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

(vii) In the event of a direct conflict between the priority provisions of this
Section 2.4 and any other provision contained in this Agreement or any other
Loan Document, it is the intention of the parties hereto that such provisions be
read together and construed, to the fullest extent possible, to be in concert
with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, if the conflict relates to the provisions of
Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall
control and govern, and if otherwise, then the terms and provisions of this
Section 2.4 shall control and govern.

(viii) Subject to Section 2.4(b)(v), if a payment is made by a Person that is
obligated in respect of both US Obligations and Canadian Obligations, US Agent
shall apply such proceeds first, to the US Obligations until paid in full and
then to Canadian Obligations until paid in full, in each case in accordance with
Section 2.4. Subject to Section 2.4(b)(v), if Collateral secures both US
Obligations and Canadian Obligations, US Agent shall apply such proceeds first,
to the US Obligations until paid in full and then to Canadian Obligations until
paid in full, in each case in accordance with Section 2.4.

(c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate
on the Maturity Date. US Borrowers may reduce the US Revolver Commitments,
without prepayment or penalty, to an amount (which may be zero) not less than
the sum of (A) the US Revolver Usage as of such date, plus (B) the principal
amount of all US Advances not yet made as to which a request has been given by
US Borrowers under Section 2.3(a), plus (C) the amount of all US Letters of
Credit not yet issued as to which a request has been given by US Borrowers
pursuant to Section 2.11(a). Canadian Borrower may reduce the Canadian Revolver
Commitments, without prepayment or penalty, to an amount (which may be zero) not
less than the sum of (A) the Canadian Revolver Usage as of such date, plus
(B) the principal amount of all Canadian Advances not yet made as to which a
request has been given by Canadian Borrower under Section 2.3(a), plus (C) the
amount of all Canadian Letters of Credit not yet issued as to which a request
has been given by Canadian Borrower pursuant to Section 2.12(a). Each such
reduction shall be in an amount which is not less than $5,000,000 (unless the
applicable Revolver Commitments are being reduced to zero and the amount of such
Revolver Commitments in effect immediately prior to such reduction are less than
$5,000,000), shall be made by providing not less than 10 Business Days prior
written notice to the applicable Agent and shall be irrevocable. Once reduced,
the Revolver Commitments may not be increased except pursuant to Section 2.1(e).
Each such reduction of the Revolver Commitments shall reduce the Revolver
Commitments of each Lender proportionately in accordance with its ratable share
thereof.

(d) Optional Prepayments. Borrowers may prepay the principal of any Advance at
any time in whole or in part, without premium or penalty. Each such prepayment
shall be applied first to Base Rate Loans and then to LIBOR Rate Loans in direct
order of Interest Period maturity.

(e) Mandatory Prepayments.

(i) [Intentionally Omitted].

 

-22-

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

(ii) Casualty Loss. To the extent of cash proceeds received in connection with a
Casualty Loss, the Borrowers shall prepay the Obligations in an amount equal to
100% of such cash proceeds if the US Agent shall have elected to apply the
proceeds realized from such Casualty Loss to the prepayment of the Obligations
pursuant to Section 5.10, subject to the right of the Loan Parties to use
proceeds of any Casualty Loss to repair, replace or rebuild in accordance with
Section 5.10. Such prepayment shall be applied as set forth in
Section 2.4(f)(ii) below.

(iii) Asset Dispositions. Promptly and in any event within 5 days following the
occurrence of any Asset Disposition, the Borrowers shall prepay the Obligations
in an aggregate amount equal to the Net Cash Proceeds of the related Asset
Disposition. Such prepayment shall be applied as set forth in Section 2.4(f)(ii)
below.

(f) Application of Payments.

(i) [Intentionally Omitted].

(ii) Each prepayment pursuant to Section 2.4(e)(ii) or (iii) shall be applied as
follows: (A) if such prepayment consists of cash proceeds of any Casualty Loss
of, or Net Cash Proceeds of any Asset Disposition by, any US Loan Party (x) so
long as no Application Event shall have occurred and be continuing, first, to
the outstanding principal amount of the US Advances (with a corresponding
permanent reduction in the US Maximum Revolver Amount, to the extent required by
the Senior Note Debt Documents), until paid in full, and second, to cash
collateralize the US Letters of Credit in an amount equal to 105% of the then
extant US Letter of Credit Usage (with a corresponding permanent reduction in
the US Maximum Revolver Amount, to the extent required by the Senior Note Debt
Documents), and (y) if an Application Event shall have occurred and be
continuing, be applied in the manner set forth in Section 2.4(b)(ii) and (B) if
such prepayment consists of cash proceeds of any Casualty Loss of, or Net Cash
Proceeds of any Asset Disposition by, any Canadian Loan Party (x) so long as no
Application Event shall have occurred and be continuing, first, to the
outstanding principal amount of the Canadian Advances (with a corresponding
permanent reduction in the Canadian Maximum Revolver Amount, to the extent
required by the Senior Note Debt Documents), until paid in full, and second, to
cash collateralize the Canadian Letters of Credit in an amount equal to 105% of
the then extant Canadian Letter of Credit Usage (with a corresponding permanent
reduction in the Canadian Maximum Revolver Amount, to the extent required by the
Senior Note Debt Documents), and (y) if an Application Event shall have occurred
and be continuing, be applied in the manner set forth in Section 2.4(b)(iii).

2.5. Overadvances.

If, at any time or for any reason, the amount of US Obligations owed by US
Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.11 is greater
than any of the limitations set forth in Section 2.1 or Section 2.11, as
applicable (a “US Overadvance”), US Borrowers shall immediately pay to US Agent,
in cash, the amount of such excess, which amount shall be used by US Agent to
reduce the US Obligations in accordance with the priorities set forth in
Section 2.4(b). If, at any time or for any reason, the amount of Canadian
Obligations

 

-23-

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

owed by Canadian Borrower to the Lender Group pursuant to Section 2.1 or
Section 2.12 is greater than any of the limitations set forth in Section 2.1 or
Section 2.12, as applicable (a “Canadian Overadvance”), Canadian Borrower shall
immediately pay to Canadian Agent, in cash, the amount of such excess, which
amount shall be used by Canadian Agent to reduce the Canadian Obligations in
accordance with the priorities set forth in Section 2.4(b). Borrowers promise to
pay the Obligations (including principal, interest, fees, costs, and expenses)
in full on the Maturity Date or, if earlier, on the date on which the
Obligations (other than the Bank Product Obligations) become due and payable
pursuant to the terms of this Agreement.

2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.

(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations
(except for undrawn Letters of Credit) that have been charged to a Loan Account
pursuant to the terms hereof shall bear interest on the Daily Balance thereof as
follows:

(i) if the relevant US Obligation is a LIBOR Rate Loan, at a per annum rate
equal to the US LIBOR Rate plus the LIBOR Rate Margin,

(ii) if the relevant US Obligation is not a LIBOR Rate Loan, at a per annum rate
equal to US Base Rate plus the Base Rate Margin,

(iii) if the relevant Canadian Obligation is a LIBOR Rate Loan, at a per annum
rate equal to the Canadian LIBOR Rate plus the LIBOR Rate Margin, and

(iv) if the relevant Canadian Obligation is not a LIBOR Rate Loan, at a per
annum rate equal to the Canadian Base Rate plus the Base Rate Margin.

(b) Letter of Credit Fees. US Borrowers shall pay US Agent (for the ratable
benefit of the Lenders with a US Revolver Commitment), a Letter of Credit fee
(in addition to the charges, commissions, fees, and costs set forth in
Section 2.11(f)) which shall accrue at a per annum rate equal to the LIBOR Rate
Margin times the Daily Balance of the undrawn amount of all outstanding US
Letters of Credit. Canadian Borrower shall pay Canadian Agent (for the ratable
benefit of the Lenders with a Canadian Revolver Commitment), a Letter of Credit
fee (in addition to the charges, commissions, fees, and costs set forth in
Section 2.12(f)) which shall accrue at a per annum rate equal to the LIBOR Rate
Margin times the Daily Balance of the undrawn amount of all outstanding Canadian
Letters of Credit.

(c) Default Rate. Upon the occurrence and during the continuation of an Event of
Default and at the election of the Required Lenders,

(i) all Obligations (except for undrawn Letters of Credit) that have been
charged to a Loan Account pursuant to the terms hereof shall bear interest on
the Daily Balance thereof at a per annum rate equal to 2 percentage points above
the per annum rate otherwise applicable thereunder, and

(ii) the Letter of Credit fees provided for in Section 2.6(b) shall be increased
to 2 percentage points above the per annum rate otherwise applicable hereunder.

 

-24-

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

(d) Payment. Except to the extent provided to the contrary in Section 2.10 or
Section 2.13(a), all interest, all Letter of Credit fees, all other fees payable
hereunder or under any of the other Loan Documents, all costs and expenses
payable hereunder or under any of the other Loan Documents, and all Lender Group
Expenses shall be due and payable, in arrears, on the first day of each month at
any time that Obligations or Commitments are outstanding. Each US Borrower
hereby authorizes US Agent, from time to time without prior notice to such
Borrower, to charge all interest, Letter of Credit fees, and all other fees
payable hereunder or under any of the other Loan Documents (in each case, as and
when due and payable) by the US Borrowers, all costs and expenses payable
hereunder or under any of the other Loan Documents (in each case, as and when
accrued or incurred) by the US Borrowers, and all Lender Group Expenses (as and
when accrued or incurred), all charges, commissions, fees, and costs provided
for in Section 2.11(f) (as and when accrued or incurred) of the US Borrowers,
all fees and costs provided for in Section 2.10 (as and when accrued or
incurred) payable by the US Borrowers, and all other payment obligations of the
US Borrowers as and when due and payable under any Loan Document or any Bank
Product Agreement (including any amounts due and payable to the US Bank Product
Providers in respect of US Bank Products) to the US Borrowers’ Loan Account,
which amounts thereafter shall constitute US Advances hereunder and, initially,
shall accrue interest at the rate then applicable to US Advances that are Base
Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with
the terms of this Agreement). Canadian Borrower hereby authorizes Canadian
Agent, from time to time without prior notice to such Borrower, to charge all
interest, Letter of Credit fees, and all other fees payable hereunder or under
any of the other Loan Documents (in each case, as and when due and payable) by
the Canadian Borrower, all costs and expenses payable hereunder or under any of
the other Loan Documents (in each case, as and when accrued or incurred) by the
Canadian Borrower, and all Lender Group Expenses (as and when accrued or
incurred), all charges, commissions, fees, and costs provided for in
Section 2.12(f) (as and when accrued or incurred) of the Canadian Borrower, all
fees and costs provided for in Section 2.10 (as and when accrued or incurred)
payable by the Canadian Borrower, and all other payment obligations of the
Canadian Borrower as and when due and payable under any Loan Document or any
Bank Product Agreement (including any amounts due and payable to the Canadian
Bank Product Providers in respect of Canadian Bank Products) to the Canadian
Borrower’s Loan Account, which amounts thereafter shall constitute Canadian
Advances hereunder and, initially, shall accrue interest at the rate then
applicable to Canadian Advances that are Base Rate Loans. Any interest, fees,
costs, expenses, Lender Group Expenses, or other amounts payable hereunder or
under any other Loan Document or under any Bank Product Agreement that are
charged to the applicable Loan Account shall thereupon constitute Advances
hereunder to the applicable Borrowers and shall initially accrue interest at the
rate then applicable to such Advances that are Base Rate Loans (unless and until
converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

(e) Computation. All interest and fees chargeable under the Loan Documents shall
be computed on the basis of a 360 day year (or a 365/366 day year, in the case
of Advances that are Base Rate Loans), in the case of interest and fees
chargeable to the US Loan Parties, or a 365/366 day year, in the case of
interest and fees chargeable to the Canadian Loan Parties, as applicable, in
each case, for the actual number of days elapsed in the period during which the
interest or fees accrue. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.

 

-25-

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

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the
interest rate or rates payable under this Agreement, plus any other amounts paid
in connection herewith, exceed the highest rate permissible under any law that a
court of competent jurisdiction shall, in a final determination, deem
applicable. Each Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that, anything contained herein
to the contrary notwithstanding, if such rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, ipso facto, as
of the date of this Agreement, Borrowers are and shall be liable only for the
payment of such maximum amount as is allowed by law, and payment received from
Borrowers in excess of such legal maximum, whenever received, shall be applied
to reduce the principal balance of the Obligations to the extent of such excess,
and after repayment of such principal balance in full, any remaining amount
shall be refunded to Borrowers.

2.7. Crediting Payments; Clearance Charge.

The receipt of any payment item by either Agent shall not be considered a
payment on account unless such payment item is a wire transfer of immediately
available federal funds made to such Agent’s Account or unless and until such
payment item is honored when presented for payment. Should any payment item not
be honored when presented for payment, then Borrowers shall be deemed not to
have made such payment and interest shall be calculated accordingly. Anything to
the contrary contained herein notwithstanding, any payment item shall be deemed
received by an Agent only if it is received into such Agent’s Account on a
Business Day on or before 1:00 p.m. (Chicago time). If any payment item is
received into an Agent’s Account on a non-Business Day or after 1:00 p.m.
(Chicago time) on a Business Day, it shall be deemed to have been received by
such Agent as of the opening of business on the immediately following Business
Day.

2.8. Designated Accounts.

US Agent is authorized to make the US Advances, and US Issuing Bank is
authorized to issue the US Letters of Credit, under this Agreement based upon
telephonic or other instructions received from anyone purporting to be an
Authorized Person of US Borrowers or, without instructions, if pursuant to
Section 2.6(d). Canadian Agent is authorized to make the Canadian Advances, and
Canadian Issuing Lender is authorized to issue the Canadian Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person of Canadian Borrower or, without
instructions, if pursuant to Section 2.6(d). US Borrowers agree to establish and
maintain the US Designated Account with the US Designated Account Bank for the
purpose of receiving the proceeds of the US Advances requested by US Borrowers
and made by US Agent or the Lenders hereunder. Canadian Borrower agree to
establish and maintain the Canadian Designated Account with the Canadian
Designated Account Bank for the purpose of receiving the proceeds of the
Canadian Advances requested by Canadian Borrower and made by Canadian Agent or
the Lenders hereunder. Unless otherwise agreed by US Agent and US Borrowers, any
US Advance or US Swing Loan requested by US Borrowers and made by US Agent or
the Lenders hereunder shall be made to the US Designated Account. Unless
otherwise agreed by Canadian Agent and Canadian Borrower, any Canadian Advance
or Canadian Swing Loan requested by Canadian Borrower and made by Canadian Agent
or the Lenders hereunder shall be made to the Canadian Designated Account.

 

-26-

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

2.9. Maintenance of Loan Accounts; Statements of Obligations.

US Agent shall maintain an account on its books in the name of US Borrowers (the
“US Loan Account”) on which US Borrowers will be charged with all US Advances
(including US Protective Advances and US Swing Loans) made by US Agent, US Swing
Lender, or the Lenders to US Borrowers or for any US Borrower’s account, the US
Letters of Credit issued or arranged by US Issuing Bank for any US Borrower’s
account, and with all other payment Obligations owing by US Borrowers hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.7, the US Loan
Account will be credited with all payments received by US Agent from US
Borrowers or for any US Borrower’s account. Canadian Agent shall maintain an
account on its books in the name of Canadian Borrower (the “Canadian Loan
Account”) on which Canadian Borrower will be charged with all Canadian Advances
(including Canadian Protective Advances and Canadian Swing Loans) made by
Canadian Agent, Canadian Swing Lender, or the Lenders to Canadian Borrower or
for Canadian Borrower’s account, the Canadian Letters of Credit issued or
arranged by Canadian Issuing Lender for Canadian Borrower’s account, and with
all other payment Obligations owing by Canadian Borrower hereunder or under the
other Loan Documents, including, accrued interest, fees and expenses, and Lender
Group Expenses. In accordance with Section 2.7, the Canadian Loan Account will
be credited with all payments received by Canadian Agent from Canadian Borrower
or for Canadian Borrower’s account. US Agent shall render monthly statements
regarding the US Loan Account to US Borrowers, and Canadian Agent shall render
monthly statements regarding the Canadian Loan Account to Canadian Borrower, in
each case including principal, interest, fees, and including an itemization of
all charges and expenses constituting Lender Group Expenses owing, and such
statements, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between the applicable Borrowers
and the Lender Group unless, within 30 days after receipt thereof by the
applicable Borrowers, such Borrowers shall deliver to the applicable Agent
written objection thereto describing the error or errors contained in any such
statements.

2.10. Fees.

(a) The applicable Borrower shall pay to the applicable Agent, for the account
of such Agent, as and when due and payable under the terms of the Fee Letter,
the fees set forth in the Fee Letter payable to such Agent.

(b) The US Borrowers shall pay to US Agent, for the ratable account of those
Lenders with US Revolver Commitments, on the first day of each month from and
after the Closing Date up to the first day of the month prior to the Payoff Date
and on the Payoff Date, an unused line fee in an amount equal to the Applicable
Unused Line Margin per annum times the result of (i) the aggregate amount of the
US Revolver Commitments less the Dollar Equivalent of the Canadian Revolver
Commitments, less (ii) the average Daily Balance of the US Revolver Usage
(including US Swing Loans) during the immediately preceding month (or portion
thereof).

 

-27-

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

(c) The Canadian Borrower shall pay to Canadian Agent, for the ratable account
of those Lenders with Canadian Revolver Commitments, on the first day of each
month from and after the Closing Date up to the first day of the month prior to
the Payoff Date and on the Payoff Date, an unused line fee in an amount equal to
the Applicable Unused Line Margin per annum times the result of (i) the
aggregate amount of the Canadian Revolver Commitments, less (ii) the average
Daily Balance of the Canadian Revolver Usage (including Canadian Swing Loans)
during the immediately preceding month (or portion thereof).

(d) The Borrowers shall pay to Agents audit, appraisal, and valuation fees and
charges, as and when incurred or chargeable, as follows (i) a fee of $1,000 per
day, per auditor, plus reasonable out-of-pocket expenses for each financial
audit of Borrowers performed by personnel employed by either Agent, (ii) if
implemented, a fee of $1,000 per day, per applicable individual, plus reasonable
out-of-pocket expenses for the establishment of electronic collateral reporting
systems, and (iii) the actual charges paid or incurred by each Agent if it
elects to employ the services of one or more third Persons to perform financial
audits of the Loan Parties, to establish electronic collateral reporting
systems, to appraise the Collateral, or any portion thereof, provided, however,
that so long as no Event of Default shall have occurred and be continuing and
Excess Availability exceeds $30,000,000, Borrowers shall not be obligated to
reimburse Agents for more than one (1) audit during any calendar year; provided,
further, that so long as no Event of Default shall have occurred and be
continuing, Borrowers shall not be obligated to reimburse the Agents for more
than one (1) appraisal of the Inventory during any calendar year, more than one
(1) appraisal of the Equipment during any calendar year or more than one
(1) appraisal of the Real Property Collateral during any calendar year.

2.11. US Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
US Borrowers made in accordance herewith, US Issuing Bank agrees to issue a
requested US Letter of Credit. By submitting a request to US Issuing Bank for
the issuance of a US Letter of Credit, US Borrowers shall be deemed to have
requested that US Issuing Bank issue the requested Letter of Credit. Each
request for the issuance of a US Letter of Credit, or the amendment, renewal, or
extension of any outstanding US Letter of Credit, shall be made in writing by an
Authorized Person of a US Borrower and delivered to US Issuing Bank via hand
delivery, telefacsimile, or other electronic method of transmission reasonably
in advance of the requested date of issuance, amendment, renewal, or extension.
Each such request shall be in form and substance reasonably satisfactory to US
Issuing Bank and (i) shall specify (A) the amount of such US Letter of Credit,
(B) the date of issuance, amendment, renewal, or extension of such US Letter of
Credit, (C) the proposed expiration date of such US Letter of Credit, (D) the
name and address of the beneficiary of the US Letter of Credit, and (E) such
other information (including, the conditions of drawing, and, in the case of an
amendment, renewal, or extension, identification of the US Letter of Credit to
be so amended, renewed, or extended) as shall be necessary to prepare, amend,
renew, or extend such US Letter of Credit, and (ii) shall be accompanied by such
Issuer Documents as US Agent or US Issuing Bank may request or require. Anything
contained herein to the contrary notwithstanding, US Issuing Bank may, but shall
not be obligated to, issue or cause the issuance of a US Letter of Credit that
supports the obligations of US Borrowers or their Subsidiaries (1) in respect of
(A) a lease of real property, or (B) an employment contract, or (2) at any time
that one or more of the Lenders is a Defaulting Lender,

 

-28-

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

unless such US Letter of Credit is fully supported as a result of either or both
of the following: (i) such Defaulting Lender’s Pro Rata Share of such US Letter
of Credit shall be reallocated among all other Lenders with a US Revolver
Commitment that are non-Defaulting Lenders in proportion with their Pro Rata
Shares of the US Revolver Commitment, but only to the extent that, after giving
effect to such reallocation, US Revolver Usage does not exceed the sum of all
such non-Defaulting Lenders’ Pro Rata Share of the US Revolver Commitment; and
(ii) to the extent that such US Letter of Credit exceeds the amount that is
permitted to be reallocated pursuant to the immediately preceding clause (i) or
if there is no such reallocation, US Borrowers shall have provided cash
collateral to US Agent to hold on behalf of US Borrowers, on terms and
conditions reasonably satisfactory to US Issuing Bank and US Agent, in an amount
equal to such excess. Any Letter of Credit fee payable to US Agent pursuant to
Section 2.6(b) otherwise payable to a Defaulting Lender with respect to any
portion of such Defaulting Lender’s Pro Rata Share in any US Letter of Credit
reallocated pursuant to the preceding sentence shall be payable instead to the
non-Defaulting Lenders in proportion to their Pro Rata Share of such
non-Defaulting Lenders’ Pro Rata Share in any US Letter of Credit so allocated
to them. In the event that a Defaulting Lender ceases to be a Defaulting Lender
then the portion of such Defaulting Lender’s Pro Rata Share in any US Letter of
Credit reallocated to non-Defaulting Lenders pursuant to this Section 2.11(a)
shall be reallocated to such previously Defaulting Lender and, from and after
(and in respect of Letter of Credit fees pursuant to Section 2.6(b) accruing
from and after) the date of such reallocation, such previously Defaulting Lender
shall be entitled to receive any Letter of Credit fees payable in respect of
such previously Defaulting Lender’s Pro Rata Share in any US Letter of Credit
previously reallocated to the non-Defaulting Lenders.

The US Issuing Bank shall have no obligation to issue a US Letter of Credit if
any of the following would result after giving effect to the requested issuance:

(i) the US Letter of Credit Usage would exceed the US Borrowing Base less the
outstanding amount of US Advances (inclusive of US Swing Loans), or

(ii) the US Letter of Credit Usage would exceed an amount equal to $15,000,000
less the Dollar Equivalent of the Canadian Letter of Credit Usage, or

(iii) the US Letter of Credit Usage would exceed the US Maximum Revolver Amount
less the outstanding amount of US Advances (including US Swing Loans).

Additionally, US Issuing Bank shall have no obligation to issue a US Letter of
Credit if (I) any order, judgment, or decree of any Governmental Authority or
arbitrator shall, by its terms, purport to enjoin or restrain US Issuing Bank
from issuing such US Letter of Credit, or any law applicable to US Issuing Bank
or any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over US Issuing Bank shall prohibit or
request that US Issuing Bank refrain from the issuance of letters of credit
generally or such US Letter of Credit in particular, or (II) the issuance of
such US Letter of Credit would violate one or more policies of US Issuing Bank
applicable to letters of credit generally.

 

-29-

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

US Borrowers and the Lender Group hereby acknowledge and agree that all Existing
Letters of Credit shall constitute US Letters of Credit under this Agreement on
and after the Closing Date with the same effect as if such Existing Letters of
Credit were issued by US Issuing Bank at the request of US Borrowers on the
Closing Date. Each US Letter of Credit shall be in form and substance reasonably
acceptable to US Issuing Bank, including the requirement that the amounts
payable thereunder must be payable in Dollars. If US Issuing Bank makes a
payment under a US Letter of Credit, US Borrowers shall pay to US Agent, for the
benefit of US Issuing Bank, an amount equal to the applicable US Letter of
Credit Disbursement on the date such US Letter of Credit Disbursement is made
and, in the absence of such payment, the amount of the US Letter of Credit
Disbursement immediately and automatically shall be deemed to be an US Advance
hereunder and, initially, shall bear interest at the rate then applicable to US
Advances that are Base Rate Loans. If a US Letter of Credit Disbursement is
deemed to be a US Advance hereunder (notwithstanding any failure to satisfy any
condition precedent set forth in Section 3), US Borrowers’ obligation to pay the
amount of such US Letter of Credit Disbursement to US Issuing Bank shall be
automatically converted into an obligation to pay the resulting US Advance.
Promptly following receipt by US Agent of any payment from US Borrowers pursuant
to this paragraph, US Agent shall distribute such payment to US Issuing Bank or,
to the extent that Lenders have made payments pursuant to Section 2.11(b) to
reimburse US Issuing Bank, then to such Lenders and US Issuing Bank as their
interests may appear.

(b) Promptly following receipt of a notice of a US Letter of Credit Disbursement
pursuant to Section 2.11(a), each Lender with a US Revolver Commitment agrees to
fund its Pro Rata Share of any US Advance deemed made pursuant to
Section 2.11(a) on the same terms and conditions as if US Borrowers had
requested the amount thereof as a US Advance and US Agent shall promptly pay to
US Issuing Bank the amounts so received by it from the Lenders. By the issuance
of a US Letter of Credit (or an amendment, renewal, or extension of a US Letter
of Credit) and without any further action on the part of the US Issuing Bank or
the Lenders with US Revolver Commitments, the US Issuing Bank shall be deemed to
have granted to each Lender with a US Revolver Commitment, and each Lender with
a US Revolver Commitment shall be deemed to have purchased, a participation in
each US Letter of Credit issued by US Issuing Bank, in an amount equal to its
Pro Rata Share of such US Letter of Credit, and each such Lender agrees to pay
to US Agent, for the account of the US Issuing Bank, such Lender’s Pro Rata
Share of any US Letter of Credit Disbursement made by US Issuing Bank under the
applicable US Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a US Revolver Commitment hereby absolutely and
unconditionally agrees to pay to US Agent, for the account of the US Issuing
Bank, such Lender’s Pro Rata Share of each US Letter of Credit Disbursement made
by US Issuing Bank and not reimbursed by US Borrowers on the date due as
provided in Section 2.11(a), or of any reimbursement payment required to be
refunded (or that US Agent or US Issuing Bank elects, based upon the advice of
counsel, to refund) to US Borrowers for any reason. Each Lender with a US
Revolver Commitment acknowledges and agrees that its obligation to deliver to US
Agent, for the account of the US Issuing Bank, an amount equal to its respective
Pro Rata Share of each US Letter of Credit Disbursement pursuant to this
Section 2.11(b) shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of a Default or an Event of
Default or the failure to satisfy any condition set forth in Section 3. If any
such Lender fails to make available to US Agent the amount of such Lender’s Pro
Rata Share of a US Letter of Credit Disbursement as provided in this Section,
such Lender shall be deemed to be a

 

-30-

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

Defaulting Lender and US Agent (for the account of the US Issuing Bank) shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate until paid in full.

(c) Each US Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group harmless from any damage, loss, cost, expense, or liability (other
than Taxes, which shall be governed by Section 16), and reasonable attorneys’
fees incurred by US Issuing Bank or any other member of the Lender Group arising
out of or in connection with any US Letter of Credit; provided, however, that no
US Borrower shall be obligated hereunder to indemnify any such Person for any
loss, cost, expense, or liability that a court of competent jurisdiction finally
determines to have resulted from the gross negligence or willful misconduct of
such Person.

(d) Each Lender with a US Revolver Commitment and each US Borrower agree that,
in paying any drawing under a US Letter of Credit, US Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the US Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of US
Issuing Bank, Agents, any of the Lender-Related Persons or Agent-Related
Persons, nor any correspondent, participant or assignee of US Issuing Bank shall
be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; (iii) any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any US Letter of Credit or any error in interpretation of
technical terms; or (iv) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any US Letter of Credit
or Issuer Document. Each US Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any US
Letter of Credit; provided, however, that this assumption is not intended to,
and shall not, preclude any Borrower from pursuing such rights and remedies as
it may have against the beneficiary or transferee at law or under any other
agreement. None of US Issuing Bank, Agents, any of the Lender-Related Persons or
Agent-Related Persons, nor any correspondent, participant or assignee of US
Issuing Bank shall be liable or responsible for any of the matters described in
clauses (i) through (vi) of Section 2.11(e) or for any action, neglect or
omission under or in connection with any US Letter of Credit or Issuer Document,
including in connection with the issuance or any amendment of any US Letter of
Credit, the failure to issue or amend any US Letter of Credit, the honoring or
dishonoring of any demand under any US Letter of Credit, or the following of any
US Borrower’s instructions or those contained in the US Letter of Credit or any
modifications, amendments, or supplements thereto, and such action or neglect or
omission will bind such US Borrower; provided, however, that anything in such
clauses to the contrary notwithstanding, any US Borrower may have a claim
against US Issuing Bank, and US Issuing Bank may be liable to such US Borrower,
to the extent, but only to the extent, of any direct, as opposed to
consequential, exemplary or punitive, damages suffered by such US Borrower which
such US Borrower proves were caused by US Issuing Bank’s willful misconduct or
gross negligence or US Issuing Bank’s willful failure to pay under any US Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a US Letter
of Credit; provided further, however, that any claim

 

-31-

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

against US Issuing Bank by any US Borrower for any loss suffered or incurred by
such US Borrower shall be reduced by an amount equal to the sum of (i) the
amount (if any) saved by such US Borrower as a result of the breach or other
wrongful conduct that allegedly caused such loss, and (ii) the amount (if any)
of the loss that would have been avoided had such US Borrower taken all
reasonable steps to mitigate such loss, including, without limitation, by
enforcing its rights against any beneficiary and, in case of a claim of wrongful
dishonor, by specifically and timely authorizing Issuing Bank to cure such
dishonor. In furtherance and not in limitation of the foregoing, US Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary (or US Issuing Bank may refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such US Letter of Credit and may disregard any requirement in a US
Letter of Credit that notice of dishonor be given in a particular manner and any
requirement that presentation be made at a particular place or by a particular
time of day), and US Issuing Bank shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a US Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason. The US Issuing Bank shall not be responsible for the
wording of any US Letter of Credit (including any drawing conditions or any
terms or conditions that are ineffective, ambiguous, inconsistent, unduly
complicated or reasonably impossible to satisfy), notwithstanding any assistance
US Issuing Bank may provide to any US Borrower with drafting or recommending
text for any letter of credit application or with the structuring of any
transaction related to any US Letter of Credit, and each US Borrower hereby
acknowledges and agrees that any such assistance will not constitute legal or
other advice by US Issuing Bank or any representation or warranty by US Issuing
Bank that any such wording or such US Letter of Credit will be effective.
Without limiting the foregoing, US Issuing Bank may, as it deems appropriate,
modify or alter and use in any US Letter of Credit the terminology contained on
the letter of credit application for such US Letter of Credit. Each US Borrower
hereby acknowledges and agrees that neither US Issuing Bank nor any other member
of the Lender Group shall be responsible for delays, errors, or omissions
resulting from the malfunction of equipment in connection with any US Letter of
Credit.

(e) The obligation of each US Borrower to reimburse the US Issuing Bank for each
drawing under each US Letter of Credit shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

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

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that any Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of such US Letter of Credit (or any Person for
whom any such beneficiary or any such transferee may be acting), US Issuing Bank
or any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or such US Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction,

 

-32-

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

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

(iv) any payment by US Issuing Bank under such US Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such US Letter of Credit (including, without limitation, any
requirement that presentation be made at a particular place or by a particular
time of day), or any payment made by US Issuing Bank under such US Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such US Letter of Credit,

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

(vi) the fact that any Default or Event of Default shall have occurred and be
continuing.

(f) Each US Borrower acknowledges and agrees that any and all standard fees,
charges, and commissions in effect from time to time of US Issuing Bank relating
to US Letters of Credit, upon the issuance of any US Letter of Credit, upon the
payment or negotiation of any drawing under any US Letter of Credit, or upon the
occurrence of any other activity with respect to any US Letter of Credit
(including the transfer, amendment or cancellation of any US Letter of Credit),
together with any and all fronting fees in effect from time to time related to
US Letters of Credit, shall be Lender Group Expenses for purposes of this
Agreement, and shall be reimbursable immediately by US Borrowers to US Agent for
the account of US Issuing Bank; it being acknowledged and agreed by US Borrowers
that, as of the Closing Date, the usage charge imposed by the US Issuing Bank is
.125% per annum times the undrawn amount of each US Letter of Credit, that such
usage charge may be changed from time to time, and that the US Issuing Bank also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.

(g) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by US Issuing Bank or
any other member of the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any US Letter of Credit issued or caused to be issued
hereunder or hereby, or

 

-33-

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

(ii) there shall be imposed on US Issuing Bank or any other member of the Lender
Group any other condition regarding any US Letter of Credit,

and the result of the foregoing is to increase, directly or indirectly, the cost
to US Issuing Bank or any other member of the US Lender Group of issuing,
making, participating in, or maintaining any US Letter of Credit or to reduce
the amount receivable in respect thereof, then, and in any such case, US Agent
may, at any time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify US Borrowers, and US
Borrowers shall pay within 30 days after demand therefor, such amounts as US
Agent may specify to be necessary to compensate US Issuing Bank or any other
member of the Lender Group for such additional cost or reduced receipt, together
with interest on such amount from the date of such demand until payment in full
thereof at the rate then applicable to Base Rate Loans hereunder; provided,
however, that no US Borrower shall be required to provide any compensation
pursuant to this Section 2.11(g) for any such amounts incurred more than 180
days prior to the date on which the demand for payment of such amounts is first
made to US Borrowers (provided, that notwithstanding anything herein to the
contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, regulations, guidelines or directives thereunder or issued in
connection therewith shall be deemed to be a change in applicable law or
compliance requirement enacted after the Closing Date regardless of the date
actually enacted, adopted or issued); provided further, however, that if an
event or circumstance giving rise to such amounts is retroactive, then the
180-day period referred to above shall be extended to include the period of
retroactive effect thereof. The determination by US Agent of any amount due
pursuant to this Section 2.11(g), as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.

(h) Unless otherwise expressly agreed by US Issuing Bank and the applicable US
Borrower when a US Letter of Credit is issued (including any such agreement
applicable to an Existing Letter of Credit), (i) the rules of the ISP and the
UCP 600 shall apply to each standby US Letter of Credit, and (ii) the rules of
the UCP 600 shall apply to each commercial US Letter of Credit.

(i) In the event of a direct conflict between the provisions of this
Section 2.11 and any provision contained in any Issuer Document, it is the
intention of the parties hereto that such provisions be read together and
construed, to the fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of this Section 2.11 shall control and
govern.

2.12. Canadian Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of
Canadian Borrower made in accordance herewith, the Canadian Issuing Lender
agrees to issue, or to cause a Canadian Underlying Issuer (including, as
Canadian Issuing Lender’s agent) to issue, a requested Canadian Letter of
Credit. If Canadian Issuing Lender, at its option, elects to cause a Canadian
Underlying Issuer to issue a requested Canadian Letter of Credit, then Canadian
Issuing Lender agrees that it will enter into arrangements relative to the
reimbursement of such Canadian Underlying Issuer (which may include, among,
other means, by becoming an applicant with respect to such Canadian Letter of
Credit or entering into undertakings which

 

-34-

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

provide for reimbursements of such Canadian Underlying Issuer with respect to
such Canadian Letter of Credit; each such obligation or undertaking,
irrespective of whether in writing, a “Canadian Reimbursement Undertaking”) with
respect to Canadian Letters of Credit issued by such Canadian Underlying Issuer.
By submitting a request to Canadian Issuing Lender for the issuance of a
Canadian Letter of Credit, Canadian Borrower shall be deemed to have requested
that Canadian Issuing Lender issue or that a Canadian Underlying Issuer issue
the requested Letter of Credit and to have requested Canadian Issuing Lender to
issue a Canadian Reimbursement Undertaking with respect to such requested
Canadian Letter of Credit if it is to be issued by a Canadian Underlying Issuer
(it being expressly acknowledged and agreed by Canadian Borrower that Canadian
Borrower is and shall be deemed to be the applicant with respect to each
Canadian Underlying Letter of Credit). Each request for the issuance of a
Canadian Letter of Credit, or the amendment, renewal, or extension of any
outstanding Canadian Letter of Credit, shall be made in writing by an Authorized
Person of Canadian Borrower and delivered to the Canadian Issuing Lender via
hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance reasonably
satisfactory to the Canadian Issuing Lender and shall specify (i) the amount of
such Canadian Letter of Credit, (ii) the date of issuance, amendment, renewal,
or extension of such Canadian Letter of Credit, (iii) the proposed expiration
date of such Canadian Letter of Credit, (iv) the name and address of the
beneficiary of the Canadian Letter of Credit, and (v) such other information
(including, the conditions of drawing, and, in the case of an amendment,
renewal, or extension, identification of the Canadian Letter of Credit to be so
amended, renewed, or extended) as shall be necessary to prepare, amend, renew,
or extend such Canadian Letter of Credit. Anything contained herein to the
contrary notwithstanding, the Canadian Issuing Lender may, but shall not be
obligated to, issue or cause the issuance of a Canadian Letter of Credit or to
issue a Canadian Reimbursement Undertaking in respect of a Canadian Underlying
Letter of Credit, in either case, that supports the obligations of Canadian
Borrower or its Subsidiaries (1) in respect of (A) a lease of real property, or
(B) an employment contract, or (2) at any time that one or more of the Lenders
is a Defaulting Lender, unless such Canadian Letter of Credit or Canadian
Reimbursement Undertaking is fully supported as a result of either or both of
the following: (i) such Defaulting Lender’s Pro Rata Share of such Canadian
Letter of Credit or Canadian Reimbursement Undertaking shall be reallocated
among all other Lenders with a Canadian Revolver Commitment that are
non-Defaulting Lenders in proportion with their Pro Rata Shares of the Canadian
Revolver Commitment, but only to the extent that, after giving effect to such
reallocation, Canadian Revolver Usage does not exceed the sum of all such
non-Defaulting Lenders’ Pro Rata Share of the Canadian Revolver Commitment; and
(ii) to the extent that such Canadian Letter of Credit or Canadian Reimbursement
Undertaking exceeds the amount that is permitted to be reallocated pursuant to
the immediately preceding clause (i) or if there is no such reallocation,
Canadian Borrower shall have provided cash collateral to Canadian Agent to hold
on behalf of Canadian Borrower, on terms and conditions reasonably satisfactory
to Canadian Issuing Lender and Canadian Agent, in an amount equal to such
excess. Any Letter of Credit fee payable to Canadian Agent pursuant to
Section 2.6(b) otherwise payable to a Defaulting Lender with respect to any
portion of such Defaulting Lender’s Pro Rata Share in any Canadian Letter of
Credit reallocated pursuant to the preceding sentence shall be payable instead
to the non-Defaulting Lenders in proportion to their Pro Rata Share of such
non-Defaulting Lenders’ Pro Rata Share in any Canadian Letter of Credit so
allocated to them. In the event that a Defaulting Lender ceases to be a
Defaulting Lender then the portion of such Defaulting Lender’s Pro Rata

 

-35-

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

Share in any Canadian Letter of Credit or Canadian Reimbursement Undertaking
reallocated to non-Defaulting Lenders pursuant to this Section 2.12(a) shall be
reallocated to such previously Defaulting Lender and, from and after (and in
respect of Letter of Credit fees pursuant to Section 2.6(b) accruing from and
after) the date of such reallocation, such previously Defaulting Lender shall be
entitled to receive any Letter of Credit fees payable in respect of such
previously Defaulting Lender’s Pro Rata Share in any Canadian Letter of Credit
or Canadian Reimbursement Undertaking previously reallocated to the
non-Defaulting Lenders.

The Canadian Issuing Lender shall have no obligation to issue a Canadian Letter
of Credit or a Canadian Reimbursement Undertaking in respect of a Canadian
Underlying Letter of Credit, in either case, if any of the following would
result after giving effect to the requested issuance:

(i) the Canadian Letter of Credit Usage would exceed the Canadian Borrowing Base
less the outstanding amount of Canadian Advances (inclusive of US Swing Loans),
or

(ii) the Canadian Letter of Credit Usage would exceed Cdn$3,000,000, or

(iii) the Canadian Letter of Credit Usage would exceed the Canadian Maximum
Revolver Amount less the outstanding amount of Canadian Advances (including
Canadian Swing Loans).

Each Canadian Letter of Credit shall be in form and substance reasonably
acceptable to the Canadian Issuing Lender, including the requirement that the
amounts payable thereunder must be payable in Canadian Dollars. If Canadian
Issuing Lender makes a payment under a Canadian Letter of Credit or a Canadian
Underlying Issuer makes a payment under a Canadian Underlying Letter of Credit,
Canadian Borrower shall pay to Canadian Agent an amount equal to the applicable
Canadian Letter of Credit Disbursement on the date such Canadian Letter of
Credit Disbursement is made and, in the absence of such payment, the amount of
the Canadian Letter of Credit Disbursement immediately and automatically shall
be deemed to be a Canadian Advance hereunder and, initially, shall bear interest
at the rate then applicable to Canadian Advances that are Base Rate Loans. If a
Canadian Letter of Credit Disbursement is deemed to be a Canadian Advance
hereunder (notwithstanding any failure to satisfy any condition precedent set
forth in Section 3), Canadian Borrower’s obligation to pay the amount of such
Canadian Letter of Credit Disbursement to Canadian Issuing Lender shall be
automatically converted into an obligation to pay the resulting Canadian
Advance. Promptly following receipt by Canadian Agent of any payment from
Canadian Borrower pursuant to this paragraph, Canadian Agent shall distribute
such payment to the Canadian Issuing Lender or, to the extent that Lenders have
made payments pursuant to Section 2.12(b) to reimburse the Canadian Issuing
Lender, then to such Lenders and the Canadian Issuing Lender as their interests
may appear.

(b) Promptly following receipt of a notice of a Canadian Letter of Credit
Disbursement pursuant to Section 2.12(a), each Lender with a Canadian Revolver
Commitment agrees to fund its Pro Rata Share of any Canadian Advance deemed made
pursuant to Section 2.12(a) on the same terms and conditions as if Canadian
Borrower had requested the

 

-36-

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

amount thereof as a Canadian Advance and Canadian Agent shall promptly pay to
Canadian Issuing Lender the amounts so received by it from the Lenders. By the
issuance of a Canadian Letter of Credit or a Canadian Reimbursement Undertaking
(or an amendment, renewal, or extension of a Canadian Letter of Credit or a
Canadian Reimbursement Undertaking) and without any further action on the part
of the Canadian Issuing Lender or the Lenders with Canadian Revolver
Commitments, the Canadian Issuing Lender shall be deemed to have granted to each
Lender with a Canadian Revolver Commitment, and each Lender with a Canadian
Revolver Commitment shall be deemed to have purchased, a participation in each
Canadian Letter of Credit issued by Canadian Issuing Lender and each Canadian
Reimbursement Undertaking, in an amount equal to its Pro Rata Share of such
Canadian Letter of Credit or Canadian Reimbursement Undertaking, and each such
Lender agrees to pay to Canadian Agent, for the account of the Canadian Issuing
Lender, such Lender’s Pro Rata Share of any Canadian Letter of Credit
Disbursement made by Canadian Issuing Lender or a Canadian Underlying Issuer
under the applicable Canadian Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Canadian Revolver Commitment
hereby absolutely and unconditionally agrees to pay to Canadian Agent, for the
account of the Canadian Issuing Lender, such Lender’s Pro Rata Share of each
Canadian Letter of Credit Disbursement made by Canadian Issuing Lender or a
Canadian Underlying Issuer and not reimbursed by Canadian Borrower on the date
due as provided in Section 2.12(a), or of any reimbursement payment required to
be refunded (or that Canadian Agent or Canadian Issuing Lender elects, based
upon the advice of counsel, to refund) to Canadian Borrower for any reason. Each
Lender with a Canadian Revolver Commitment acknowledges and agrees that its
obligation to deliver to Canadian Agent, for the account of the Canadian Issuing
Lender, an amount equal to its respective Pro Rata Share of each Canadian Letter
of Credit Disbursement pursuant to this Section 2.12(b) shall be absolute and
unconditional and such remittance shall be made notwithstanding the occurrence
or continuation of an Event of Default or Default or the failure to satisfy any
condition set forth in Section 3. If any such Lender fails to make available to
Canadian Agent the amount of such Lender’s Pro Rata Share of a Canadian Letter
of Credit Disbursement as provided in this Section, such Lender shall be deemed
to be a Defaulting Lender and US Agent (for the account of the Canadian Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.

(c) Canadian Borrower hereby agrees to indemnify, save, defend, and hold the
Lender Group and each Canadian Underlying Issuer harmless from any damage, loss,
cost, expense, or liability (other than Taxes, which shall be governed by
Section 16), and reasonable attorneys’ fees incurred by Canadian Issuing Lender,
any other member of the Lender Group, or any Canadian Underlying Issuer arising
out of or in connection with any Canadian Reimbursement Undertaking or any
Canadian Letter of Credit; provided, however, that Canadian Borrower shall not
be obligated hereunder to indemnify any such Person for any loss, cost, expense,
or liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Person.
Canadian Borrower agrees to be bound by the Canadian Underlying Issuer’s
regulations and interpretations of any Canadian Letter of Credit or by Canadian
Issuing Lender’s interpretations of any Canadian Reimbursement Undertaking even
though this interpretation may be different from such Borrower’s own, and
Canadian Borrower understands and agrees that none of the Canadian Issuing
Lender, any other member of the Lender Group, or any Canadian Underlying Issuer
shall be liable for any error,

 

-37-

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

negligence, or mistake, whether of omission or commission, in following Canadian
Borrower’s instructions or those contained in the Canadian Letter of Credit or
any modifications, amendments, or supplements thereto. Canadian Borrower
understands that the Canadian Reimbursement Undertakings may require Canadian
Issuing Lender to indemnify the Canadian Underlying Issuer for certain costs or
liabilities arising out of claims by Canadian Borrower against such Canadian
Underlying Issuer. Canadian Borrower hereby agrees to indemnify, save, defend,
and hold Canadian Issuing Lender and the other members of the Lender Group
harmless with respect to any loss, cost, expense (including reasonable and
documented attorneys’ fees), or liability (other than Taxes, which shall be
governed by Section 16) incurred by them under any Canadian Reimbursement
Undertaking as a result of the Canadian Issuing Lender’s indemnification of a
Canadian Underlying Issuer; provided, however, that Canadian Borrower shall not
be obligated hereunder to indemnify any such Person for any such loss, cost,
expense, or liability to the extent that it is caused by the gross negligence or
willful misconduct of such Person. Canadian Borrower hereby acknowledges and
agrees that none of the Canadian Issuing Lender, any other member of the Lender
Group, or any Canadian Underlying Issuer shall be responsible for delays,
errors, or omissions resulting from the malfunction of equipment in connection
with any Canadian Letter of Credit.

(d) The obligation of Canadian Borrower to reimburse the Canadian Issuing Lender
for each drawing under each Canadian Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:

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

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that any Borrower or any of its Subsidiaries may have at any time against any
beneficiary or any transferee of such Canadian Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting), the
Canadian Issuing Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or such Canadian Letter of
Credit or any agreement or instrument relating thereto, or any unrelated
transaction,

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

(iv) any payment by the Canadian Issuing Lender under such Canadian Letter of
Credit against presentation of a draft or certificate that does not
substantially or strictly comply with the terms of such Canadian Letter of
Credit (including, without limitation, any requirement that presentation be made
at a particular place or by a particular time of day), or any payment made by
the Canadian Issuing Lender under such Canadian Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Canadian Letter of
Credit,

 

-38-

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

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

(vi) the fact that any Event of Default shall have occurred and be continuing.

(e) Canadian Borrower hereby authorizes and directs any Canadian Underlying
Issuer to deliver to the Canadian Issuing Lender all instruments, documents, and
other writings and property received by such Canadian Underlying Issuer pursuant
to such Canadian Underlying Letter of Credit and to accept and rely upon the
Canadian Issuing Lender’s instructions with respect to all matters arising in
connection with such Canadian Underlying Letter of Credit and the related
application.

(f) Canadian Borrower acknowledges and agrees that any and all issuance charges,
usage charges, commissions, fees, and costs incurred by the Canadian Issuing
Lender relating to Canadian Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and shall be reimbursable immediately by
Canadian Borrower to Canadian Agent for the account of the Canadian Issuing
Lender; it being acknowledged and agreed by Canadian Borrower that, as of the
Closing Date, the usage charge imposed by the Canadian Underlying Issuer is
.125% per annum times the undrawn amount of each Canadian Underlying Letter of
Credit, that such usage charge may be changed from time to time, and that the
Canadian Underlying Issuer also imposes a schedule of charges for amendments,
extensions, drawings, and renewals.

(g) If by reason of (i) any change after the Closing Date in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Canadian
Issuing Lender, any other member of the Lender Group, or Canadian Underlying
Issuer with any direction, request, or requirement (irrespective of whether
having the force of law) of any Governmental Authority or monetary authority
including, Regulation D of the Federal Reserve Board as from time to time in
effect (and any successor thereto):

(i) any reserve, deposit, or similar requirement is or shall be imposed or
modified in respect of any Canadian Letter of Credit issued or caused to be
issued hereunder or hereby, or

(ii) there shall be imposed on the Canadian Issuing Lender, any other member of
the Lender Group, or Canadian Underlying Issuer any other condition regarding
any Canadian Letter of Credit or Canadian Reimbursement Undertaking,

and the result of the foregoing is to increase, directly or indirectly, the cost
to the Canadian Issuing Lender, any other member of the Canadian Lender Group,
or a Canadian Underlying Issuer of issuing, making, participating in, or
maintaining any Canadian Reimbursement

 

-39-

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

Undertaking or Canadian Letter of Credit or to reduce the amount receivable in
respect thereof, then, and in any such case, Canadian Agent may, at any time
within a reasonable period after the additional cost is incurred or the amount
received is reduced, notify Canadian Borrower, and Canadian Borrower shall pay
within 30 days after demand therefor, such amounts as Canadian Agent may specify
to be necessary to compensate the Canadian Issuing Lender, any other member of
the Lender Group, or a Canadian Underlying Issuer for such additional cost or
reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate
Loans hereunder; provided, however, that Canadian Borrower shall not be required
to provide any compensation pursuant to this Section 2.12(g) for any such
amounts incurred more than 180 days prior to the date on which the demand for
payment of such amounts is first made to Canadian Borrower (provided, that
notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street
Reform and Consumer Protection Act and all requests, rules, regulations,
guidelines or directives thereunder or issued in connection therewith shall be
deemed to be a change in applicable law or compliance requirement enacted after
the Closing Date regardless of the date actually enacted, adopted or issued);
provided further, however, that if an event or circumstance giving rise to such
amounts is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof. The determination
by Canadian Agent of any amount due pursuant to this Section 2.12(g), as set
forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto.

2.13. LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at
the rate based upon the Base Rate, Borrowers shall have the option, subject to
Section 2.13(b) below (the “LIBOR Option”) to have interest on all or a portion
of the Advances be charged (whether at the time when made (unless otherwise
provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or
upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of
interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be
payable on the earliest of (i) the last day of the Interest Period applicable
thereto, (ii) the date on which all or any portion of the Obligations are
accelerated pursuant to the terms hereof, or (iii) the date on which this
Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Borrowers properly have exercised the LIBOR
Option with respect thereto, the interest rate applicable to such LIBOR Rate
Loan automatically shall convert to the rate of interest then applicable to Base
Rate Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing at the written election of the Required Lenders,
Borrowers no longer shall have the option to request that Advances bear interest
at a rate based upon the LIBOR Rate.

(b) LIBOR Election.

(i) US Borrowers and Canadian Borrower may, at any time and from time to time
(so long as Administrative Borrower has not received a notice from Agents, after
the occurrence of and during the continuance of an Event of Default, of the
election by the Required Lenders to terminate Borrowers’ right to exercise the
LIBOR Option), elect to exercise the LIBOR Option by notifying US Agent or
Canadian Agent, as applicable, prior to 1:00 p.m. (Chicago time) at least 3
Business Days prior to the

 

-40-

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

commencement of the proposed Interest Period (the “LIBOR Deadline”). Notice of
US Borrowers’ or Canadian Borrower’s election of the LIBOR Option for a
permitted portion of the Advances and an Interest Period pursuant to this
Section shall be made by delivery to US Agent or Canadian Agent, as applicable,
of a LIBOR Notice received by such Agent before the LIBOR Deadline, or by
telephonic notice received by such Agent before the LIBOR Deadline (to be
confirmed by delivery to such Agent of a LIBOR Notice received by such Agent
prior to 4:00 p.m. (Chicago time) on the same day). Promptly upon its receipt of
each such LIBOR Notice, such Agent shall provide a copy thereof to each of the
affected Lenders.

(ii) Each LIBOR Notice shall be irrevocable and binding on each Borrower issuing
such LIBOR Notice. In connection with each LIBOR Rate Loan, each Borrower
issuing such LIBOR Notice shall indemnify, defend, and hold the Agents and the
Lenders harmless against any loss, cost, or expense actually incurred by any
Agent or any Lender (excluding loss of anticipated profits) as a result of
(A) the payment of any principal of any LIBOR Rate 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 LIBOR Rate Loan other than on the last
day of the Interest Period applicable thereto, or (C) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses,
“Funding Losses”). A certificate of an Agent or a Lender delivered to Borrowers
setting forth in reasonable detail any amount or amounts that such Agent or such
Lender is entitled to receive pursuant to this Section 2.13 shall be conclusive
absent manifest or demonstrable error. Borrowers shall pay such amount to such
Agent or such Lender, as applicable, within 30 days of the date of its receipt
of such certificate. If a payment of a LIBOR Rate Loan on a day other than the
last day of the applicable Interest Period would result in a Funding Loss,
Agents shall at the request of Borrowers, hold the amount of such payment as
cash collateral in support of the Obligations until the last day of such
Interest Period and apply such amounts to the payment of the applicable LIBOR
Rate Loan on such last day, it being agreed that in the event that an Agent does
not defer such application, Borrowers shall be obligated to pay any resulting
Funding Losses.

(iii) US Borrowers shall have not more than 7 LIBOR Rate Loans in effect at any
given time. US Borrowers only may exercise the LIBOR Option for proposed LIBOR
Rate Loans of at least $1,000,000. Canadian Borrower shall have not more than 5
LIBOR Rate Loans in effect at any given time. Canadian Borrower only may
exercise the LIBOR Option for proposed LIBOR Rate Loans of at least Cdn$500,000.

(c) Conversion. Subject to Section 2.13(b)(i), Borrowers may convert LIBOR Rate
Loans to Base Rate Loans at any time; provided, however, that in the event that
LIBOR Rate Loans are converted or prepaid on any date that is not the last day
of the Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by the applicable Agent of
proceeds of Borrowers’ and their Subsidiaries’ Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of all or any portion of the Obligations
pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold
Agents and the Lenders and their Participants harmless against any and all
Funding Losses in accordance with Section 2.13 (b)(ii).

 

-41-

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

(d) Special Provisions Applicable to LIBOR Rate.

(i) The LIBOR Rate may be adjusted by the applicable Agent with respect to any
Lender on a prospective basis to take into account any additional or increased
costs to such Lender of maintaining or obtaining any eurodollar deposits or
increased costs, in each case, due to changes in applicable law (other than
changes in laws relative to Taxes, which shall be governed by Section 16)
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in the reserve requirements imposed by the Board of Governors
of the Federal Reserve System (or any successor), which additional or increased
costs would increase the cost of funding or maintaining loans bearing interest
at the LIBOR Rate. In any such event, the affected Lender shall give US
Borrowers or Canadian Borrower, as applicable, and US Agent or Canadian Agent,
as applicable, notice of such a determination and adjustment and such Agent
promptly shall transmit the notice to each other Lender and, upon its receipt of
the notice from the affected Lender, such Borrowers may, by notice to such
affected Lender (y) require such Lender to furnish to such Borrowers a statement
setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under Section 2.13(b)(ii)).

(ii) In the event that any change in market conditions or any law, regulation,
treaty, or directive, or any change therein or in the interpretation or
application thereof, shall at any time after the date hereof, in the reasonable
opinion of any Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to US Agent or Canadian Agent, as
applicable, and US Borrowers or Canadian Borrower, as applicable, and such Agent
promptly shall transmit the notice to each other Lender and (y) in the case of
any LIBOR Rate Loans of such Lender that are outstanding, the date specified in
such Lender’s notice shall be deemed to be the last day of the Interest Period
of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Base Rate Loans,
and (z) such Borrowers shall not be entitled to elect the LIBOR Option until
such Lender determines that it would no longer be unlawful or impractical to do
so.

(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither any Agent, nor any Lender, nor any of their
Participants, is required actually to acquire eurodollar deposits to fund or
otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.

2.14. Capital Requirements.

(a) If, after the date hereof, any Lender determines that (i) the adoption of or
change in any law, rule, regulation or guideline regarding capital or reserve
requirements for banks or bank holding companies, or any change in the
interpretation, implementation, or

 

-42-

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

application thereof by any Governmental Authority charged with the
administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Lender’s or such holding company’s capital
as a consequence of such Lender’s Commitments hereunder to a level below that
which such Lender or such holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender’s or such
holding company’s then existing policies with respect to capital adequacy and
assuming the full utilization of such entity’s capital) by any amount deemed by
such Lender to be material, then such Lender may notify US Borrowers or Canadian
Borrower, as applicable, and US Agent or Canadian Agent, as applicable, thereof;
provided, that notwithstanding anything herein to the contrary, the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all requests, rules,
regulations, guidelines or directives thereunder or issued in connection
therewith shall be deemed to be a change in law or compliance requirement
enacted after the Closing Date regardless of the date actually enacted, adopted
or issued. Following receipt of such notice, the applicable Borrowers agree to
pay such Lender on demand the amount of such reduction of return of capital as
and when such reduction is determined, payable within 30 days after presentation
by such Lender of a statement in the amount and setting forth in reasonable
detail such Lender’s calculation thereof and the assumptions upon which such
calculation was based (which statement shall be deemed true and correct absent
manifest error). In determining such amount, such Lender may use any reasonable
averaging and attribution methods. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s right to demand such compensation; provided that no Borrower shall
be required to compensate a Lender pursuant to this Section for any reductions
in return incurred more than 180 days prior to the date that such Lender
notifies the applicable Borrower of such law, rule, regulation or guideline
giving rise to such reductions and of such Lender’s intention to claim
compensation therefor; provided further that if such claim arises by reason of
the adoption of or change in any law, rule, regulation or guideline that is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

(b) If any Lender requests additional or increased costs referred to in
Section 2.13(d)(i) or amounts under Section 2.14(a) or sends a notice under
Section 2.13(d)(ii) relative to changed circumstances (any such Lender, an
“Affected Lender”), then such Affected Lender shall use reasonable efforts to
promptly designate a different one of its lending offices or to assign its
rights and obligations hereunder to another of its offices or branches, if
(i) in the reasonable judgment of such Affected Lender, such designation or
assignment would eliminate or reduce amounts payable pursuant to
Section 2.13(d)(i) or Section 2.14(a), as applicable, or would eliminate the
illegality or impracticality of funding or maintaining LIBOR Rate Loans and
(ii) in the reasonable judgment of such Affected Lender, such designation or
assignment would not subject it to any material unreimbursed cost or expense and
would not otherwise be materially disadvantageous to it. Borrowers agree to pay
all reasonable out-of-pocket costs and expenses incurred by such Affected Lender
in connection with any such designation or assignment. If, after such reasonable
efforts, such Affected Lender does not so designate a different one of its
lending offices or assign its rights to another of its offices or branches so as
to eliminate Borrowers’ obligation to pay any future amounts to such Affected
Lender pursuant to Section 2.13(d)(i) or Section 2.14(a), as applicable, or to
enable Borrowers to obtain LIBOR

 

-43-

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

Rate Loans, then Borrowers (without prejudice to any amounts then due to such
Affected Lender under Section 2.13(d)(i) or Section 2.14(a), as applicable) may,
unless prior to the effective date of any such assignment the Affected Lender
withdraws its request for such additional amounts under Section 2.13(d)(i) or
Section 2.14(a), as applicable, or indicates that it is no longer unlawful or
impractical to fund or maintain LIBOR Rate Loans, may seek a substitute Lender
reasonably acceptable to US Agent or Canadian Agent, as applicable, to purchase
the Obligations owed to such Affected Lender and such Affected Lender’s
Commitments hereunder (a “Replacement Lender”), and if such Replacement Lender
agrees to such purchase, such Affected Lender shall assign to the Replacement
Lender its Obligations and Commitments, pursuant to an Assignment and Acceptance
Agreement, and upon such purchase by the Replacement Lender, such Replacement
Lender shall be deemed to be a “Lender” for purposes of this Agreement and such
Affected Lender shall cease to be a “Lender” for purposes of this Agreement. In
connection with the arrangement of a Replacement Lender hereunder, the Affected
Lender shall have no right to refuse to be replaced hereunder (subject to the
above), and agrees to execute and deliver a completed form of Assignment and
Acceptance (and agrees that it shall be deemed to have executed and delivered
such document if it fails to do so) subject only to being paid its share of the
outstanding Obligations (other than Bank Product Obligations, but including
(1) all interest, fees, and other amounts that may be due and payable in respect
thereof, including, without limitation, pursuant to Section 2.13(d)(i) and/or
Section 2.14(a) and (2) an assumption of its Pro Rata Share of its participation
in the Letters of Credit).

2.15. Joint and Several Liability of US Borrowers.

(a) Each US Borrower is accepting joint and several liability hereunder and
under the other Loan Documents with the other US Borrowers in consideration of
the financial accommodations to be provided by the Lender Group under this
Agreement, for the mutual benefit, directly and indirectly, of each US Borrower
and in consideration of the undertakings of the other US Borrowers to accept
joint and several liability for the Obligations.

(b) Each US Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other US Borrowers, with respect to the payment
and performance of all of the US Obligations (including any US Obligations
arising under this Section 2.15), it being the intention of the parties hereto
that all the US Obligations shall be the joint and several obligations of each
US Borrower without preferences or distinction among them.

(c) If and to the extent that any US Borrower shall fail to make any payment
with respect to any of the US Obligations as and when due or to perform any of
the US Obligations in accordance with the terms thereof, then in each such event
the other US Borrowers will make such payment with respect to, or perform, such
US Obligation until such time as all of the US Obligations are paid in full.

(d) The US Obligations of each US Borrower under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse US
Obligations of each US Borrower enforceable against each US Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of the provisions of this Agreement (other than this
Section 2.15(d)) or any other circumstances whatsoever.

 

-44-

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

(e) Except as otherwise expressly provided in this Agreement, each US Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advances or Letters of Credit issued under or pursuant to this Agreement,
notice of the occurrence of any Default, Event of Default, or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by Agents or Lenders under or in respect of any of the Obligations, any
requirement of diligence or to mitigate damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement (except as otherwise provided in this
Agreement). Each US Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agents or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement, any and all other indulgences whatsoever by Agents or Lenders
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any Borrower. Without limiting the generality of the foregoing, each US
Borrower assents to any other action or delay in acting or failure to act on the
part of any Agent or Lender with respect to the failure by any Borrower to
comply with any of its respective Obligations, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might,
but for the provisions of this Section 2.15 afford grounds for terminating,
discharging or relieving any Borrower, in whole or in part, from any of its
Obligations under this Section 2.15, it being the intention of each US Borrower
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of each US Borrower under this Section 2.15 shall not be discharged
except by performance and then only to the extent of such performance. The US
Obligations of each US Borrower under this Section 2.15 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any other
Borrower or any Agent or Lender.

(f) Each US Borrower represents and warrants to Agents and Lenders that such US
Borrower is currently informed of the financial condition of Borrowers and of
all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each US Borrower further
represents and warrants to Agent and Lenders that such US Borrower has read and
understands the terms and conditions of the Loan Documents. Each US Borrower
hereby covenants that such US Borrower will continue to keep informed of
Borrowers’ financial condition and of all other circumstances which bear upon
the risk of nonpayment or nonperformance of the Obligations.

(g) The provisions of this Section 2.15 are made for the benefit of each Agent,
each member of the Lender Group, each Bank Product Provider, and their
respective successors and assigns, and may be enforced by it or them from time
to time against any or all US Borrowers as often as occasion therefor may arise
and without requirement on the part of any Agent, any member of the Lender
Group, any Bank Product Provider, or any of their successors or assigns first to
marshal any of its or their claims or to exercise any of its or their rights
against any Borrower or to exhaust any remedies available to it or them against
any Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or

 

-45-

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

to elect any other remedy. The provisions of this Section 2.15 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this
Section 2.15 will forthwith be reinstated in effect, as though such payment had
not been made.

2.16. Interest Act (Canada); Criminal Rate of Interest; Nominal Rate of
Interest.

Notwithstanding anything to the contrary contained in this Agreement or in any
other Loan Document, solely to the extent that a court of competent jurisdiction
finally determines that the calculation or determination of interest payable by
Canadian Borrower in respect of the Obligations pursuant to this Agreement and
the other Loan Documents shall be governed by the laws of any province of Canada
and the federal laws of Canada:

(a) whenever interest payable by Canadian Borrower is calculated on the basis of
a period which is less than the actual number of days in a calendar year, each
rate of interest determined pursuant to such calculation is, for the purposes of
the Interest Act (Canada), equivalent to such rate multiplied by the actual
number of days in the calendar year in which such rate is to be ascertained and
divided by the number of days used as the basis of such calculation;

(b) in no event shall the aggregate “interest” (as defined in Section 347 of the
Criminal Code, R.S.C. 1985, c. C-46, as the same shall be amended, replaced or
re-enacted from time to time) payable by Canadian Borrower to any Agent or any
Lender under this Agreement or any other Loan Document exceed the effective
annual rate of interest on the “credit advanced” (as defined in that section)
under this Agreement or such other Loan Document lawfully permitted under that
section and, if any payment, collection or demand pursuant to this Agreement or
any other Loan Document in respect of “interest” (as defined in that section) is
determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of
Agents, Lenders and Canadian Borrower and the amount of such payment or
collection shall be refunded by the applicable Agent and Lenders to Canadian
Borrower. For the purposes of this Agreement and each other Loan Document to
which Canadian Borrower is a party, the effective annual rate of interest
payable by Canadian Borrower shall be determined in accordance with generally
accepted actuarial practices and principles over the term of the loans on the
basis of annual compounding for the lawfully permitted rate of interest and, in
the event of dispute, a certificate of a Fellow of the Institute of Actuaries
appointed by Canadian Agent for the account of Canadian Borrower will be
conclusive for the purpose of such determination in the absence of evidence to
the contrary;

(c) all calculations of interest payable by Canadian Borrower under this
Agreement or any other Loan Document are to be made on the basis of the nominal
interest rate described herein and therein and not on the basis of effective
yearly rates or on any other basis which gives effect to the principle of deemed
reinvestment of interest. The parties acknowledge that there is a material
difference between the stated nominal interest rates and the effective yearly
rates of interest and that they are capable of making the calculations required
to determine such effective yearly rates of interest; and

 

-46-

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

(d) any provision of this Agreement that would oblige Canadian Borrower to pay
any fine, penalty or rate of interest on any arrears of principal or interest
secured by a mortgage on real property or hypothec on immovables that has the
effect of increasing the charge on arrears beyond the rate of interest payable
on principal money not in arrears shall not apply to Canadian Borrower, which
shall be required to pay interest on money in arrears at the same rate of
interest payable on principal money not in arrears.

2.17. Currencies.

All US Obligations shall be paid in Dollars (except for any US Obligations
consisting of a Guaranty that provides for the payment in another currency). All
Canadian Obligations shall be paid in Canadian Dollars (except for any Canadian
Obligations consisting of a Guaranty that provides for the payment in another
currency).

 

3. CONDITIONS; TERM OF AGREEMENT.

3.1. Conditions Precedent to the Initial Extension of Credit.

The effectiveness of this Agreement is subject to the fulfillment, to the
satisfaction of each Agent and each Lender (or waiver by each Agent and each
Lender), of each of the conditions precedent set forth on Schedule 3.1.

3.2. Conditions Precedent to all Extensions of Credit.

The obligation of the Lender Group (or any member thereof) to make any Advances
hereunder (or to extend any other credit hereunder) at any time shall be subject
to the following conditions precedent:

(a) the representations and warranties of each Borrower or its Subsidiaries
contained in this Agreement or in the other Loan Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on and as of the date
of such extension of credit, as though made on and as of such date (except to
the extent that such representations and warranties relate solely to an earlier
date in which case such representations and warranties shall be true and correct
in all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of such earlier date);

(b) no Default or Event of Default shall have occurred and be continuing on the
date of such extension of credit, nor shall either result from the making
thereof; and

(c) if the aggregate Dollar Equivalent amount of the sum of US Revolver Usage
and Canadian Revolver Usage is greater than $200,000,000 (or would be greater
than $200,000,000 upon giving effect to such extension of credit),
Administrative Borrower shall have delivered a certificate to each Agent, in
form and substance reasonably satisfactory to each

 

-47-

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

Agent, executed by the chief executive officer or chief financial officer of
Administrative Borrower and certifying to each Agent that such extension of
credit in excess of $200,000,000 is permitted under the Senior Note Debt
Documents.

3.3. Maturity.

This Agreement shall continue in full force and effect for a term ending on
October 1, 2016 (the “Maturity Date”). The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to
terminate its obligations under this Agreement immediately and without notice to
any Borrower upon the occurrence and during the continuation of an Event of
Default.

3.4. Effect of Maturity.

On the Maturity Date, all commitments of the Lender Group to provide additional
credit hereunder shall automatically be terminated and all of the Obligations
immediately shall become due and payable without notice or demand and Borrowers
shall be required to repay all of the Obligations in full. No termination of the
obligations of the Lender Group (other than payment in full of the Obligations
and termination of the Commitments) shall relieve or discharge any Loan Party of
its duties, obligations, or covenants hereunder or under any other Loan Document
and Agents’ Liens in the Collateral shall continue to secure the Obligations and
shall remain in effect until all Obligations have been paid in full and the
Commitments have been terminated. When all of the Obligations have been paid in
full and the Lender Group’s obligations to provide additional credit under the
Loan Documents have been terminated irrevocably, each Agent will, at Borrowers’
sole expense, execute and deliver any possessory collateral held in connection
herewith or any termination statements, lien releases, discharges of security
interests, and other similar discharge or release documents (and, if applicable,
in recordable form) as are reasonably requested to release, as of record, such
Agent’s Liens and all notices of security interests and liens previously filed
by Agent.

3.5. Early Termination by Borrowers.

Borrowers have the option, at any time upon 10 Business Days prior written
notice to each Agent, to terminate this Agreement and terminate the Commitments
hereunder by repaying to the Agents all of the Obligations in full.

 

4. REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower
makes the following representations and warranties to the Lender Group which
shall be true, correct, and complete, in all material respects (except that such
materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date, and shall be true, correct, and complete, in
all material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof), as of the date of the making of
each Advance (or other extension of credit) made thereafter, as though made on
and as of the date of such Advance (or other extension of credit) (except to the
extent that such representations and warranties relate solely to an earlier date
in

 

-48-

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

which case such representations and warranties shall be true and correct in all
material respects (except that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of such earlier date) and
such representations and warranties shall survive the execution and delivery of
this Agreement:

4.1. Organization and Qualification.

Such Borrower and each of its Subsidiaries (i) is a corporation or limited
liability company duly organized, validly existing and in good standing (or in
each case, its equivalent, to the extent such concept is applicable to its
respective jurisdiction) under the laws of the state or other jurisdiction of
its organization, (ii) has the power and authority to own its properties and
assets and to transact the businesses in which it is presently, or proposes to
be, engaged, and (iii) is duly qualified and is authorized to do business and is
in good standing in every jurisdiction in which the failure to be so qualified
would reasonably be expected to cause a Material Adverse Change. Schedule 4.1
contains a true, correct and complete list of all jurisdictions in which each
Loan Party is qualified to do business as a foreign corporation or foreign
limited liability company as of the Closing Date.

4.2. Solvency.

The fair saleable value of such Borrower’s assets exceeds all probable
liabilities, including those to be incurred pursuant to this Agreement. Such
Borrower (i) does not have unreasonably small capital in relation to the
business in which it is or proposes to be engaged or (ii) has not incurred, and
does not believe that it will incur after giving effect to the transactions
contemplated by this Agreement and by the other Loan Documents, debts beyond its
ability to pay such debts as they become due.

4.3. Liens; Inventory.

There are no Liens in favor of third parties with respect to any of the
Collateral, including, without limitation, with respect to the Inventory,
wherever located, other than Permitted Liens. Upon the proper filing of
financing statements and the proper recordation of other applicable documents
with the appropriate filing or recordation offices in each of the necessary
jurisdictions, the security interests granted pursuant to the Loan Documents
constitute and shall at all times constitute valid and enforceable first, prior
and perfected Liens on the Collateral (other than Permitted Liens), to the full
extent such Collateral may be perfected by the proper filing of such financing
statements and proper recordation of such other applicable documents. The Loan
Parties are or will be at the time additional Collateral is acquired by them,
the absolute owners of the Collateral with full right to pledge, sell, consign,
transfer and create a Lien therein (subject to Section 6.12 herein), free and
clear of any and all Liens in favor of third parties, except Permitted Liens.

4.4. No Conflict.

The execution and delivery by such Borrower of this Agreement and by the other
Loan Parties of each of the other Loan Documents executed and delivered in
connection herewith and the performance of the obligations of such Loan Party
hereunder and thereunder, as

 

-49-

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

applicable, and the consummation by such Loan Party of the transactions
contemplated hereby and thereby: (i) are within the corporate or other
organizational, as the case may be, powers of such Loan Party; (ii) are duly
authorized by the board of directors or similar managing body of such Loan
Party; (iii) are not in contravention of the terms of (A) the organizational
documents of such Loan Party, (B) any indenture, contract, lease, agreement
instrument or other commitment to which such Loan Party is a party or by which
such Loan Party or any of its properties are bound (except to the extent such
contravention would not reasonably be expected to cause a Material Adverse
Change), or (C) the Senior Note Indenture; (iv) do not require the consent,
registration or approval of any Governmental Authority or any other Person
(except such as have been duly obtained, made or given, and are in full force
and effect, and except to the extent the failure to obtain such consent,
registration or approval (from a non-Government Authority) would not reasonably
be expected to cause a Material Adverse Change); (v) do not contravene in any
material respect any statute, law, ordinance regulation, rule, order or other
governmental restriction applicable to or binding upon such Loan Party; and
(vi) will not, except as contemplated herein for the benefit of the Agents on
behalf of the Lenders, result in the imposition of any Liens upon any property
of such Loan Party under any existing indenture, mortgage, deed of trust, loan
or credit agreement or other material agreement or instrument to which such Loan
Party is a party or by which it or any of its property may be bound or affected.

4.5. Enforceability.

The Agreement and all of the other Loan Documents, as applicable, are the legal,
valid and binding obligations of each Loan Party party thereto, and with respect
to those Loan Documents executed and delivered by any other Subsidiary, of each
such other Subsidiary, and are enforceable against such Loan Party and such
other Subsidiaries, as the case may be, in accordance with their terms except as
such enforceability may be limited by (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).

4.6. Financial Data; Projections; Material Adverse Change.

The Borrowers have furnished to the Lenders the following financial statements
(the “Financials”) and the Projections referenced below: (i) the consolidated
balance sheet of Coleman Cable and its Subsidiaries as of, and consolidated
statements of income, retained earnings and changes in financial position for
the fiscal year ended December 31, 2010 audited by independent certified public
accountants, (ii) the unaudited consolidated balance sheet of the Coleman Cable
and its Subsidiaries as of, and consolidated statement of income, retained
earnings and changes in financial position for the period ending May 31, 2011
certified by the chief executive officer and chief financial officer of Coleman
Cable, and (iii) monthly financial and operational projections for each month
during the first year following the Closing Date and yearly financial and
operational projections for the four subsequent years (the “Projections”). The
Financials are and the historical financial statements to be furnished to the
Lenders in accordance with Section 5.1 below will be in accordance with the
books and records of Coleman Cable and fairly present the financial condition of
each of the Loan Parties at the dates thereof and the results of operations for
the periods indicated (subject, in the case of unaudited financial statements,
to normal year-end adjustments), and such financial statements have been and
will be prepared in conformity with GAAP consistently applied throughout the
periods involved. The

 

-50-

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

Projections have been prepared in good faith based on reasonable assumptions at
the time made (it being understood that such Projections are subject to
uncertainties and contingencies, many of which are beyond the control of the
Loan Parties and their Subsidiaries and that actual results may differ
materially from such Projections).

4.7. Locations of Offices, Records and Inventory.

The Loan Parties’ states or other jurisdictions of domicile, principal places of
business and chief executive offices are set forth in Schedule 4.7, and the
books and records of the Loan Parties and all chattel paper and all records of
accounts are located at the principal places of business and chief executive
offices of the Loan Parties. There is no jurisdiction in which any Loan Party
has any Collateral (except for vehicles, Inventory held for shipment by third
Persons, Inventory in transit, Inventory held for processing by third Persons,
vehicles and equipment out for repair or immaterial quantities of assets,
equipment or Inventory with an aggregate book value of less than $1,000,000)
other than those jurisdictions listed on Schedule 4.7. Schedule 4.7 is a true,
correct and complete list of (i) the legal names and addresses of each
warehouseman, filler, processor and packer at which Inventory is stored (other
than Inventory with an aggregate book value of less than $1,000,000), (ii) the
address of the chief executive offices of the Loan Parties and (iii) the address
of all offices where records and books of account of the Loan Parties are kept.

4.8. [Intentionally Omitted].

4.9. Subsidiaries.

The only direct or indirect Subsidiaries of Coleman Cable are those listed on
Schedule 4.9. The Persons identified on Schedule 4.9 are the record and
beneficial owner of all of the shares of capital Stock of each of the Loan
Parties listed on Schedule 4.9 as being owned thereby and, except as set forth
in Schedule 4.9, there are no proxies, irrevocable or otherwise, with respect to
such shares, and no equity securities of any of any of such Persons are or may
become required to be issued by reason of any options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into or exchangeable for, shares of any
capital Stock of any such Person, and there are no contracts, commitments,
understandings or arrangements by which any such Person is or may become bound
to issue additional shares of its capital Stock or securities convertible into
or exchangeable for such shares. All of such shares are owned by such Persons
free and clear of any Liens other than Permitted Liens.

4.10. No Judgments or Litigation.

Except as set forth on Schedule 4.10, no judgments, orders, writs or decrees are
outstanding against any Loan Party or any of its Subsidiaries nor is there now
pending or, to the best of such Loan Party’s knowledge, threatened any
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against such Loan Party or any of its Subsidiaries except
judgments and pending or threatened litigation, contested claims,
investigations, arbitrations and governmental proceedings which would not
reasonably be expected to cause a Material Adverse Change.

 

-51-

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

4.11. No Defaults.

Neither any Loan Party nor any of its Subsidiaries is in default under any term
of any indenture, contract, lease, agreement, instrument or other commitment to
which any of them is a party or by which any of them is bound which default
would be reasonably expected to cause a Material Adverse Change. No Loan Party
knows of any dispute regarding any indenture, contract, lease, agreement,
instrument or other commitment which would reasonably be expected to cause a
Material Adverse Change.

4.12. No Employee Disputes.

Except as set forth in Schedule 4.20, there are no applications, claims,
complaints or proceedings pending or, to the best of any Loan Party’s knowledge,
threatened between such Loan Party or any of its Subsidiaries and any of their
respective employees, other than those arising in the ordinary course of
business which would not, in the aggregate, reasonably be expected to cause a
Material Adverse Change.

4.13. Compliance with Law.

No Loan Party nor any of its Subsidiaries has violated or failed to comply with
any statute, law, ordinance, regulation, rule or order of any foreign, federal,
state, provincial or local government, or any other Governmental Authority or
any self-regulatory organization, or any judgment, decree or order of any court,
applicable to its business or operations except where the aggregate of all such
violations or failures to comply would not reasonably be expected to cause a
Material Adverse Change. The conduct of the business of each Loan Party and each
of its Subsidiaries is in conformity with all securities, commodities, energy,
public utility, zoning, building code, health, OSHA and environmental
requirements and all other foreign, federal, state, provincial and local
governmental and regulatory requirements and requirements of any self-regulatory
organizations, except where such non-conformities would not reasonably be
expected to cause a Material Adverse Change. No Loan Party nor any of its
Subsidiaries has received any notice to the effect that, or otherwise been
advised that, it is not in compliance with, and no Loan Party nor any of its
Subsidiaries has any reason to anticipate that any currently existing
circumstances are likely to result in the violation of any such statute, law,
ordinance, regulation, rule, judgment, decree or order which failure or
violation would reasonably be expected to cause a Material Adverse Change.

4.14. ERISA.

No Loan Party nor any of their Subsidiaries or ERISA Affiliates maintains or
contributes to any Benefit Plan other than those listed on Schedule 4.14. Except
as disclosed in Schedule 4.14, each Benefit Plan has been and is being
maintained and funded in accordance with its terms and in compliance in all
material respects with all provisions of ERISA and the IRC applicable thereto,
including without limitation the applicable minimum funding standards of IRC
Sections 412 and 430. Each Loan Party, each of its Subsidiaries and each of its
ERISA Affiliates has fulfilled all obligations related to the minimum funding
standards of ERISA and the IRC for each Benefit Plan, is in compliance in all
material respects with the currently applicable provisions of ERISA and of the
IRC and has not incurred any liability (other than routine liability for
premiums) under Title IV of ERISA. No Termination Event has occurred

 

-52-

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

nor has any other event occurred that may result in such a Termination Event.
Except as disclosed in Schedule 4.14, to the best of each Loan Parties’
knowledge, no event or events have occurred in connection with a Benefit Plan
which would cause any Loan Party or any of its Subsidiaries or ERISA Affiliates,
any fiduciary of a Benefit Plan or any Benefit Plan, directly or indirectly, to
be subject to any material liability, individually or in the aggregate, under
ERISA, the IRC or any other law, regulation or governmental order or under any
agreement, instrument, statute, rule of law or regulation (other than routine
liability for benefits or premium payments) or pursuant to or under which any
such entity has agreed to indemnify or is required to indemnify any person
against liability incurred under, or for a violation or failure to satisfy the
requirements of, any such statute, regulation or order.

4.15. Compliance with Environmental Laws.

(a) The operations of each Loan Party and each of its Subsidiaries comply with
all applicable federal, provincial, state or local environmental, health and
safety statutes, regulations, directions, ordinances, criteria or guidelines and
(b) none of the operations of each Loan Party or any of its Subsidiaries is the
subject of any judicial or administrative proceeding alleging the violation of
any federal, provincial, state or local environmental, health or safety statute,
regulation, direction, ordinance, criteria or guidelines, except where the
failure to so comply or such violation would not reasonably be expected to cause
a Material Adverse Change. Except as disclosed on Schedule 4.15, to the best of
each Loan Parties’ knowledge, none of the operations of such Loan Party or any
of its Subsidiaries is the subject of any federal, provincial, or state
investigation evaluating whether such Loan Party or any of its Subsidiaries
disposed any hazardous or toxic waste, substance or constituent or other
substance at any site that may require remedial action, or any federal,
provincial, or state investigation evaluating whether any remedial action is
needed to respond to a release of any hazardous or toxic waste, substance or
constituent, or other substance into the environment, in any case that would
reasonably be expected to cause a Material Adverse Change. Except as disclosed
on Schedule 4.15, no Loan Party nor any of its Subsidiaries has filed any notice
under any federal, provincial, or state law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill or
release of a hazardous or toxic waste, substance or constituent, or other
substance into the environment, in any case that would reasonably be expected to
cause a Material Adverse Change. Except as disclosed on Schedule 4.15, no Loan
Party nor any of its Subsidiaries have any contingent liability of which such
Loan Party has knowledge or reasonably should have knowledge in connection with
any release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment, nor has such Loan Party or any of its
Subsidiaries received any notice, letter or other indication of potential
liability arising from the disposal of any hazardous or toxic waste, substance
or constituent or other substance into the environment, in any case that would
reasonably be expected to cause a Material Adverse Change.

4.16. [Intentionally Omitted].

4.17. Intellectual Property.

Each Loan Party and each of its Subsidiaries possesses adequate assets,
licenses, patents, patent applications, copyrights, service marks, trademarks,
tradenames, industrial designs or any other form of intellectual property and
registrations or applications therefor necessary and material to conduct its
business as heretofore conducted by it. Schedule 4.17 sets

 

-53-

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

forth (a) all of the federal, state and foreign registrations of trademarks,
service marks and other marks, trade names or other trade rights of such Loan
Party and its Subsidiaries, and all pending applications for any such
registrations, (b) all of the federal and foreign registrations of patents and
copyrights of such Loan Party and its Subsidiaries and all pending applications
therefor and (c) all other material trademarks, service marks and other marks,
trade names and other trade rights used by such Loan Party or any of its
Subsidiaries in connection with their businesses (collectively, the “Proprietary
Rights”). Such Loan Parties and their Subsidiaries are collectively the owners
of each of the trademarks listed on Schedule 4.17 as indicated on such schedule,
and, no other Person has the right to use any of such marks in commerce either
in the identical form or in such near resemblance thereto as may be likely to
cause confusion or to cause mistake or to deceive. The Proprietary Rights listed
on Schedule 4.17 are all those necessary for the conduct of the businesses of
such Loan Party and its Subsidiaries. Except as disclosed on Schedule 4.17, no
person has a right to receive any royalty or similar payment in respect of any
Proprietary Rights necessary for the conduct of the business of the Loan Parties
pursuant to any contractual arrangements entered into by such Loan Party, or any
of its Subsidiaries and no person otherwise has a right to receive any royalty
or similar payment in respect of any such Proprietary Rights except as disclosed
on Schedule 4.17. Neither such Loan Party nor any of its Subsidiaries has
granted any license or sold or otherwise transferred any interest in any of the
Proprietary Rights necessary for the conduct of the business of the Loan Parties
to any other person, except as disclosed on Schedule 4.17. To the best of the
Loan Parties’ knowledge, the use of each of the Proprietary Rights by such Loan
Party and its Subsidiaries is not infringing upon or otherwise violating the
rights of any third party in or to such Proprietary Rights, and no proceeding
has been instituted against or notice received by such Loan Party or any of its
Subsidiaries that are presently outstanding alleging that the use of any of the
Proprietary Rights infringes upon or otherwise violates the rights of any third
party in or to any of the Proprietary Rights, other than in each case as would
not reasonably be expected to cause a Material Adverse Change. Neither such Loan
Party nor any of its Subsidiaries have given notice to any Person that it is
infringing on any of the Proprietary Rights and to the best of such Loan Party’s
knowledge, no Person is infringing on any of the Proprietary Rights, other than
in each case as would not reasonably be expected to cause a Material Adverse
Change. All of the Proprietary Rights necessary for the conduct of the business
of the Loan Parties of such Loan Party and its Subsidiaries are valid and
enforceable rights of such Loan Party and its Subsidiaries and will not cease to
be valid and in full force and effect by reason of the execution and delivery of
this Agreement or the Loan Documents or the consummation of the transactions
contemplated hereby or thereby.

4.18. Licenses and Permits.

Each Loan Party and each of its Subsidiaries have obtained and hold in full
force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their businesses as presently conducted and as proposed to be conducted, except
where the failure to do so would not reasonably be expected to cause a Material
Adverse Change. Neither any such Loan Party nor any of its Subsidiaries is in
violation of the terms of any such franchise, license, lease, permit,
certificate, authorization, qualification, easement, right of way, right or
approval in any such case which would not reasonably be expected to cause a
Material Adverse Change.

 

-54-

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

4.19. Title to Property.

Each Loan Party has (i) good, sufficient and legal title to or valid leasehold
interests in all of its real property, including, without limitation, the Real
Property (all such real property and the nature of such Loan Party’s interest
therein is disclosed on Schedule 4.19, as it may be updated from time to time
pursuant to Section 5.9), and (ii) good and marketable title to all of its other
property (including without limitation, all real and other property in each case
as reflected in the Financial Statements delivered to the US Agent hereunder),
other than, with respect to properties described in clause (ii) above,
properties disposed of in the ordinary course of business or in any manner
otherwise permitted under this Agreement since the date of the most recent
audited consolidated balance sheet of Coleman Cable, and in each case subject to
no Liens other than Permitted Liens. Each Loan Party and its Subsidiaries enjoy
peaceful and undisturbed possession of all its real property (except, in the
case of any Real Property, for easements, rights of way, covenants, conditions,
zoning restrictions, and minor defects of title that do not interfere with the
ability of the Loan Parties, taken as a whole, to conduct the business as
currently conducted), including, without limitation, the Real Property, and
there is no pending or, to the best of their knowledge, threatened condemnation
proceeding relating to any such real property. No lease of any Real Property by
any Loan Party contains provisions which would reasonably be expected to cause a
Material Adverse Change. No material default exists under any lease of any Real
Property by any Loan Party.

4.20. Labor Matters.

No Loan Party nor any of its Subsidiaries is engaged in any unfair labor
practice. Except as disclosed in Schedule 4.20, no Loan Party or any of its
Subsidiaries is a party to any collective bargaining agreement, contract or
legally binding commitment to any trade union or employee organization or
association in respect of or affecting its employees, including, without
limitation, its Canadian Employees. Except as set forth in Schedule 4.20, there
is (a) no material unfair labor practice complaint pending against any Loan
Party or any of its Subsidiaries or, to the best knowledge of any Loan Party,
threatened against any of them, before the National Labor Relations Board, and
no grievance, complaint, inquiry arbitration or other proceeding arising out of
or under collective bargaining agreements or under any statute related to its
employees, including, without limitation, any Canadian Employees, or the
termination thereof, that would reasonably be expected to cause a Material
Adverse Change is so pending against any Loan Party or any of its Subsidiaries
or, to the best knowledge of any Loan Party, threatened against any of them,
(b) no pending complaint, inquiry or other investigation by any regulatory or
other administrative authority or agency with regard to or in relation to any
employee, including, without limitation, any Canadian Employee, or the
termination thereof that would reasonably be expected to cause a Material
Adverse Change; (c) no strike, labor dispute, slowdown or stoppage pending
against any Loan Party or any of its Subsidiaries or, to the best knowledge of
any Loan Party, threatened against any of them, and (d) no pending union
representation application with respect to the employees of any Loan Party or
any Subsidiaries and, to the best knowledge of any Loan Party, no union
organizing activities.

4.21. Investment Company, Etc.

No Loan Party nor any of its Subsidiaries is (a) an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment

 

-55-

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

Company Act of 1940, as amended, or (b) subject to any other law which purports
to regulate or restrict its ability to borrow money or to consummate the
transactions contemplated by this Agreement or the other Loan Documents or to
perform its obligations hereunder or thereunder.

4.22. Margin Security.

No Borrower owns any margin stock and no portion of the proceeds of any Advances
or Letters of Credit shall be used by the Borrowers for the purpose of
purchasing or carrying any “margin stock” (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation U, T, U or X of said Board of Governors or
for any other purpose in violation of any applicable statute or regulation, or
of the terms and conditions of this Agreement.

4.23. [Intentionally Omitted].

4.24. Taxes and Tax Returns.

Each Loan Party has filed, or caused to be filed, all material tax returns
(federal, state, provincial, local and foreign) required to be filed and paid
all amounts of taxes shown thereon to be due (including interest and penalties)
and has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Loan Parties is aware of any proposed material
tax assessments against it or any other Loan Party.

4.25. [Intentionally Omitted].

4.26. Status of Accounts.

Each Eligible Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by a Loan Party in the
ordinary course of its business; the Goods and Inventory being sold and the
Eligible Accounts created are its exclusive property and are not and shall not
be subject to any Lien, consignment arrangement, encumbrance, security interest
or financing statement whatsoever, other than the Permitted Liens; and each Loan
Party’s customers have accepted the goods or services, owe and are obligated to
pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that would reasonably be
expected to cause, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Change. Each Borrower, on
behalf of itself and the Loan Parties, confirms to the Lenders that any and all
taxes or fees relating to its business, its sales, the Eligible Accounts or the
Goods relating thereto, are its sole responsibility and that same will be paid
by such Loan Party when due (unless duly contested and adequately reserved for)
and that none of said taxes or fees is or will become a lien on or claim against
the Eligible Accounts in violation of this Agreement.

4.27. [Intentionally Omitted].

 

-56-

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

4.28. Material Contracts.

Schedule 4.28 sets forth a true, correct and complete list of all the Material
Contracts currently in effect on the Closing Date. None of the Material
Contracts contains provisions the performance or nonperformance of which would
reasonably be expected to cause a Material Adverse Change. All of the Material
Contracts are in full force and effect, and no defaults currently exist
thereunder, except for defaults which, either individually or in the aggregate,
would not reasonably be expected to cause a Material Adverse Change.

4.29. Survival of Representations.

All representations made by each Loan Party in this Agreement and in any other
Loan Document shall survive the execution and delivery hereof and thereof.

4.30. [Intentionally Omitted].

4.31. [Intentionally Omitted].

4.32. [Intentionally Omitted].

4.33. Accuracy and Completeness of Information.

All factual information (taken as a whole (other than materials marked as drafts
or forward looking information and projections and information of a general
economic nature and general information about Borrowers’ industry) heretofore,
contemporaneously or hereafter furnished by or on behalf of the Loan Parties or
any of their respective Subsidiaries in writing to either Agent, any Lender, or
the Independent Accountant for purposes of or in connection with this Agreement
or any Loan Documents, or any transaction contemplated hereby or thereby is or
will be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. There is no fact now known to any
officer of any Loan Party or any of its Subsidiaries which would have a Material
Adverse Change which fact has not been set forth herein, in the Financials, or
any certificate, opinion or other written statement made or furnished by any
Loan Party to either Agent.

4.34. Anti-Terrorism Laws.

(a) General. None of the Loan Parties nor to their knowledge any of their
Affiliates is in violation of any Anti-Terrorism Law or engages in or conspires
to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any Anti-Terrorism Law. Without
limiting the forgoing, no Loan Party or any of their Subsidiaries is an “enemy”
or an “ally of the enemy” within the meaning of Section 2 of the Trading with
the Enemy Act of the United States of America (50 U.S.C. App. §§ 1 et seq.), as
amended and no Loan Party or any of their Subsidiaries is in violation of
(a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, or (c) the Proceeds of Crime (Money Laundering) and Terrorist
Financial Act (Canada).

 

-57-

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

(b) Executive Order No. 13224. None of the Loan Parties nor to their knowledge
any of their Affiliates is any of the following (each a “Blocked Person”):

(i) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224;

(ii) a Person or entity with which any bank or other financial institution is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

(iii) a Person or entity that commits, threatens or conspires to commit or
supports “terrorism” as defined in Executive Order No. 13224;

(iv) a Person or entity that is named as a “specially designated national” on
the most current list published by the U.S. Treasury Department Office of
Foreign Asset Control at its official website or any replacement website or
other replacement official publication of such list; or

(v) a Person or entity who is affiliated with a Person or entity listed above.

(c) None of the Loan Parties nor to their knowledge any of their Affiliates
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person or
(ii) deals in, or otherwise engages in any transaction relating to, any property
or interests in property blocked pursuant to Executive Order No. 13224.

4.35. Deposit Accounts.

As of the Closing Date, none of the Loan Parties has any Deposit Account or
Securities Accounts at any bank or other financial institution that is not
described on Schedule 4.35 and Schedule 4.35 accurately sets forth the purpose
for which each such Deposit Account is maintained.

4.36. [Intentionally Omitted].

4.37. [Intentionally Omitted].

4.38. [Intentionally Omitted].

4.39. Compliance with OFAC Rules and Regulations.

None of the Borrowers, Guarantors or their Subsidiaries or to their knowledge,
their respective Affiliates (a) is a Sanctioned Person, (b) has more than 15% of
its assets in Sanctioned Countries, or (c) derives more than 15% of its
operating income from investments in,

 

-58-

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

or transactions with Sanctioned Persons or Sanctioned Countries. No part of the
proceeds of any Loan hereunder will be used directly or indirectly to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Country.

4.40. Compliance with FCPA.

Each of the Borrowers and Guarantors and their Subsidiaries is in compliance
with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and any
foreign counterpart thereto. None of the Borrowers, Guarantors or their
Subsidiaries has made a payment, offering, or promise to pay, or authorized the
payment of, money or anything of value (a) in order to assist in obtaining or
retaining business for or with, or directing business to, any foreign official,
foreign political party, party official or candidate for foreign political
office, (b) to a foreign official, foreign political party or party official or
any candidate for foreign political office, and (c) with the intent to induce
the recipient to misuse his or her official position to direct business
wrongfully to such Borrower, Guarantor or its Subsidiary or to any other Person,
in violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

4.41. Canadian Employee Benefits.

(a) Except as set forth in Schedule 4.41, any overtime pay, vacation pay,
premiums for unemployment insurance, health and welfare insurance premiums,
accrued wages, salaries and commissions and severance pay have been fully paid
by each Canadian Loan Party, will be paid when due, or, in the case of accrued
unpaid overtime pay or accrued unpaid vacation pay for Canadian Employees, has
been accurately accounted for in the books and records of each Canadian Loan
Party.

(b) Schedule 4.41 lists all the Canadian Employee Plans including all Canadian
Pension Plans (including the registration number) applicable to the Canadian
Employees of each Canadian Loan Party in respect of employment in Canada and
which are currently maintained or sponsored by a Canadian Loan Party or to which
a Canadian Loan Party contributes or has an obligation to contribute, except,
for greater certainty, any statutory plans to which a Canadian Loan Party is
obligated to contribute or comply with under applicable law. None of the
Canadian Pension Plans contains a “defined benefit provision” as defined in
subsection 147.1(1) of the Income Tax Act (Canada) and no Canadian Loan Party
sponsors, maintains or administers or, at any point in the last 10 years, has
ever sponsored, maintained or administered a “registered pension plan”, as
defined in subsection 248(1) of the Income Tax Act (Canada) which is a defined
benefit pension plan or contains a “defined benefit provision” as defined in
subsection 147.1(1) of the Income Tax Act (Canada). The Canadian Pension Plans
are duly registered under the Income Tax Act (Canada), the Canadian Employee
Benefits Legislation and any other applicable laws which require registration
and no event has occurred which would reasonably be expected to cause the loss
of such registered status. The Canadian Pension Plans have each been
administered, funded and invested in material compliance with the terms of the
particular plan, all applicable laws, including, where applicable, the Income
Tax Act (Canada), the Canadian Employee Benefits Legislation and the terms of
all applicable collective bargaining agreements, employment contracts and
funding agreements.

 

-59-

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

(c) To the best knowledge of each Canadian Loan Party, no improvements to any
Canadian Employee Plan (including, for greater certainty any Canadian Pension
Plan) have been promised, except such improvements as are described in the
collective bargaining agreements listed in Schedule 4.41, and no amendments or
improvements to a Canadian Employee Plan (including, for greater certainty any
Canadian Pension Plan) will be made or promised by any Canadian Loan Party
before the closing date.

(d) Except for the Canadian Pension Plans or as otherwise disclosed in Schedule
4.41, no Canadian Loan Party provides benefits to retired Canadian Employees or
to beneficiaries or dependents of retired Canadian Employees.

(e) There are no outstanding defaults or violations by any party to any Canadian
Employee Plan (including, for greater certainty any Canadian Pension Plan) and
no taxes, penalties or fees are owing or exigible under any of the Canadian
Employee Plans, except which would not reasonably be expected to cause a
Material Adverse Change. To the best knowledge of each Canadian Loan Party, no
fact or circumstance exists that could adversely affect the tax-exempt status of
a Canadian Pension Plan or Canadian Employee Plan.

(f) All contributions (including, where applicable, “normal cost”, “special
payments” and any other payment in respect of any funding deficiencies or
shortfalls), assessments, premiums, fees, taxes, penalties or fines in relation
to the Canadian Employees have been duly paid, withheld or remitted and there is
no outstanding liability of any kind in relation to the employment of the
Canadian Employees or the termination of employment of any Canadian Employee. No
Lien has arisen or exists, choate or inchoate, in respect of a Canadian Loan
Party or its property in connection with any Canadian Pension Plan. There have
been no improper withdrawals or applications of the assets of the Canadian
Pension Plans or Canadian Employee Plans, except which could not reasonably be
expected to result in a Material Adverse Change.

(g) Each Canadian Loan Party is in material compliance with all applicable
requirements of Canadian Employee Benefits Legislation and health and safety,
workers compensation, employment standards, labour relations, health insurance,
employment insurance, protection of personal information, human rights laws and
any Canadian federal, provincial or local counterparts or equivalents as amended
from time to time.

(h) No Canadian Loan Party has taken any action or intends to take any action to
cause the wind-up, in whole or in part, of any Canadian Pension Plan. Each
Canadian Loan Party is of the opinion, acting reasonably, that no circumstances
exist or are expected to arise that would provide any basis for the
Superintendent under the Canadian Employee Benefits Legislation or any other
pension plan regulator under any applicable pension standards legislation to
take steps to cause the wind-up, in whole or in part, of any Canadian Pension
Plan and no Canadian Loan Party has received or is aware of any notice or other
communication from the Superintendent under the Canadian Employee Benefits
Legislation or any other pension plan regulator under any applicable pension
standards legislation that indicates that the Superintendent or regulator
intends to order the wind-up, in whole or in part, of any Canadian Pension Plan.

 

-60-

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

4.42. Obligations Constitute Permitted Indebtedness.

The Obligations constitute permitted indebtedness under the Senior Note
Indenture.

4.43. Withholdings and Remittances.

Each Canadian Loan Party has remitted all Canada Pension Plan contributions,
provincial pension plan contributions, workers’ compensation assessments,
employment insurance premiums, employee health premiums, municipal real estate
taxes and other taxes payable under applicable law by them, and, furthermore,
have withheld from each payment made to any of its present or former employees,
officers and directors, and to all persons who are non-residents of Canada for
the purposes of the Income Tax Act (Canada) all amounts required by law to be
withheld, including without limitation all payroll deductions required to be
withheld and has remitted such amounts to the proper governmental authority
within the time required under applicable law.

 

5. AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall and
shall cause each of their Subsidiaries to comply with each of the following:

5.1. Financial Information.

Coleman Cable will furnish to the Agents and the Lenders the following
information within the following time periods:

(a) within 120 days after the close of the fiscal year of Coleman Cable, (i) the
audited consolidated and consolidating balance sheets and statements of income
and retained earnings and of changes in cash flow of Coleman Cable and its
Subsidiaries, for such year, each in reasonable detail, each setting forth in
comparative form the corresponding figures for the preceding year, prepared in
accordance with GAAP, and accompanied by a report and opinion of Deloitte &
Touche LLP or other nationally recognized accounting firm (which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any “going concern” or like assumption,
qualification or exception or any assumption, qualification or exception as to
the scope of the audit) or other Independent Accountant selected by Coleman
Cable and reasonably satisfactory to Agents and (ii) a divisional operating
income analysis for such year, in reasonable detail, setting forth in
comparative form the corresponding analysis for the preceding year, prepared by
Coleman Cable. The delivery by electronic mail or other form of electronic
distribution reasonably satisfactory to the Agents of a Form 10-K as filed with
the SEC within 90 days after the end of such fiscal year shall be deemed to
satisfy all of the requirements contained in this Section 5.1(a);

(b) within 50 days after the end of each fiscal quarter of Coleman Cable other
than the final fiscal quarter, unaudited consolidated financial statements and
divisional operating income analyses similar to those required by clause
(a) above as of the end of such period and for such period then ended and for
the period from the beginning of the current fiscal year to the end

 

-61-

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

of such period, setting forth in comparative form the corresponding figures for
the comparable period in the preceding fiscal year and to the figures set forth
in the business plan provided pursuant to Section 5.1(i) for the comparable
period, prepared in accordance with GAAP (except that such quarterly statements
need not include footnotes) and certified by both the chief financial officer
and the chief executive officer of Coleman Cable. The delivery by electronic
mail or other form of electronic distribution reasonably satisfactory to the US
Agent of a Form 10-Q as filed with the SEC within 45 days after the end of such
fiscal quarter shall be deemed to satisfy all of the requirements contained in
this Section 5.1(b);

(c) within 30 days after the end of each fiscal month of Coleman Cable other
than the final month of each fiscal quarter, unaudited consolidated and
consolidating financial statements and divisional operating income analyses
similar to those required by clause (a) above as of the end of such period and
for such period then ended and for the period from the beginning of the current
fiscal year to the end of such period, setting forth in comparative form the
corresponding figures for the comparable period in the preceding fiscal year and
to the figures set forth in the business plan provided pursuant to
Section 5.1(i) for the comparable period, prepared in accordance with GAAP
(except that such monthly statements need not include footnotes);

(d) at the time of delivery of each quarterly and annual statement, a Compliance
Certificate signed by both the chief financial officer and the chief executive
officer of Coleman Cable stating that both signing officers have caused this
Agreement to be reviewed and have no knowledge of any Default or Event of
Default, during such quarter or at the end of such year, or, if such officer has
such knowledge, specifying each Default or Event of Default and the nature
thereof, and showing compliance by Coleman Cable as of the date of such
statement with the financial covenant set forth in Section 7;

(e) not later than 12:00 noon (Chicago time) on the 15th day of each month (or
if such day is not a Business Day, then on the next succeeding Business Day), a
US Borrowing Base Certificate, duly completed and certified by the
Administrative Borrower’s chief financial officer or a person designated by the
chief financial officer, detailing the US Borrowers’ US Eligible Accounts as of
the last day of the immediately preceding month and US Eligible Inventory as of
the most recent date of determination which shall be determined not less
frequently than monthly. In addition, on the 15th day of each month (or if such
day is not a Business Day, then on the next succeeding Business Day), Coleman
Cable shall furnish a written report to US Agent and the Lenders setting forth,
in each case with respect to Accounts and Inventory of the US Borrowers, (i) the
accounts receivable aged trial balance at the immediately preceding month end
for each account debtor, aged by due date, which aging reports shall indicate
which Accounts are current, up to 30, 30 to 60 and over 60 days past due, and
which Accounts are up to 30, 30 to 60, 60 to 90, 90 to 120 days and over 120
days past their invoice date, and shall list the names and addresses of all
applicable account debtors, (ii) an accounts payable aged trial balance at the
immediately preceding month end for each account creditor, aged by due date,
which aging reports shall indicate which Accounts are current, up to 30, 30 to
60 and over 60 days past due and shall list the names and addresses of all
applicable account creditors), (iii) a schedule of Inventory owned by each US
Borrower by location and category; and (iv) an accounts receivable aged trial
balance at the immediately preceding month end for each account debtor that pays
through a Buying Association, organized and listed by Buying

 

-62-

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

Association, and aged by due date, which aging reports shall indicate which
Accounts are current, up to 30, 30 to 60 and over 60 days past due, and which
Accounts are up to 30, 30 to 60, 60 to 90, 90 to 120 days and over 120 days past
their invoice date, and shall list the names and addresses of all applicable
account debtors, such information to be presented by individual account debtor
and by Buying Association (aggregated for all account debtors which are members
of a single Buying Association). The US Agent may, but shall not be required to,
rely on each US Borrowing Base Certificate delivered hereunder as accurately
setting forth the available US Borrowing Base for all purposes of this Agreement
until such time as a new US Borrowing Base Certificate is delivered to the US
Agent in accordance herewith. Notwithstanding the foregoing, each of the
certificates, reports and schedules required to be delivered under this clause
(e) on a monthly basis shall be delivered, as determined by US Agent or as
directed by Required Lenders, on a weekly basis within 2 Business Days after the
end of each such week at all times after Excess Availability is less than
$25,000,000 for a period of 5 consecutive Business Days (provided, that,
delivery of such certificates, reports and schedules shall return to a monthly
basis if Excess Availability is greater than $25,000,000 for 60 consecutive
days);

(f) not later than 12:00 noon (Chicago time) on the 15th day of each month (or
if such day is not a Business Day, then on the next succeeding Business Day), a
Canadian Borrowing Base Certificate, duly completed and certified by the
Canadian Borrower’s chief financial officer or a person designated by the chief
financial officer, detailing the Canadian Borrower’s Canadian Eligible Accounts
as of the last day of the immediately preceding month and Canadian Eligible
Inventory as of the most recent date of determination which shall be determined
not less frequently than monthly. In addition, on the 15th day of each month (or
if such day is not a Business Day, then on the next succeeding Business Day),
Canadian Borrower shall furnish a written report to Canadian Agent and the
Lenders setting forth, in each case with respect to Accounts and Inventory of
the Canadian Borrower, (i) the accounts receivable aged trial balance at the
immediately preceding month end for each account debtor, aged by due date, which
aging reports shall indicate which Accounts are current, up to 30, 30 to 60 and
over 60 days past due, and which Accounts are up to 30, 30 to 60, 60 to 90, 90
to 120 days and over 120 days past their invoice date, and shall list the names
and addresses of all applicable account debtors, (ii) an accounts payable aged
trial balance at the immediately preceding month end for each account creditor,
aged by due date, which aging reports shall indicate which Accounts are current,
up to 30, 30 to 60 and over 60 days past due and shall list the names and
addresses of all applicable account creditors), (iii) a schedule of Inventory
owned by Canadian Borrower by location and category; and (iv) an accounts
receivable aged trial balance at the immediately preceding month end for each
account debtor that pays through a Buying Association, organized and listed by
Buying Association, and aged by due date, which aging reports shall indicate
which Accounts are current, up to 30, 30 to 60 and over 60 days past due, and
which Accounts are up to 30, 30 to 60, 60 to 90, 90 to 120 days and over 120
days past their invoice date, and shall list the names and addresses of all
applicable account debtors, such information to be presented by individual
account debtor and by Buying Association (aggregated for all account debtors
which are members of a single Buying Association). The Canadian Agent may, but
shall not be required to, rely on each Canadian Borrowing Base Certificate
delivered hereunder as accurately setting forth the available Canadian Borrowing
Base for all purposes of this Agreement until such time as a new Canadian
Borrowing Base Certificate is delivered to the Canadian Agent in accordance
herewith. Notwithstanding the foregoing, each of the certificates, reports and

 

-63-

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

schedules required to be delivered under this clause (f) on a monthly basis
shall be delivered, as determined by Canadian Agent or as directed by Required
Lenders, on a weekly basis within 2 Business Days after the end of each such
week at all times after Excess Availability is less than $25,000,000 for a
period of 5 consecutive Business Days (provided, that, delivery of such
certificates, reports and schedules shall return to a monthly basis if Excess
Availability is greater than $25,000,000 for 60 consecutive days);

(g) promptly upon receipt thereof, copies of all management letters and other
material reports which are submitted to Coleman Cable by its Independent
Accountant in connection with any annual or interim audit of the books of
Coleman Cable made by such accountants;

(h) as soon as practicable but, in any event, within 10 Business Days after the
issuance thereof, copies of such other financial statements and reports as
Coleman Cable shall send to its stockholders as such, and copies of all regular
and periodic reports which Coleman Cable may be required to file with the
Securities and Exchange Commission or any similar or corresponding governmental
commission, department or agency substituted therefor, or any similar or
corresponding Governmental Authority;

(i) no later than 60 days after the beginning of each fiscal year during which
this Agreement is in effect, a business plan for the immediately succeeding
fiscal year of Coleman Cable which includes a projected consolidated balance
sheet and statement of income for such fiscal year, a projected consolidated
statement of cash flows for such fiscal year, in each case, prepared on a
monthly basis for such fiscal year;

(j) upon the request of either Agent, promptly upon receipt thereof, copies of
all notices delivered to any Loan Party or sent by or on behalf of any Loan
Party with respect to the Senior Note Debt (2010), including, without
limitation, any notice of default and all reports required by and/or delivered
to the holders of the Senior Notes (2010) (the Loan Parties expressly agreeing
to furnish all such notices by telecopy or electronic transmission);

(k) promptly and in any event within 2 Business Days after becoming aware of the
occurrence of a Default or Event of Default, a certificate of the chief
executive officer or chief financial officer of the Administrative Borrower
specifying the nature thereof and the Loan Parties’ proposed response thereto,
each in reasonable detail;

(l) promptly and in any event within 15 days after the end of each fiscal
quarter, a certificate setting for the Quarterly Excess Availability
Calculation, duly completed and certified by Administrative Borrower’s chief
financial officer or a person designated by the chief financial officer; and

(m) with reasonable promptness, such other data as either Agent may reasonably
request.

Documents required to be delivered pursuant to this Section 5.1 (to the extent
any such documents are included in materials otherwise filed with the SEC) may
be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which any Borrower posts such documents, or
provides a link thereto on Borrowers’ website on

 

-64-

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

the Internet at the website address listed on Schedule 5.1 and notifies the
Agents that such documents are available (which shall include notification via
website subscription); or (ii) on which such documents are posted on the
Borrowers’ behalf on an Internet or intranet website, if any, to which each
Lender and the Agents have access (whether a commercial, third-party website or
whether sponsored by the Agents) and Agents receive notification that such
documents are available; provided, that the Borrowers shall deliver paper copies
of such documents to either Agent or any Lender upon its request to the
Administrative Borrower to deliver such paper copies. Notwithstanding anything
contained in this paragraph to the contrary, in every instance the Borrowers
shall be required to provide copies of the Compliance Certificates
electronically or otherwise in a manner reasonably satisfactory to the Agents.
The Agents shall have no obligation to request the delivery of or to maintain
paper copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by Borrowers with any such request for
delivery by a Lender, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.

5.2. Inventory.

(a) Upon the request of the US Agent after the occurrence and during the
continuance of an Event of Default, the US Loan Parties will provide to the US
Agent written statements listing items of Inventory of the US Loan Parties in
reasonable detail as requested by the US Agent. The US Loan Parties conduct
cycle counts of Inventory from time to time and will conduct at least annually a
physical count of any Inventory for which perpetual inventory with
cycle-counting adjustments is not maintained. The US Loan Parties will permit US
Agent or its representative to observe any such count and shall furnish a copy
of such count promptly to the US Agent accompanied by a report of the value
(valued at FIFO) of such Inventory; provided that the US Loan Parties will
conduct such a physical count or cycle count at such other times and as of such
dates as the US Agent shall reasonably request, not to exceed, in the case of a
physical count, one (1) per calendar year or, after the occurrence and during
the continuance of an Event of Default, as often as requested by the US Agent.

(b) Upon the request of the Canadian Agent after the occurrence and during the
continuance of an Event of Default, the Canadian Loan Parties will provide to
the Canadian Agent written statements listing items of Inventory of the Canadian
Loan Parties in reasonable detail as requested by the Canadian Agent. The
Canadian Loan Parties conduct cycle counts of Inventory from time to time and
will conduct at least annually a physical count of any Inventory for which
perpetual inventory with cycle-counting adjustments is not maintained. The
Canadian Loan Parties will permit Canadian Agent or its representative to
observe any such count and shall furnish a copy of such count promptly to the
Canadian Agent accompanied by a report of the value (valued at FIFO) of such
Inventory; provided that the Canadian Loan Parties will conduct such a physical
count or cycle count at such other times and as of such dates as the Canadian
Agent shall reasonably request, not to exceed, in the case of a physical count,
one (1) per calendar year or, after the occurrence and during the continuance of
an Event of Default, as often as requested by the US Agent.

5.3. Corporate Existence.

Each Loan Party and each of its Subsidiaries (a) will, subject to Section 6.4,
maintain their current corporate or other organizational existence, will
maintain in full force and

 

-65-

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

effect all material licenses, bonds, franchises, leases, trademarks and
qualifications to do business, (b) will obtain or maintain patents, contracts
and other rights necessary or desirable to the profitable conduct of their
businesses, (c) will continue in, and limit their operations to, substantially
the same general lines of business as presently conducted by Coleman Cable and
its Subsidiaries, and business activities reasonably related, ancillary or
complementary thereto and (d) will comply with all applicable laws and
regulations of any federal, state, provincial or local Governmental Authority,
except where noncompliance of clauses (a) (solely with respect to maintaining
all material licenses, bonds, franchises, leases, trademarks and qualifications
to do business), (b) and (d) hereof would not reasonably be expected to cause a
Material Adverse Change. Notwithstanding the foregoing, the following shall be
expressly permitted: (i) the dissolution, liquidation or winding up of any
Subsidiary of Coleman Cable that is not a Loan Party; and (ii) upon prior
written notice to the US Agent, the dissolution, liquidation or winding up of
any Loan Party (other than Coleman Cable); provided that the assets of any such
Loan Party shall be transferred to another Loan Party.

5.4. ERISA.

Each Loan Party will deliver to the US Agent, at such Loan Party’ expense, the
following information at the times specified below:

(a) Promptly after any Loan Party or any of its Subsidiaries or ERISA Affiliates
knows that a Termination Event has occurred, a written statement describing such
Termination Event and the action, if any, which such Loan Party or other such
entities have taken, are taking or propose to take with respect thereto, and
when known, any action taken or threatened by any Governmental Authority
(including, without limitation, the Internal Revenue Service, Department of
Labor or PBGC) with respect thereto;

(b) Promptly after any Loan Party or any of its Subsidiaries or ERISA Affiliates
knows that a prohibited transaction (as defined in Section 406 of ERISA and
Section 4975 of the IRC) for which a statutory, private or class exemption is
not available has occurred, a statement describing such transaction and the
action which such Loan Party or other such entities have taken, are taking or
propose to take with respect thereto;

(c) Upon request of US Agent, copies of each annual report (form 5500 series),
including all schedules and attachments thereto, filed with respect to each
Benefit Plan;

(d) Upon request of US Agent, and following receipt by any Loan Party or any of
its Subsidiaries or ERISA Affiliates of each actuarial report for any Benefit
Plan or Multiemployer Plan and each annual report for any Multiemployer Plan,
copies of each such report;

(e) Promptly after the filing thereof with the Internal Revenue Service or
Department of Labor, a copy of each funding waiver request filed with respect to
any Benefit Plan and all communications received by any Loan Party or any of its
Subsidiaries or ERISA Affiliates with respect to such request;

(f) Promptly upon the occurrence thereof, notification of any increase in the
benefits of any existing Benefit Plan or the establishment of any new Benefit
Plan or the commencement of contributions to any Benefit Plan to which any Loan
Party or any of its Subsidiaries or ERISA Affiliates was not previously
contributing;

 

-66-

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

(g) Promptly after any Loan Party or any of its Subsidiaries or ERISA Affiliates
fail to make a required installment or any other required payment under
Section 412 of the IRC on or before the due date for such installment or
payment, a notification of such failure.

(h) Promptly after receipt by any Loan Party or any of its Subsidiaries or ERISA
Affiliates of a notice regarding the imposition of withdrawal liability, copies
of each such notice;

For purposes of this Section 5.4, any Loan Party or any of its Subsidiaries or
ERISA Affiliates shall be deemed to know all facts known by the administrator of
any Plan of which such entity is the plan sponsor. The Loan Parties will
establish, maintain and operate all Plans to comply in all material respects
with the applicable provisions of ERISA, the IRC, and all other applicable laws,
and the regulations and interpretations thereunder other than to the extent that
the Loan Parties are in good faith contesting by appropriate proceedings the
validity or implication of any such provision, law, rule, regulation or
interpretation.

5.5. Proceedings or Adverse Changes.

The Loan Parties will as soon as possible, and in any event within 5 Business
Days after any Loan Party learns of the following, give written notice to the US
Agent of any proceeding(s) being instituted or threatened to be instituted by or
against any Loan Party or any of its Subsidiaries in any federal, state,
provincial, local or foreign court or before any commission or other regulatory
body (federal, state, provincial, local or foreign) that, if adversely
determined, would reasonably be expected to cause a Material Adverse Change.
Provision of such notice by the Loan Parties will not constitute a waiver or
excuse of any Default or Event of Default occurring as a result of such changes
or events.

5.6. Environmental Matters.

Each Loan Party will conduct its business and the businesses of each of the
Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, directions, ordinances, criteria and guidelines in all
jurisdictions in which any of them is or may at any time be doing business
including, without limitation, environmental land use, occupational safety or
health laws, regulations, directions, ordinances, criteria, guidelines,
requirements or permits in all jurisdictions in which any of them is or may at
any time be doing business, except to the extent that any Loan Party or any of
its Subsidiaries is contesting, in good faith by appropriate legal proceedings,
any such law, regulation, direction, ordinance, criteria, guideline, or
interpretation thereof or application thereof or to the extent that
non-compliance thereof would not reasonably be expected to cause a Material
Adverse Change; provided, that each Loan Party and each of the Subsidiaries will
comply with the order of any court or other governmental body of the applicable
jurisdiction relating to such laws unless such Loan Party or Subsidiary shall
currently be prosecuting an appeal or proceedings for review and shall have
secured a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review. If any
Loan Party or any of its Subsidiaries shall (a) receive notice that any material
violation of any federal, provincial, state, or local environmental

 

-67-

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

law, regulation, direction, ordinance, criteria or guideline may have been
committed or is about to be committed by such Loan Party or any of its
Subsidiaries, (b) receive notice that any administrative or judicial complaint
or order has been filed or is about to be filed against such Loan Party or any
of its Subsidiaries alleging material violations of any federal, provincial,
state or local environmental law, regulation, direction, ordinance, criteria or
guideline or requiring such Loan Party or any of its Subsidiaries to take any
action in connection with the release of toxic or hazardous substances into the
environment or (c) receive any notice from a federal, provincial, state, or
local governmental agency or private party alleging that such Loan Party or any
of its Subsidiaries may be liable or responsible for costs which may exceed
$1,000,000 associated with a response to or cleanup of a release of a toxic or
hazardous substance into the environment or any damages caused thereby, the Loan
Parties will provide the US Agent with a copy of such notice within 15 days
after the receipt thereof by the applicable Loan Party or any of its
Subsidiaries. Within 15 days after any Loan Party learns of the enactment or
promulgation of any federal, provincial, state or local environmental law,
regulation, direction, ordinance, criteria or guideline which would reasonably
cause a Material Adverse Change, such Loan Party will provide the US Agent with
notice thereof. Each Loan Party will promptly take all actions necessary to
prevent the imposition of any Liens on any of its properties arising out of or
related to any environmental matters. After the occurrence and during the
continuation of an Event of Default, at the request of the US Agent from time to
time, and at the sole cost and expense of the Loan Parties, the Loan Parties
will retain an environmental consulting firm, satisfactory to the US Agent in
its reasonable discretion, to conduct an environmental review and audit of the
properties of the Loan Parties and their Subsidiaries located in the United
States and Canada and provide to the US Agent and each Lender a copy of any
reports delivered in connection therewith.

5.7. Books and Records; Inspection.

Each Loan Party will, and will cause each of its Subsidiaries to, maintain books
and records pertaining to the Collateral in such detail, form and scope as is
consistent with good business practice. Each Loan Party agrees that either of
the Agents or their agents may enter upon the premises of each Loan Party or any
of its Subsidiaries at any time and from time to time upon reasonable prior
notice, during normal business hours, and at any time at all on and after the
occurrence of an Event of Default which continues beyond the expiration of any
grace or cure period applicable thereto, and which has not otherwise been waived
by Required Lenders, for the purpose of (a) enabling each Agent’s internal
auditors or outside third party designees to conduct field examinations at such
Loan Party’s expense, (b) inspecting and appraising the Collateral,
(c) inspecting and/or copying (at such Loan Party’ expense) any and all records
pertaining thereto, (d) discussing the affairs, finances and business of any
Loan Party or with any officers, employees and directors of any Loan Party with
the Independent Accountant and (e) verifying Eligible Accounts and/or Eligible
Inventory. The Lenders, in the reasonable discretion of the US Agent, may
accompany either Agent at such Lender’s sole expense in connection with the
foregoing inspections. Each Loan Party agrees to afford each Agent 10 days prior
written notice (or such shorter period approved by US Agent in its sole
discretion) of any change in the location of any Collateral (other than
vehicles, Inventory held for shipment by third Persons, Inventory in transit,
Inventory held for processing by third Persons or immaterial quantities of
assets, equipment or Inventory with an aggregate book value of less than
$1,000,000), and 10 days prior written notice (or such shorter period approved
by US Agent in its sole discretion) of

 

-68-

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

any change in its jurisdiction of organization or the location of its chief
executive office or place of business from the locations specified in
Schedule 4.7, and to execute in advance of such change, cause to be filed and/or
delivered to each Agent any financing statements or other documents reasonably
required by such Agent, all in form and substance reasonably satisfactory to
such Agent. Each Loan Party agrees to advise each Agent promptly, in sufficient
detail, of any event which would reasonably be expected to cause a Material
Adverse Change.

5.8. Collateral Records.

Each Loan Party will, and will cause each of its Subsidiaries to, execute and
deliver to each Agent, from time to time, solely for such Agent’s convenience in
maintaining a record of the Collateral, such written statements and schedules as
such Agent may reasonably require, including without limitation those described
in Section 5.1, designating, identifying or describing the Collateral pledged to
each Agent, for the benefit of the Lenders, hereunder. Any Loan Party’s failure,
however, to promptly give either Agent such statements or schedules shall not
affect, diminish, modify or otherwise limit the Agents’ or the Lenders’ security
interests in the Collateral. Such Loan Party agrees to maintain such books and
records regarding Accounts and the other Collateral as each Agent may reasonably
require, and agrees that such books and records will reflect the Lenders’
interest in the Accounts and such other Collateral.

5.9. Security Interests.

Each Loan Party will defend the Collateral against all non-frivolous claims and
demands of all Persons at any time claiming the same or any interest therein.
Each Loan Party agrees to, and will cause the other Loan Parties to, comply with
the requirements of all state, provincial and federal laws in order to grant to
the Lenders valid and perfected first security interest in the Collateral,
subject to Permitted Liens. Each Agent is hereby authorized by each Loan Party
to file any financing statements covering the Collateral whether or not any Loan
Party’s signature appears thereon. Each Loan Party agrees to do whatever either
Agent may reasonably request, from time to time, by way of: filing notices of
liens, financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with each Agent’s custodians; keeping stock
records; making commercially reasonable efforts to obtain waivers from landlords
and mortgagees and from warehousemen, fillers, processors and packers and their
respective landlords and mortgagees; paying claims, which might if unpaid,
become a Lien (other than a Permitted Lien) on the Collateral; assigning its
rights to the payment of Accounts pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. §3727 et. seq.) (the failure of which to so assign
will permit the applicable Agent to exclude such Accounts from the applicable
Borrowing Base); and performing such further acts as such Agent may reasonably
require in order to effect the purposes of this Agreement and the other Loan
Documents. Any and all fees, costs and expenses of whatever kind and nature
(including any Taxes, reasonable and documented attorneys’ fees or costs for
insurance of any kind), which either Agent may incur with respect to the
Collateral or the Obligations: in filing public notices; in preparing or filing
documents; making title examinations or rendering opinions; in protecting,
maintaining, or preserving the Collateral or its interest therein; in enforcing
or foreclosing the Liens hereunder, whether through judicial procedures or
otherwise; or in defending or prosecuting any actions or proceedings arising out
of or relating to its transactions with any Loan Party or any of its
Subsidiaries under this Agreement or any other Loan Document, will be borne and
paid by the Loan Parties. If same are not promptly paid by the Loan Parties,
each Agent

 

-69-

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

may pay same on the Loan Parties’ behalf, and the amount thereof shall be an
Obligation secured hereby and due to such Agent on demand. If any Loan Party
leases any Real Property or acquires any Real Property with a fair market value
in excess of $2,500,000 after the date hereof, such Loan Party will promptly
(i) submit to the US Agent an updated Schedule 4.19 pursuant to Section 5.23 and
(ii) with respect to all such Real Property with a fair market value in excess
of $2,500,000 that is owned by a Loan Party, execute and deliver to the
applicable Agent a Mortgage on such Real Property, and deliver to the each Agent
the other items reasonably requested by such Agent in connection therewith,
including, without limitation, surveys and flood hazard certificates, and all
provisions of this Agreement (including, without limitation, the foregoing
provisions of this Section 5.9 and all other applicable representations,
warranties and covenants) that are applicable to Real Property or Mortgages
shall apply thereto.

5.10. Insurance; Casualty Loss.

Each Loan Party will, and will cause each of the Subsidiaries to, maintain
public liability insurance, third party property damage insurance and
replacement value insurance on their assets under such policies of insurance,
with such insurance companies, in such amounts and covering such risks as
ordinarily are insured against by other Persons engaged in the same or similar
lines of business. All policies covering the Collateral are to name the US Loan
Parties and the US Agent or the Canadian Loan Parties and the Canadian Agent, as
applicable, in each case for the benefit of the Lenders, as loss payees in case
of loss, as their interests may appear, and all liability policies are to name
the US Loan Parties and the Agents or the Canadian Loan Parties and the Agents,
as applicable, as additional insureds, as their interests may appear, and are to
contain such other provisions as the US Agent may reasonably require to fully
protect each Agent’s interest in the Collateral and to any payments to be made
under such policies. True copies of all original insurance policies or
certificates of insurance evidencing such insurance are to be delivered to US
Agent on or prior to the Closing Date, premium prepaid, with the loss payable
endorsement in the applicable Agent’s favor, and shall (to the extent the
applicable insurance company has agreed) provide for not less than 30 days prior
written notice to the applicable Agent, of the exercise of any right of
cancellation. In the event that any Borrower receives any notice of cancellation
or intended cancellation of any of its or its Subsidiaries’ insurance policies,
Borrowers shall immediately notify US Agent of the receipt of such notice and
send a copy of such notice to US Agent. In the event any Loan Party or any of
its Subsidiaries fail to respond in a timely and appropriate manner (as
determined by the US Agent in its sole discretion) with respect to collecting
under any insurance policies required to be maintained under this Section 5.10,
following the occurrence of an Event of Default and during the continuance
thereof, each Agent shall have the right, in the name of such Agent, such Loan
Party or Subsidiary, to file claims under such insurance policies, to receive
and give acquittance for any payments that may be payable thereunder, and to
execute any and all endorsements, receipts, releases, assignments, reassignments
or other documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Loan Party will
provide written notice to Agents and the Lenders of the occurrence of any of the
following events within 5 Business Days after the occurrence of such event: any
asset or property owned or used by any Loan Party or any of its Subsidiaries is
(i) materially damaged or destroyed, or suffers any other loss or (ii) is
condemned, confiscated or otherwise taken, in whole or in part, or the use
thereof is otherwise diminished so as to render impracticable or unreasonable
the use of such asset or property for the purpose to which such asset or
property

 

-70-

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

were used immediately prior to such condemnation, confiscation or taking, by
exercise of the powers of condemnation or eminent domain or otherwise, and in
either case the amount of the damage, destruction, loss or diminution in value
of the Collateral which is in excess of $2,500,000 (collectively, a “Casualty
Loss”). Each Loan Party will diligently file and prosecute its claim or claims
for any award or payment in connection with a Casualty Loss. Within 1 Business
Day of the date of receipt by any Loan Party or any of its Subsidiaries of the
proceeds of any Casualty Loss, such Loan Party shall prepay the outstanding
principal amount of the Obligations in accordance with Section 2.4(f) in an
amount equal to 100% of such proceeds (including condemnation awards and
payments in lieu thereof) received by such Person in connection with such
Casualty Loss; provided that, so long as (A) no Default or Event of Default
shall have occurred and is continuing or would result therefrom, (B) Borrowers
shall have given the Agents prior written notice of Borrowers’ intention to
apply such monies to the costs of replacement of the properties or assets that
are the subject of such Casualty Loss or the cost of purchase or construction of
other assets useful in the business of the Loan Parties, (C) the monies are held
in a Deposit Account in which an Agent has a perfected first-priority security
interest, and (D) the Loan Parties, as applicable, complete such replacement,
purchase, or construction within 365 days after the initial receipt of such
monies, then the Loan Party whose assets were the subject of such disposition
shall have the option to apply such monies to the costs of replacement of the
assets that are the subject of such Casualty Loss or the costs of purchase or
construction of other assets useful in the business of such Loan Party unless
and to the extent that such applicable period shall have expired without such
replacement, purchase, or construction being made or completed, in which case,
any amounts remaining in the Deposit Account referred to in clause (C) above
shall be paid to the applicable Agent and applied in accordance with
Section 2.4(f). After the occurrence and during the continuance of an Event of
Default, (i) no settlement on account of any such Casualty Loss shall be made
without the consent of the applicable Agent and (ii) each Agent may participate
in any such proceedings and the Loan Parties will deliver to each Agent such
documents as may be requested by such Agent to permit such participation and
will consult with each Agent, its attorneys and agents in the making and
prosecution of such claim or claims. Each Loan Party hereby irrevocably
authorizes and appoints each Agent its attorney-in-fact, after the occurrence
and continuance of an Event of Default, to collect and receive for any such
award or payment and to file and prosecute such claim or claims, which power of
attorney shall be irrevocable and shall be deemed to be coupled with an
interest, and each Loan Party shall, upon demand of either Agent, make, execute
and deliver any and all assignments and other instruments sufficient for the
purpose of assigning any such award or payment to the applicable Agent for the
benefit of the Lenders, free and clear of any encumbrances of any kind or nature
whatsoever.

5.11. Taxes.

Each Loan Party will, and will cause each of the Subsidiaries to, pay, when due
and in any event prior to delinquency, all federal, provincial and other Taxes
lawfully levied or assessed against any Loan Party, any of its Subsidiaries or
any of the Collateral; provided, however, that unless such Taxes have become a
federal or a provincial tax lien or ERISA lien on any of the assets of any Loan
Party or any of its Subsidiaries, no such Tax need be paid if (i) such Tax,
together with all other Taxes not paid when due, does not exceed $100,000 in the
aggregate, or (ii) if the same is being contested in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision shall have been made therefor as required
in order to be in conformity with GAAP.

 

-71-

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

5.12. Compliance With Laws.

Each Loan Party will, and will cause each of the Subsidiaries to, comply with
all acts, rules, regulations, orders, directions and ordinances of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply would not reasonably be expected to cause a
Material Adverse Change.

5.13. Use of Proceeds.

Use the proceeds of any loan made hereunder for any purpose other than (a) on
the Closing Date, to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and (b) thereafter, consistent with the terms
and conditions hereof, for their lawful and permitted purposes (including that
no part of the proceeds of the loans made to Borrowers will be used to purchase
or carry any such Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates
the provisions of Regulation T, U or X of the Board of Governors of the United
States Federal Reserve), including, without limitation, to finance the ongoing
general corporate needs of the Borrowers and to finance the consideration
payable in connection with Permitted Acquisitions.

5.14. Fiscal Year; Accounting Policies.

Each Loan Party agrees that it will not change its fiscal year from a year
ending December 31 unless required by law, in which case such Loan Party will
give the US Agent at least 30 days prior written notice thereof; provided, that
any Subsidiary acquired pursuant to a Permitted Acquisition that becomes a Loan
Party pursuant to Section 5.16 may for accounting purposes change its fiscal
year to conform with the fiscal year of Coleman Cable. Subject to Section 1.2,
each Loan Party agrees that it will not change its accounting policies from
those used to prepare the financial statements delivered pursuant to Section 4.6
without the prior written consent of the US Agent.

5.15. Notification of Certain Events.

Each Loan Party agrees that it will promptly notify US Agent of the occurrence
of any of the following events:

(a) any Material Contract of any Loan Party or any of its Subsidiaries is
terminated or amended in any material respect or any new Material Contract is
entered into (in which event each Loan Party shall provide the US Agent with a
copy of such Material Contract); or

(b) any order, judgment or decree in excess of $2,500,000 shall have been
entered against any Loan Party or any of its Subsidiaries or any of their
respective properties or assets, or

 

-72-

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

(c) any notification of a violation of any law or regulation or any inquiry
shall have been received by any Loan Party or any of its Subsidiaries from any
local, state, provincial, federal or foreign Governmental Authority or agency,
which violation or inquiry would reasonably be expected to cause a Material
Adverse Change.

5.16. Additional Guarantors.

(a) [Intentionally Omitted].

(b) Promptly upon any Person becoming a direct or indirect Subsidiary of Coleman
Cable (other than any Subsidiary which is not a Material Subsidiary or any
Foreign Subsidiary to the extent excluded below), the Loan Parties will provide
the Agents with written notice thereof setting forth information in reasonable
detail describing all of the assets of such Person and shall (i) cause such
Person to execute and deliver to each Agent a Joinder Agreement in substantially
the form of Exhibit J-1, causing such Subsidiary to become a party to (A) the
Canadian Security Agreement (if such Subsidiary is a Canadian Subsidiary) or US
Security Agreement (if such Subsidiary is not a Canadian Subsidiary, Foreign
Subsidiary or a Domestic Holdco Subsidiary), as applicable, as an “Obligor”
granting a first priority Lien on its personal property, subject to Permitted
Liens, (B) a Guaranty, as a “Guarantor” (provided that no Canadian Subsidiary,
Foreign Subsidiary or a Domestic Holdco Subsidiary shall be obligated to execute
a Guaranty of the US Obligations and no Foreign Subsidiary shall be obligated to
execute a Guaranty of the Canadian Obligations), and (C) the Contribution
Agreement (if such Subsidiary is a Borrower or a Guarantor as set forth
therein), as a “Contributing Party,” (ii) as appropriate, cause the Loan Party
of which such Person is the direct Subsidiary to execute and deliver to each
Agent a Pledge Agreement, as a “Pledgor”, causing all of such Person’s capital
Stock (or if such Loan Party is a US Loan Party, in the case in which such
Person is a Foreign Subsidiary, Canadian Subsidiary or Domestic Holdco
Subsidiary, 65% of such Person’s capital Stock) to be delivered to the US
Agent, if such Loan Party is a US Loan Party, or the Canadian Agent, if such
Loan Party is a Canadian Loan Party (in each case together with undated stock
powers signed in blank and pledged to the applicable Agent), (iii) cause any
such Person (other than a Foreign Subsidiary) to execute and deliver to the
applicable Agent, if it owns any Real Property, a Mortgage thereon (to the
extent required by Section 5.9) in favor of the applicable Agent and
(iv) deliver such other documentation as each Agent may reasonably request in
connection with the foregoing, including, without limitation, appropriate UCC-1
financing statements, PPSA financing statements, Acknowledgment Agreements,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to such Agent. For the avoidance of doubt, no Canadian Subsidiary,
Foreign Subsidiary, or Domestic Holdco Subsidiary shall guarantee any
obligations of Coleman Cable or any Domestic Subsidiary under this Agreement,
and Coleman Cable and its Domestic Subsidiaries shall not be required to pledge
more than 65% of the capital stock of any directly owned Canadian Subsidiary,
Foreign Subsidiary, or Domestic Holdco Subsidiary or to pledge any stock of any
indirectly owned Canadian Subsidiary, Foreign Subsidiary, or Domestic Holdco
Subsidiary to secure obligations of Coleman Cable or any Domestic Subsidiary
under this Agreement.

5.17. [Intentionally Omitted].

 

-73-

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

5.18. Collection of Accounts; Cash Management.

(a) The Loan Parties, individually or through Coleman Cable, shall establish and
shall maintain one or more lockboxes (each a “Lockbox”) with financial
institutions, including, without limitation, Wells Fargo, selected by Coleman
Cable and reasonably acceptable to the Agents (each a “Lockbox Bank”) and shall
instruct all account debtors on the Accounts of each Loan Party to remit all
payments to its respective Lockboxes. All amounts received by the Loan Parties
from any account debtor, in addition to all other cash received from any other
source (including but not limited to proceeds from asset sales and judgments,
but excluding the cash in those accounts permitted pursuant to Section 6.10),
shall be promptly deposited into an account which is maintained at a Lockbox
Bank and which is subject to a Deposit Account Control Agreement in favor of US
Agent, with respect to the US Loan Parties, or the Canadian Agent, with respect
to the Canadian Loan Parties, as applicable (each such account, a “Lockbox
Account”) or into a Cash Concentration Account.

(b) Unless (a) Excess Availability shall fall below $25,000,000 for 5 or more
consecutive Business Days (an “Excess Availability Event”) or (b) an Event of
Default has occurred and is continuing (each a “Cash Management Event”), each
Borrower may and will enforce, collect and receive all amounts owing on the
Accounts and other Collateral, for the benefit, and on behalf, of the Agents and
Lenders, but at the Borrowers’ sole expense in accordance with the provisions of
Section 5.18(c) hereof. Upon the occurrence of a Cash Management Event and until
Excess Availability is greater than $25,000,000 for 60 consecutive days and no
Event of Default has occurred and is continuing, (i) each Agent may, and at the
direction of Required Lenders shall, be entitled to enforce, collect and receive
all amounts owing on the Accounts, from the Account Debtors and/or any Buying
Association, and all other amounts for the Lenders’ benefit and on the Lenders’
behalf (but at the Loan Parties’ expense) and in accordance with the Loan
Documents, (ii) any checks, cash, notes or other instruments or property
received by any Loan Party or any of its Subsidiaries with respect to any
Accounts and/or other Collateral shall be held by such Loan Party or such
Subsidiary in trust for the benefit of the Lenders, separate from such Loan
Party’s or Subsidiary’s own property and funds, and immediately turned over in
accordance with Section 5.18(c) with proper assignments or endorsements and
(iii) no checks, drafts or other instruments received by either Agent shall
constitute final payment unless and until such instruments have actually been
collected.

(c) Unless a Cash Management Event shall have occurred and be continuing, the
Loan Parties shall be permitted to receive directly for their own account all
payments or other remittances of Accounts of the Loan Parties and other proceeds
of the Collateral. Upon the occurrence of a Cash Management Event and until
Excess Availability is greater than $25,000,000 for 60 consecutive days and no
Event of Default has occurred and is continuing, each Agent may, and at the
direction of the Required Lenders shall, give to the Loan Parties and the
Lockbox Banks a written payment direction notice (a “Payment Direction Notice”)
(which notice in the case of an Event of Default described in Section 8(f) shall
be deemed given to the Loan Parties without any further act by either Agent or
any Lender) directing that all receipts held in the Lockboxes shall be remitted
daily to the appropriate Lockbox Account. All funds deposited into the Lockbox
Accounts of the US Loan Parties or Canadian Loan Parties, as applicable, on any
Business Day shall be transferred to the US Cash Concentration Account or
Canadian Cash Concentration Account. as applicable. All collected funds
deposited on any

 

-74-

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

Business Day to the US Cash Concentration Account shall be transferred to US
Agent’s Account and applied by the US Agent on the following Business Day to
reduce the then outstanding balance of the US Advances and to pay accrued
interest thereon and to pay any other outstanding US Obligations which are then
due and payable hereunder; provided that for the purpose of determining US
Availability hereunder, such funds deposited into the US Cash Concentration
Account shall be deemed to have reduced the outstanding US Advances on the
Business Day such funds were deposited into such account. All good funds
deposited on any Business Day to the Canadian Cash Concentration Account shall
be transferred to Canadian Agent’s Account and applied by the Canadian Agent on
the following Business Day to reduce the then outstanding balance of the
Canadian Advances and to pay accrued interest thereon and to pay any other
outstanding Canadian Obligations which are then due and payable hereunder;
provided that for the purpose of determining Canadian Availability hereunder,
such funds deposited into the Canadian Cash Concentration Account shall be
deemed to have reduced the outstanding Canadian Advances on the Business Day
such funds were deposited into such account. All amounts received directly by
the Loan Parties from any account debtor, in addition to all other cash received
from any other source (including, without limitation, proceeds from asset sales
and judgments), shall be held in trust by the Loan Parties and promptly
deposited into a Lockbox Account or, if made by wire transfer, directly to the
applicable Cash Concentration Account.

(d) All funds deposited into the Cash Concentration Accounts shall immediately
become the property of the Agents and the Loan Parties shall obtain the
agreement by the Lockbox Banks to waive any offset rights against the funds so
deposited. Neither Agent assumes any responsibility for the Lockbox
arrangements, including without limitation, any claim of accord and satisfaction
or release with respect to deposits accepted by the Lockbox Banks thereunder.

(e) The Loan Parties may close Lockboxes only with the prior written consent of
the Agents and subject to the terms and conditions set forth in any applicable
Deposit Account Control Agreement. The Loan Parties may open new Lockboxes and
Lockbox Accounts, subject to such Lockbox Account being subject to a Deposit
Account Control Agreement as contemplated above.

(f) No Loan Party shall direct any account debtor to submit payment on any
Account to any address or location other than to a Lockbox. No collections from
any Account shall be deposited into any account other than a Lockbox Account or
a Cash Concentration Account.

(g) At such time as Excess Availability is greater than $25,000,000 for 60
consecutive days and no Event of Default has occurred and is continuing, the
applicable Agent shall give to the Lockbox Banks a notice rescinding any Payment
Direction Notice given by such Agent delivered in connection with such Cash
Management Event.

5.19. Notice; Credit Memoranda; and Returned Goods.

Each Loan Party will notify US Agent promptly of any matters materially
affecting the value, enforceability or collectability of any Account, and of all
material customer disputes, offsets, defenses, counterclaims, returns and
rejections, and all reclaimed or repossessed merchandise or goods, provided,
however, that such notice shall only be required as

 

-75-

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

to any such matter that affects Eligible Accounts outstanding at any one time
from any account debtor, which affected Eligible Accounts have a value greater
than $1,000,000. Each Loan Party will issue credit memoranda promptly (with
duplicates to either Agent upon its request for same) upon accepting returns or
granting allowances, and may continue to do so until the occurrence of an Event
of Default which continues beyond the expiration of the applicable grace or cure
period, or which has not otherwise been waived by the Required Lenders. After
the occurrence and during the continuance of an Event of Default, at the request
of Agents, each Loan Party agrees that all returned, reclaimed or repossessed
merchandise or goods shall be set aside by such Loan Party, marked with the
Lenders’ name and held by such Loan Party for the Lenders’ account as owner and
assignee.

5.20. Acknowledgment Agreements.

Each Loan Party will make commercially reasonable efforts to assist each Agent
in obtaining executed Acknowledgment Agreements from each of the warehousemen,
processors, packers, fillers, landlords, mortgagees, freight forwarders,
shipping agents, sales agents, Buying Associations and other bailees with whom
such Loan Party conducts business from time to time (other than those that
maintain immaterial quantities of assets, equipment or Inventory with an
aggregate book value of less than $1,000,000).

5.21. Trademarks.

Each Loan Party will do and cause to be done all things necessary to preserve
and keep in full force and effect all registrations of trademarks, service marks
and other marks, trade names or other trade rights, the non-preservation of
which would reasonably be expected to cause a Material Adverse Change.

5.22. Maintenance of Property.

Each Loan Party will, and will cause each of its Subsidiaries to, keep all
property useful and necessary to its respective business in good working order
and condition (ordinary wear and tear excepted) in accordance with their past
operating practices and not to commit or suffer any waste with respect to any of
its properties, except dispositions permitted hereunder and where the failure to
do so would not reasonably be expected to cause a Material Adverse Change.

5.23. Revisions or Updates to Schedules.

If any of the information or disclosures provided on any of Schedules 4.7, 4.8,
4.9, 4.14, 4.17, 4.19 or 4.28, originally attached hereto become outdated or
incorrect in any material respect, the Loan Parties (i) may, in their
discretion, at any time deliver to the Agents and the Lenders and (ii) shall, as
part of the compliance certificate required pursuant to Section 5.1(d), deliver
to the Agents and the Lenders such revision or updates to such Schedule(s) as
may be necessary or appropriate to update or correct such Schedule(s); provided,
no such revisions or updates shall be deemed to have cured any breach of
warranty or misrepresentation resulting from the inaccuracy or incompleteness of
any such Schedule(s).

 

-76-

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

5.24. Anti-Terrorism Laws.

None of the Loan Parties shall, nor shall any of them permit any of their
respective Subsidiaries to, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including the making or
receiving any contribution of funds, goods or services to or for the benefit of
any Blocked Person; (ii) deal in, or otherwise engage in any transaction
relating to, any property or interests in property blocked pursuant to Executive
Order No. 13224; or (iii) engage in on conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in Executive Order No. 13224 or the
Patriot Act. Each of the Loan Parties shall deliver to the Agents and Lenders
any certification or other evidence requested from time to time by either Agent
or any Lender, in such Agent’s or Lender’s, as applicable, sole discretion,
confirming such Person’s compliance with this Section.

5.25. Canadian Employees.

(a) Each Canadian Loan Party will cause to be delivered to the Canadian Agent,
promptly upon the Canadian Agent’s written request, a copy of each Canadian
Pension Plan.

(b) Each Canadian Loan Party shall to the extent it receives any correspondence
from any Governmental Authority with respect to any revocation of a Canadian
Pension Plan or Canadian Employment Benefit Plan, promptly provide the Canadian
Agent with such correspondence. Each Canadian Loan Party shall ensure that each
Canadian Pension Plan or Canadian Employee Plan retains its registered status
under and is administered in all material respects in accordance with the terms
of the applicable Canadian Pension Plan text, funding agreement and Canadian
Employee Benefits Legislation.

(c) Each Canadian Loan Party will provide to the Canadian Agent (i) upon request
copies of each annual information return, actuarial report (including applicable
schedules), and any applications for regulatory approval of asset withdrawals
other than benefit or individual member account transfers with respect to each
Canadian Pension Plan or any fund maintained in respect thereof, unless such
requirement is waived by the Agents; (ii) promptly after becoming aware of any
failure to withhold, make, remit or pay any employee or employer payments,
contributions to a Canadian Pension Plan on a timely basis or the occurrence of
or forthcoming occurrence of any event which would reasonably be expected to
result in the partial or full termination of any Canadian Pension Plan, written
notice thereof, together with an explanation of the actions taken or proposed to
be taken by any Loan Parties relating thereto; and (iii) upon request by the
Agents, copies of any notifications or remittances or similar documents prepared
and delivered to the trustee or custodian of any Canadian Pension Plan pursuant
to section 56.1 of the Pension Benefits Act (Ontario) or similar applicable
legislation in another jurisdiction.

(d) Each applicable Canadian Loan Party shall perform in all material respects
all obligations (including (if applicable), funding, investment and
administration obligations) required to be performed by such Canadian Loan Party
in connection with each applicable Canadian Pension Plan and remit all
contributions under each applicable Canadian Pension Plan and pay all premiums
required to be made or paid by it in accordance with the terms of each

 

-77-

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

applicable Canadian Employee Plan and Canadian Employee Benefits Legislation and
withhold by way of authorized payroll deductions or otherwise collect and pay
into the applicable Canadian Pension Plan or Canadian Employee Plan all employee
contributions required to be withheld or collected by it in accordance with the
terms of each applicable Canadian Pension Plan or Canadian Employee Plan, and
Canadian Employee Benefits Legislation.

5.26. Post-Closing Obligations.

(a) Within 90 days following the Closing Date, Borrowers shall deliver to US
Agent the following for each of the properties set forth on Schedule 5.26
hereto, each in form and substance satisfactory to US Agent: (i) a loan policy
of title insurance (including all endorsements thereto required by US Agent),
insuring the Mortgage encumbering such property as amended (if applicable) in
connection with this Agreement, (ii) a title commitment and all documents of
record set forth therein, (iii) an ALTA survey of such property, (iv) a flood
certificate, (v) with respect to any Existing Property identified on Schedule
5.26, recorded copies of any amendments to the Mortgage encumbering such
property, (vi) with respect to any leased property, a landlord estoppel and
consent, a copy of the lease and a recorded memorandum thereof, and (vii) with
respect to any New Property identified on Schedule 5.26, a recorded Mortgage for
such property.

(b) Within 30 days following the Closing Date or such longer period agreed to by
US Agent in its sole discretion (not to exceed 90 days following the Closing
Date), US Borrowers shall deliver to US Agent and Canadian Borrower shall
deliver to Canadian Agent, as applicable, a fully executed Deposit Account
Control Agreement with respect to each deposit account set forth on
Schedule 4.35 hereto (except for any deposit account for which a Deposit Account
Control Agreement is not required pursuant to Section 6.10), each in form and
substance satisfactory to US Agent or Canadian Agent, as applicable.

(c) Within 60 days following the Closing Date or such longer period agreed to by
Canadian Agent in its sole discretion, Canadian Borrower shall deliver to
Canadian Agent evidence, in form and substance satisfactory to Canadian Agent,
that (i) each of Bank of America, N.A. and Katy Industries have executed and
delivered to Canadian Borrower releases of their respective Liens on the
intellectual property of Canadian Borrower, and (ii) such releases have been
submitted to the Canadian Intellectual Property Office for filing.

(d) Within 30 days following the Closing Date, US Borrowers shall cause CCI to
(i) execute and deliver to each Agent a Joinder Agreement in substantially the
form of Exhibit J-1, causing such Subsidiary to become a party to (A) the US
Security Agreement, as an “Obligor” granting a first priority Lien on its
personal property, subject to Permitted Liens, (B) a Guaranty, as a “Guarantor”,
and (C) the Contribution Agreement, as a “Contributing Party,” (ii) cause the
Loan Party of which such Subsidiary is the direct Subsidiary to execute and
deliver to each Agent a Pledge Agreement, as a “Pledgor”, causing all of such
Person’s capital Stock to be delivered to the US Agent (in each case together
with undated stock powers signed in blank and pledged to US Agent),
(iii) execute and deliver to the US Agent, if it owns any Real Property, a
Mortgage thereon (to the extent required by Section 5.9) in favor of US Agent
and (iv) deliver such other documentation as each Agent may reasonably request
in connection with the foregoing, including, without limitation, appropriate
UCC-1 financing statements, Acknowledgment Agreements, certified resolutions and
other organizational and authorizing

 

-78-

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

documents of such Subsidiary and favorable opinions of counsel to such
Subsidiary (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to above), all
in form, content and scope reasonably satisfactory to such Agent.

(e) Within 30 days following the Closing Date, US Borrowers shall deliver to US
Agent an original stock certificate representing 100% of the shares of the stock
of Patco Electronics, Inc. held by TRC, together with an assignment separate
from certificate executed in blank, each in form and substance satisfactory to
US Agent.

(f) Within 30 days following the Closing Date or such longer period agreed to by
Canadian Agent in its sole discretion, Canadian Borrower shall deliver to
Canadian Agent a certificate of property insurance evidencing the property
insurance of Canadian Borrower (i) modified to state that commercial property
endorsement includes the standard mortgagee clause as approved by the Insurance
Bureau of Canada or (ii) otherwise modified in a manner satisfactory to Canadian
Agent in its sole discretion.

(g) Within 5 days following the Closing Date, Coleman Cable shall deliver to US
Agent evidence that Coleman Cable is in good standing in the state of Illinois,
in form and substance satisfactory to US Agent.

 

6. NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties will not
and will not permit any of their Subsidiaries to do any of the following:

6.1. Restrictions on Liens.

Mortgage, assign, pledge, transfer or otherwise permit any Lien or judgment
(whether as a result of a purchase money or title retention transaction, or
other security interest, or otherwise) to exist on any of its assets or
properties, whether real, personal or mixed, whether now owned or hereafter
acquired, except for Permitted Liens.

6.2. Restrictions on Additional Indebtedness.

Incur, create or suffer to exist, any Indebtedness other than Permitted
Indebtedness.

6.3. Restrictions on Sale of Assets.

Sell, lease, assign, transfer or otherwise dispose of any assets (including the
capital Stock of any Subsidiary of Coleman Cable) other than:

(a) sales of Inventory in the ordinary course of business;

(b) sale-leaseback transactions permitted by Section 6.14, the making of
Permitted Investments, and transactions permitted pursuant to Section 6.8;

 

-79-

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

(c) sales or other dispositions in the ordinary course of business of assets or
properties that are obsolete or that are no longer used or useful in the conduct
of such Loan Party’s or Subsidiary’s business;

(d) sales in the ordinary course of business of assets or properties (other than
Inventory) used in such Loan Party’s or Subsidiary’s business that are worn out
or in need of replacement and that are replaced with assets of reasonably
equivalent value or utility;

(e) termination of Hedge Agreements in the ordinary course of business;

(f) (A) the sale, lease or transfer of property or assets among the US Loan
Parties, or (B) the sale, lease or transfer of property or assets among the
Canadian Loan Parties;

(g) so long as no Event of Default has occurred and is continuing or would
result therefrom, the sale of all or substantially all of the assets of any
Subsidiary of Coleman Cable that is not a Loan Party; and

(h) so long as no Event of Default has occurred and is continuing or would
result therefrom, the sale of all of the capital Stock of any Subsidiary of
Coleman Cable that is not a Loan Party.

(i) the sale or discount, in each case without recourse, of Accounts arising in
the ordinary course of business, but only in connection with the compromise or
collection thereof;

(j) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights
and other intellectual property rights in the ordinary course of business;

(k) any involuntary loss, damage or destruction of property;

(l) any involuntary condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, or confiscation or requisition of use of property;

(m) the leasing or subleasing of assets of any Borrower or its Subsidiaries in
the ordinary course of business;

(n) the lapse of registered patents, trademarks and other intellectual property
of any Borrower and its Subsidiaries, the lapse of which would not reasonably be
expected to cause in a Material Adverse Change and so long as such lapse is not
materially adverse to the interests of the Lenders;

(o) dispositions of assets acquired by Borrowers and their Subsidiaries pursuant
to a Permitted Acquisition consummated within 12 months of the date of the
proposed disposition so long as (i) the consideration received for the assets to
be so disposed is at least equal to the fair market value thereof, (ii) not less
than 75% of the consideration for such disposition is in the form of cash
received by a Loan Party, (iii) the assets to be so disposed are not necessary
or economically desirable in connection with the business of Borrowers and their
Subsidiaries, and (iv) the assets to be so disposed are readily identifiable as
assets acquired pursuant to the subject Permitted Acquisition; and

 

-80-

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

(p) sales, leases or other dispositions of assets not otherwise permitted in
clauses (a) through (o) above so long as (i) before and after giving effect to
such sale, lease or disposition, no Default or Event of Default is in existence
or would result therefrom, (ii) the consideration received for the assets so
disposed is at least equal to the fair market value thereof, (iii) after giving
effect to such sale, lease or disposition, Excess Availability is at least equal
to Required Excess Availability, and (iv) such sale, lease or disposition is
made at fair market value and the aggregate fair market value of all assets
disposed of in any one calendar year (including the proposed disposition) would
not exceed $5,000,000; provided, that such limitation for the aggregate fair
market value of all assets disposed of in any one calendar year shall be
increased to 15% of the Consolidated Assets so long as (A) the conditions set
forth in clauses (i) through (iii) above in this Section 6.3(p) are satisfied,
(B) in the case of individual assets with a book value in excess of $1,000,000,
the consideration received in respect thereof is at least equal to the portion
of the Advances predicated on the value of such assets, (C) the consideration
received in respect thereof is all cash, and (D) at least 10 days prior to such
sale, lease or disposition, Borrowers shall have provided US Agent with written
confirmation, supported by reasonably detailed calculations, that on a pro forma
basis (taking into account the elimination of the assets and business subject to
such sale, lease or disposition), Borrowers (x) would have a Fixed Charge
Coverage Ratio of at least 1.0 to 1.0, measured for the 12 month period ending
on the last day of the most recently ended calendar month for which US Agent has
received the financial statements required to be delivered under Section 5.1
prior to such sale, lease or disposition, and (y) are projected to have a Fixed
Charge Coverage Ratio of at least 1.0 to 1.0 for the 12 consecutive month period
ended one year after the proposed date of consummation of such sale, lease or
disposition.

6.4. No Corporate Changes.

Other than to consummate a Permitted Acquisition so long as a Loan Party is the
surviving entity, merge, amalgamate or consolidate with any Person, except the
following, without duplication, shall be expressly permitted:

(a) so long as no Event of Default has occurred and is continuing or would
result therefrom, the merger, amalgamation or consolidation of a Subsidiary of
Coleman Cable with or into another Subsidiary (including a Subsidiary acquired
in a Permitted Acquisition) of Coleman Cable; provided that if either Subsidiary
is a Loan Party, the continuing or surviving Person shall be a Loan Party, if
either Loan Party is a US Loan Party, the continuing or surviving Person shall
be a US Loan Party and if either Subsidiary is a Borrower, the continuing or
surviving Person shall be a Borrower;

(b) the merger, amalgamation or consolidation of a Subsidiary (including a
Subsidiary acquired in a Permitted Acquisition) of Coleman Cable with or into
Coleman Cable; provided that Coleman Cable shall be the continuing or surviving
entity;

(c) alter or modify any Loan Party’s or any of its Subsidiary’s articles or
certificate of incorporation or other equivalent organizational document or form
of organization in a manner materially adverse to the interests of the Agents or
the Lenders or which would reasonably be expected to cause a Material Adverse
Change;

 

-81-

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

(d) without providing 10 days prior written notice to US Agent (or such shorter
period approved by US Agent in its sole discretion), (i) change its state or
other jurisdiction of incorporation or formation, (ii) change its registered
corporate name, (iii) change the location of its chief executive office and
principal place of business (as well as its books and records) from the
locations set forth on Schedule 4.7, or (iv) change the location of its
Collateral from the locations set forth for such Person on Schedule 4.7; or

(e) enter into or engage in any business, operation or activity materially
different from that presently being conducted by the Loan Parties.

6.5. No Guarantees.

Assume, guarantee, endorse, or otherwise become liable upon the obligations of
any other Person, including, without limitation, any Subsidiary or Affiliate of
any Loan Party, except (a) by the endorsement of negotiable instruments in the
ordinary course of business, (b) by the giving of indemnities in connection with
the sale of Inventory or other asset dispositions permitted hereunder.
(c) guarantees of Permitted Indebtedness and (d) accounts payable, operating
leases and other obligations (not constituting Indebtedness) that arose in the
ordinary course of business assumed by a Loan Party upon the consummation of a
Permitted Acquisition; and (e) unsecured guarantees of Coleman Cable and its
Subsidiaries in respect of accounts payable, operating leases and other
obligations (not constituting Indebtedness) entered into in the ordinary course
of business.

6.6. No Restricted Payments.

Make a Restricted Payment, other than: (a) the payment of dividends solely in
the same class of capital Stock of such Person; (b) the payment of dividends or
other distributions to any Loan Party (directly or through their Subsidiaries);
(c) the payment of pro rata dividends and distributions by any Foreign
Subsidiary; (d) so long as (i) no Default or Event of Default shall then exist
or would exist after giving effect thereto and (ii) the Fixed Charge Coverage
Ratio, measured for the 12 month period ending on the last day of the most
recently ended calendar month for which US Agent has received financial
statements required to be delivered under Section 5.1 and calculated as if such
payment was made on the last day of such 12 month period is at least 1.0 to 1.0,
the payment of consulting fees to Affiliates in an aggregate amount of up to
$1,000,000 in any 12 month period; (e) so long as no Default or Event of Default
shall then exist or would exist after giving effect thereto, repurchase of
equity interests (or other Restricted Payments pursuant to a profit sharing or
like plan) from present and former employees, directors and officers (or any
spouse, ex-spouse or estate of any of the foregoing) in an aggregate amount of
up to $2,500,000 in any fiscal year; and (f) Coleman Cable may purchase or
redeem any Stock issued by Coleman Cable or pay dividends to its stockholders in
an amount not to exceed $20,000,000 in any calendar year so long as (A) no
Default or Event of Default shall then exist or would exist after giving effect
thereto, and (B) after giving effect to such purchase or redemption, Excess
Availability is at least equal to Required Excess Availability; provided, that
such $20,000,000 limitation shall not apply so long as each of the following
conditions shall be satisfied: (i) Excess Availability for each day of the 30
day period ending on the date of such purchase, redemption or payment is equal
to or greater than Required Excess Availability, (ii) Excess Availability as of
the day of such purchase, redemption or payment, immediately after giving effect
to such purchase, redemption or payment, is equal to or greater than Required

 

-82-

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

Excess Availability, (iii) the Fixed Charge Coverage Ratio, measured for the 12
month period ending on the last day of the most recently ended calendar month
for which US Agent has received the financial statements required to be
delivered under Section 5.1 and calculated as if such purchase, redemption or
payment was made on the last day of such 12 month period is at least 1.0 to 1.0
and (iv) no Default or Event of Default shall then exist or would exist after
giving effect to such purchase, redemption or payment.

6.7. No Investments.

Make any Investment other than Permitted Investments.

6.8. No Affiliate Transactions.

Enter into any transaction with, including, without limitation, the purchase,
sale or exchange of property or the rendering of any service to any Subsidiary
or Affiliate of any Loan Party except:

(a) in the ordinary course of, and pursuant to the reasonable requirements of,
such Loan Party’s business and upon fair and reasonable terms no less favorable
to such Loan Party than could be obtained in a comparable arm’s-length
transaction with an unaffiliated Person;

(b) as permitted under Section 6.6;

(c) transactions among Loan Parties (provided, that no US Loan Party shall enter
into a transaction with a Canadian Loan Party, other than (i) a transaction that
is permitted under Section 6.8(a), (ii) loans in an aggregate amount outstanding
at any time not to exceed the amount permitted under clause (viii) of the
definition of Permitted Indebtedness, or (iii) other Investments not to exceed
the amount permitted under clause (viii) of the definition of Permitted
Investments);

(d) transactions among Subsidiaries that are not Loan Parties;

(e) so long as it has been approved by such Loan Party’s or such Subsidiary’s
board of directors (or comparable governing body or authorized officer) in
accordance with applicable law, any indemnity provided for the benefit of
directors (or comparable managers) of such Loan Party or such Subsidiary; and

(f) so long as it has been approved by such Loan Party’s or such Subsidiary’s
board of directors (or comparable governing body or authorized officer) in
accordance with applicable law, the payment of reasonable compensation,
severance, or employee benefit arrangements to employees, officers, and outside
directors of each Loan Party and its Subsidiaries in the ordinary course of
business and consistent with industry practice.

6.9. No Prohibited Transactions Under ERISA.

(a) Engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction which could result in a civil penalty or excise tax described in
Section 406 of ERISA or Section 4975 of the IRC for which a statutory or class
exemption is not available or a private exemption has not been previously
obtained from the Department of Labor;

 

-83-

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

(b) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;

(c) fail, or permit any ERISA Affiliate to fail to make any required
contribution or payment to any Multiemployer Plan;

(d) amend, or permit any ERISA Affiliate to amend, a Benefit Plan resulting in
an increase in current liability for the plan year such that any of the Loan
Parties or any of their Subsidiaries or ERISA Affiliates is required to provide
an additional contribution to such Benefit Plan under Sections 401(a)(29) and
436 of the IRC; or

(e) allow any representation made in Section 4.14 to be untrue at any time
during the term of this Agreement.

6.10. No Additional Bank Accounts.

Open, maintain or otherwise have any Deposit Accounts at any bank or other
financial institution, other than (a) the Deposit Accounts set forth on
Schedule 4.35, each of which shall be subject to a Deposit Account Control
Agreement, except to the extent otherwise determined by US Agent, (b) Deposit
Accounts established after the Closing Date that are subject to a Deposit
Account Control Agreement, (c) other Deposit Accounts established after the
Closing Date solely as payroll and other zero balance accounts, (d) Deposit
Accounts maintained by Subsidiaries that are not Loan Parties, and (e) other
Deposit Accounts, so long as at any time the balance in any such account does
not exceed $100,000 and the aggregate balance in all such accounts does not
exceed $500,000.

6.11. Amendments of Material Contracts, Operative Documents.

Without the prior written consent of US Agent or as specifically permitted by
Section 6.13, amend, modify, or change or permit the amendment, modification, or
change of any of the Material Contracts in any manner materially adverse to the
interests of the Agents or the Lenders or which would reasonably be expected to
cause a Material Adverse Change.

6.12. Additional Negative Pledges.

Create or otherwise cause or suffer to exist or become effective, or permit any
of the Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, any prohibition or restriction (including any
agreement to provide equal and ratable security to any other Person in the event
a Lien is granted to or for the benefit of the Agents and the Lenders, but
excluding any Dollar or Canadian Dollar restriction or limit so long as such
restriction or limit is sufficient in amount to allow at all times the Liens to
secure the Obligations in full) on the creation or existence of any Lien upon
the assets of any Loan Party or any of its Subsidiaries, other than Permitted
Liens, other than (a) under this Agreement or the other Loan Documents,
(b) under the Senior Note Debt Documents (2010) and the documentation

 

-84-

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

evidencing any refinancing thereof permitted by clause (vi) of the definition of
“Permitted Indebtedness”, (c) any agreements governing any purchase money Liens
or Capital Leases otherwise permitted hereby or any other secured obligation
permitted by clauses (viii), (ix), (xiv) or (xviii) of the definition of
“Permitted Indebtedness” (in which case, any prohibition or limitation shall
only be effective against (x) in the case of purchase money Liens or Capital
Leases, the assets financed thereby and proceeds thereof and (y) in the case of
other secured obligations, the specific assets subject to the Lien securing such
obligation), (d) customary provisions in joint venture agreements and similar
agreements and any agreement with respect to Indebtedness primarily incurred to
finance the acquisition of an interest in a joint venture that restrict the
transfer or encumbrance of assets of, or equity interests in, the applicable
joint ventures, (e) any Bank Product Agreement or Lender Hedging Agreement
containing provisions not more restrictive than the provisions of this
Agreement, (f) licenses or sublicenses by Coleman Cable and its Subsidiaries of
intellectual property in the ordinary course of business (in which case, any
prohibition or limitation shall only be effective against the intellectual
property subject thereto), (g) customary restrictions in any agreements
governing Indebtedness of a joint venture which prohibit the pledge of the
assets of, or equity interests in, such joint venture, and (h) encumbrances and
restrictions affecting any Foreign Subsidiary in Indebtedness permitted by
clause (vi) of the definition of “Permitted Indebtedness”.

6.13. Other Indebtedness.

(a) Effect or permit any change in or amendment to any document or instrument
pertaining to the subordination, terms of payment or required prepayments of any
Senior Note Debt (2010) in any manner adverse to the interests of the Agents or
the Lenders;

(b) Increase the rates or amounts of interest or fees payable with respect to
any Senior Note Debt (2010);

(c) Effect or permit any change in or amendment to any document or instrument
pertaining to the covenants or events of default of any Senior Note Debt
(2010) if the effect of any such change or amendment is to make such covenants
or events of default more restrictive;

(d) Give any notice of optional redemption or optional prepayment or offer to
repurchase under any such document or instrument, or, directly or indirectly,
make any payment of principal of or interest on or in redemption, retirement or
repurchase of any Senior Note Debt (2010) other than (i) the scheduled payments
required by the terms of the documents and instruments evidencing Senior Note
Debt (2010), (ii) redemptions, prepayments or repurchases in connection with the
refinancing of the Senior Note Debt (2010) with the proceeds of Indebtedness
meeting the conditions set forth in clause (vi) of the definition of “Permitted
Indebtedness,” or (iii) other redemptions, prepayments or repurchases not
permitted under the forgoing clause (ii) in an amount not to exceed $20,000,000
in any calendar year so long as (A) no Default or Event of Default shall then
exist or would exist after giving effect thereto and (B) after giving effect to
such redemption, prepayment or repurchase, Excess Availability is at least equal
to Required Excess Availability; provided, that such $20,000,000 limitation
shall not apply so long as (1) no Default or Event of Default shall then exist
or would exist after giving effect to such redemption, prepayment or repurchase,
(2) Excess Availability for each day of the thirty (30) day period ending on the
date of such redemption, prepayment or repurchase is equal

 

-85-

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

to or greater than Required Excess Availability,(3) Excess Availability as of
the day of such redemption, prepayment or repurchase, immediately after giving
effect to such redemption, prepayment or repurchase, is equal to or greater than
Required Excess Availability, and (4) the Fixed Charge Coverage Ratio, measured
for the 12 month period ending on the last day of the most recently ended fiscal
month for which US Agent has received the financial statements required to be
delivered under Section 5.1 and calculated as if such redemption, prepayment or
repurchase was made on the last day of such 12 month period is at least 1.0 to
1.0; or

(e) Effect or permit any change in or amendment to any Senior Note Debt Document
(2010) which would have the effect of increasing the aggregate principal amount
of the notes issued pursuant to the Senior Note Indenture to more than
$275,000,000, subject to clause (vi) of the definition of Permitted
Indebtedness.

6.14. Sale and Leaseback.

Enter into any arrangement, directly or indirectly, whereby any Loan Party or
any of its Subsidiaries shall sell or transfer any property owned by it to a
Person (other than, subject to Section 6.3, the Loan Parties or any of their
Subsidiaries) in order then or thereafter to lease such property or lease other
property which such Loan Party or Subsidiary intends to use for substantially
the same purpose as the property being sold or transferred. Notwithstanding the
foregoing provisions of this Section 6.14, any Loan Party or any of its
Subsidiaries may sell or transfer any property owned by it as described in the
preceding sentence provided that the aggregate current market value of all
assets so sold or transferred (in each case determined at the time of such sale
or transfer, and taking into account all such sales or transfers under this
Section 6.14 since the Closing Date) shall not exceed $5,000,000.

6.15. [Intentionally Omitted].

6.16. Limitations.

Create, nor will it permit any of its Subsidiaries which are Loan Parties to,
directly or indirectly, create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Person to (a) pay dividends or make any
other distribution on any of such Person’s capital Stock, (b) pay any
Indebtedness owed to the Loan Parties, (c) make loans or advances to any other
Loan Party or (d) transfer any of its property to any other Loan Party, except
for encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest, (ii) any
agreement or other instrument of a Person existing at the time it becomes a
Subsidiary of a Loan Party; provided that such encumbrance or restriction is not
applicable to any other Person, or any property of any other Person, other than
such Person becoming a Subsidiary of a Loan Party and was not entered into in
contemplation of such Person becoming a Subsidiary of a Loan Party, (iii) this
Agreement and the other Loan Documents, (iv) the Senior Note Debt Documents
(2010) and the documentation evidencing any refinancing thereof permitted by
clause (vi) of the definition of “Permitted Indebtedness”, (v) encumbrances and
restrictions affecting any Foreign Subsidiary in Indebtedness permitted by
clause (vi) of the definition of “Permitted Indebtedness”, (vii) customary
provisions in joint venture agreements and similar agreements that restrict the
transfer of equity interests in joint ventures (in which case such restrictions
shall relate only to

 

-86-

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

assets of, or equity interests in, such joint venture or any holding company
which may hold the Stock of such joint venture), (viii) any restrictions
regarding licenses or sublicenses by Coleman Cable and its Subsidiaries of
intellectual property in the ordinary course of business (in which case such
restriction shall relate only to such intellectual property); (ix) customary
restrictions and conditions contained in agreements relating to the sale of all
or a substantial part of the capital stock or assets of any Loan Party or
Subsidiary of any Loan Party pending such sale, provided such restrictions and
conditions apply only to the Person to be sold and such sale is permitted
hereunder, (x) with respect to restrictions described in clause (a) of this
Section 6.16, restrictions contained in agreements governing guarantees
permitted by Section 6.5(c) or (d) hereof, and (xi) with respect to restrictions
described in clause (c) of this Section 6.16, restrictions contained in
agreements governing Indebtedness permitted by clause (iii) of the definition of
“Permitted Indebtedness” (as long as such restrictions apply to the property
financed thereby).

6.17. [Intentionally Omitted].

6.18. Hedge Transactions.

Engage in any transaction involving commodity options or future contracts or any
similar speculative transactions, except for Hedge Agreements used solely as
part of the normal business operations of a Borrower or other Loan Party as a
risk management strategy and/or a hedge against changes resulting from market
operations in accordance with such Borrower’s or such other Loan Party’s
customary policies and not as a means to speculate for investment purposes.

6.19. [Intentionally Omitted].

6.20. Canadian Employees; Canadian Employee Plans; Canadian Pension Plans.

(a) Establish, maintain or terminate, or permit any other Loan Party to
establish, maintain or terminate, any Canadian Pension Plan or take any other
action with respect to any Canadian Pension Plan, which could reasonably be
expected to result in any material liability of a Loan Party;

(b) contribute to or assume an obligation to contribute to, or permit any other
Loan Party to contribute to or assume an obligation to contribute to, any
“multi-employer pension plan” as such term is defined in the Pension Benefits
Act (Ontario) or such other Canadian Employee Benefits Legislation, as
applicable; or

(c) notwithstanding any other provision in this Agreement, acquire, or permit
any other Loan Party to acquire, without the prior consent of the Agent (it
being understood that such consent may include such conditions or pre-conditions
as the Agent may request or impose including, without limitation, the right to
recalculate the Canadian Borrowing Base and take, in its Permitted Discretion,
pension-related reserves) an interest in any Person if such Person sponsors,
maintains or contributes to any “registered pension plan”, as defined in
subsection 248(1) of the Income Tax Act (Canada) which is a defined benefit
pension plan or contains a “defined benefit provision” as defined in subsection
147.1(1) of the Income Tax Act (Canada); provided that, any Loan Party may
acquire an interest in any such Person if such Person is acquired as a Permitted
Acquisition and no Loan Party has any legal liability to perform such Person’s
obligations or assume such Person’s liabilities.

 

-87-

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

6.21. Immaterial Subsidiaries.

Notwithstanding any other provision in this Agreement to the contrary, (i) until
Borrowers have complied with Section 5.26(d), permit CCI to have assets in
excess of $100,000 in the aggregate at any time or (ii) until such time, if any,
as Moonrays.com, Inc., a Wisconsin corporation, becomes a Guarantor in
accordance with the requirements of Section 5.16(b), permit Moonrays.com, Inc.
to have assets in excess of $25,000 in the aggregate at any time.

 

7. FINANCIAL COVENANTS.

Each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations:

(a) Fixed Charge Coverage Ratio. If during any calendar month Excess
Availability on any day is less than $30,000,000, Borrowers shall have a Fixed
Charge Coverage Ratio of at least 1.0 to 1.0 for the 12 month period ending on
the last day of such calendar month and for the 12 month period ending on the
last day of each calendar month thereafter, until Excess Availability shall be
greater than or equal to $30,000,000 for 60 consecutive days.

 

8. EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default
(each, an “Event of Default”) under this Agreement:

(a) failure of any Borrower to pay (i) any interest or fees hereunder when due,
in each case whether at stated maturity, by acceleration, or otherwise and such
failure continues for a period of 3 consecutive Business Days, (ii) any
principal of the Advances or to reimburse the applicable Issuing Lender or
applicable Canadian Underlying Issuer for any Letter of Credit Disbursements
when due, whether at stated maturity, by acceleration or otherwise or (iii) any
other Obligations within 3 Business Days after receipt by the Borrowers from
either Agent or any applicable Lender of notice that such expenses are payable;

(b) any representation or warranty, contained in this Agreement, the other Loan
Documents or any other agreement, document, instrument or certificate among any
Loan Party, either Agent and the Lenders or executed by any Loan Party in favor
of either Agent or the Lenders shall prove untrue in any material respect on or
as of the date it was made or was deemed to have been made;

(c) failure of any Loan Party to perform, comply with or observe any term,
covenant or agreement applicable to it contained in Section 5.3, Section 5.7,
Section 5.26, Section 6 or Section 7;

(d) failure of any Loan Party (i) to deliver any Borrowing Base Certificate
within 5 Business Days of the day required by Section 5.1(e) or (f), or (ii) to
comply with any other covenant contained in this Agreement, the other Loan
Documents or any other agreement, document, instrument or certificate among any
Loan Party, either Agent and the Lenders or

 

-88-

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

executed by any Loan Party in favor of either Agent or the Lenders and, in the
event such breach or failure to comply is capable of cure, such breach or
failure to comply is not cured within 30 days after the earlier of the date on
which written notice thereof is given to Administrative Borrower by any Agent or
the date on which any executive officer of any Borrower has knowledge thereof;

(e) dissolution, liquidation, winding up or cessation of the business of any
Loan Party or any of its Subsidiaries not permitted by Section 5.3 or 6.4, or
the failure of any Loan Party or any of its Subsidiaries to meet its debts
generally as they mature, or the calling of a meeting of any Loan Party’s or any
of its Subsidiaries’ creditors for purposes of compromising any Loan Party’s or
any of its Subsidiaries’ debts, or the failure by any Loan Party or any of its
Subsidiaries generally, or the admission by any Loan Party or any of its
Subsidiaries of its inability, to pay its debts as they become due (unless such
debts are the subject of a bona fide dispute);

(f) the commencement by or against any Loan Party or any of its Subsidiaries of
any bankruptcy, insolvency, arrangement, reorganization, receivership or similar
case or proceeding with respect to it under any federal, provincial or state law
and, in the event any such proceeding is commenced against any Loan Party or any
of its Subsidiaries, such proceeding is not dismissed within 60 days or an order
for relief is entered at any time;

(g) if any Loan Party or any other Person shall take any steps or actions (other
than preparation of preliminary legal documentation and similar prepatory
actions) to pursue or provide any notice to any Person that they intend to
pursue a recapitalization of a Loan Party or any of its Subsidiaries, whether
pursuant to a plan of arrangement under the Canada Business Corporations Act
(Canada) or otherwise;

(h) the occurrence of a Change of Control or a “Change of Control”, as such term
is defined in the Senior Note Indenture;

(i) any Loan Party or any of its Subsidiaries shall fail to make any payment in
respect of Indebtedness outstanding (other than the Obligations) in an aggregate
principal amount of $5,000,000 or more when due or within any applicable grace
period;

(j) (A) the occurrence of a default or event of default (in each case which
shall continue beyond the expiration of any applicable grace periods) under, or
the occurrence of any event that results in or would permit the acceleration of
the maturity of any note, agreement or instrument (including, without
limitation, as a result of any required mandatory prepayment or “put” right
thereunder) evidencing (i) any Senior Note Debt (2010) or any related
refinancing Indebtedness, or (ii) any other Indebtedness of any Loan Party or
any of its Subsidiaries and the aggregate principal amount of all such other
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is accelerated or permitted to be accelerated
(including, without limitation, as a result of any required mandatory prepayment
or “put” right thereunder), exceeds $5,000,000, or (B) the occurrence of a
default or event of default (in each case which shall continue beyond the
expiration of any applicable grace periods) under, or the occurrence of any
event that results in or would permit the early termination of, any Lender
Hedging Agreement provided that the obligations owing thereunder exceed
$5,000,000;

 

-89-

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

(k) any covenant, agreement or obligation of any party contained in or evidenced
by any of the Loan Documents shall cease to be enforceable in accordance with
its terms, or any party (other than the Agents or the Lenders) to any Loan
Document shall deny or disaffirm its obligations under any of the Loan
Documents, or any Loan Document shall be canceled, terminated, revoked or
rescinded without the express prior written consent of the each Agent, or any
action or proceeding shall have been commenced by any Person (other than the
Agents or any Lender) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Loan Document, or any court or other
Governmental Authority shall issue a judgment, order, decree or ruling to the
effect that any of the obligations of any party to any Loan Document are
illegal, invalid or unenforceable;

(l) one or more judgments or decrees shall be entered against one or more of the
Loan Parties or any of their Subsidiaries involving a liability of $5,000,000 or
more in the aggregate (to the extent not paid or covered by insurance
(i) provided by a carrier who has acknowledged coverage and has the ability to
perform or (ii) as determined by the US Agent in its reasonable discretion) and
any such judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days from the entry thereof;

(m) any Termination Event with respect to a Benefit Plan shall have occurred and
be continuing 30 days after notice thereof shall have been given to Coleman
Cable by either Agent or any Lender, and the then current value of such Benefit
Plan’s benefits guaranteed under Title IV of ERISA exceeds the then current
value of such Benefit Plan’s assets allocable to such benefits by more than
$5,000,000 (or in the case of a Termination Event involving the withdrawal of a
substantial employer, the withdrawing employer’s proportionate share of such
excess exceeds such amount);

(n) (i) any Person institutes steps to terminate a Canadian Pension Plan or
causes such Canadian Pension Plan to no longer be registered if required to be
registered, if as a result of such termination or de-registration any Loan Party
could be required to make a contribution to such Canadian Pension Plan, or could
incur a liability or obligation to such Canadian Pension Plan, in excess of
$5,000,000; or (ii) a contribution failure occurs with respect to any Canadian
Pension Plan sufficient to give rise to a Lien under any Canadian Employee
Benefits Legislation; or

(o) any Loan Document shall fail to be in full force and effect or to give the
Agents and/or the Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except (i) as such documents may be
terminated or no longer in force and effect in accordance with the terms
thereof, other than those indemnities and provisions which by their terms shall
survive, (ii) to the extent solely as the result of an action or failure to act
on the part of any Agent or (iii) with respect to Collateral the aggregate value
of which, for all such Collateral, does not exceed at any time, $2,500,000).

 

9. RIGHTS AND REMEDIES.

9.1. Rights and Remedies.

Upon the occurrence and during the continuation of an Event of Default, Agents
may, and, at the instruction of the Required Lenders, shall (in each case under
clauses (a) or (b)

 

-90-

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

by written notice to Administrative Borrower), in addition to any other rights
or remedies provided for hereunder or under any other Loan Document or by
applicable law, do any one or more of the following:

(a) declare the Obligations (other than the Bank Product Obligations), whether
evidenced by this Agreement or by any of the other Loan Documents immediately
due and payable, whereupon the same shall become and be immediately due and
payable and Borrowers shall be obligated to repay all of such Obligations in
full, without presentment, demand, protest, or further notice or other
requirements of any kind, all of which are hereby expressly waived by each
Borrower;

(b) declare the Commitments terminated, whereupon the Commitments shall
immediately be terminated together with (i) any obligation of any Lender
hereunder to make Advances, (ii) the obligation of either Swing Lender to make
Swing Loans, and (iii) the obligation of either Issuing Lender to issue Letters
of Credit; and

(c) exercise all other rights and remedies available to Agents or the Lenders
under the Loan Documents or applicable law.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 8(f), in addition to the remedies set forth
above, without any notice to any Borrower or any other Person or any act by the
Lender Group, the Commitments shall automatically terminate and the Obligations
(other than the Bank Product Obligations), inclusive of all accrued and unpaid
interest thereon and all fees and all other amounts owing under this Agreement
or under any of the other Loan Documents, shall automatically and immediately
become due and payable and Borrowers shall be obligated to repay all of such
Obligations in full, without presentment, demand, protest, or notice of any
kind, all of which are expressly waived by each Borrower.

9.2. Remedies Cumulative.

The rights and remedies of the Lender Group under this Agreement, the other Loan
Documents, and all other agreements shall be cumulative. The Lender Group shall
have all other rights and remedies not inconsistent herewith as provided under
the Code or the PPSA, by law, or in equity. No exercise by the Lender Group of
one right or remedy shall be deemed an election, and no waiver by the Lender
Group of any Event of Default shall be deemed a continuing waiver. No delay by
the Lender Group shall constitute a waiver, election, or acquiescence by it.

 

10. WAIVERS; INDEMNIFICATION.

10.1. Demand; Protest; etc.

Each Borrower waives demand, protest, notice of protest, notice of default or
dishonor, notice of payment and nonpayment, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of documents, instruments, chattel
paper, and guarantees at any time held by the Lender Group on which such
Borrower may in any way be liable.

 

-91-

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

10.2. The Lender Group’s Liability for Collateral.

Each Borrower hereby agrees that: (a) so long as US Agent complies with its
obligations, if any, under the Code, and Canadian Agent complies with its
obligations, if any, under the PPSA, the Lender Group shall not in any way or
manner be liable or responsible for: (i) the safekeeping of the Collateral,
(ii) any loss or damage thereto occurring or arising in any manner or fashion
from any cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other
Person, and (b) all risk of loss, damage, or destruction of the Collateral shall
be borne by Borrowers.

10.3. Indemnification.

Borrowers shall pay, indemnify, defend, and hold the Agent-Related Persons, the
Lender-Related Persons, and each Participant (each, an “Indemnified Person”)
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, liabilities,
fines, costs, penalties, and damages, and all reasonable and documented fees and
disbursements of attorneys, experts, or consultants and all other costs and
expenses actually incurred in connection therewith or in connection with the
enforcement of this indemnification (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the execution and delivery (provided that Borrowers shall not be
liable for costs and expenses (including attorneys’ fees) of any Lender (other
than WFCF, Wells Fargo and WF Canada) incurred in advising, structuring,
drafting, reviewing, administering or syndicating the Loan Documents),
enforcement, performance, or administration (including any restructuring or
workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby or the monitoring of the Loan
Parties’ and their Subsidiaries’ compliance with the terms of the Loan Documents
(provided, however, that the indemnification in this clause (a) shall not extend
to (i) disputes solely between or among the Lenders, (ii) disputes solely
between or among the Lenders and their respective Affiliates; it being
understood and agreed that the indemnification in this clause (a) shall extend
to each Agent (but not the Lenders) relative to disputes between or among either
or both Agents on the one hand, and one or more Lenders, or one or more of their
Affiliates, on the other hand, or (iii) any Taxes or any costs attributable to
Taxes, which shall be governed by Section 16), (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto, and (c) in
connection with or arising out of any presence or release of Hazardous Materials
at, on, under, to or from any assets or properties owned, leased or operated by
any Borrower or any of its Subsidiaries or any Environmental Actions,
Environmental Liabilities or Remedial Actions related in any way to any such
assets or properties of any Borrower or any of its Subsidiaries (each and all of
the foregoing, the “Indemnified Liabilities”). The foregoing to the contrary
notwithstanding, no Borrower shall have any obligation to any Indemnified Person
under this Section 10.3 with respect to any Indemnified Liability that a court
of competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of such Indemnified Person or its officers,
directors, employees, attorneys, or agents. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment

 

-92-

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

to any other Indemnified Person with respect to an Indemnified Liability as to
which any Borrower was required to indemnify the Indemnified Person receiving
such payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.

 

11. NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to
this Agreement or any other Loan Document shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as a party may
designate in accordance herewith), or telefacsimile. In the case of notices or
demands to Borrowers, US Agent or Canadian Agent, as the case may be, they shall
be sent to the respective address set forth below:

 

If to Borrowers:    COLEMAN CABLE, INC.    1530 South Shields Drive    Waukegan,
Illinois 60085    Attn: Richard Burger, Executive VP and CFO    Fax No. (847)
689-9099 with copies to:    WINSTON & STRAWN LLP    35 West Wacker Drive   
Chicago, Illinois 60601    Attn: Kevin M. Ryan, Esq.    Fax No. (312) 558-5700
If to US Agent:    WELLS FARGO CAPITAL FINANCE, LLC    111 South Wacker Drive,
30th Floor    Chicago, Illinois 60606    Attn: Portfolio Manager—Coleman Cable
   Fax No. (312) 332-0424 with copies to:    GOLDBERG KOHN LTD.    55 E. Monroe
Street    Suite 3300    Chicago, Illinois 60603    Attn: Gary Zussman, Esq.   
Fax No.                             

 

-93-

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

If to Canadian Agent:   

WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA

   40 King Street West    Suite 2500, Toronto, ON M5H 3Y2    Canada    Attn:
                                    Fax No.                             

Any party hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this Section 11, shall be
deemed received on the earlier of the date of actual receipt or 3 Business Days
after the deposit thereof in the mail; provided, that (a) notices sent by
overnight courier service shall be deemed to have been given when received,
(b) notices by facsimile shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient) and (c) notices by electronic mail shall be deemed received
upon the sender’s receipt of an acknowledgment from the intended recipient (such
as by the “return receipt requested” function, as available, return email or
other written acknowledgment).

 

12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED
IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
US AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE US AGENT ELECTS TO
BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 12(b).

 

-94-

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

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND EACH
MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

(d) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF
NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT. 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
EITHER AGENT 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.

 

13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1. Assignments and Participations.

(a) With the prior written consent of Administrative Borrower, which consent of
Administrative Borrower shall not be unreasonably withheld, delayed or
conditioned, and shall not be required (1) if an Event of Default has occurred
and is continuing, or (2) in connection with an assignment to a Person that is a
Lender or an Affiliate (other than individuals) of a Lender; and with the prior
written consent of US Agent (with respect to assignments of the US Obligations
and US Commitments) or Canadian Agent (with respect to assignments of the
Canadian Obligations and Canadian Commitments), as applicable, which consent of
the applicable Agent shall not be unreasonably withheld, delayed or conditioned,
and shall not be required in connection with an assignment to a Person that is a
Lender or an Affiliate (other than individuals) of a Lender, any Lender may
assign and delegate to one or more assignees so long as such prospective
assignee is an Eligible Transferee (each, an “Assignee”; provided, however, that
no Loan Party or Affiliate of a Loan Party of shall be permitted to become an
Assignee) all or any portion of the Advances, the Commitments and the other
rights and obligations of such Lender hereunder and under the other Loan
Documents, in a minimum amount (unless waived by the applicable Agent and so
long as no Event of Default has occurred and is continuing, Administrative
Borrower) of $5,000,000 or Cdn$5,000,000, as applicable

 

-95-

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

(except such minimum amount shall not apply to (x) an assignment or delegation
by any Lender to any other Lender or an Affiliate of any Lender or (y) a group
of new Lenders, each of which is an Affiliate of each other or a Related Fund of
such new Lender to the extent that the aggregate amount to be assigned to all
such new Lenders is at least $5,000,000 or Cdn$5,000,000, as applicable);
provided, however, that Borrowers and Agents may continue to deal solely and
directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses, and related information with respect to the Assignee,
have been given to Administrative Borrower and the applicable Agent by such
Lender and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and the applicable Agent an Assignment and Acceptance
and such Agent has notified the assigning Lender of its receipt thereof in
accordance with Section 13.1(b), and (iii) unless waived by the applicable
Agent, the assigning Lender or Assignee has paid to US Agent for US Agent’s
separate account a processing fee in the amount of $3,500 or Canadian Agent, for
Canadian Agent’s separate account a processing fee in the amount of Cdn$3,500,
as applicable.

(b) From and after the date that the applicable Agent notifies the assigning
Lender (with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and, if applicable, payment of the required processing
fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall be a “Lender” and shall have the rights and
obligations of a Lender under the Loan Documents, and (ii) the assigning Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to Section 10.3) and be
released from any future obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto); provided,
however, that nothing contained herein shall release any assigning Lender from
obligations that survive the termination of this Agreement, including such
assigning Lender’s obligations under Section 15 and Section 17.9(a).

(c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other Loan Document furnished pursuant hereto,
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto, (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance,
(iv) such Assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to

 

-96-

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

make its own credit decisions in taking or not taking action under this
Agreement, (v) such Assignee appoints and authorizes each Agent to take such
actions and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to such Agent, by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto, and (vi) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.

(d) Immediately upon the applicable Agent’s receipt of the required processing
fee, if applicable, and delivery of notice to the assigning Lender pursuant to
Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Lender
pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial
institutions, or other Persons (a “Participant”) participating interests in all
or any portion of its Obligations, its Commitment, and the other rights and
interests of that Lender (the “Originating Lender”) hereunder and under the
other Loan Documents; provided, however, that (i) the Originating Lender shall
remain a “Lender” for all purposes of this Agreement and the other Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a “Lender” hereunder or under
the other Loan Documents and the Originating Lender’s obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agents, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender (other than a
waiver of default interest), or (E) decreases the amount or postpones the due
dates of scheduled principal repayments or prepayments or premiums payable to
such Participant through such Lender, and (v) all amounts payable by Borrowers
hereunder shall be determined as if such Lender had not sold such participation
(except where applicable for the purposes of Section 16), except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement. The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or

 

-97-

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

any direct rights as to the other Lenders, Agents, Borrowers, the Collections of
Borrowers or their Subsidiaries, the Collateral, or otherwise in respect of the
Obligations. No Participant shall have the right to participate directly in the
making of decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed
assignment or participation or any grant of a security interest in, or pledge
of, its rights under and interest in this Agreement, a Lender may, subject to
the provisions of Section 17.9, disclose all documents and information which it
now or hereafter may have relating to any Borrower and its Subsidiaries and
their respective businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any
time create a security interest in, or pledge, all or any portion of its rights
under and interest in this Agreement in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge
or security interest in any manner permitted under applicable law.

(h) US Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain,
or cause to be maintained, a register (the “Register”) on which it enters the
name and address of each Lender as the registered owner of the Commitments and
Advances (and the principal amount of the Advances and stated interest thereon)
held by such Lender (each, a “Registered Loan”). Other than in connection with
an assignment by a Lender of all or any portion of its portion of the
Commitments to an Affiliate of such Lender or a Related Fund of such Lender
(i) a Registered Loan (and the registered note, if any, evidencing the same) may
be assigned or sold in whole or in part only by registration of such assignment
or sale on the Register (and each registered note shall expressly so provide)
and (ii) any assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the registered note, if any evidencing the same), Borrowers shall
treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary. In the case of any assignment by a Lender of all or any
portion of its Commitments to an Affiliate of such Lender or a Related Fund of
such Lender, and which assignment is not recorded in the Register, the assigning
Lender, on behalf of Borrowers, shall maintain a register comparable to the
Register.

(i) In the event that a Lender sells participations in the Registered Loan, such
Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or
cause to be maintained) a register on which it enters the name of all
participants in the Registered Loans held by it (and the principal amount (and
stated interest thereon) of the portion of such Registered Loans that is subject
to such participations) (the “Participant Register”). A Registered Loan (and the
Registered Note, if any, evidencing the same) may be participated in whole or in
part only by

 

-98-

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

registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.

(j) US Agent shall make a copy of the Register (and each Lender shall make a
copy of its Participant Register in the extent it has one) available for review
by Borrowers from time to time as Borrowers may reasonably request.

(k) US Agent shall make a copy of those portions of the Register with respect to
the Commitments and Advances held by a Lender available for review by such
Lender from time to time as such Lender may reasonably request.

13.2. Successors.

This Agreement shall bind and inure to the benefit of the respective successors
and assigns of each of the parties; provided, however, that no Borrower may
assign this Agreement or any rights or duties hereunder without the Lenders’
prior written consent and any prohibited assignment shall be absolutely void ab
initio. No consent to assignment by the Lenders, unless expressly provided in
such consent, shall release any Borrower from its Obligations. A Lender may
assign this Agreement and the other Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 13.1 and, except as expressly
required pursuant to Section 13.1, no consent or approval by any Borrower is
required in connection with any such assignment.

 

14. AMENDMENTS; WAIVERS.

14.1. Amendments and Waivers.

(a) No amendment, waiver or other modification of any provision of this
Agreement or any other Loan Document (other than Bank Product Agreements or the
Fee Letter), and no consent with respect to any departure by any Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by the US Agent at the written request of the Required
Lenders) and the Loan Parties that are party thereto and then any such waiver or
consent shall be effective, but only in the specific instance and for the
specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
directly affected thereby and all of the Loan Parties that are party thereto, do
any of the following:

(i) increase the amount of or extend the expiration date of any Commitment of
any Lender or amend, modify, or eliminate the last sentence of Section 2.4(c),

(ii) postpone or delay any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,

 

-99-

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

(iii) reduce the principal of, or the rate of interest on, any loan or other
extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document (except in connection with the waiver
of applicability of Section 2.6(c) (which waiver shall be effective with the
written consent of the Required Lenders)),

(iv) amend, modify, or eliminate this Section or any provision of this Agreement
providing for consent or other action by all Lenders,

(v) amend, modify or eliminate Section 15.11,

(vi) other than as permitted by Section 15.11, release either Agent’s Lien in
and to any of the Collateral,

(vii) amend, modify, or eliminate the definition of “Required Lenders”,
“Supermajority Lenders” or “Pro Rata Share”,

(viii) contractually subordinate any of either Agent’s Liens,

(ix) other than in connection with a merger, amalgamation, liquidation,
dissolution or sale of such Person expressly permitted by the terms hereof or
the other Loan Documents, release any Borrower or any Guarantor from any
obligation for the payment of money or consent to the assignment or transfer by
any Borrower or any Guarantor of any of its rights or duties under this
Agreement or the other Loan Documents,

(x) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i),
(ii) or (iii), or

(xi) amend, modify, or eliminate any of the provisions of Section 13.1(a) to
permit a Loan Party or an Affiliate of a Loan Party to be permitted to become an
Assignee.

(b) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or eliminate the definition of Borrowing Base, Canadian Borrowing Base
or US Borrowing Base or any of the defined terms (including the definitions of
US Transition Amount, US Eligible Accounts, Canadian Eligible Accounts, US
Eligible Inventory and Canadian Eligible Inventory) that are used in such
definition to the extent that any such change results in more credit being made
available to Borrowers based upon the applicable Borrowing Base, but not
otherwise, or the definitions of Canadian Maximum Revolver Amount or US Maximum
Revolver Amount, without the written consent of such Borrowers and the
Supermajority Lenders,

(c) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive (i) the definition of, or any of the terms or provisions of,
the Fee Letter, without the written consent of Agents and Borrowers (and shall
not require the written consent of any of the Lenders), and (ii) any provision
of Section 15 pertaining to either Agent, or any other rights or duties of
either Agent under this Agreement or the other Loan Documents, without the
written consent of Agents, Borrowers, and the Required Lenders,

 

-100-

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

(d) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to either Issuing Lender, or any other rights or duties of either
Issuing Lender under this Agreement or the other Loan Documents, without the
written consent of such Issuing Lender, Agents, Borrowers, and the Required
Lenders,

(e) No amendment, waiver, modification, elimination, or consent shall amend,
modify, or waive any provision of this Agreement or the other Loan Documents
pertaining to either Swing Lender, or any other rights or duties of either Swing
Lender under this Agreement or the other Loan Documents, without the written
consent of such Swing Lender, Agents, Borrowers, and the Required Lenders,

(f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any
amendment, modification, elimination, waiver, consent, termination, or release
of, or with respect to, any provision of this Agreement or any other Loan
Document that relates only to the relationship of the Lender Group among
themselves, and that does not affect the rights or obligations of any Loan Party
or otherwise impact any Loan Party in any adverse manner, shall not require
consent by or the agreement of any Loan Party, and (ii) any amendment, waiver,
modification, elimination, or consent of or with respect to any provision of
this Agreement or any other Loan Document may be entered into without the
consent of, or over the objection of, any Defaulting Lender.

14.2. Replacement of Certain Lenders.

(a) If (i) any action to be taken by the Lender Group or Agents hereunder
requires the consent, authorization, or agreement of all Lenders affected
thereby and if such action has received the consent, authorization, or agreement
of the Required Lenders but not of all Lenders affected thereby, or (ii) any
Lender makes a claim for compensation under Section 16, then Borrowers or US
Agent, upon at least 5 Business Days prior irrevocable notice, may permanently
replace any Lender that failed to give its consent, authorization, or agreement
(a “Holdout Lender”) or any Lender that made a claim for compensation (a “Tax
Lender”) with one or more Replacement Lenders, and the Holdout Lender or Tax
Lender, as applicable, shall have no right to refuse to be replaced hereunder.
Such notice to replace the Holdout Lender or Tax Lender, as applicable, shall
specify an effective date for such replacement, which date shall not be later
than 30 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Holdout Lender or Tax
Lender, as applicable, and each Replacement Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Holdout Lender or Tax Lender, as
applicable, being repaid in full its share of the outstanding Obligations
(without any premium or penalty of any kind whatsoever, but including (i) all
interest, fees and other amounts that may be due in payable in respect thereof,
and (ii) an assumption of its Pro Rata Share of participations in the Letters of
Credit). If the Holdout Lender or Tax Lender, as applicable, shall refuse or
fail to execute and deliver any such Assignment and Acceptance prior to the
effective date of such replacement, US Agent may, but shall not be required to,
execute and deliver such Assignment and Acceptance in

 

-101-

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

the name or and on behalf of the Holdout Lender or Tax Lender, as applicable,
and irrespective of whether US Agent executes and delivers such Assignment and
Acceptance, the Holdout Lender or Tax Lender, as applicable, shall be deemed to
have executed and delivered such Assignment and Acceptance. The replacement of
any Holdout Lender or Tax Lender, as applicable, shall be made in accordance
with the terms of Section 13.1. Until such time as one or more Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender or Tax Lender, as applicable,
hereunder and under the other Loan Documents, the Holdout Lender or Tax Lender,
as applicable, shall remain obligated to make the Holdout Lender’s or Tax
Lender’s, as applicable, Pro Rata Share of Advances and to purchase a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of such Letters of Credit.

14.3. No Waivers; Cumulative Remedies.

No failure by either Agent or any Lender to exercise any right, remedy, or
option under this Agreement or any other Loan Document, or delay by either Agent
or any Lender in exercising the same, will operate as a waiver thereof. No
waiver by either Agent or any Lender will be effective unless it is in writing,
and then only to the extent specifically stated. No waiver by either Agent or
any Lender on any occasion shall affect or diminish either Agent’s and each
Lender’s rights thereafter to require strict performance by each Borrower of any
provision of this Agreement. Each Agent’s and each Lender’s rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that either Agent or any Lender may have.

 

15. AGENTS; THE LENDER GROUP.

15.1. Appointment and Authorization of Agent.

Each Lender hereby designates and appoints (i) WFCF as its US agent under this
Agreement and the other Loan Documents and (ii) WF Canada as its Canadian agent
under this Agreement and the other Loan Documents, and each Lender hereby
irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to designate, appoint, and authorize) each
Agent to execute and deliver each of the other Loan Documents on its behalf and
to take such other action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to such Agent by the terms of this Agreement or any
other Loan Document, together with such powers as are reasonably incidental
thereto. Each Agent agrees to act as agent for and on behalf of the Lenders (and
the Bank Product Providers) on the conditions contained in this Section 15. Any
provision to the contrary contained elsewhere in this Agreement or in any other
Loan Document notwithstanding, neither Agent shall have any duties or
responsibilities, except those expressly set forth herein or in the other Loan
Documents, nor shall either Agent have or be deemed to have any fiduciary
relationship with any Lender (or Bank Product Provider), and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against either Agent. Without limiting the generality of the foregoing, the use
of the term “agent” in this Agreement or the other Loan Documents with reference
to either Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom,

 

-102-

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

and is intended to create or reflect only a representative relationship between
independent contracting parties. Each Lender hereby further authorizes (and by
entering into a Bank Product Agreement, each Bank Product Provider shall be
deemed to authorize) each Agent to act as the secured party under each of the
Loan Documents that create a Lien on any item of Collateral. Except as expressly
otherwise provided in this Agreement, each Agent shall have and may use its sole
discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that such
Agent expressly is entitled to take or assert under or pursuant to this
Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights
or powers to either Agent, Lenders agree that each Agent shall have the right to
exercise the following powers as long as this Agreement remains in effect:
(a) maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Collateral, the
Collections of Borrowers and their Subsidiaries, and related matters,
(b) execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the Loan Documents,
(c) make Advances, for itself or on behalf of Lenders, as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Borrowers and their Subsidiaries as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as such Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections of
Borrowers and their Subsidiaries, (f) perform, exercise, and enforce any and all
other rights and remedies of the Lender Group with respect to Borrowers or their
Subsidiaries, the Obligations, the Collateral, the Collections of Borrowers and
their Subsidiaries, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as such Agent may
deem necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to the Loan Documents.

15.2. Delegation of Duties.

Either Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Neither Agent shall be responsible for the negligence or misconduct of any agent
or attorney in fact that it selects as long as such selection was made without
gross negligence or willful misconduct.

15.3. Liability of Agents.

None of the Agent-Related Persons shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (b) be responsible in any manner
to any of the Lenders (or Bank Product Providers) for any recital, statement,
representation or warranty made by any Borrower or any of its Subsidiaries or
Affiliates, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by either Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Borrower or

 

-103-

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

its Subsidiaries or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
books and records or properties of any Borrower or its Subsidiaries.

15.4. Reliance by Agents.

Each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any writing, resolution, notice, consent, certificate, affidavit, letter,
telegram, telefacsimile or other electronic method of transmission, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrowers or counsel to any Lender), independent accountants and
other experts selected by such Agent. Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless such Agent shall first receive such advice or concurrence of the
Lenders as it deems appropriate and until such instructions are received, such
Agent shall act, or refrain from acting, as it deems advisable. If either Agent
so requests, it shall first be indemnified to its reasonable satisfaction by the
Lenders (and, if it so elects, the Bank Product Providers) against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Required
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders (and Bank Product Providers).

15.5. Notice of Default or Event of Default.

Neither Agent shall be deemed to have knowledge or notice of the occurrence of
any Default or Event of Default, except with respect to defaults in the payment
of principal, interest, fees, and expenses required to be paid to such Agent for
the account of the Lenders and, except with respect to Events of Default of
which such Agent has actual knowledge, unless such Agent shall have received
written notice from a Lender or any Borrower referring to this Agreement,
describing such Default or Event of Default, and stating that such notice is a
“notice of default.” Each Agent promptly will notify each other Agent and the
Lenders of its receipt of any such notice or of any Event of Default of which
such Agent has actual knowledge. If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and each
Agent of such Event of Default. Each Lender shall be solely responsible for
giving any notices to its Participants, if any. Subject to Section 15.4, each
Agent shall take such action with respect to such Default or Event of Default as
may be requested by the Required Lenders in accordance with Section 9; provided,
however, that unless and until such Agent has received any such request, such
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable.

 

-104-

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

15.6. Credit Decision.

Each Lender (and Bank Product Provider) acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by either Agent hereinafter taken, including any review of the affairs of
any Borrower and its Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender (or
Bank Product Provider). Each Lender represents (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to represent) to
each Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such due diligence, documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of any Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrowers. Each Lender also represents (and by entering into
a Bank Product Agreement, each Bank Product Provider shall be deemed to
represent) that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of any Borrower or any other Person
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agents, neither
Agent shall have any duty or responsibility to provide any Lender (or Bank
Product Provider) with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any Borrower or any other Person party to a Loan Document
that may come into the possession of any of the Agent-Related Persons. Each
Lender acknowledges (and by entering into a Bank Product Agreement, each Bank
Product Provider shall be deemed to acknowledge) that neither Agent has any duty
or responsibility, either initially or on a continuing basis (except to the
extent, if any, that is expressly specified herein) to provide such Lender (or
Bank Product Provider) with any credit or other information with respect to any
Borrower, its Affiliates or any of their respective business, legal, financial
or other affairs, and irrespective of whether such information came into such
Agent’s or its Affiliates’ or representatives’ possession before or after the
date on which such Lender became a party to this Agreement (or such Bank Product
Provider entered into a Bank Product Agreement).

15.7. Costs and Expenses; Indemnification.

Each Agent may incur and pay Lender Group Expenses to the extent such Agent
reasonably deems necessary or appropriate for the performance and fulfillment of
its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys’ fees and expenses, fees and expenses of financial
accountants, advisors, consultants, and appraisers, costs of collection by
outside collection agencies, auctioneer fees and expenses, and costs of security
guards or insurance premiums paid to maintain the Collateral, whether or not
Borrowers are obligated to reimburse Agents or Lenders for such expenses
pursuant to this Agreement or otherwise. Each Agent is authorized and directed
to deduct and retain sufficient amounts from the Collections of Borrowers and
their Subsidiaries received by such Agent to reimburse such

 

-105-

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

Agent for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders (or Bank Product Providers). In the event either Agent is not
reimbursed for such costs and expenses by Borrowers or their Subsidiaries, each
Lender hereby agrees that it is and shall be obligated to pay to such Agent such
Lender’s ratable thereof. Whether or not the transactions contemplated hereby
are consummated, each of the Lenders, on a ratable basis, shall indemnify and
defend the Agent-Related Persons (to the extent not reimbursed by or on behalf
of Borrowers and without limiting the obligation of Borrowers to do so) from and
against any and all Indemnified Liabilities; provided, however, that no Lender
shall be liable for the payment to any Agent-Related Person of any portion of
such Indemnified Liabilities resulting solely from such Person’s gross
negligence or willful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse each Agent upon demand for such Lender’s ratable share of any
costs or out of pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) incurred by such Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any other Loan Document to the extent that such Agent is not reimbursed for
such expenses by or on behalf of Borrowers. The undertaking in this Section
shall survive the payment of all Obligations hereunder and the resignation or
replacement of either Agent. For the avoidance of doubt, this Section 15.7 shall
not apply to Taxes governed by Section 16.

15.8. Agent in Individual Capacity.

WFCF, WF Canada and any of their Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, provide Bank Products to,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
Subsidiaries and Affiliates and any other Person party to any Loan Document as
though neither WFCF nor WF Canada were an Agent hereunder, and, in each case,
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such activities, WFCF, WF Canada or any of their Affiliates may
receive information regarding Borrowers or their Affiliates or any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders (or Bank Product Providers), and the Lenders
acknowledge (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to acknowledge) that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver each Agent
will use its reasonable best efforts to obtain), neither Agent shall be under
any obligation to provide such information to them. The terms “Lender” and
“Lenders” include WFCF in its individual capacity and WF Canada in its
individual capacity.

15.9. Successor Agents.

Either Agent may resign as an Agent upon 30 days prior written notice to the
Lenders (unless such notice is waived by the Required Lenders) and
Administrative Borrower (unless such notice is waived by Borrowers or an Event
of Default exists) and without any notice

 

-106-

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

to the Bank Product Providers; provided, that if an Event of Default exists
Agent shall notify Administrative Borrower on or before such resignation. If
either Agent resigns under this Agreement, the Required Lenders shall be
entitled, with (so long as no Event of Default has occurred and is continuing)
the consent of Administrative Borrower (such consent not to be unreasonably
withheld, delayed, or conditioned), appoint a successor US Agent or Canadian
Agent, as applicable, for the Lenders (and the Bank Product Providers). If, at
the time that such Agent’s resignation is effective, it is acting as an Issuing
Lender or a Swing Lender, such resignation shall also operate to effectuate its
resignation as such Issuing Lender or such Swing Lender, as applicable, and it
shall automatically be relieved of any further obligation to issue Letters of
Credit, to cause the Canadian Underlying Issuer to issue Letters of Credit, or
to make Swing Loans. If no successor to such Agent is appointed prior to the
effective date of the resignation of such Agent, such Agent may appoint, after
consulting with the Lenders and Administrative Borrower, a successor US Agent or
Canadian Agent, as applicable. If such Agent has materially breached or failed
to perform any material provision of this Agreement or of applicable law, the
Required Lenders may agree in writing to remove and replace such Agent with a
successor US Agent or Canadian Agent, as applicable, from among the Lenders with
(so long as no Event of Default has occurred and is continuing) the consent of
Borrowers (such consent not to be unreasonably withheld, delayed, or
conditioned). In any such event, upon the acceptance of its appointment as
successor US Agent or Canadian Agent, as applicable, hereunder, such successor
Agent shall succeed to all the rights, powers, and duties of the retiring Agent
and the term “US Agent” or “Canadian Agent”, as applicable, shall mean such
successor Agent and the retiring Agent’s appointment, powers, and duties as an
Agent shall be terminated. After any retiring Agent’s resignation hereunder as
an Agent, the provisions of this Section 15 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement. If no successor Agent has accepted appointment as an Agent by the
date which is 30 days following a retiring Agent’s notice of resignation, the
retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of such Agent hereunder until such
time, if any, as the Lenders appoint a successor Agent as provided for above.

15.10. Lender in Individual Capacity.

Any Lender and its respective Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, provide Bank Products to,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with any Borrower and its
Subsidiaries and Affiliates and any other Person party to any Loan Documents as
though such Lender were not a Lender hereunder without notice to or consent of
the other members of the Lender Group (or the Bank Product Providers). The other
members of the Lender Group acknowledge (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to acknowledge) that,
pursuant to such activities, such Lender and its respective Affiliates may
receive information regarding Borrowers or their Affiliates or any other Person
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrowers or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to
acknowledge) that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender shall not be under any obligation to
provide such information to them.

 

-107-

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

15.11. Collateral Matters.

(a) The Lenders hereby irrevocably authorize (and by entering into a Bank
Product Agreement, each Bank Product Provider shall be deemed to authorize) each
Agent to release any Lien on any Collateral (i) upon the termination of the
Commitments and payment and satisfaction in full by Borrowers of all of the
Obligations, (ii) constituting property being sold or disposed of if a release
is required or desirable in connection therewith and if Borrowers certify to
such Agent that the sale or disposition is permitted under Section 6.4 (and each
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Borrower and no Subsidiary of Borrowers
owned any interest at the time the applicable Agent’s Lien was granted nor at
any time thereafter, or (iv) constituting property leased to any Borrower or its
Subsidiaries under a lease that has expired or is terminated in a transaction
permitted under this Agreement or subject to a Permitted Lien securing Permitted
Indebtedness pursuant to clause (iii) of the definition thereof. The Loan
Parties and the Lenders hereby irrevocably authorize (and by entering into a
Bank Product Agreement, each Bank Product Provider shall be deemed to authorize)
each Agent, based upon the instruction of the Required Lenders, to (a) consent
to, credit bid or purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any sale thereof conducted
under the provisions of the Bankruptcy Code, including under Section 363 of the
Bankruptcy Code including any similar laws in any other jurisdictions to which a
Loan Party is subject, (b) credit bid or purchase (either directly or through
one or more acquisition vehicles) all or any portion of the Collateral at any
sale or other disposition thereof conducted under the provisions of the Code or
the PPSA, including pursuant to Sections 9-610 or 9-620 of the Code, or
(c) credit bid or purchase (either directly or through one or more acquisition
vehicles) all or any portion of the Collateral at any other sale or foreclosure
conducted by such Agent (whether by judicial action or otherwise) in accordance
with applicable law. In connection with any such credit bid or purchase, the
Obligations owed to the Lenders and the Bank Product Providers shall be entitled
to be, and shall be, credit bid on a ratable basis (with Obligations with
respect to contingent or unliquidated claims being estimated for such purpose if
the fixing or liquidation thereof would not unduly delay the ability of such
Agent to credit bid or purchase at such sale or other disposition of the
Collateral and, if such claims cannot be estimated without unduly delaying the
ability of such Agent to credit bid, then such claims shall be disregarded, not
credit bid, and not entitled to any interest in the asset or assets purchased by
means of such credit bid) and the Lenders and the Bank Product Providers whose
Obligations are credit bid shall be entitled to receive interests (ratably based
upon the proportion of their Obligations credit bid in relation to the aggregate
amount of Obligations so credit bid) in the asset or assets so purchased (or in
the Stock of the acquisition vehicle or vehicles that are used to consummate
such purchase). Except as provided above, neither Agent will execute and deliver
a release of any Lien on any Collateral without the prior written authorization
of (y) if the release is of all or substantially all of the Collateral, all of
the Lenders (without requiring the authorization of the Bank Product Providers),
or (z) otherwise, the Required Lenders (without requiring the authorization of
the Bank Product Providers). Upon request by either Agent or any Borrower at any
time, the Lenders will (and if so requested, the Bank Product Providers will)
confirm in writing such Agent’s authority to release any such Liens on
particular types or items of Collateral pursuant to this Section 15.11;

 

-108-

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

provided, however, that (1) neither Agent shall be required to execute any
document necessary to evidence such release on terms that, in such Agent’s
opinion, would expose such Agent to liability or create any obligation or entail
any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) 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 any Borrower in respect of)
all interests retained by any Borrower, including, the proceeds of any sale, all
of which shall continue to constitute part of the Collateral. The Lenders
further hereby irrevocably authorize (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to authorize) each Agent,
in its sole discretion, to subordinate on terms and conditions satisfactory to
such Agent any Lien granted to or held by such Agent under any Loan Document to
the holder of any Permitted Lien on such property if such Permitted Lien secures
purchase money Indebtedness.

In connection with any termination or release authorized by this
Section 15.11(a), the applicable Agent is further authorized to promptly:
(i) execute and/or deliver to any Loan Party, at such Loan Party’s expense, all
documents reasonably requested by such Loan Party to evidence such termination
or release and (ii) deliver to any such Loan Party any portion of such
Collateral so terminated or released that is in the possession of any Agent.

(b) Neither Agent shall have any obligation whatsoever to any of the Lenders (or
the Bank Product Providers) to assure that the Collateral exists or is owned by
a Borrower or its Subsidiaries or is cared for, protected, or insured or has
been encumbered, or that either Agent’s Liens have been properly or sufficiently
or lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or that any particular items of Collateral meet the
eligibility criteria applicable in respect thereof or whether to impose,
maintain, reduce, or eliminate any particular reserve hereunder or whether the
amount of any such reserve is appropriate or not, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to each Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, subject to the terms and conditions contained herein,
each Agent may act in any manner it may deem appropriate, in its sole discretion
given such Agent’s own interest in the Collateral in its capacity as one of the
Lenders and that neither Agent shall have any other duty or liability whatsoever
to any Lender (or Bank Product Provider) as to any of the foregoing, except as
otherwise provided herein.

15.12. Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written
consent of each Agent, following the occurrence and during the existence of an
Event of Default, set off against the Obligations, any amounts owing by such
Lender to any Borrower or its Subsidiaries or any deposit accounts of any
Borrower or its Subsidiaries now or hereafter maintained with such Lender. Each
of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by either Agent, following the occurrence and during the
existence of an Event of Default, take or cause to be taken any action,
including, the commencement of any legal or equitable proceedings to enforce any
Loan Document against any Borrower or any Guarantor or to foreclose any Lien on,
or otherwise enforce any security interest in, any of the Collateral.

 

-109-

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

(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from either Agent pursuant to the terms of this
Agreement, or (ii) payments from either Agent in excess of such Lender’s Pro
Rata Share of all such distributions by such Agent, such Lender promptly shall
(A) turn the same over to the applicable Agent, in kind, and with such
endorsements as may be required to negotiate the same to such Agent, or in
immediately available funds, as applicable, for the account of all of the
Lenders and for application to the Obligations in accordance with the applicable
provisions of this Agreement, or (B) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other
Lenders so that such excess payment received shall be applied ratably as among
the Lenders in accordance with their Pro Rata Shares; provided, however, that to
the extent that such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.

15.13. Agency for Perfection.

Each Agent hereby appoints each Lender (and each Bank Product Provider) as its
agent (and each Lender hereby accepts (and by entering into a Bank Product
Agreement, each Bank Product Provider shall be deemed to accept) such
appointment) for the purpose of perfecting each Agent’s Liens in assets which,
in accordance with Article 8 or Article 9, as applicable, of the Code or in
respect of the applicable provisions of the PPSA or the STA can be perfected by
possession or control. Should any Lender obtain possession or control of any
such Collateral, such Lender shall notify US Agent or Canadian Agent, as
applicable, thereof, and, promptly upon such Agent’s request therefor shall
deliver possession or control of such Collateral to such Agent or in accordance
with such Agent’s instructions.

15.14. Payments by Agents to the Lenders.

All payments to be made by either Agent to the Lenders (or Bank Product
Providers) shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to such Agent. Concurrently with each such payment,
such Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.

15.15. Concerning the Collateral and Related Loan Documents.

Each member of the Lender Group authorizes and directs each Agent to enter into
this Agreement and the other Loan Documents. Each member of the Lender Group
agrees (and by entering into a Bank Product Agreement, each Bank Product
Provider shall be deemed to agree) that any action taken by either Agent in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral and the exercise by such Agent 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 Lenders (and such Bank Product
Provider).

 

-110-

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

15.16. Audits and Examination Reports; Confidentiality; Disclaimers by Lenders;
Other Reports and Information.

By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that each Agent furnish such Lender, promptly
after it becomes available, a copy of each field audit or examination report
respecting any Borrower or its Subsidiaries (each, a “Report”) prepared by or at
the request of such Agent, and such Agent shall so furnish each Lender with such
Reports,

(b) expressly agrees and acknowledges that neither Agent (i) makes any
representation or warranty as to the accuracy of any Report, and (ii) shall be
liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive
audits or examinations, that an Agent or other party performing any audit or
examination will inspect only specific information regarding a Borrower and its
Subsidiaries and will rely significantly upon each Borrower’s and its
Subsidiaries’ books and records, as well as on representations of each
Borrower’s personnel,

(d) agrees to keep all Reports and other material, non-public information
regarding each Borrower and its Subsidiaries and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with Section 17.9, and

(e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold each Agent and any other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
fail to take or any conclusion the indemnifying Lender may reach or draw from
any Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to Borrowers, or the indemnifying
Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or
loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold
each Agent, and any such other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including, attorneys’ fees and costs) incurred by such Agent and any
such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.

In addition to the foregoing: (x) any Lender may from time to time request of
either Agent in writing that such Agent provide to such Lender a copy of any
report or document provided by any Borrower or its Subsidiaries to such Agent
that has not been contemporaneously provided by any Borrower or such Subsidiary
to such Lender, and, upon receipt of such request, such Agent promptly shall
provide a copy of same to such Lender, (y) to the extent that either Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from any Borrower or such Subsidiary, any Lender may,
from time to time, reasonably request such Agent to exercise such right as
specified in such Lender’s notice to such Agent, whereupon such Agent promptly
shall request of such Borrower the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from such Borrower or its
Subsidiaries, such Agent promptly shall provide a copy of same to such Lender,
and (z) any time that Agent renders to any Borrower a statement regarding the
Loan Account, such Agent shall send a copy of such statement to each Lender.

 

-111-

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

15.17. Several Obligations; No Liability.

Notwithstanding that certain of the Loan Documents now or hereafter may have
been or will be executed only by or in favor of the US Agent or the Canadian
Agent in its capacity as such, and not by or in favor of the Lenders, any and
all obligations on the part of either Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in Section 15.7, no member of the Lender Group shall have any
liability for the acts of any other member of the Lender Group. No Lender shall
be responsible to any Borrower or any other Person for any failure by any other
Lender (or Bank Product Provider) to fulfill its obligations to make credit
available hereunder, nor to advance for such Lender (or Bank Product Provider)
or on its behalf, nor to take any other action on behalf of such Lender (or Bank
Product Provider) hereunder or in connection with the financing contemplated
herein.

 

16. WITHHOLDING TAXES.

(a) All payments made by any Loan Party hereunder or under any note or other
Loan Document will be made without setoff, counterclaim, or other defense. In
addition, all such payments will be made free and clear of, and without
deduction or withholding for, any present or future Taxes, unless such deduction
or withholding is required by applicable law. If any Indemnified Taxes are
levied or imposed, the Loan Parties agree to deduct and withhold and to timely
pay and remit the full amount of such Indemnified Taxes to the applicable
Governmental Authority in accordance with applicable laws and to pay such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement, any note, or Loan Document, including any amount paid
pursuant to this Section 16(a) after withholding or deduction for or on account
of any Indemnified Taxes, will not be less than the amount provided for herein.
The Loan Parties will furnish to US Agent as promptly as possible after the date
the payment of any Indemnified Tax is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by the Loan Parties.

(b) The Loan Parties agree to pay in accordance with applicable law any present
or future stamp, value added or documentary taxes or any other excise or
property taxes, charges, or similar levies (collectively, the “Other Taxes”)
that arise from any payment made hereunder or under any of the other Loan
Documents or from the execution, delivery, performance, recordation, or filing
of, or otherwise with respect to this Agreement or any other Loan Document.

 

-112-

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

(c) If a Lender or Participant is entitled to claim an exemption or reduction
from United States withholding tax, such Lender or Participant agrees with and
in favor of US Agent, to deliver to US Agent (or, in the case of a Participant,
to the Lender granting the participation only) one of the following before
receiving its first payment under this Agreement:

(i) if such Lender or Participant is entitled to claim an exemption from United
States withholding tax pursuant to the portfolio interest exception, (A) a
statement of the Lender or Participant, signed under penalty of perjury, that it
is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a
10% shareholder of any Loan Party (within the meaning of Section 871(h)(3)(B) of
the IRC), or (III) a controlled foreign corporation related to any Loan Party
within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed
and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);

(ii) if such Lender or Participant is entitled to claim an exemption from, or a
reduction of, withholding tax under a United States tax treaty, a properly
completed and executed copy of IRS Form W-8BEN;

(iii) if such Lender or Participant is entitled to claim that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, a
properly completed and executed copy of IRS Form W-8ECI;

(iv) if such Lender or Participant is entitled to claim that interest paid under
this Agreement is exempt from United States withholding tax because such Lender
or Participant serves as an intermediary, a properly completed and executed copy
of IRS Form W-8IMY (with proper attachments); or

(v) a properly completed and executed copy of any other form or forms, including
IRS Form W-9, as may be required under the IRC or other laws of the United
States as a condition to exemption from, or reduction of, United States
withholding or backup withholding tax.

Each Lender or Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify US Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

(d) If a payment made to a Lender or Participant under this Agreement or any
other Loan Document would be subject to FATCA if such Lender or Participant were
to fail to comply with the applicable requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender
or Participant shall deliver to the US Agent (or, in the case of a Participant,
to the Lender granting the participation only) at the time or times prescribed
by law and at such time or times reasonably requested by the US Agent (or, in
the case of a Participant, to the Lender granting the participation only) such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation
reasonably requested by the US Agent (or, in the case of a Participant, to the
Lender granting the participation only) as may be necessary for the US Agent

 

-113-

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

(or, in the case of a Participant, to the Lender granting the participation
only) to comply with their obligations under FATCA and to determine that such
Lender or Participant has complied with such Lender’s or Participant’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment.

(e) If a Lender or Participant claims an exemption from withholding tax in a
jurisdiction other than the United States, such Lender or such Participant
agrees with and in favor of US Agent, to deliver to US Agent (or, in the case of
a Participant, to the Lender granting the participation only) any such form or
forms, as may be required under the laws of such jurisdiction as a condition to
exemption from, or reduction of, withholding or backup withholding tax before
receiving its first payment under this Agreement, but only if such Lender or
such Participant is legally able to deliver such forms. If any Lender or
Participant is entitled to an exemption from, or reduction of, any withholding
or backup withholding tax in a jurisdiction other than the United States, such
Lender or such Participant agrees with and in favor of US Agent, to deliver to
US Agent (or, in the case of a Participant, to the Lender granting the
participation only) any such form or forms, as may be reasonably requested by a
Loan Party or US Agent (or, in the case of a Participant, the Lender granting
the participation only) as will permit such payments to be made without, or at a
reduced rate of, withholding. In addition, any Lender or Participant, if
requested by a Loan Party or US Agent (or, in the case of a Participant, to the
Lender granting the participation only), shall deliver such other documentation
prescribed by law or reasonably requested by the Loan Party or US Agent (or, in
the case of a Participant, the Lender granting the participation only), as will
enable the Loan Party or US Agent to determine whether or not such Lender or
Participant is subject to any withholding (including backup withholding) or
information reporting requirements. Nothing in this Section 16(e) shall require
a Lender or Participant to disclose any information that it deems to be
confidential (including without limitation, its tax returns). Each Lender and
each Participant shall provide new forms (or successor forms) upon the
expiration or obsolescence of any previously delivered forms and to promptly
notify US Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render
invalid any claimed exemption or reduction.

(f) If a Lender or Participant claims exemption from, or reduction of,
withholding tax and such Lender or Participant sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of
Borrowers to such Lender or Participant, such Lender or Participant agrees to
notify Agent (or, in the case of a sale of a participation interest, to the
Lender granting the participation only) of the percentage amount in which it is
no longer the beneficial owner of Obligations of Borrowers to such Lender or
Participant. To the extent of such percentage amount, Agent will treat such
Lender’s or such Participant’s documentation provided pursuant to Section 16(c)
or 16(d) as no longer valid. With respect to such percentage amount, such
Participant or Assignee may provide new documentation, pursuant to Section 16(c)
or 16(d), if applicable. Each Borrower agrees that each Participant shall be
entitled to the benefits of this Section 16 with respect to its participation in
any portion of the Commitments and the Obligations so long as such Participant
complies with the obligations set forth in this Section 16 with respect thereto.

(g) If a Lender or a Participant is entitled to a reduction in the applicable
withholding tax, Agent (or, in the case of a Participant, to the Lender granting
the participation)

 

-114-

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

may withhold from any interest payment to such Lender or such Participant an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by Section 16(c) or
16(d) are not delivered to Agent (or, in the case of a Participant, to the
Lender granting the participation), then Agent (or, in the case of a
Participant, to the Lender granting the participation) may withhold from any
interest payment to such Lender or such Participant not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.

(h) If the IRS or any other Governmental Authority of the United States or other
jurisdiction asserts a claim that either Agent (or, in the case of a
Participant, to the Lender granting the participation) did not properly withhold
tax from amounts paid to or for the account of any Lender or any Participant due
to a failure on the part of the Lender or any Participant (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify such Agent (or such Participant failed to notify the
Lender granting the participation) of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify and hold each Agent and their
respective its affiliates, officers, agents and employees harmless (or, in the
case of a Participant, such Participant shall indemnify and hold the Lender
granting the participation harmless) for all amounts paid, directly or
indirectly, by such Agent and its affiliates, officers, agents and employees
(or, in the case of a Participant, to the Lender granting the participation), as
tax or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to Agent (or, in the case of
a Participant, to the Lender granting the participation only) under this
Section 16, together with all costs and expenses (including attorneys’ fees and
expenses). The obligation of the Lenders and the Participants under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.

(i) If an Agent or a Lender determines, in its sole discretion, acting in good
faith, that it has received a refund of any Taxes as to which it has been
indemnified by Borrowers or with respect to which the Loan Parties have paid
additional amounts pursuant to this Section 16, so long as no Default or Event
of Default has occurred and is continuing, it shall pay over such refund to the
Loan Parties (but only to the extent of payments made, or additional amounts
paid, by the Loan Parties under this Section 16 with respect to Taxes giving
rise to such a refund), net of all out-of-pocket expenses of such Agent or such
Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such a refund); provided, that the Loan
Parties, upon the request of such Agent or such Lender, agree to repay the
amount paid over to the Loan Parties (plus any penalties, interest or other
charges, imposed by the relevant Governmental Authority, other than such
penalties, interest or other charges imposed as a result of the willful
misconduct or gross negligence of Agent hereunder) to Agent or such Lender in
the event Agent or such Lender is required to repay such refund to such
Governmental Authority. Notwithstanding anything in this Agreement to the
contrary, this Section 16 shall not be construed to require Agent or any Lender
to make available its tax returns (or any other information which it deems
confidential) to any Loan Party or any other Person or to arrange its affairs in
any manner other than it thinks fit and, in particular, no Agent or Lender shall
be under any obligation to claim relief for tax purposes or to claim such relief
in priority to other claims, credits or deductions.

 

-115-

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

(j) If a Loan Party fails to pay any Indemnified Taxes or Other Taxes when due
to the appropriate taxing authorities or fails to remit to an Agent or any
Lender the required receipts or other documentary evidence of the payment of the
Indemnified Taxes or Other Taxes, the Loan Parties shall jointly and severally
indemnify each Indemnified Person (as defined in Section 10.3) and its agents
(collectively, a “Tax Indemnitee”) for the full amount of Indemnified Taxes or
Other Taxes arising in connection with this Agreement or any other Loan Document
(including, without limitation, any Indemnified Taxes and Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 16) paid by
such Tax Indemnitee and all reasonable fees and disbursements of attorneys,
experts, or consultants and all other costs and expenses actually incurred in
connection therewith or in connection with the enforcement of this
indemnification, as and when they are incurred and irrespective of whether suit
is brought, and whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority, provided,
however, the Loan Party shall not be required to compensate any such Tax
Indemnitee pursuant to this Section for any Indemnified Taxes or Other Taxes
solely resulting from such Tax Indemnitee’s gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction). Payment
under this indemnification shall be made within 30 days from the date the
applicable Agent or the relevant Lender makes written demand for it. Tax
Indemnitee shall deliver a certificate containing reasonable detail as to the
amount of such Indemnified Taxes or Other Taxes submitted to a Loan Party by an
Agent or the relevant Lender which shall be conclusive evidence, absent manifest
error, of the amount due from such Loan Party to such Agent or such Lender. This
Section 16(j) shall survive the termination of this Agreement and the repayment
of the Obligations.

 

17. GENERAL PROVISIONS.

17.1. Effectiveness.

This Agreement shall be binding and deemed effective when executed by each Loan
Party, each Agent, and each Lender whose signature is provided for on the
signature pages hereof.

17.2. Section Headings.

Headings and numbers have been set forth herein for convenience only. Unless the
contrary is compelled by the context, everything contained in each Section
applies equally to this entire Agreement.

17.3. Interpretation.

Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed against the Lender Group or any Loan Party, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by
all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.

 

-116-

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

17.4. Severability of Provisions.

Each provision of this Agreement shall be severable from every other provision
of this Agreement for the purpose of determining the legal enforceability of any
specific provision.

17.5. Bank Product Providers.

Each Bank Product Provider shall be deemed a third party beneficiary hereof and
of the provisions of the other Loan Documents for purposes of any reference in a
Loan Document to the parties for whom either Agent is acting. US Agent hereby
agrees to act as agent for each US Bank Product Provider and, by virtue of
entering into a Bank Product Agreement, the applicable US Bank Product Provider
shall be automatically deemed to have appointed US Agent as its agent and to
have accepted the benefits of the Loan Documents; it being understood and agreed
that the rights and benefits of each US Bank Product Provider under the Loan
Documents consist exclusively of such US Bank Product Provider’s being a
beneficiary of the Liens and security interests (and, if applicable, guarantees)
granted to US Agent and the right to share in payments and collections out of
the Collateral as more fully set forth herein. Canadian Agent hereby agrees to
act as agent for each Canadian Bank Product Provider and, by virtue of entering
into a Bank Product Agreement, the applicable Canadian Bank Product Provider
shall be automatically deemed to have appointed Canadian Agent as its agent and
to have accepted the benefits of the Loan Documents; it being understood and
agreed that the rights and benefits of each Canadian Bank Product Provider under
the Loan Documents consist exclusively of such Canadian Bank Product Provider’s
being a beneficiary of the Liens and security interests (and, if applicable,
guarantees) granted to Canadian Agent and the right to share in payments and
collections out of the Collateral as more fully set forth herein. In addition,
each Bank Product Provider, by virtue of entering into a Bank Product Agreement,
shall be automatically deemed to have agreed that each Agent shall have the
right, but shall have no obligation, to establish, maintain, relax, or release
reserves in respect of the Bank Product Obligations and that if reserves are
established there is no obligation on the part of either Agent to determine or
insure whether the amount of any such reserve is appropriate or not. In
connection with any such distribution of payments or proceeds of Collateral,
each Agent shall be entitled to assume no amounts are due or owing to any Bank
Product Provider unless such Bank Product Provider has provided a written
certification (setting forth a reasonably detailed calculation) to the
applicable Agent as to the amounts that are due and owing to it and such written
certification is received by such Agent a reasonable period of time prior to the
making of such distribution. Neither Agent shall have any obligation to
calculate the amount due and payable with respect to any Bank Products, but may
rely upon the written certification of the amount due and payable from the
relevant Bank Product Provider. In the absence of an updated certification, each
Agent shall be entitled to assume that the amount due and payable to the
relevant Bank Product Provider is the amount last certified to such Agent by
such Bank Product Provider as being due and payable (less any distributions made
to such Bank Product Provider on account thereof). Any Borrower may obtain Bank
Products from any Bank Product Provider, although no Borrower is required to do
so. Each Borrower acknowledges and agrees that no Bank Product Provider has
committed to provide any Bank Products and that the providing of Bank Products
by any Bank Product Provider is in the sole and absolute discretion of such Bank
Product Provider. Notwithstanding anything to the contrary in this Agreement or
any other Loan Document, no provider or holder of any Bank Product shall have
any voting or approval rights

 

-117-

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

hereunder (or be deemed a Lender) solely by virtue of its status as the provider
or holder of such agreements or products or the Obligations owing thereunder,
nor shall the consent of any such provider or holder be required (other than in
their capacities as Lenders, to the extent applicable) for any matter hereunder
or under any of the other Loan Documents, including as to any matter relating to
the Collateral or the release of Collateral or Guarantors.

17.6. Debtor-Creditor Relationship.

The relationship between the Lenders and Agents, on the one hand, and the Loan
Parties, on the other hand, is solely that of creditor and debtor. No member of
the Lender Group has (or shall be deemed to have) any fiduciary relationship or
duty to any Loan Party arising out of or in connection with the Loan Documents
or the transactions contemplated thereby, and there is no agency or joint
venture relationship between the members of the Lender Group, on the one hand,
and the Loan Parties, on the other hand, by virtue of any Loan Document or any
transaction contemplated therein.

17.7. Counterparts; Electronic Execution.

This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed counterpart
of this Agreement by telefacsimile or other electronic method of transmission
shall be equally as effective as delivery of an original executed counterpart of
this Agreement. Any party delivering an executed counterpart of this Agreement
by telefacsimile or other electronic method of transmission also shall deliver
an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.

17.8. Revival and Reinstatement of Obligations.

If the incurrence or payment of the Obligations by any Borrower or Guarantor or
the transfer to the Lender Group of any property should for any reason
subsequently be asserted, or declared, to be void or voidable under any state,
federal or other applicable law relating to creditors’ rights, including
provisions of the Bankruptcy Code or other applicable law relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (each, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the advice of counsel, then, as to any such Voidable
Transfer, or the amount thereof that the Lender Group is required or elects to
repay or restore, and as to all reasonable costs, expenses, and attorneys’ fees
of the Lender Group related thereto, the liability of Borrowers or Guarantor
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.

17.9. Confidentiality.

(a) Agents and Lenders each individually (and not jointly or jointly and
severally) agree that non-public information regarding Borrowers and their
Subsidiaries, their

 

-118-

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

operations, assets, and existing and contemplated business plans (“Confidential
Information”) shall be treated by Agents and the Lenders in a confidential
manner, and shall not be disclosed by Agents and the Lenders to Persons who are
not parties to this Agreement, except: (i) to attorneys for and other advisors,
accountants, auditors, and consultants to any member of the Lender Group and to
employees, directors and officers of any member of the Lender Group (the Persons
in this clause (i), “Lender Group Representatives”) on a “need to know” basis in
connection with this Agreement and the transactions contemplated hereby and on a
confidential basis, (ii) to Subsidiaries and Affiliates of any member of the
Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.9, (iii) as may be required by
regulatory authorities so long as such authorities are informed of the
confidential nature of such information, (iv) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation; provided
that (x) prior to any disclosure under this clause (iv), the disclosing party
agrees to provide Administrative Borrower with prior notice thereof, to the
extent that it is practicable to do so and to the extent that the disclosing
party is permitted to provide such prior notice to Borrowers pursuant to the
terms of the applicable statute, decision, or judicial or administrative order,
rule, or regulation and (y) any disclosure under this clause (iv) shall be
limited to the portion of the Confidential Information as may be required by
such statute, decision, or judicial or administrative order, rule, or
regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as
requested or required by any Governmental Authority pursuant to any subpoena,
applicable law or other legal process, provided, that, (x) prior to any
disclosure under this clause (vi) the disclosing party agrees to provide
Borrowers with prior written notice thereof, to the extent that it is
practicable to do so and to the extent that the disclosing party is permitted to
provide such prior written notice to Borrowers pursuant to the terms of the
subpoena, applicable law or other legal process and (y) any disclosure under
this clause (vi) shall be limited to the portion of the Confidential Information
as may be required by such Governmental Authority pursuant to such subpoena or
other legal process, (vii) as to any such information that is or becomes
generally available to the public (other than as a result of prohibited
disclosure by Agents or the Lenders or the Lender Group Representatives),
(viii) in connection with any assignment, participation or pledge of any
Lender’s interest under this Agreement, provided that prior to receipt of
Confidential Information any such assignee, participant, or pledgee shall have
agreed in writing to receive such Confidential Information hereunder subject to
the terms of this Section, (ix) in connection with any litigation or other
adversary proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents; provided, that, prior to any
disclosure to any Person (other than any Loan Party, either Agent, any Lender,
any of their respective Affiliates, or their respective counsel) under this
clause (ix) with respect to litigation involving any Person (other than any
Borrower, either Agent, any Lender, any of their respective Affiliates, or their
respective counsel), the disclosing party agrees to provide Borrowers with prior
written notice thereof, and (x) in connection with, and to the extent reasonably
necessary for, the exercise of any secured creditor remedy under this Agreement
or under any other Loan Document.

(b) Anything in this Agreement to the contrary notwithstanding, each Agent may
(i) provide information concerning the terms and conditions of this Agreement
and the other Loan Documents to loan syndication and pricing reporting services,
and (ii) use the name, logos, and other insignia of Borrowers and Loan Parties
and the Total Commitments provided hereunder in any “tombstone” or comparable
advertising, on its website or in other marketing materials of such Agent.

 

-119-

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

17.10. Lender Group Expenses.

Borrowers agree to pay the Lender Group Expenses on the date on which demand
therefor is made by either Agent. Borrowers agree that their respective
obligations contained in this Section 17.10 shall survive payment or
satisfaction in full of all other Obligations.

17.11. Survival.

All 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 Agent,
the Issuing Lender, or any Lender may have had notice or knowledge of any
Default or Event of 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.

17.12. Patriot Act.

Each Lender that is subject to the requirements of the Patriot Act hereby
notifies Borrowers that pursuant to the requirements of the Act, it is required
to obtain, verify and record information that identifies each Borrower, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify each Borrower in accordance with the
Patriot Act. In addition, if Agent is required by law or regulation or internal
policies to do so, it shall have the right to periodically conduct (a) Patriot
Act searches, OFAC/PEP searches, and customary individual background checks for
the Loan Parties and (b) OFAC/PEP searches and customary individual background
checks for the Loan Parties’ senior management and key principals, and each
Borrower agrees to reasonably cooperate in respect of the conduct of such
searches and further agrees that the reasonable costs and charges for such
searches shall constitute Lender Expenses hereunder and be for the account of
Borrowers.

17.13. Anti-Money Laundering.

(a) Each Canadian Loan Party acknowledges that, pursuant to the AML Legislation,
the Lenders and the Agents may be required to obtain, verify and record
information regarding each Canadian Loan Party, its directors, authorized
signing officers, direct or indirect shareholders or other Persons in control of
each Canadian Loan Party, and the transactions contemplated hereby. Each
Canadian Loan Party shall promptly provide all such information, including
supporting documentation and other evidence, as may be reasonably requested by
any Lender or any Agent, or any prospective assign or participant of a Lender or
an Agent, in order to comply with any applicable AML Legislation, whether now or
hereafter in existence.

 

-120-

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

(b) If any Agent has ascertained the identity of each Canadian Loan Party or any
authorized signatories of each Canadian Loan Party for the purposes of
applicable AML Legislation, then such Agent:

 

  (i) shall be deemed to have done so as an agent for each Lender, and this
Agreement shall constitute a “written agreement” in such regard between each
Lender and such Agent within the meaning of applicable AML Legislation; and

 

  (ii) shall provide to each Lender copies of all information obtained in such
regard without any representation or warranty as to its accuracy or
completeness.

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders agrees that the Agents have no obligation to
ascertain the identity of each Canadian Loan Party or any authorized signatories
of each Canadian Loan Party on behalf of any Lender, or to confirm the
completeness or accuracy of any information it obtains from each Canadian Loan
Party or any such authorized signatory in doing so.

17.14. Integration.

This Agreement, together with the other Loan Documents, reflects the entire
understanding of the parties with respect to the transactions contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, before the date hereof. The foregoing to the contrary
notwithstanding, all Bank Product Agreements, if any, are independent agreements
governed by the written provisions of such Bank Product Agreements, which will
remain in full force and effect, unaffected by any repayment, prepayments,
acceleration, reduction, increase, or change in the terms of any credit extended
hereunder, except as otherwise expressly provided in such Bank Product
Agreement.

17.15. Coleman Cable as Agent for Borrowers.

Each Borrower hereby irrevocably appoints Coleman Cable as the attorney-in-fact
for all Borrowers and each US Borrower hereby irrevocably appoints Coleman Cable
as the borrowing agent for all US Borrowers (in each such capacity, the
“Administrative Borrower”) which appointment shall remain in full force and
effect unless and until US Agent shall have received prior written notice signed
by each Borrower that such appointment has been revoked and that another
Borrower has been appointed Administrative Borrower. Each Borrower hereby
irrevocably appoints and authorizes the Administrative Borrower (a) to provide
US Agent with all notices with respect to US Advances and US Letters of Credit
obtained for the benefit of any US Borrower and all other notices and
instructions under this Agreement, and (b) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain US Advances
and US Letters of Credit and to exercise such other powers as are reasonably
incidental thereto to carry out the purposes of this Agreement. It is understood
that the handling of the Loan Accounts and Collateral in a combined fashion, as
more fully set forth herein, is done solely as an accommodation to Borrowers in
order to utilize the collective borrowing powers of Borrowers in the most
efficient and economical manner and at their request, and that Lender Group
shall not incur liability to any Borrower as a result hereof. Each Borrower
expects to derive benefit, directly or indirectly, from the handling of the Loan
Accounts and the Collateral in a combined

 

-121-

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

fashion since the successful operation of each Borrower is dependent on the
continued successful performance of the integrated group. To induce the Lender
Group to do so, and in consideration thereof, each Borrower hereby jointly and
severally agrees to indemnify each member of the Lender Group and hold each
member of the Lender Group harmless against any and all liability, expense, loss
or claim of damage or injury, made against the Lender Group by any Borrower or
by any third party whosoever, arising from or incurred by reason of (a) the
handling of the Loan Accounts and Collateral of Borrowers as herein provided, or
(b) the Lender Group’s relying on any instructions of the Administrative
Borrower, except that Borrowers will have no liability to the relevant
Agent-Related Person or Lender-Related Person under this Section 17.15 with
respect to any liability that has been finally determined by a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of such Agent-Related Person or Lender-Related Person, as the
case may be.

17.16. Determinations; Judgment Currency.

(a) This is an international financial transaction in which the specification of
a currency and payment is of the essence. Dollars or Canadian Dollars, as
applicable, shall be the currency of account in the case of all payments
pursuant to or arising under this Agreement or under any other Loan Document,
and all such payments shall be made to the applicable Agent’s Account in
immediately available funds. To the fullest extent permitted by applicable law,
the Obligations of each Borrower to Agents and the Lenders under this Agreement
and under the other Loan Documents shall not be discharged by any amount paid in
any other currency or in any other manner than to the applicable Agent’s Account
to the extent that the amount so paid after conversion under this Agreement and
transfer to the applicable Agent’s Account, as applicable, does not yield the
amount of Dollars with respect to US Obligations or Canadian Dollars with
respect to Canadian Obligations owing to Lenders due under this Agreement and
under the other Loan Documents. If, for the purposes of obtaining or enforcing
judgment against Borrowers in any court in any jurisdiction in connection with
this Agreement or any Loan Document, it becomes necessary to convert into any
other currency (such other currency being referred to as the “Judgment
Currency”) an amount due under this Agreement or any Loan Document in Dollars or
Canadian Dollars, as applicable, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding (a) the date of
actual payment of the amount due, in the case of any proceeding in the courts of
any jurisdiction that would give effect to such conversion being made on such
date, or (b) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the applicable date as of
which such conversion is made pursuant to this Section 17.16 being hereinafter
referred to as the “Judgment Conversion Date”).

(b) If, in the case of any proceeding in the court of any jurisdiction referred
to in subsection (a) above, there is a change in the rate of exchange prevailing
between the Judgment Conversion Date and the date of actual receipt for value of
the amount due, the applicable Borrowers shall pay such additional amount (if
any and in any event not a lesser amount) as may be necessary to ensure that the
amount actually received in the Judgment Currency, when converted at the rate of
exchange prevailing on the date of payment, will produce the amount of Dollars
or Canadian Dollars, as applicable, which could have been purchased with the
amount of the Judgment Currency stipulated in the judgment or judicial order at
the rate of exchange prevailing on the Judgment Conversion Date. The term “rate
of

 

-122-

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

exchange” in this Section means the spot rate of exchange at which US Agent
would, on the relevant date at or about 10:30 a.m. (New York time), be prepared
to sell Dollars or Canadian Dollars, as applicable, against the Judgment
Currency.

(c) Any amount due from Borrowers under this Section 17.16 shall constitute an
obligation separate and independent from the other obligations contained in this
Agreement and the other Loan Documents, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by any Agent or any Lender from time to time and shall continue in full force
and effect notwithstanding any judgment or order for a liquidated sum in respect
of an amount due under this Agreement or any other Loan Document or under any
judgment or order.

(d) Where any amount is denominated in Dollars under this Agreement but requires
for its determination an amount which is determined in another currency, US
Agent shall determine the applicable exchange rate in its sole Permitted
Discretion. Where any amount is denominated in Canadian Dollars under this
Agreement but requires for its determination an amount which is determined in
another currency, Canadian Agent shall determine the applicable exchange rate in
its sole Permitted Discretion.

[Signature pages to follow.]

 

-123-

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

 

COLEMAN CABLE, INC.,

a Delaware corporation, as a US Borrower

By:  

/s/ Richard N. Burger

Title:  

Chief Financial Officer, Executive Vice President and Secretary

TECHNOLOGY RESEARCH CORPORATION,

a Florida corporation, as a US Borrower

By:  

/s/ Richard N. Burger

Title:  

Treasurer and Secretary

WOODS INDUSTRIES (CANADA) INC.,

an Ontario corporation, as Canadian Borrower

By:  

/s/ Richard N. Burger

Title:  

Treasurer

WELLS FARGO CAPITAL FINANCE, LLC.,

a Delaware limited liability company, as US Agent

By:  

Illegible

Title:  

Vice President

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,

an Ontario corporation, as Canadian Agent and as a Lender

By:  

/s/ Domenic Cosentino

Title:  

Vice President

Signature Page to Second A&R Credit Agreement

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

WELLS FARGO BANK, N.A.,

as a Lender

By:  

Illegible

Title:  

Vice President

Signature Page to Second A&R Credit Agreement

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

BANK OF AMERICA, N.A.,

as a Lender

By:  

/s/ Elizabeth Mitchell

Title:  

Vice President

BANK OF AMERICA, N.A.,

acting through its Canada branch, as a Lender

By:  

/s/ Medina Sales de Andrade

Title:  

Vice President

Signature Page to Second A&R Credit Agreement

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

REGIONS BANK,

as a Lender

By:  

Illegible

Title:  

Senior Vice President

Signature Page to Second A&R Credit Agreement

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

JPMORGAN CHASE BANK, N.A.,

as a Lender

By:  

Illegible

Title:  

Duly Authorized Signatory

JPMORGAN CHASE BANK, N.A., TORONTO BRANCH,

as a Lender

By:  

/s/ Agostino A. Marchetti

Title:  

Senior Vice President

Signature Page to Second A&R Credit Agreement

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

Schedule 1.1

As used in the Agreement, the following terms shall have the following
definitions:

“Account” means an account (as that term is defined in the Code).

“Account Debtor” means any Person who is obligated on an Account, chattel paper,
or a general intangible.

“Accounting Changes” means changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions).

“Acknowledgment Agreements” means (a) the acknowledgment agreements,
substantially in the form of Exhibit D (or such other form as shall be
reasonably acceptable to the US Agent), between each Loan Party’s warehousemen,
fillers, packers, processors, and other bailees and the applicable Agent,
(b) Landlord Agreements, (c) Licensor Consents, (d) Freight Forwarder
Agreements, (e) Buying Association Supplemental Agreements or (f) any other
bailee acknowledgment and/or waiver agreement in form and substance reasonably
satisfactory to the applicable Agent.

“Administrative Borrower” has the meaning specified therefor in Section 17.15 of
the Agreement.

“Advances” means the US Advances and/or the Canadian Advances, as applicable, as
the context requires.

“Affected Lender” has the meaning specified therefor in Section 2.14(b) of the
Agreement.

“Affiliate” means, with respect to any Person, any entity which directly or
indirectly controls, is controlled by, or is under common control with, such
Person. For purposes of this definition, “control” shall mean the possession,
directly or indirectly, of the power to (i) vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person, or
(ii) direct or cause the direction of management and policies of a business,
whether through the ownership of voting securities, by contract or otherwise and
either alone or in conjunction with others or any group.

“Agent” means US Agent and/or Canadian Agent, as applicable, as the context
requires.

“Agent-Related Persons” means each Agent, together with its Affiliates,
officers, directors, employees, attorneys, and agents.

 

Schedule 1.1 – Page 1

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

“Agent’s Liens” means the Liens granted by any Loan Party or its Subsidiaries to
either Agent under the Loan Documents.

“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.

“AML Legislation” means the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada) and other applicable anti-money laundering,
anti-terrorist financing, government sanctioned “know your client” laws, within
Canada.

“Anti-Terrorism Law” means the Patriot Act or any other statute, regulation,
executive order, or other law pertaining to the prevention of future acts of
terrorism, in each case as such law may be amended from time to time.

“Application Event” means the occurrence of (a) a failure by Borrowers to repay
all of the Obligations in full on the Maturity Date, or (b) an Event of Default
and the election by Agents or the Required Lenders to require that payments and
proceeds of Collateral be applied pursuant to Section 2.4(b)(ii) and (iii) of
the Agreement.

“Applicable Unused Line Margin” means, as of any date of determination (with
respect to the calculation of the fees payable to US Agent, for the ratable
account of those Lenders with US Revolver Commitments, and Canadian Agent, for
the ratable account of those Lenders with Canadian Revolver Commitments,
respectively, under Section 2.10(b) and (c)), the applicable margin set forth in
the following table that corresponds to the average daily Excess Availability
calculation for the most recently ended fiscal quarter delivered to Agent
pursuant to Section 5.1 of the Agreement (the “Quarterly Excess Availability
Calculation”); provided, however, that for the period from the Closing Date
through the date Agent receives the Quarterly Excess Availability Calculation in
respect of the testing period ending September 30, 2011, the Applicable Unused
Line Margin shall be at the margin in the row styled “Level III”:

 

Level

  

Quarterly Excess Availability Calculation

   Base Rate Margin I    If the Quarterly Excess Availability Calculation is
less than or equal to $30,000,000    0.50 percentage points II    If the
Quarterly Excess Availability Calculation is greater than $30,000,000 and less
than or equal to $75,000,000    0.375 percentage points III    If the Quarterly
Excess Availability Calculation is greater than $75,000,000    0.25 percentage
points

Except as set forth in the foregoing proviso, the Applicable Unused Line Margin
shall be based upon the most recent the Quarterly Excess Availability
Calculation, which will be calculated as of the end of each fiscal quarter.
Except as set forth in the foregoing proviso, the Applicable Unused Line Margin
shall be re-determined quarterly on the first day of the month following the
date of delivery to Agent of the certified calculation of the Quarterly Excess
Availability Calculation pursuant to Section 5.1 of the Agreement; provided,
however, that if

 

Schedule 1.1 – Page 2

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

Borrowers fail to provide such certification when such certification is due, the
Applicable Unused Line Margin shall be set at the margin in the row styled
“Level I” as of the first day of the month following the date on which the
certification was required to be delivered until the date on which such
certification is delivered (on which date (but not retroactively), without
constituting a waiver of any Default or Event of Default occasioned by the
failure to timely deliver such certification, the Applicable Unused Line Margin
shall be set at the margin based upon the calculations disclosed by such
certification). In the event that the information regarding the Quarterly Excess
Availability Calculation contained in any certificate delivered pursuant to
Section 5.1 of the Agreement is shown to be inaccurate, and such inaccuracy, if
corrected, would have led to the application of a higher or lower Applicable
Unused Line Margin for any period (an “Applicable Unused Line Period”) than the
Applicable Unused Line Margin actually applied for such Applicable Unused Line
Period, then (i) Borrowers shall immediately deliver to US Agent a correct
certificate for such Applicable Unused Line Period, (ii) the Applicable Unused
Line Margin shall be determined as if the correct Applicable Unused Line Margin
(as set forth in the table above) were applicable for such Applicable Unused
Line Period, and (iii) Borrowers shall immediately deliver to the applicable
Agent, for the ratable account of those Lenders with a US Revolver Commitment or
a Canadian Revolver Commitment, as applicable, full payment in respect of the
accrued additional unused line fees as a result of such increased Applicable
Unused Line Margin for such Applicable Unused Line Period or, as applicable, the
applicable Agent shall establish a credit for the Borrowers in an amount equal
to the excess unused line fees paid by the Borrowers to a Lender that shall be
credited to future unused line fee payments to such Lender (but only so long as
such Lender’s Revolver Commitment has not changed during the Applicable Unused
Line Period).

“Appraised Equipment” means any Equipment of a US Borrower subject to a first
priority Lien in favor of US Agent that has been appraised by an appraiser
reasonably acceptable to US Agent pursuant to a net orderly liquidation value
appraisal reasonably acceptable to US Agent.

“Appraised Real Property” means any owned Real Property of a US Borrower
(i) subject to a first priority Lien that has been appraised by an appraiser
reasonably acceptable to US Agent pursuant to a fair market value appraisal
acceptable to US Agent, (ii) with respect to which US Agent has received
(A) mortgagee title insurance policies issued by a title insurance company
reasonably satisfactory to US Agent in amounts satisfactory to US Agent assuring
US Agent that the Mortgages on such Real Property are valid and enforceable
first priority mortgage Liens on such Real Property free and clear of all
defects and encumbrances except Permitted Liens, and otherwise in form and
substance reasonably satisfactory to US Agent, (B) ALTA surveys in form and
substance reasonably satisfactory to US Agent, and (C) phase-I environmental
reports with respect to each parcel composing the Real Property (the
environmental consultants retained for such reports, the scope of the reports,
and the results thereof of which shall be reasonably satisfactory to US Agent).

“Asset Disposition” means the disposition (other than (x) a disposition
described in clauses (a), (b), (j), (m) or (n) of Section 6.3 or (y) a
disposition described in clauses (c), (d), (o) or (p) of Section 6.3, so long as
the proceeds thereof are used to repair existing assets or acquire other assets
or property useful in the relevant Loan Party’s business within 365 days of such
disposition) of any or all of the assets (including, without limitation, the
capital Stock of a Loan Party or

 

Schedule 1.1 – Page 3

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

Subsidiary of a Loan Party) of any Loan Party or its Subsidiaries, whether by
sale, lease, transfer or otherwise, in a single transaction, or in a series of
related transactions in any consecutive 12-month period for Net Cash Proceeds in
the aggregate in excess of $5,000,000.

“Assignee” has the meaning specified therefor in Section 13.1(a) of the
Agreement.

“Assignment and Acceptance” means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.

“Authorized Person” means any one of the individuals identified on Schedule A-3
as being Authorized Persons of US Borrowers or Canadian Borrower, as applicable,
as such schedule is updated from time to time by written notice from
Administrative Borrower to Agent.

“Availability” means the US Availability and/or Canadian Availability, as the
context requires.

“Bank Product” means any one or more of the following financial products or
accommodations extended to any Borrower or any Loan Party by a Bank Product
Provider: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) stored value cards, (e) purchase cards (including so-called
“procurement cards” or “P-cards”), (f) Cash Management Services, or
(g) transactions under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time
by a Loan Party with a Bank Product Provider in connection with the obtaining of
any of the Bank Products.

“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to the applicable Agent) to be held by US
Agent for the benefit of the US Bank Product Providers (other than the US Hedge
Providers) or by Canadian Agent for the benefit of the Canadian Bank Product
Providers (other than the Canadian Hedge Providers) in an amount determined by
such Agent as sufficient to satisfy the reasonably estimated credit exposure
with respect to the then existing Bank Product Obligations (other than Hedge
Obligations).

“Bank Product Obligations” means the US Bank Product Obligations and/or the
Canadian Bank Product Obligations, as the context requires.

“Bank Product Provider” means a US Bank Product Provider and/or a Canadian Bank
Product Provider, as the context requires.

“Bank Product Provider Letter Agreement” means a letter agreement in
substantially the form attached hereto as Exhibit B-3, duly executed by the
applicable Bank Product Provider, applicable Loan Parties, and the applicable
Agent.

“Bankruptcy Code” means (i) title 11 of the United States Code, (ii) the
Bankruptcy and Insolvency Act (Canada), (iii) the Companies’ Creditors
Arrangement Act (Canada) (iv) the Winding-Up and Restructuring Act (Canada)
and/or (v) any similar legislation in a relevant jurisdiction, in each case as
applicable and as in effect from time to time.

 

Schedule 1.1 – Page 4

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

“Base Rate” means, with respect to the US Advances and the other US Obligations,
the US Base Rate, and with respect to the Canadian Advances and the other
Canadian Obligations, the Canadian Base Rate.

“Base Rate Loan” means each portion of the Advances that bears interest at a
rate determined by reference to the applicable Base Rate.

“Base Rate Margin” means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a Base Rate Loan), the
applicable margin set forth in the following table that correspond to the most
recent Quarterly Excess Availability Calculation; provided, however, that for
the period from the Closing Date through the date Agent receives the Quarterly
Excess Availability Calculation in respect of the testing period ending
September 30, 2011, the Base Rate Margin shall be at the margin in the row
styled “Level III”:

 

Level

  

Quarterly Excess Availability Calculation

   Base Rate Margin I    If the Quarterly Excess Availability Calculation is
less than or equal to $30,000,000    0.75 percentage points II    If the
Quarterly Excess Availability Calculation is greater than $30,000,000 and less
than or equal to $75,000,000    0.50 percentage points III    If the Quarterly
Excess Availability Calculation is greater than $75,000,000    0.25 percentage
points

Except as set forth in the foregoing proviso, the Base Rate Margin shall be
based upon the most recent Quarterly Excess Availability Calculation, which will
be calculated as of the end of each fiscal quarter. Except as set forth in the
foregoing proviso, the Base Rate Margin shall be re-determined quarterly on the
first day of the month following the date of delivery to Agent of the certified
calculation of the Quarterly Excess Availability Calculation pursuant to
Section 5.1 of the Agreement; provided, however, that if Borrowers fail to
provide such certification when such certification is due, the Base Rate Margin
shall be set at the margin in the row styled “Level I” as of the first day of
the month following the date on which the certification was required to be
delivered until the date on which such certification is delivered (on which date
(but not retroactively), without constituting a waiver of any Default or Event
of Default occasioned by the failure to timely deliver such certification, the
Base Rate Margin shall be set at the margin based upon the calculations
disclosed by such certification). In the event that the information regarding
the Quarterly Excess Availability Calculation contained in any certificate
delivered pursuant to Section 5.1 of the Agreement is shown to be inaccurate,
and such inaccuracy, if corrected, would have led to the application of a higher
or lower Base Rate Margin for any period (a “Base Rate Period”) than the Base
Rate Margin actually applied for such Base Rate Period, then (i) Borrowers shall
immediately deliver to Agent a correct certificate for such Base Rate Period,
(ii) the Base Rate Margin shall be determined as if the correct Base Rate Margin
(as set forth in the table above) were applicable for such Base Rate Period, and
(iii) Borrowers shall immediately deliver to Agent full payment in respect of
the accrued

 

Schedule 1.1 – Page 5

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

additional interest as a result of such increased Base Rate Margin for such Base
Rate Period, which payment shall be promptly applied by Agent to the affected
Obligations or, as applicable, US Agent shall establish a credit for the
Borrowers in an amount equal to the excess interest paid by the Borrowers to a
Lender that shall be credited to future interest payments to such Lender (but
only so long as such Lender’s Revolver Commitment has not changed during the
Base Rate Period).

“Benefit Plan” means a defined benefit plan as defined in Section 3(35) of ERISA
(other than a Multiemployer Plan) in respect of which any Loan Party, any
Subsidiary or any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an “employer” as defined in Section 3(5) of ERISA.

“Borrower” and “Borrowers” have the respective meanings specified therefor in
the preamble to the Agreement.

“Borrowing” means a US Borrowing and/or a Canadian Borrowing, as the context
requires.

“Borrowing Base” means the US Borrowing Base and/or the Canadian Borrowing Base,
as the context requires.

“Borrowing Base Certificate” means the US Borrowing Base Certificate and/or the
Canadian Borrowing Base Certificate, as the context requires.

“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks are authorized or required to close in the state of Illinois, except
that (a) if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term “Business Day” also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market, and (b) if a
determination of a Business Day shall relate to a Canadian Advance or Canadian
Letter of Credit (including a request therefor), the term “Business Day” also
shall exclude any day on which banks are authorized or required to close in
Toronto, Ontario, Canada.

“Buying Association” means any Person (other than a bank or other financial
institution) (a) the members of which are customers of a Borrower and receive
price rebates on the purchase of goods from such Borrower as a result of being
members in such Person and (b) that pays such Borrower’s accounts receivable
owed by its members to such Borrower from amounts paid to such Person by those
members.

“Buying Association Agreement” means an agreement between a Buying Association
and the applicable Borrower.

“Buying Association Supplemental Agreement” means an agreement in form and
substance satisfactory to US Agent between a Buying Association and the
applicable Borrower supplementing a Buyer Association Agreement.

“Canadian Advances” has the meaning specified therefor in Section 2.1(b) of the
Agreement.

 

Schedule 1.1 – Page 6

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

“Canadian Agent” has the meaning specified therefor in the preamble to the
Agreement.

“Canadian Agent’s Account” means the Deposit Account of Canadian Agent
identified on Schedule A-2.

“Canadian Agent’s Liens” means the Liens granted by a Canadian Loan Party to
Canadian Agent under the Loan Documents.

“Canadian Availability” means, as of any date of determination, the amount that
Canadian Borrower is entitled to borrow as Canadian Advances under Section 2.1
of the Agreement (after giving effect to all then outstanding Canadian
Obligations (other than Canadian Bank Product Obligations)).

“Canadian Bank Product Obligations” means (a) all obligations, liabilities,
reimbursement obligations, fees, or expenses owing by a Canadian Loan Party to
any Canadian Bank Product Provider pursuant to or evidenced by a Bank Product
Agreement and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, (b) all Canadian Hedge Obligations, and (c) all amounts that
either Agent or any Lender is obligated to pay to a Canadian Bank Product
Provider as a result of either Agent or such Lender purchasing participations
from, or executing guarantees or indemnities or reimbursement obligations to, a
Canadian Bank Product Provider with respect to the Canadian Bank Products
provided by such Canadian Bank Product Provider to a Canadian Loan Party;
provided, however, in order for any item described in clauses (a) (b), or
(c) above, as applicable, to constitute “Canadian Bank Product Obligations”, if
the applicable Canadian Bank Product Provider is any Person other than Wells
Fargo or its Affiliates, the applicable Bank Product must have been provided on
or after the Closing Date and Canadian Agent shall have received a Bank Product
Provider Letter Agreement within 10 Business Days after the date of the
provision of the applicable Bank Product to any Canadian Loan Party.

“Canadian Bank Product Provider” means any Lender or any of its Affiliates that
provides Bank Products to a Canadian Loan Party; provided, however, that no such
Person (other than Wells Fargo or its Affiliates) shall constitute a Canadian
Bank Product Provider with respect to a Bank Product provided to a Canadian Loan
Party unless and until US Agent shall have received a Bank Product Provider
Letter Agreement from such Person and with respect to the applicable Bank
Product within 10 days after the provision of such Bank Product to a Canadian
Loan Party; provided further, however, that if, at any time, a Lender ceases to
be a Lender under the Agreement, then, from and after the date on which it
ceases to be a Lender thereunder, neither it nor any of its Affiliates shall
constitute Bank Product Providers and the obligations with respect to Bank
Products provided by such former Lender or any of its Affiliates shall no longer
constitute Bank Product Obligations.

“Canadian Bank Product Reserve Amount” means, as of any date of determination,
the Canadian Dollar amount of reserves that the Canadian Agent has, in its
Permitted Discretion, determined it is necessary or appropriate to establish
(based upon the Canadian Bank Product Providers’ reasonable determination of the
liabilities and obligations of Canadian Loan Parties in respect of Bank
Products) in respect of Bank Products then provided or outstanding.

 

Schedule 1.1 – Page 7

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

“Canadian Base Rate” means, at any time, the annual rate of interest equal to
the greater of (i) the rate from time to time publicly announced by Canadian
Imperial Bank of Commerce as its “prime rate” in effect for determining interest
rates on Canadian Dollar denominated commercial loans in Canada, subject to each
increase or decrease in such prime rate, effective as of the day any such change
occurs, whether or not such announced rate is the best rate available at such
bank, or (ii) the rate of interest equal to the sum of the 30-day Canadian LIBOR
Rate at such time plus 1% per annum.

“Canadian Borrowing” means a borrowing consisting of Canadian Advances made on
the same day by the Lenders (or Canadian Agent on behalf thereof), or by
Canadian Swing Lender in the case of a Canadian Swing Loan, or by Canadian Agent
in the case of a Canadian Protective Advance.

“Canadian Borrowing Base” means, as of any date of determination, the following
amount calculated in Canadian Dollars as follows:

(1) 85% of the amount of Canadian Eligible Accounts; plus

(2) an amount equal to the lesser of (a) Cdn$12,000,000 and (b) the lesser of
(x) 70% of the book value (calculated at the lower of cost or market on a basis
consistent with Canadian Loan Parties’ historical accounting practices) of
Canadian Eligible Inventory and (y) 85% times the most recently determined Net
Liquidation Percentage times the value (calculated at the lower of cost or
market on a basis consistent with Canadian Loan Parties’ historical accounting
practices) of Canadian Loan Parties’ Inventory (provided, however, that not more
than 5% of the aggregate amount of Canadian Eligible Inventory may consist of
Processor Inventory); minus

(3) reserves established by the Canadian Agent from time to time, in its
Permitted Discretion, as a result of changes that the Canadian Agent becomes
aware of that have resulted or would reasonably be expected to result in a
diminution in the quantity, quality or value of any Collateral; provided that
prior to establishing or modifying any such reserve, the Canadian Agent shall
have given Canadian Borrower a reasonable opportunity and a reasonable amount of
time (it being agreed that if Excess Availability is greater than $25,000,000
prior to giving effect to such reserve, the Canadian Agent will give Canadian
Borrower 5 Business Days) to confer with the Canadian Agent regarding the
proposed new or modified reserve. Subject to the foregoing, such reserves may
include, without limitation but without duplication, the Canadian Bank Product
Reserve Amount, rent reserves, import and duty and freight charge reserves,
Canadian Inventory Reserves, and Canadian Priority Payables Reserves.

Subject to the relevant terms and provisions set forth in this Agreement,
including specifically Section 14, the Canadian Agent at all times shall be
entitled to reduce or increase the advance rates and change the standards of
eligibility under this Agreement, in each case in its Permitted Discretion,
including, without limitation, following the Canadian Agent’s review of any
inventory appraisal and the orderly liquidation values contained therein.
Promptly after making any such adjustments, the Canadian Agent shall notify the
Canadian Borrower thereof.

 

Schedule 1.1 – Page 8

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

“Canadian Borrowing Base Certificate” means a certificate in the form of
Exhibit B-2.

“Canadian Borrowing Base Excess” has the meaning set forth in Section 2.4(e)(i).

“Canadian Cash Concentration Account” means a deposit account established and
maintained by Canadian Borrower, for itself and as agent for the other Canadian
Loan Parties, over which the Canadian Agent, for itself and for the benefit of
the Lenders, has control over such deposit account, whether by virtue of such
deposit account’s being maintained at the Canadian Agent or, if required by the
Canadian Agent, pursuant to the terms of a Deposit Account Control Agreement in
form and substance reasonably satisfactory to the Canadian Agent.

“Canadian Designated Account” means the Deposit Account of Canadian Borrower
identified on Schedule D-2.

“Canadian Designated Account Bank” has the meaning specified therefor in
Schedule D-1.

“Canadian Dollars” or “Cdn$” means the lawful currency of Canada, as in effect
from time to time.

“Canadian Eligible Accounts” means the aggregate face amount of the Accounts of
each of the Canadian Loan Parties that conform to the warranties contained
herein and at all times continue to be acceptable to the Canadian Agent in its
Permitted Discretion, less the aggregate amount of all returns, discounts,
claims, credits, charges and allowances of any nature (whether issued, owing,
granted or outstanding), and less the aggregate amount of all reserves for slow
paying accounts, foreign sales, bill and hold (or deferred shipment)
transactions and the Lenders’ charges as set forth in this Agreement. Unless
otherwise approved in writing by the Canadian Agent, no Account shall be deemed
to be a Canadian Eligible Account if:

(a) the Account arises out of a sale made by any Canadian Loan Party to an
Affiliate or to any employee of any Loan Party;

(b) the Account is unpaid more than 120 days after the original invoice date or
60 days after the original payment due date thereof;

(c) such Account is from the same Account Debtor (or any Affiliate thereof) and
50% or more, in face amount, of other Accounts from such Account Debtor (or any
Affiliate thereof) are due or unpaid more than 120 days after the original
invoice date or 60 days after the original payment due date thereof;

(d) (i) the amount of the Account, when aggregated with all other Accounts of
any Account Debtor, exceeds 20% in face value of all Accounts of the Loan
Parties then outstanding, but only to the extent of such excess, or (ii) the
amount of the Account owing from Account Debtors that pay through the same
Buying Association, when aggregated with all other Accounts which will be paid
through the same Buying Association, exceeds 30% in face value of all Accounts
of the Loan Parties then outstanding, but only to the extent of such excess;

 

Schedule 1.1 – Page 9

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

(e) an Account for which (i) the Account Debtor is also a creditor of any Loan
Party, but only to the extent of the amount owed by such Loan Party to the
Account Debtor, (ii) the Account Debtor has disputed its liability on, or the
Account Debtor has made any claim with respect to, such Account or any other
Account due from such Account Debtor to such Loan Party, which has not been
resolved, or (iii) the Account Debtor has or acquires any right of setoff
against such Account, but only to the extent of the amount of such setoff;

(f) the Account is owing by an Account Debtor that has commenced a voluntary
case under the Bankruptcy Code or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to such Account Debtor in an involuntary
case under the Bankruptcy Code; any petition or other application for relief
under the Bankruptcy Code has been filed by or against the Account Debtor; or
such Account Debtor is generally not paying its debts as they become due (unless
such debts are the subject of a bona fide dispute), or has suspended business,
ceased to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs;

(g) the Account arises from a sale to an Account Debtor outside of any province
of Canada, unless the sale is (i) on letter of credit, guaranty or banker’s
acceptance terms, in each case acceptable to the Canadian Agent in its Permitted
Discretion, or (ii) otherwise approved by and acceptable to the Canadian Agent
in its Permitted Discretion;

(h) the Account arises from a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval or consignment basis or is made pursuant to
any other written agreement providing for repurchase or return;

(i) the Canadian Agent believes, in its Permitted Discretion, that collection of
such Account is insecure or that such Account may not be paid by reason of the
Account Debtor’s financial inability to pay;

(j) an Account for which the related Account Debtor is a Governmental Authority,
unless any applicable assignment of claims statute, including the Financial
Administration Act (Canada), has been complied with;

(k) an Account for which the goods giving rise thereto have not been shipped and
invoiced to the related Account Debtor or its designee; the services giving rise
to such Account have not been performed by or on behalf of the applicable
Canadian Loan Party and accepted by the related Account Debtor or its designee;
or such Account otherwise does not represent a final sale;

(l) the aggregate face amount of the Account and all other Accounts owing by the
same Account Debtor exceeds a credit limit as to such Account Debtor determined
by the Canadian Agent, in its Permitted Discretion, but only to the extent such
aggregate face amount exceeds such limit;

(m) any Account in which the Canadian Agent does not have a first priority,
perfected security interest;

 

Schedule 1.1 – Page 10

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

(n) an Account for which an invoice has not been prepared and delivered to the
related Account Debtor; or

(o) an Account which the Canadian Agent, at any time and in the exercise of its
Permitted Discretion, determines it to be ineligible.

“Canadian Eligible Inventory” means (a) the aggregate gross amount of each
Canadian Loan Party’s Inventory (excluding 80% of all work-in-process, except
for work-in-process consisting solely of drawn copper wire located at any
facility of a Canadian Loan Party or a Subsidiary of a Canadian Loan Party
(which shall not be excluded)), valued at the lower of cost (on a FIFO basis) or
market, which (i) is owned solely by such Canadian Loan Party and with respect
to which such Canadian Loan Party has good, valid and marketable title, (ii) is
stored on property that is either (A) owned or leased by such Canadian Loan
Party or (B) owned or leased by a warehouseman that has contracted with such
Canadian Loan Party to store Inventory on such warehouseman’s property or by
another bailee of such Canadian Loan Party (other than a Processor) (provided
that, with respect to Inventory stored on property leased by such Canadian Loan
Party, such Canadian Loan Party shall have delivered in favor of the Canadian
Agent an Acknowledgment Agreement from the landlord of such leased location,
and, with respect to Inventory stored on property owned or leased by a
warehouseman or other bailee (other than a Processor), such Canadian Loan Party
shall have delivered to the Canadian Agent an Acknowledgment Agreement executed
by such warehouseman or other bailee (other than a Processor)); or if not so
stored, such Inventory constitutes Processor Inventory or In-Transit Inventory;
(iii) is subject to a valid, enforceable and first priority Lien in favor of
Canadian Agent except, with respect to Canadian Eligible Inventory stored at
sites described in clause (B) above for normal and customary warehouseman,
filler, packer and processor charges); (iv) is located in Canada; and (v) is not
obsolete, excess or slow moving and for which a markdown reserve has not been
made, and which otherwise conforms to the warranties contained herein and which
at all times continues to be acceptable to the Canadian Agent in its Permitted
Discretion, less (b) the sum of (i) Inventory of a Canadian Loan Party
consisting of manufacturing supplies (other than raw materials), expense
supplies, shipping supplies or packaging materials, (ii) reserves imposed by the
applicable Canadian Loan Party, (iii) any goods returned or rejected by such
Canadian Loan Party’s customers for which a credit has not yet been issued,
(iv) goods in transit to third parties (other than to such Canadian Loan Party’s
agents, warehouses, or other bailees (other than a Processor) that have
furnished an Acknowledgement Agreement to such Canadian Loan Party and the
Canadian Agent or which constitutes Processor Inventory or In-Transit
Inventory), (v) damaged Inventory of a Canadian Loan Party, (vi) any Inventory
of a Canadian Loan Party that the Canadian Agent determines in its Permitted
Discretion to be a no charge or sample item; (vii) a reserve equal to the amount
of all accounts payable of such Canadian Loan Party owed or owing to any filler,
packer, processor or other bailee of such Canadian Loan Party; (viii) any
reserves required by the Canadian Agent in its Permitted Discretion, including,
without limitation, for special order goods, market value declines, shrinkage,
import duty and freight charges, rebates and purchase price variances and
Canadian Inventory Reserves; (ix) any Inventory of a Canadian Loan Party which
is held by a Canadian Loan Party pursuant to consignment, sale or return, sale
on approval or similar arrangement; and (x) any Inventory of a Canadian Loan
Party that the Canadian Agent determines in its Permitted Discretion to be
ineligible.

 

Schedule 1.1 – Page 11

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

“Canadian Employee” means any employee or former employee of a Canadian Loan
Party.

“Canadian Employee Benefits Legislation” means the Canada Pension Plan (Canada),
the Pension Benefits Act (Ontario), and any Canadian federal, provincial or
local counterparts or equivalents, in each case, as applicable and as amended
from time to time.

“Canadian Employee Plan” means any employee benefit, health, welfare,
supplemental unemployment benefit, bonus, pension, supplemental pension, profit
sharing, retiring allowance, severance, deferred compensation, stock
compensation, stock purchase, retirement, life, hospitalization insurance,
medical, dental, disability or other employee group or similar benefit or
employment plans or supplemental arrangements applicable to the Canadian
Employees.

“Canadian Guaranty” means the guarantee, dated as of the Closing Date, executed
and delivered by the US Loan Parties in respect of the Canadian Obligations.

“Canadian Hedge Obligations” means any and all obligations or liabilities,
whether absolute or contingent, due or to become due, now existing or hereafter
arising, of a Canadian Loan Party arising under, owing pursuant to, or existing
in respect of Hedge Agreements entered into with one or more of the Canadian
Bank Product Providers.

“Canadian Hedge Provider” means any Lender or any of its Affiliates that enters
into a Hedge Agreement with a Canadian Loan Party; provided, however, that no
such Person (other than WF Canada or its Affiliates) shall constitute a Canadian
Hedge Provider unless and until Canadian Agent shall have received a Bank
Product Provider Letter Agreement from such Person and with respect to the
applicable Hedge Agreement within 10 days after the execution and delivery of
such Hedge Agreement with a Canadian Loan Party; provided further, however, that
if, at any time, a Lender ceases to be a Lender under the Agreement, then, from
and after the date on which it ceases to be a Lender thereunder, neither it nor
any of its Affiliates shall constitute Canadian Hedge Providers and the
obligations with respect to Hedge Agreements entered into with such former
Lender or any of its Affiliates shall no longer constitute Canadian Hedge
Obligations.

“Canadian Issuing Lender” means WF Canada or any other Lender that, at the
request of any Canadian Borrower and with the consent of US Agent, agrees, in
such Lender’s sole discretion, to become a Canadian Issuing Lender for the
purpose of issuing Canadian Letters of Credit or Canadian Reimbursement
Undertakings pursuant to Section 2.12 of the Agreement and the Canadian Issuing
Lender shall be a Lender.

“Canadian Inventory Reserves” means reserves (determined from time to time by
Canadian Agent in its Permitted Discretion) for (a) the estimated costs relating
to unpaid freight charges, warehousing or storage charges, taxes, duties, and
other similar unpaid costs associated with the acquisition of Eligible Inventory
by the Canadian Loan Parties, plus (b) the estimated reclamation claims of
unpaid suppliers of Inventory sold to Canadian Loan Parties (including, without
limitation, claims arising under the Bankruptcy and Insolvency Act (Canada)).

 

Schedule 1.1 – Page 12

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

“Canadian Letter of Credit” means a letter of credit (as that term is defined in
the Code) issued by Canadian Issuing Lender or a letter of credit (as that term
is defined in the Code) issued by Canadian Underlying Issuer, as the context
requires.

“Canadian Letter of Credit Disbursement” means a payment made by Canadian
Issuing Lender or Canadian Underlying Issuer pursuant to a Canadian Letter of
Credit.

“Canadian Letter of Credit Usage” means, as of any date of determination, the
aggregate undrawn amount of all outstanding Canadian Letters of Credit.

“Canadian LIBOR Rate” means the annual rate of interest equal to the average
rate applicable to Canadian Dollar bankers’ acceptances for the applicable
Interest Period appearing on the “Reuters Screen CDOR Page” (as defined in the
International Swaps and Derivatives Association, Inc. 2000 definitions, as
modified and amended from time to time), rounded to the nearest 1/100th of 1%
(with .005% being rounded up), at approximately 10:00 a.m. (Toronto time), on
such day, or if such day is not a Business Day, then on the immediately
preceding Business Day, provided that if such rate does not appear on the
Reuters Screen CDOR Page on such day as contemplated, then the Canadian LIBOR
Rate on such day shall be calculated as the average of the rates for such period
applicable to Canadian Dollar bankers’ acceptances quoted by the banks listed in
Schedule I of the Bank Act (Canada) as of 10:00 a.m. (Toronto time) on such day
or, if such day is not a Business Day, then on the immediately preceding
Business Day for a term and in an amount comparable to the Interest Period and
the amount of the Canadian LIBOR Rate Loan requested (whether as an initial
Canadian LIBOR Rate Loan or as a continuation of a Canadian LIBOR Rate Loan or
as a conversion of a Canadian Base Rate Loan to a Canadian LIBOR Rate Loan) by
the Canadian Borrower in accordance with the Agreement, which determination
shall be conclusive in the absence of manifest error.

“Canadian Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.

“Canadian Loan Party” means Canadian Borrower and each Loan Party organized
under the laws of Canadian or any province or territory thereof.

“Canadian Maximum Revolver Amount” means Cdn$20,000,000, decreased by the amount
of reductions in the Canadian Revolver Commitments made in accordance with
Section 2.4(c) of the Agreement.

“Canadian Obligations” means, without duplication, (a) all loans (including the
Canadian Advances (inclusive of Canadian Protective Advances and Canadian Swing
Loans)), debts, principal, interest (including any interest that accrues after
the commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
reimbursement or indemnification obligations with respect to Canadian
Reimbursement Undertakings or with respect to Canadian Letters of Credit
(irrespective of whether contingent), premiums, liabilities (including all
amounts charged to the Canadian Borrower’s Loan Account pursuant to the
Agreement), obligations (including indemnification obligations), fees (including
the fees provided for in the Fee Letter), Lender Group Expenses (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

 

Schedule 1.1 – Page 13

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

in any such Insolvency Proceeding), guaranties, and all covenants and duties of
any other kind and description owing by any Canadian Loan Party pursuant to or
evidenced by the Agreement or any of the other Loan Documents and irrespective
of whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all other expenses or other amounts
that any Canadian Loan Party is required to pay or reimburse by the Loan
Documents or by law or otherwise in connection with the Loan Documents, (b) all
debts, liabilities, or obligations (including reimbursement or indemnification
obligations, irrespective of whether contingent) owing by Canadian Borrower or
any other Canadian Loan Party to a Canadian Underlying Issuer now or hereafter
arising from or in respect of Canadian Underlying Letters of Credit, and (c) all
Canadian Bank Product Obligations. Any reference in the Agreement or in the
other Loan Documents to the Canadian Obligations shall include all or any
portion thereof and any extensions, modifications, renewals, or alterations
thereof, both prior and subsequent to any Insolvency Proceeding.

“Canadian Overadvance” has the meaning specified therefor in Section 2.4(e) of
the Agreement.

“Canadian Pension Plan” means any pension plan required to be registered under
the Income Tax Act (Canada) or any Canadian federal or provincial law and or
contributed to by a Canadian Loan Party for its Canadian Employees or former
Canadian Employees, including any pension benefit plan within the meaning of the
Pension Benefits Act (Ontario), but does not include the Canada Pension Plan
maintained by the Government of Canada or the Quebec Pension Plan maintained by
the Province of Quebec.

“Canadian Priority Payables Reserves” means reserves (determined from time to
time by Canadian Agent in its Permitted Discretion) for: (a) the amount past due
and owing by any Canadian Loan Party, or the accrued amount for which such
Canadian Loan Party has an obligation to remit, to a Governmental Authority or
other Person pursuant to any applicable law, rule or regulation, in respect of
(i) goods and services taxes, sales taxes, employee income taxes, municipal
taxes and other taxes payable or to be remitted or withheld; (ii) workers’
compensation; (iii) vacation or holiday pay; and (iv) other like charges and
demands to the extent that any Governmental Authority or other Person may claim
a lien, security interest, hypothec, trust or other claim ranking or capable of
ranking in priority to or pari passu with one or more of the Liens granted in
the Loan Documents; and (b) the aggregate amount of any other liabilities of any
Canadian Loan Party (i) in respect of which a trust has been or may be imposed
on any Collateral to provide for payment, or (ii) in respect of unpaid or
unremitted pension plan contributions, or (iii) which are secured by a lien,
security interest, pledge, charge, right or claim on any Collateral, or (iv) in
respect of directors and officers, debtor-in-possession financing,
administrative charges, critical supplier charges or shareholder charges; in
each case, pursuant to any applicable law, rule or regulation and which such
lien, trust, security interest, hypothec, pledge, charge, right or claim ranks
or, in the Permitted Discretion of the Canadian Agent, is capable of ranking in
priority to or pari passu with one or more of the Liens granted in the Loan
Documents (such as liens, trusts, security interests, hypothecs, pledges,
charges, rights or claims in favor of employees, landlords, warehousemen,
customs brokers, carriers, mechanics, materialmen, labourers, or suppliers, or
liens, trusts, security interests, hypothecs, pledges, charges, rights or claims
for ad valorem, excise, sales, or other taxes where given priority under
applicable law); in each case net of the aggregate amount of all restricted cash
held or set aside for the payment of such obligations

 

Schedule 1.1 – Page 14

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

“Canadian Protective Advances” has the meaning specified therefor in
Section 2.3(d)(i) of the Agreement.

“Canadian Reimbursement Undertaking” has the meaning specified therefor in
Section 2.12(b) of the Agreement.

“Canadian Revolver Commitment” means, with respect to each Lender, its Canadian
Revolver Commitment, and, with respect to all Lenders, their Canadian Revolver
Commitments, in each case as such Canadian Dollar amounts are set forth beside
such Lender’s name under the applicable heading on Schedule C-1 or in the
Assignment and Acceptance pursuant to which such Lender became a Lender under
the Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of the Agreement.

“Canadian Revolver Usage” means, as of any date of determination, the sum of
(a) the amount of outstanding Canadian Advances (including, without limitation,
Canadian Swing Loans), plus (b) the amount of the Canadian Letter of Credit
Usage.

“Canadian Security Agreement” means a general security agreement dated as of the
Closing Date and execute and delivered to Canadian Agent by Canadian Borrower
and each other Canadian Loan Party.

“Canadian Subsidiary” means any Subsidiary organized under the laws of Canada or
any province or territory thereof.

“Canadian Swing Lender” means WF Canada or any other Lender that, at the request
of Canadian Borrower and with the consent of US Agent agrees, in such Lender’s
sole discretion, to become the Canadian Swing Lender under Section 2.3(b).

“Canadian Swing Loan” has the meaning specified therefor in Section 2.3(b) of
the Agreement.

“Canadian Underlying Issuer” means Toronto Dominion Bank, any of its Affiliates
or any other Lender that, at the request of Canadian Borrower and with the
consent of Canadian Agent, agrees, in such Lender’s sole discretion, to become a
Canadian Underlying Issuer for the purpose of issuing Canadian Letters of
Credit.

“Canadian Underlying Letter of Credit” means a Canadian Letter of Credit that
has been issued by a Canadian Underlying Issuer.

“Capital Expenditures” shall mean expenditures for the acquisition (including
the acquisition by capitalized lease) or improvement of capital assets, as
determined in accordance with GAAP.

 

Schedule 1.1 – Page 15

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

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

“Cash Concentration Account” means the US Cash Concentration Account and/or the
Canadian Cash Concentration Account, as the context requires.

“Cash Equivalents” shall mean, as to any Person, (a) securities issued or
directly and fully guaranteed or insured by the United States or Canada or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States or Canada is pledged in support thereof) having maturities of
not more than one (1) year from the date of acquisition, (b) time deposits or
certificates of deposit of any commercial bank incorporated under the laws of
the United States or any state thereof or Canada or any province or territory
thereof, of recognized standing having capital and unimpaired surplus in excess
of $1,000,000,000 and whose short-term commercial paper rating at the time of
acquisition is at least A-1 or the equivalent thereof by Standard & Poor’s
Ratings Group or at least P-1 or the equivalent thereof by Moody’s Investors
Services, Inc. (any such bank, an “Approved Bank”), with such deposits or
certificates having maturities of not more than one (1) year from the date of
acquisition, (c) repurchase obligations with a term of not more than 7 days for
underlying securities of the types described in clauses (a) and (b) above
entered into with any Approved Bank, (d) commercial paper or finance company
paper issued by any Person incorporated under the laws of the United States or
any state thereof or the federal laws of Canada and rated at least A-1 or the
equivalent thereof by Standard & Poor’s Corporation or at least P-1 or the
equivalent thereof by Moody’s Investors Service, Inc., and in each case maturing
not more than one year after the date of acquisition, (e) investments in money
market funds that are registered under the Investment Company Act of 1940, as
amended, which have net assets of at least $1,000,000,000 and at least 85% of
whose assets consist of securities and other obligations of the type described
in clauses (a) through (d) above, and (f) shares of any money market mutual fund
that (i) has substantially all of its assets invested continuously in the types
of investments referred to in clauses (a) through (e) above and (ii) has net
assets of not less than $500,000,000. All such Cash Equivalents must be
denominated solely for payment in Dollars.

“Cash Management Event” has the meaning specified therefor in Section 5.18(b) of
the Agreement.

“Cash Management Services” means any cash management or related services
including treasury, depository, return items, overdraft, controlled
disbursement, merchant store value cards, e-payables services, electronic funds
transfer, interstate depository network, automatic clearing house transfer
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) and other cash management
arrangements.

“Casualty Loss” has the meaning specified therefor in Section 5.10 of the
Agreement.

“CCI” means CCI International, Inc., a Delaware corporation.

 

Schedule 1.1 – Page 16

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

“CFC” means a controlled foreign corporation within the meaning of Section 957
or the IRC in which any Loan Party is a United States stockholder within the
meaning of Section 951(b) of the IRC.

“Change of Control” shall mean the occurrence of any of the following:
(i) Coleman Cable shall fail to own 100% of the outstanding capital Stock of
each of the other Borrowers and the Guarantors or (ii) Continuing Directors
shall cease for any reason to constitute a majority of the members of the board
of directors of Coleman Cable.

“Closing Date” means the date this Agreement becomes effective.

“Code” means the New York Uniform Commercial Code, as in effect from time to
time.

“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by a Borrower or its Subsidiaries in or upon which a
Lien is granted by such Person in favor of either Agent or the Lenders under any
of the Loan Documents.

“Collections” means all cash, checks, notes, instruments, and other items of
payment (including insurance proceeds, cash proceeds of asset sales, rental
proceeds, and tax refunds).

“Coleman Cable” has the meaning specified therefor in the preamble to the
Agreement.

“Commitment” means, with respect to each Lender, its US Revolver Commitment, its
Canadian Revolver Commitment, or its Total Commitment, as the context requires,
and, with respect to all Lenders, their US Revolver Commitments, their Canadian
Revolver Commitments, or their Total Commitments, as the context requires, in
each case as such Dollar or Canadian Dollar amounts are set forth beside such
Lender’s name under the applicable heading on Schedule C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender under the
Agreement, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1
of the Agreement or pursuant to Section 2.1(e).

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C-1 delivered by the chief financial officer of Administrative Borrower
to US Agent.

“Confidential Information” has the meaning specified therefor in Section 17.9(a)
of the Agreement.

“Consolidated Assets” shall mean, for any applicable period of computation, all
amounts which would be included under total assets on a consolidated balance
sheet of Coleman Cable and its Subsidiaries as of the last day of the preceding
period, determined in accordance with applicable law and GAAP.

“Consolidated Cash Taxes” shall mean, for any applicable period of computation,
the sum of all taxes paid in cash by Coleman Cable and its consolidated
Subsidiaries during such period, determined on a consolidated basis in
accordance with applicable law and GAAP.

 

Schedule 1.1 – Page 17

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

“Consolidated EBITDA” means, for any applicable period of computation,
(a) Consolidated Net Income for such period, but excluding therefrom all
extraordinary items of income or loss for such period, plus (b) the sum of the
following to the extent deducted in calculating Consolidated Net Income:
(i) Consolidated Interest Expense for such period, plus (ii) tax expense
(including, without limitation, any federal, state, local and foreign income and
similar taxes) of Coleman Cable and its Subsidiaries for such period, plus
(iii) depreciation, amortization and other non-cash charges (excluding non-cash
charges that are expected to become cash charges in the next succeeding 12
months or that are reserves for future cash charges, and including compensation
expense related to stock options determined in accordance with SFAS No. 123(R))
for such period.

“Consolidated Fixed Charges” shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense paid in cash for such period plus (ii) Consolidated Scheduled Funded
Indebtedness Payments made during such period.

“Consolidated Funded Indebtedness” shall mean, as of any date of determination,
all Funded Indebtedness of the Coleman Cable and its consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” shall mean, for any applicable period of
computation, all interest expense, net of cash interest income, of Coleman Cable
and its consolidated Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

“Consolidated Net Income” shall mean, for any applicable period of computation,
the net income (or net deficit) of Coleman Cable and its consolidated
Subsidiaries for such period, after deduction of interest expense, income taxes
and depreciation and amortization for such period, determined on a consolidated
basis in accordance with GAAP.

“Consolidated Scheduled Funded Indebtedness Payments” shall mean, for any
applicable period of computation, the sum of all scheduled payments of principal
on Consolidated Funded Indebtedness for such period (including the principal
component of payments due on Capital Leases or under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product during such period), determined on a consolidated basis in
accordance with GAAP; it being understood that Consolidated Scheduled Funded
Indebtedness Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 2.4.

“Continuing Director” means (a) any member of the board of directors who was a
director (or comparable manager) of Coleman Cable on the Closing Date, and
(b) any individual who becomes a member of the board of directors after the
Closing Date if such individual was approved, appointed or nominated for
election to the board of directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the board of directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Coleman Cable and whose initial assumption of office
resulted from such contest or the settlement thereof.

 

Schedule 1.1 – Page 18

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

“Contractual Obligations” means, with respect to any Person, any term or
provision of any securities issued by such Person, or any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement to
which such Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

“Contribution Agreement” means a contribution agreement, dated as of the Closing
Date, executed by US Loan Parties.

“Currency Exchange Rate” means, as of the any date of determination, the spot
rate for the purchase of Dollars based on the amount of a particular currency
(including Canadian Dollars) necessary to purchase one Dollar, as published in
the Wall Street Journal on such date of determination; provided, that if the
Wall Street Journal does not publish such rate or is not available, the Currency
Exchange Rate shall be such rate as determined by Agent in its reasonable
discretion.

“Current Derivative Exposure” means, as to any Person, as of any date of
determination, the amount that would be payable by such Person in the event all
transactions under its Hedge Agreements outstanding on such date were terminated
due to an event of default for which such Person was a defaulting party under
such Hedge Agreements, without giving credit for any amounts that would be
payable to such Person in connection with such terminations.

“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.

“Default” means an event, condition, or default that, with the giving of notice,
the passage of time, or both (subject to the cure or waiver thereof in
accordance with the terms of this Agreement), would be an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed to fund any amounts
required to be funded by it under the Agreement on the date that it is required
to do so under the Agreement (including the failure to make available to either
Agent amounts required pursuant to a Settlement or to make a required payment in
connection with a Letter of Credit Disbursement), (b) notified any Borrower,
either Agent, or any Lender in writing that it does not intend to comply with
all or any portion of its funding obligations under the Agreement, (c) has made
a public statement to the effect that it does not intend to comply with its
funding obligations under the Agreement or under other agreements generally (as
reasonably determined by Agent) under which it has committed to extend credit,
(d) failed, within 1 Business Day after written request by either Agent, to
confirm that it will comply with the terms of the Agreement relating to its
obligations to fund any amounts required to be funded by it under the Agreement,
(e) otherwise failed to pay over to either Agent or any other Lender any other
amount required to be paid by it under the Agreement on the date that it is
required to do so under the Agreement, or (f) (i) becomes or is insolvent or has
a parent company that has become or is insolvent or (ii) becomes the subject of
a bankruptcy or Insolvency Proceeding, or has had a receiver, conservator,
trustee, or custodian or appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or Insolvency Proceeding, or has had a receiver,
conservator, trustee, or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment.

 

Schedule 1.1 – Page 19

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

“Defaulting Lender Rate” means (a) for the first 3 days from and after the date
the relevant payment is due, the applicable Base Rate, and (b) thereafter, the
interest rate then applicable to Advances that are Base Rate Loans (inclusive of
the Base Rate Margin applicable thereto).

“Defined Benefit Plan” means any Canadian Pension Plan which contains a “defined
benefit” provision as defined in subsection 147.1(1) of the Income Tax Act
(Canada).

“Deposit Account” means a deposit account (as that term is defined in the Code).

“Deposit Account Control Agreement” means an agreement among a Loan Party, a
Lockbox Bank or other depositary institution, and an Agent, which agreement is
in a form as is reasonably acceptable to such Agent and its counsel and which
provides for such Agent having “control” (as such term is used in Article 9 of
the Code) over the deposit accounts described therein, in each case as the same
may be amended, restated, supplemented, or otherwise modified from time to time.
For certainty, for any Canadian deposit account (including the Canadian Cash
Concentration Account), such term shall refer to a “blocked account” agreement
with respect to such deposit account, notwithstanding that the execution and
delivery of such agreement is not a perfection requirement.

“Designated Account” means the US Designated Account and/or the Canadian
Designed Account, as the context requires.

“Designated Account Bank” means the US Designated Account Bank and/or the
Canadian Designated Account Bank, as the context requires.

“Dollars” or “$” means United States dollars.

“Dollar Equivalent” means, at any time, (a) as to any amount denominated in
Dollars, the amount thereof at such time, and (b) as to any amount denominated
in a currency other than Dollars, the equivalent amount in Dollars as determined
by US Agent at such time on the basis of the Currency Exchange Rate for the
purchase of Dollars with such currency.

“Domestic Holdco Subsidiary” means any Domestic Subsidiary all of the assets of
which (other than a de minimis amount) consist of the capital stock of Foreign
Subsidiaries, Canadian Subsidiaries or other Domestic Holdco Subsidiaries.

“Domestic Subsidiary” means any Subsidiary organized under the laws of a State
of the United States or the District of Columbia (other than a Domestic Holdco
Subsidiary).

“Eligible Accounts” means US Eligible Accounts and/or Canadian Eligible
Accounts, as the context requires.

“Eligible Inventory” means US Eligible Inventory and/or Canadian Eligible
Inventory, as the context requires.

 

Schedule 1.1 – Page 20

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

“Eligible Transferee” means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a pre-existing
Lender, (e) so long as no Event of Default has occurred and is continuing, any
other Person approved by the applicable Agent and Borrowers (such approval by
Borrowers not to be unreasonably withheld, conditioned or delayed), and
(f) during the continuation of an Event of Default, any other Person approved by
US Agent.

“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter, or other written communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials (a) from any assets, properties, or
businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or
(c) from or onto any facilities which received Hazardous Materials generated by
any Borrower, any Subsidiary of a Borrower, or any of their predecessors in
interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, in each case, to the extent binding on any
Borrower or its Subsidiaries, relating to the protection of the environment, the
effect of Hazardous Materials on human health, in each case as amended from time
to time.

“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, costs and expenses (including all reasonable fees, disbursements and
expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.

“Equipment” means equipment (as that term is defined in the Code).

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

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are
treated as employed by the same employer as the employees of any Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of any Borrower or its Subsidiaries under IRC Section 414(c),
(c) solely for purposes of Section 302 of ERISA and Section 412 of

 

Schedule 1.1 – Page 21

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

the IRC, any organization subject to ERISA that is a member of an affiliated
service group of which any Borrower or its Subsidiaries is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and
Section 412 of the IRC, any Person subject to ERISA that is a party to an
arrangement with any Borrower or its Subsidiaries and whose employees are
aggregated with the employees of any Borrower or its Subsidiaries under IRC
Section 414(o).

“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.

“Excess Availability” means, as of any date of determination, the amount equal
to the sum of US Availability and the Dollar Equivalent of the Canadian
Availability.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time
to time.

“Excluded Taxes” means, in the case of any Lender or any Participant (i) Taxes
imposed on or measured by its net income (including branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Loan Party is located) or overall gross income, net
profits or gross profits, and franchise and capital Taxes imposed on it, by
(A) the United States of America or Canada or, in each case, any state or
political subdivision thereof, (B) the jurisdiction (or by any political
subdivision or taxing authority thereof) under the laws of which such Lender or
such Participant is organized or a resident, (C) the jurisdiction (or by any
political subdivision or taxing authority thereof) in which such Lender’s or
such Participant’s principal office is located, (D) in the case of any Lender,
the jurisdiction in which its applicable lending office is located or (E) any
other jurisdiction as the result of any current or former connection between
such Lender or such Participant and the jurisdiction or taxing authority
imposing such Tax (other than any such connection arising solely from such
Lender or such Participant having executed, delivered or performed its
obligations or received payment under, or enforced its rights or remedies under
the Agreement or any other Loan Document); (ii) any United States backup
withholding Taxes, (iii) Taxes which would not have arisen but for a Lender’s or
a Participant’s failure to comply with the requirements of Section 2.1(f) or
Section 16(c) or (e) of the Agreement, (iv) any United States federal and
Canadian withholding taxes (and any corresponding Taxes imposed on the Lender or
Participant under applicable Law) that would be imposed on amounts payable to a
Foreign Lender based upon the applicable withholding rate in effect at the time
such Foreign Lender becomes a party to the Agreement (or designates a new
lending office), except that Excluded Taxes shall not include (A) any amount
that such Foreign Lender (or its assignor, if any) was previously entitled to
receive pursuant to Section 16(a) of the Agreement, if any, with respect to such
withholding tax at the time such Foreign Lender becomes a party to the Agreement
(or designates a new lending office), and (B) additional withholding taxes that
may be imposed after the time such Foreign Lender becomes a party to the
Agreement (or designates a new lending office), as a result of a change in law,
rule, regulation, order or other decision with respect to any of the foregoing
by any Governmental Authority, and (v) any Taxes imposed under FATCA.

“Existing Credit Agreement” has the meaning given to such term in the recitals
hereto.

“Existing Closing Date” has the meaning given to such term in the recitals
hereto.

 

Schedule 1.1 – Page 22

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

“Existing Letters of Credit” means those letters of credit described on
Schedule E-2 to the Agreement.

“Existing Obligations” means the “Obligations”, as such term is defined in the
Existing Credit Agreement.

“FATCA” means Sections 1471, 1472, 1473 and 1474 of the IRC and the regulations
or other guidance promulgated thereunder.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per
annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published 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 which is a Business Day, the average of the
quotations for such day on such transactions received by US Agent from three
Federal funds brokers of recognized standing selected by it.

“Fee Letter” means that certain fee letter, dated as of even date with the
Agreement, among Borrowers and Agents, in form and substance reasonably
satisfactory to Agents.

“Financial Statements” has the meaning ascribed thereto in Section 4.6.

“Fixed Charge Coverage Ratio” means, as of the last day of each month, the ratio
of (a) (i) Consolidated EBITDA (computed for the 12 month period then ending),
minus (ii) Unfinanced Capital Expenditures for such 12 month period, minus
(iii) Consolidated Cash Taxes for such 12 month period, minus (iv) cash
dividends, distributions, management fees and other Restricted Payments, paid by
Coleman Cable pursuant to Section 6.6(d), (e) or (f) during such 12 month
period, minus (v) prepayments, redemptions or repurchases of the Senior Notes
(2010) pursuant to Section 6.13(d)(iii) during such 12 month period, to
(b) Consolidated Fixed Charges (computed for such 12 month period).

“Foreign Lender” means any Lender or Participant that is not a United States
person within the meaning of IRC section 7701(a)(30).

“Foreign Subsidiary” means, with respect to any Person, any Subsidiary of such
Person which is not a Domestic Subsidiary or a Canadian Subsidiary and which is
a CFC.

“Freight Forwarder Agreement” means a freight forwarder agreement in form and
substance reasonably satisfactory to the applicable Agent among a freight
forwarder or other shipping agent of a Borrower, the applicable Agent and the
applicable Borrower.

“Funded Indebtedness” means, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all

 

Schedule 1.1 – Page 23

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

obligations of such Person issued or assumed as the deferred purchase price of
property or services purchased by such Person (other than trade debt incurred in
the ordinary course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of such Person,
(e) the principal portion of all obligations of such Person under Capital
Leases, (f) the maximum amount of all letters of credit issued or bankers’
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (g) all
preferred capital Stock issued by such Person and required by the terms thereof
to be redeemed, or for which mandatory sinking fund payments are due, by a fixed
date prior to 180 days following the Maturity Date, (h) the principal portion of
all obligations of such Person under off-balance sheet financing arrangements,
(i) the amount of Current Derivative Exposure under Hedge Agreements of such
Person, (j) all Indebtedness of another Person of the type referred to in
clauses (a) through (i) above secured by (or for which the holder of such Funded
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (k) all guaranties of such Person with respect to Indebtedness of
the type referred to in clauses (a) through (i) above of another Person and
(k) Indebtedness of the type referred to in clauses (a) through (i) above of any
partnership or unincorporated joint venture in which such Person is legally
obligated or has a reasonable expectation of being liable with respect thereto.

“Funding Date” means the date on which a Borrowing occurs.

“Funding Losses” has the meaning specified therefor in Section 2.13(b)(ii) of
the Agreement.

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, consistently applied; provided, however, that all
calculations relative to liabilities shall be made without giving effect to
Statement of Financial Accounting Standards No. 159.

“Governing Documents” means, with respect to any Person, the certificate or
articles of incorporation, by-laws, or other organizational documents of such
Person.

“Governmental Authority” means any federal (including the federal government of
Canada), state, provincial, territorial, municipal, local, or other governmental
or administrative body, instrumentality, board, department, or agency or any
court, tribunal, administrative hearing body, arbitration panel, bureau,
commission, or other similar dispute-resolving panel or body.

“Guarantor” means each of each Borrower, each other Loan Party and each other
Person that has guarantied, or is otherwise liable with respect to, or has
granted a Lien to secure, all or any part of the Obligations; provided, that no
Canadian Loan Party, Canadian Subsidiary, Foreign Subsidiary or Domestic Holdco
Subsidiary shall be a Guarantor of the US Obligations.

“Guaranty” means a general continuing guaranty (including the Canadian Guaranty)
dated as of the Closing Date, executed and delivered by an extant Guarantor in
favor of either Agent, for the benefit of the Lender Group and the Bank Product
Providers, with respect to all or any part of the Obligations.

 

Schedule 1.1 – Page 24

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

“Hazardous Materials” means (a) substances that are defined or listed in, or
otherwise classified pursuant to, any Environmental Laws as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or
any other formulation intended to define, list, or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas,
drilling fluids, produced waters, and other wastes associated with the
exploration, development, or production of crude oil, natural gas, or geothermal
resources, (c) any flammable substances or explosives or any radioactive
materials, and (d) asbestos in any form or electrical equipment that contains
any oil or dielectric fluid containing levels of polychlorinated biphenyls in
excess of 50 parts per million.

“Hedge Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity purchase or option agreement or other interest or
exchange rate or commodity price hedging agreements

“Hedge Obligations” means the US Hedge Obligations and/or the Canadian Hedge
Obligations, as the context requires.

“Hedge Provider” means the US Hedge Providers and/or the Canadian Hedge
Providers, as the context requires.

“Holdout Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.

“In-Transit Inventory” means Inventory of a Loan Party which is in transit to
such Loan Party (a) aboard trucks or other transport vehicles within the United
States or Canada owned or leased by a Loan Party or by a common carrier that has
delivered in favor of the applicable Agent an acknowledgement and lien waiver
agreement in form and substance reasonably satisfactory to such Agent or (b) at
sea or by inland waterway to, or at a port in, the United States or Canada so
long as, with respect to Inventory in transit at sea or by inland waterway, the
applicable bill of lading shall run to the order of the applicable Agent and
shall promptly be furnished to the applicable freight forwarder and, with
respect to Inventory at a port, the applicable freight forwarder shall have
delivered in favor of the applicable Agent a Freight Forwarder Agreement in form
and substance reasonably satisfactory to the applicable Agent.

“Indebtedness” means, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person (other than
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) which would appear as liabilities on a balance sheet
of such Person, (e) all obligations of such Person under take-or-pay or similar
arrangements or under commodities agreements, (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, or

 

Schedule 1.1 – Page 25

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

payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(g) all guaranties of such Person with respect to Indebtedness of the type
referred in this definition of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedge Agreements, (j) the maximum amount of all letters of credit
issued or bankers’ acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred capital Stock issued by such Person and
required by the terms thereof to be redeemed, or for which mandatory sinking
fund payments are due, by a fixed date prior to 180 days following the Maturity
Date, (l) the principal portion of all obligations of such Person under
off-balance sheet financing arrangements and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.

“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of
the Agreement.

“Indemnified Taxes” means Taxes other than Excluded Taxes or Other Taxes.

“Independent Accountant” means a firm of independent public accountants of
nationally recognized standing selected by the board of directors of Coleman
Cable, which is “independent” as that term is defined in Rule 2-01 of Regulation
S-X promulgated by the Securities and Exchange Commission.

“Insolvency Proceeding” means any proceeding commenced by or against any Person
under any provision of the Bankruptcy Code or under any other provincial, state
or federal (including the federal government of Canada) bankruptcy or insolvency
law, each as now and hereafter in effect, any successors to such statutes, and
any similar laws in any jurisdiction including, without limitation, any laws
relating to assignments for the benefit of creditors, formal or informal
moratoria, compositions, extensions generally with creditors, or proceedings
seeking reorganization, arrangement, or other similar relief and any law
permitting a debtor to obtain a stay or a compromise of the claims of its
creditors.

“Intellectual Property Security Agreements” means each copyright security
agreement, patent security agreement and trademark security agreement executed
from time to time by any Loan Party in favor of either Agent.

“Intercompany Subordination Agreement” means an intercompany subordination
agreement, dated as of the Closing Date, executed and delivered by Loan Parties
and Agents.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a

 

Schedule 1.1 – Page 26

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

LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and
ending 1, 2, 3, or 6 months (or with respect to the Canadian LIBOR Rate, 30, 60,
90 or 180 days) thereafter; provided, however, that (a) interest shall accrue at
the applicable rate based upon the LIBOR Rate from and including the first day
of each Interest Period to, but excluding, the day on which any Interest Period
expires, (b) any Interest Period that would end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day, (c) with respect to an Interest Period
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period), the Interest Period shall end on the last Business Day of
the calendar month that is 1, 2, 3, or 6 months (or with respect to the Canadian
LIBOR Rate, 30, 60, 90 or 180 days) after the date on which the Interest Period
began, as applicable, and (d) Borrowers may not elect an Interest Period which
will end after the Maturity Date.

“Inventory” means inventory (as that term is defined in the Code).

“Investment” in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise, but
exclusive of the acquisition of inventory, supplies, equipment and other
property or assets used or consumed in the ordinary course of business of the
applicable Loan Party or any of its Subsidiaries and Capital Expenditures not
otherwise prohibited hereunder) of assets, shares of capital Stock, bonds,
notes, debentures, partnership interests, joint ventures or other ownership
interests or other securities of such Person, (b) any deposit (other than
deposits constituting a Permitted Lien) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 6.3) to, such Person or (c) any other capital contribution to or
investment in such Person, including, without limitation, any obligation
incurred for the benefit of such Person. In determining the aggregate amount of
Investments outstanding at any particular time, (i) the amount of any Investment
represented by a guaranty shall be taken at not less than the maximum principal
amount of the obligations guaranteed and still outstanding; (ii) there shall be
deducted in respect of each such Investment any amount received as a return of
capital (but only by repurchase, redemption, retirement, repayment, liquidating
dividend or liquidating distribution); (iii) there shall not be deducted in
respect of any Investment any amounts received as earnings on such Investment,
whether as dividends, interest or otherwise; and (iv) there shall not be
deducted from or added to the aggregate amount of Investments any decrease or
increases, as the case may be, in the market value thereof.

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

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

“Issuer Document” means, with respect to any US Letter of Credit, a letter of
credit application, a letter of credit agreement, or any other document,
agreement or instrument entered into (or to be entered into) by any US Borrower
in favor of US Issuing Bank and relating to such US Letter of Credit.

 

Schedule 1.1 – Page 27

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

“Issuing Lender” means US Issuing Bank and/or Canadian Issuing Lender, as the
context requires.

“Landlord Agreement” means a Landlord Lien Waiver Agreement, substantially in
the form of Exhibit E hereto (or such other form as shall be reasonably
acceptable to the US Agent), between a Loan Party’s landlord and the applicable
Agent.

“Lender” has the meaning set forth in the preamble to the Agreement, shall
include the Issuing Lenders and the Swing Lenders, and shall also include any
other Person made a party to the Agreement pursuant to the provisions of
Section 13.1 of the Agreement and “Lenders” means each of the Lenders or any one
or more of them.

“Lender Group” means each of the Lenders (including the Issuing Lenders and the
Swing Lenders) and each Agent, or any one or more of them.

“Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by any Borrower or its Subsidiaries
under any of the Loan Documents that are paid, advanced, or incurred by the
Lender Group, (b) documented out-of-pocket fees or charges paid or incurred by
either Agent in connection with the Lender Group’s transactions with any
Borrower or its Subsidiaries under any of the Loan Documents, including, fees or
charges for photocopying, notarization, couriers and messengers,
telecommunication, public record searches (including tax lien, litigation, and
UCC searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles and all similar searches
and inquiries conducted in Canada), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
the Agreement or the Fee Letter), real estate surveys, real estate title
policies and endorsements, and environmental audits, (c) each Agent’s customary
fees and charges (as adjusted from time to time) with respect to the
disbursement of funds (or the receipt of funds) to or for the account of
Borrowers (whether by wire transfer or otherwise), together with any out of
pocket costs and expenses incurred in connection therewith, (d) out-of-pocket
charges paid or incurred by either Agent resulting from the dishonor of checks
payable by or to any Loan Party, (e) reasonable and documented out-of-pocket
costs and expenses paid or incurred by the Lender Group to correct any default
or enforce any provision of the Loan Documents, or during the continuance of an
Event of Default, in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) reasonable and documented out-of-pocket audit fees and expenses
(including travel, meals, and lodging) of each Agent related to any inspections
or audits to the extent of the fees and charges (and up to the amount of any
limitation) contained in the Agreement or the Fee Letter, (g) reasonable and
documented out-of-pocket costs and expenses of third party claims or any other
suit paid or incurred by the Lender Group in enforcing or defending the Loan
Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group’s relationship with any Borrower or any of its
Subsidiaries, (h) each Agent’s reasonable and documented costs and expenses
(including reasonable attorneys’ fees) incurred in advising, structuring,
drafting, reviewing, administering (including travel, meals, and lodging),
syndicating, or amending the Loan Documents, (i) each Agent’s and each Lender’s
reasonable and documented costs and expenses (including reasonable attorneys,
accountants, consultants, and other advisors fees and expenses) incurred in
terminating, enforcing (including attorneys,

 

Schedule 1.1 – Page 28

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

accountants, consultants, and other advisors fees and expenses incurred in
connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning any Borrower or any of its Subsidiaries or in exercising rights or
remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral, and (j) usage charges, charges, fees, costs and
expenses for amendments, renewals, extensions, transfers, or drawings from time
to time imposed by the Canadian Underlying Issuer or incurred by either Issuing
Lender in respect of Letters of Credit and out-of-pocket charges, fees, costs
and expenses paid or incurred by Canadian Underlying Issuer or either Issuing
Lender in connection with the issuance, amendment, renewal, extension, or
transfer of, or drawing under, any Letter of Credit or any demand for payment
thereunder.

“Lender Group Representatives” has the meaning specified therefor in
Section 17.9 of the Agreement.

“Lender Hedging Agreement” means any Hedge Agreement between any Borrower or
other Loan Party and any Person (or affiliate of such Person) that was a Lender
at the time it entered into such Hedge Agreement.

“Lender-Related Person” means, with respect to any Lender, such Lender, together
with such Lender’s Affiliates, officers, directors, employees, attorneys, and
agents.

“Letter of Credit” means a US Letter of Credit and/or a Canadian Letter of
Credit, as the context requires.

“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to the applicable Agent,
including provisions that specify that the applicable Letter of Credit fee and
all usage charges set forth in the Agreement will continue to accrue while the
Letters of Credit are outstanding) to be held by the applicable Agent for the
benefit of those Lenders with a US Revolver Commitment or a Canadian Revolver
Commitment, as applicable, in an amount equal to 105% of the then existing US
Letter of Credit Usage or Canadian Letter of Credit Usage, as applicable,
(b) causing the applicable Letters of Credit to be returned to the applicable
Agent and the applicable Issuing Lender for cancellation, or (c) providing the
applicable Agent with a standby letter of credit, in form and substance
reasonably satisfactory to such Agent, from a commercial bank acceptable to such
Agent (in its sole discretion) in an amount equal to 105% of the then existing
US Letter of Credit Usage or Canadian Letter of Credit Usage, as applicable (it
being understood that the Letter of Credit fees and all usage charges set forth
in the Agreement will continue to accrue while such Letters of Credit are
outstanding and that any such fees that accrue must be an amount that can be
drawn under any such standby letter of credit).

“Letter of Credit Disbursement” means as US Letter of Credit Disbursement or a
Canadian Letter of Credit Disbursement, as the context requires.

“Letter of Credit Usage” means the US Letter of Credit Usage and/or the Canadian
Letter of Credit Usage, as the context requires.

“LIBOR Deadline” has the meaning specified therefor in Section 2.13(b)(i) of the
Agreement.

 

Schedule 1.1 – Page 29

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

“LIBOR Notice” means a written notice in the form of Exhibit L-1.

“LIBOR Option” has the meaning specified therefor in Section 2.13(a) of the
Agreement.

“LIBOR Rate” means, with respect to the US Advances and other US Obligations,
the US LIBOR Rate, and with respect to the Canadian Advances and other Canadian
Obligations, the Canadian LIBOR Rate.

“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the applicable LIBOR Rate.

“LIBOR Rate Margin” means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the
applicable margin set forth in the following table that corresponds to the most
recent Quarterly Excess Availability Calculation; provided, however, that for
the period from the Closing Date through the date Agent receives the Quarterly
Excess Availability Calculation in respect of the testing period ending
September 30, 2011, the LIBOR Rate Margin shall be at the margin in the row
styled “Level III”:

 

Level

  

Quarterly Excess Availability Calculation

   LIBOR Rate Margin

I

   If the Quarterly Excess Availability Calculation is less than or equal to
$30,000,000    2.00 percentage points

II

   If the Quarterly Excess Availability Calculation is greater than $30,000,000
and less than or equal to $75,000,000    1.75 percentage points

III

   If the Quarterly Excess Availability Calculation is greater than $75,000,000
   1.50 percentage points

Except as set forth in the foregoing proviso, the LIBOR Rate Margin shall be
based upon the most recent Quarterly Excess Availability Calculation, which will
be calculated as of the end of each fiscal quarter. Except as set forth in the
foregoing proviso, the LIBOR Rate Margin shall be re-determined quarterly on the
first day of the month following the date of delivery to Agent of the certified
calculation of the Quarterly Excess Availability Calculation pursuant to
Section 5.1 of the Agreement; provided, however, that if Borrowers fail to
provide such certification when such certification is due, the LIBOR Rate Margin
shall be set at the margin in the row styled “Level I” as of the first day of
the month following the date on which the certification was required to be
delivered until the date on which such certification is delivered (on which date
(but not retroactively), without constituting a waiver of any Default or Event
of Default occasioned by the failure to timely deliver such certification, the
LIBOR Rate Margin shall be set at the margin based upon the calculations
disclosed by such certification). In the event that the information regarding
the Quarterly Excess Availability Calculation contained in any certificate
delivered pursuant to Section 5.1 of the Agreement is shown to be inaccurate,
and such inaccuracy, if corrected, would have led to the application of a higher
or lower LIBOR

 

Schedule 1.1 – Page 30

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

Rate Margin for any period (a “LIBOR Rate Period”) than the LIBOR Rate Margin
actually applied for such LIBOR Rate Period, then (i) Borrowers shall
immediately deliver to Agent a correct certificate for such LIBOR Rate Period,
(ii) the LIBOR Rate Margin shall be determined as if the correct LIBOR Rate
Margin (as set forth in the table above) were applicable for such LIBOR Rate
Period, and (iii) Borrowers shall immediately deliver to Agent full payment in
respect of the accrued additional interest as a result of such increased LIBOR
Rate Margin for such LIBOR Rate Period, which payment shall be promptly applied
by Agent to the affected Obligations or, as applicable, US Agent shall establish
a credit for the Borrowers in an amount equal to the excess interest paid by the
Borrowers to a Lender that shall be credited for future interest payments to
such Lender (but only so long as such Lender’s Revolver Commitment has not been
changed during the LIBOR Rate Period).

“Licensor Consents” means a consent substantially in the form of Exhibit G
hereto (or such other form as shall be reasonably acceptable to US Agent) given
by the licensor of any intellectual property licensed to a Loan Party.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge, deposit arrangement, encumbrance, easement, lien (statutory or other),
security interest, or other security arrangement and any other preference,
priority, or preferential arrangement of any kind or nature whatsoever,
including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing
lease having substantially the same economic effect as any of the foregoing.

“Loan Account” means the US Loan Account and/or the Canadian Loan Account, as
the context requires.

“Loan Documents” means the Agreement, any Borrowing Base Certificate, the
Acknowledgement Agreements, the Deposit Account Control Agreements, the Fee
Letter, the Guaranty, the Canadian Guaranty, the Intercompany Subordination
Agreement, the Letters of Credit, the Mortgages, the Security Agreements, the
Intellectual Property Security Agreements, the Contribution Agreement, any
Issuer Documents, any note or notes executed by any Loan Party in connection
with the Agreement and payable to any member of the Lender Group, any letter of
credit application or letter of credit agreement entered into by any Borrower in
connection with the Agreement, and any other instrument or agreement entered
into, now or in the future, by any Loan Party or any of its Subsidiaries and any
member of the Lender Group in connection with the Agreement.

“Loan Party” means each Borrower and each Guarantor.

“Lockbox” has the meaning specified therefor in Section 5.18(a) of the
Agreement.

“Lockbox Account” has the meaning specified therefor in Section 5.18(a) of the
Agreement.

“Lockbox Bank” has the meaning specified therefor in Section 5.18(a) of the
Agreement.

 

Schedule 1.1 – Page 31

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

“Margin Stock” as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

“Material Adverse Change” means a material adverse change in (a) the business,
operations, results of operations, assets, liabilities or condition (financial
or otherwise) of the Loan Parties, taken as a whole, (b) a material portion of
the Collateral, (c) the Loan Parties’ ability to perform their respective
obligations under the Loan Documents, or (d) the rights and remedies of the
Lenders hereunder.

“Material Contract” means (a) any contract or other agreement, written or oral,
of any Loan Party or any of its Subsidiaries involving monetary liability of or
to any such Person in an amount in excess of $25,000,000 per annum and (b) any
other contract, agreement, permit or license of the Loan Parties or any of their
Subsidiaries on which the business of Coleman Cable and its Subsidiaries (taken
as a whole) is substantially dependent.

“Material Subsidiary” means, as of any date of determination, any direct or
indirect Domestic Subsidiary or Canadian Subsidiary of Coleman Cable (a) in
which Coleman Cable or its Subsidiaries that are Loan Parties have invested more
than $2,500,000 in the aggregate, (b) that holds the capital Stock of a Loan
Party or (c) that generates more than 5% of the Consolidated EBITDA for the
period of four consecutive fiscal quarters ending as of the end of the fiscal
quarter immediately preceding such date of determination on a pro forma basis
(in the case of a newly acquired Subsidiary).

“Maturity Date” has the meaning specified therefor in Section 3.3 of the
Agreement.

“Moody’s” has the meaning specified therefor in the definition of Cash
Equivalents.

“Mortgages” means, individually and collectively, one or more mortgages, deeds
of trust, or deeds to secure debt, executed and delivered by a Loan Party in
favor of either Agent, in form and substance reasonably satisfactory to such
Agent, that encumber the Real Property Collateral.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Loan Parties or any of their
Subsidiaries or ERISA Affiliates or (ii) with respect to which any Loan Parties
or any of their Subsidiaries may incur any liability.

“Net Cash Proceeds” means the aggregate cash proceeds received by the Loan
Parties or any of their Subsidiaries in respect of any Asset Disposition, net of
(a) direct costs (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) incurred as a result thereof and
(b) taxes paid or payable as a result thereof; it being understood that “Net
Cash Proceeds” shall include, without limitation, any cash received upon the
sale or other disposition of any non-cash consideration received by the Loan
Parties or any of their Subsidiaries in any Asset Disposition.

 

Schedule 1.1 – Page 32

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

“Net Liquidation Percentage” means the percentage of the book value of
Borrowers’ Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by an
appraisal company selected by US Agent in its Permitted Discretion, in
consultation with Administrative Borrower. Net Liquidation Percentage may, at US
Agent’s election, be calculated separately for different categories of
Inventory.

“Obligations” means the US Obligations and/or the Canadian Obligations, as the
context requires.

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

“Original Closing Date” has the meaning given to such term in the recitals
hereto.

“Original Credit Agreement” has the meaning given to such term in the recitals
hereto.

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.

“Overadvance” means a US Overadvance and/or a Canadian Overadvance, as the
context requires.

“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.

“Participant Register” has the meaning set forth in Section 13.1(i) of the
Agreement.

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act
of 2001, as in effect from time to time.

“Payment Direction Notice” has the meaning specified therefor in Section 5.18(c)
of the Agreement.

“Payoff Date” means the first date on which all of the Obligations are paid in
full and the Commitments of the Lenders are terminated.

“PBGC” means the Pension Benefit Guaranty Corporation and any Person succeeding
to the functions thereof.

“Permitted Acquisition” means an acquisition or any series of related
acquisitions by Coleman Cable or any of its Subsidiaries of (a) all or
substantially all of the assets or a majority of the voting Stock of a Person,
(b) a Person by a merger, amalgamation or consolidation or any other combination
with such Person or (c) any division, line of business or other business unit of
a Person (such Person or such division, line of business or other business unit
of such Person shall be referred to herein as the “Target”), in each case that
is a type of

 

Schedule 1.1 – Page 33

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

business (or assets used in a type of business) permitted to be engaged in by
the Loan Parties and their Subsidiaries pursuant to Section 5.3, so long as
(i) no Default or Event of Default shall then exist or would exist after giving
effect thereto, (ii) the Loan Parties shall demonstrate to the reasonable
satisfaction of the US Agent that, after giving effect to the acquisition on a
pro forma basis, the Fixed Charge Coverage Ratio shall be not less than 1.0 to
1.0, (iii) the applicable Agent, on behalf of the Lenders, shall have received
(or shall receive reasonably promptly following the closing of such acquisition)
a first priority perfected security interest (subject to Permitted Liens) in all
property (including, without limitation, capital Stock) acquired with respect to
the Target in accordance with the terms of Section 5.16 and the Target, if a
Person, shall have complied with the terms of Section 5.16 (it being understood
that no Inventory of any such Person shall be Eligible Inventory until the
applicable Agent shall have received a satisfactory appraisal and no Accounts of
any such Person shall be Eligible Accounts until the applicable Agent shall have
received all documentation that it reasonably requests with respect thereto,
including, without limitation, a satisfactory field examination), (iv) the US
Agent shall have received (A) a description of the material terms of such
acquisition, and (B) audited financial statements (or, if unavailable,
management-prepared financial statements) of the Target for its two most recent
fiscal years and, if available, for any fiscal quarters ended within the fiscal
year to date, (v) such acquisition shall not be a “hostile” acquisition, and
(vi) Borrowers’ (a) Excess Availability, measured for each day of the 30 day
period ending on the date of such proposed acquisition, is greater than or equal
to Required Excess Availability and (b) Excess Availability on the date of such
proposed acquisition, measured on a pro forma basis immediately after giving
effect to such acquisition, is greater than or equal to the Required Excess
Availability. Notwithstanding the foregoing, until the aggregate purchase price
paid in respect of all Permitted Acquisitions consummated after the Closing Date
exceeds $15,000,000, Borrowers shall not be required to comply with clauses
(ii) and (vi) above.

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

“Permitted Indebtedness” means:

(i) Indebtedness to the Lenders with respect to the Advances, the Letters of
Credit or otherwise, pursuant to the Loan Documents and Bank Product
Obligations;

(ii) trade payables incurred in the ordinary course of the Loan Parties’
business;

(iii) Indebtedness, including under Capital Leases, incurred to finance the
acquisition, construction, repair or improvement of property in an aggregate
amount not exceeding $25,000,000 provided that (A) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed; and
(B) no such Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such refinancing plus
any premium, interest, fees and costs incurred in connection with such
refinancing;

(iv) obligations of a Borrower or other Loan Party in respect of Hedge
Agreements entered into in order to manage existing or anticipated interest
rate, exchange rate or commodity risks and not for speculative purposes and
otherwise in accordance with Section 6.18;

 

Schedule 1.1 – Page 34

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

(v) [intentionally omitted];

(vi) the Senior Note Debt (2010) and any refinancings of such Indebtedness;
provided that (a) the aggregate principal amount of such refinancing
Indebtedness does not exceed $275,000,000, unless immediately after giving
effect thereto, (1) no Event of Default shall then exist or would exist after
giving effect to such increase, and (2) the Fixed Charge Coverage Ratio,
measured for the 12 month period ending on the last day of the most recently
ended fiscal quarter for which US Agent has received the financial statements
required to be delivered under Section 5.1 and calculated as if such refinancing
Indebtedness was incurred on the last day of such 12 month period is at least
1.0 to 1.0, (b) the scheduled maturity dates of such Indebtedness are not
shortened, and (c) such refinancing is on terms and conditions no more
restrictive, when taken as a whole, than the terms and conditions of the Senior
Note Debt (2010);

(vii) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed
the greater of (i) the sum of 85% of the aggregate book value of accounts
receivable of the Foreign Subsidiaries plus 60% of the aggregate book value of
inventory of the Foreign Subsidiaries and (ii) $25,000,000 (not counting for the
purposes of such limit intercompany Indebtedness of such Foreign Subsidiaries
permitted under clause (viii));

(viii) intercompany Indebtedness (i) among the US Loan Parties, (ii) among
Canadian Loan Parties, (iii) among Subsidiaries of Coleman Cable that are not
Loan Parties, (iv) owing from a Loan Party to a Subsidiary of Coleman Cable that
is not a Loan Party or (v) owing from a Canadian Loan Party or a Subsidiary of
Coleman Cable that is not a US Loan Party to a US Loan Party in an aggregate
principal amount outstanding with respect to this clause (v) at any time not to
exceed $25,000,000; provided, that upon the request of the US Agent at any time,
any such Indebtedness in the preceding clause (iv) shall be fully subordinated
to the Obligations on terms reasonably satisfactory to the US Agent and shall be
evidenced by promissory notes having terms reasonably satisfactory to the US
Agent, the sole originally executed counterpart of which shall be pledged and
delivered to the applicable Agent as security for the Obligations;

(ix) Indebtedness incurred to finance insurance premiums in the ordinary course
of business;

(x) Indebtedness under performance bonds, surety bonds, release, appeal and
similar bonds, statutory obligations or with respect to workers’ compensation
claims, in each case, incurred in the ordinary course of business, and
reimbursement obligations in respect of any of the foregoing (including in
respect of letters of credit issued in support of any of the foregoing);

(xi) unsecured Indebtedness assumed in connection with a Permitted Acquisition
(and refinancings thereof, provided that such refinancing meets the conditions
set forth below) which Indebtedness was in existence at the time of acquisition
of such entity (or the assets thereof), and not incurred in contemplation of
such acquisition, so long as such Indebtedness is included in the total
consideration for such Permitted Acquisition and any refinancing indebtedness is
for a principal amount not in excess of the principal balance outstanding
thereon at the time of such acquisition plus any premium, interest, fees and
costs incurred in connection with such refinancing;

 

Schedule 1.1 – Page 35

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

(xii) Indebtedness in the form of any earnout or other similar contingent
payment obligation incurred in connection with a Permitted Acquisition, so long
as such Indebtedness is included in the total consideration for such Permitted
Acquisition; and

(xiii) unsecured Indebtedness of any Borrower that is incurred on the date of
the consummation of a Permitted Acquisition solely for the purpose of
consummating such Permitted Acquisition so long as (i) no Event of Default has
occurred and is continuing or would result therefrom, (ii) such unsecured
Indebtedness is not incurred for working capital purposes, (iii) such unsecured
Indebtedness does not mature prior to the date that is 12 months after the
Maturity Date, (iv) such Indebtedness is subordinated in right of payment to the
Obligations on terms and conditions reasonably satisfactory to US Agent, and
(v) the only interest that accrues with respect to such Indebtedness is payable
in kind;

(xiv) Indebtedness incurred in respect of credit cards, credit card processing
services, debit cards, stored value cards, purchase cards (including so-called
“procurement cards” or “P-cards”), or Cash Management Services, in each case,
incurred in the ordinary course of business;

(xv) unsecured Indebtedness of Administrative Borrower owing to present and
former employees, directors or officers (or any spouse, ex-spouse or estate of
any of the foregoing) incurred in connection with the repurchase by
Administrative Borrower of the Stock of Administrative Borrower that has been
issued to such Person so long as (A) the aggregate amount of all such
Indebtedness incurred and owing does not exceed $5,000,000 in the aggregate
outstanding at any time, (B) such Indebtedness is subordinated to the
Obligations on terms and conditions reasonably satisfactory to Agents and (C) no
Event of Default has occurred and is continuing or would result therefrom; and

(xvi) other Indebtedness which does not exceed a principal amount of $25,000,000
in the aggregate at any time outstanding.

“Permitted Investments” means:

(i) Cash Equivalents;

(ii) interest-bearing demand or time deposits (including certificates of
deposit) which are insured by the Federal Deposit Insurance Corporation (“FDIC”)
or the Canadian Deposit Insurance Corporation (“CDIC”), as the case may be, or a
similar federal insurance program; provided, however, that the Loan Parties may,
in the ordinary course of their respective businesses, maintain in their
disbursement accounts from time to time amounts in excess of then applicable
FDIC or CDIC or other program insurance limits;

(iii) Investments existing on the Closing Date and set forth on Schedule P-1
attached hereto;

(iv) advances to officers, directors and employees for expenses incurred or
anticipated to be incurred in the ordinary course;

(v) loans and Investments in (A) the US Loan Parties and (B) newly created
Domestic Subsidiaries, provided that the applicable requirements of Section 5.16
are satisfied;

 

Schedule 1.1 – Page 36

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

(vi) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

(vii) Hedge Agreements entered into by a Borrower or other Loan Party in order
to manage existing or anticipated interest rate, exchange rate or commodity
risks and not for speculative purposes and otherwise in accordance with
Section 6.18;

(viii) Investments (a) by Subsidiaries which are not Loan Parties in
Subsidiaries which are not Loan Parties, and (b) by Loan Parties in Subsidiaries
which are not Loan Parties (because they are Foreign Subsidiaries or they are
not Material Subsidiaries or by US Loan Parties in Canadian Loan Parties);
provided, that, solely with respect to Investments under clause (b) above,
(x) such Investments shall not exceed $20,000,000 in the aggregate, (y) no
Default or Event of Default shall then exist or would exist after giving effect
to such Investment, and (z) after giving effect to such Investment, Excess
Availability is at least equal to Required Excess Availability; provided,
further, that such $20,000,000 limitation shall not apply so long as the
following conditions are met: (I) no Default or Event of Default shall then
exist or would exist after giving effect thereto, (II) Excess Availability for
each day of the 30 day period ending on the date of such Investment is equal to
or greater than Required Excess Availability, (III) Excess Availability as of
the day of such Investment, immediately after giving effect to such Investment,
is equal to or greater than Required Excess Availability, and (IV) the Fixed
Charge Coverage Ratio, measured for the 12 month period ending on the last day
of the most recently ended calendar month for which US Agent has received the
financial statements required to be delivered under Section 5.1 and calculated
as if such Investment was made on the last day of such 12 month period is at
least 1.0 to 1.0;

(ix) Permitted Acquisitions;

(x) Investments, advances and other transactions permitted under Sections 6.2,
6.3, 6.4 or 6.13(d);

(xi) Investments consisting of deposits made to secure the obligations of
Coleman Cable or any of its Subsidiaries under leases entered into in the
ordinary course of business and not restricted by this Agreement; and

(xii) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business;

(xiii) advances made in connection with purchases of goods or services in the
ordinary course of business;

(xiv) guarantees permitted under the definition of Permitted Indebtedness and
guaranties by a Loan Party of obligations of any other Loan Party that do not
constitute Indebtedness;

 

Schedule 1.1 – Page 37

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

(xv) Investments held by a Person acquired in a Permitted Acquisition to the
extent that such Investments were not made in contemplation of or in connection
with such Permitted Acquisition and were in existence on the date of such
Permitted Acquisition;

(xvi) obligations under letters of intent or similar agreements that are
conditioned upon satisfying any applicable approval or other requirements
contained in this Agreement;

(xvii) to the extent constituting an Investment, escrow deposits to secure
indemnification obligations in connection with a disposition permitted under
Section 6.3 or a Permitted Acquisition; and

(xviii) other Investments not described above; so long as (x) such Investments
do not exceed $20,000,000 in the aggregate, (y) so long as no Default or Event
of Default has occurred and is continuing or would result therefrom, and
(z) after giving effect to such Investment, Excess Availability is at least
equal to Required Excess Availability; provided, that such $20,000,000
limitation shall not apply so long as the following conditions are met: (I) no
Default or Event of Default shall then exist or would exist after giving effect
thereto, (II) Excess Availability for each day of the 30 day period ending on
the date of such Investment is equal to or greater than Required Excess
Availability, (III) Excess Availability as of the day of such Investment,
immediately after giving effect to such Investment, is equal to or greater than
Required Excess Availability, and (IV) the Fixed Charge Coverage Ratio, measured
for the 12 month period ending on the last day of the most recently ended
calendar month for which US Agent has received the financial statements required
to be delivered under Section 5.1 and calculated as if such Investment was made
on the last day of such 12 month period is at least 1.0 to 1.0.

“Permitted Liens” means:

(i) Liens granted to the Agents or the Lenders (or their Affiliates to secure
Lender Hedging Agreements) by the Loan Parties pursuant to any Loan Document;

(ii) Liens listed on Schedule P-2;

(iii) Liens on assets securing purchase money Indebtedness (including Capital
Leases) to the extent permitted under Section 6.2, provided that any such Lien
attaches to such assets concurrently with or within 90 days after the
acquisition thereof and only to the assets to be acquired;

(iv) Liens of warehousemen, mechanics, materialmen, workers, repairmen, fillers,
packagers, processors, common carriers, customs brokers, landlords and other
similar Liens arising by operation of law or otherwise, not waived in connection
herewith, for amounts that are not yet due and payable or which are being
diligently contested in good faith by the relevant Loan Party by appropriate
proceedings, provided that in any such case an adequate reserve is being
maintained by such Loan Party for the payment of same;

(v) attachment or judgment Liens individually or in the aggregate that do not
constitute an Event of Default under Section 8(l) (exclusive of (a) any amounts
that are duly

 

Schedule 1.1 – Page 38

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

bonded to the satisfaction of the US Agent in its reasonable discretion or
(b) any amount adequately covered by insurance as to which the insurance company
has acknowledged in writing its obligations for coverage);

(vi) Liens for taxes, assessments or other governmental charges not yet due and
payable or which are being diligently contested in good faith by a Loan Party by
appropriate proceedings, provided that in any such case an adequate reserve is
being maintained by such Loan Party for the payment of same in accordance with
GAAP;

(vii) zoning ordinances, easements, rights of way, conditions, covenants and
other customary restrictions on the use of real property and other title
exceptions and defects of title that do not interfere in any material respect
with the ordinary course of business;

(viii) deposits or pledges to secure obligations under workmen’s compensation,
social security or similar laws, or under unemployment insurance;

(ix) deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, regulatory or statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business;

(x) Liens created by a Foreign Subsidiary securing Indebtedness permitted under
clause (vii) of the definition of “Permitted Indebtedness”;

(xi) Liens consisting of any interest of a lessor under, and Liens arising from
UCC or PPSA financing statements (or equivalent filings in foreign
jurisdictions) relating to, and deposits made to secure the obligations under,
leases entered into in the ordinary course of business and not restricted by
this Agreement;

(xii) Non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business

(xiii) Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is the subject of a permitted refinancing under this
Agreement and so long as the replacement Liens only encumber those assets that
secured the original Indebtedness;

(xiv) (A) rights of setoff or bankers’ liens upon deposits of cash in favor of
banks or other depository institutions, solely to the extent incurred in
connection with the maintenance of such deposit accounts in the ordinary course
of business or (B) Liens of a collecting bank in the ordinary course of business
under Section 4-210 of the Uniform Commercial Code in effect in the relevant
jurisdiction covering only the items being collected upon;

(xv) Liens granted in the ordinary course of business on the unearned portion of
insurance premiums securing the financing of insurance premiums to the extent
the financing is permitted under the definition of Permitted Indebtedness;

(xvi) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;

 

Schedule 1.1 – Page 39

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

(xvii) Liens solely on any cash earnest money deposits made by any Borrower or
any of its Subsidiaries in connection with any letter of intent or purchase
agreement with respect to a Permitted Acquisition; and

(xviii) other Liens securing obligations not to exceed $2,500,000 in an
aggregate principal amount at any time outstanding.

“Person” means natural persons, corporations, limited liability companies,
limited partnerships, general partnerships, limited liability partnerships,
joint ventures, trusts, land trusts, business trusts, or other organizations,
irrespective of whether they are legal entities, and governments and agencies
and political subdivisions thereof.

“Plan” means any employee benefit plan within in the meaning of Sections 3(3) of
ERISA (other than a Multiemployer Plan) maintained or contributed to by any Loan
Party or any of its Subsidiaries, or with respect to which any Loan Party or any
such Subsidiary may incur liability.

“PPSA” means the Personal Property Security Act (Ontario) (as may be amended and
in effect from time to time) or any other applicable Canadian federal or
provincial statute pertaining to the granting, perfecting, priority or ranking
of security interests, liens, hypothecs on personal property, and any successor
statutes, together with any regulations thereunder, as in effect from time to
time. References to sections of the PPSA shall be construed to also refer to any
successor sections.

“Processor” shall have the meaning given such term in the definition of
Processor Inventory.

“Processor Inventory” means Inventory of a Loan Party (other than
work-in-process) which is stored on property that is owned or leased by a
filler, packer or processor which has contracted with such Loan Party (each, a
“Processor”) and (a) such Loan Party shall have delivered to the applicable
Agent an Acknowledgment Agreement executed by such Processor; (b) such Inventory
is fully insured on terms acceptable to the US Agent in the exercise of its
Permitted Discretion; and (c) such Inventory is reported on, in the Borrowers’
monthly collateral reports delivered pursuant to Section 5.1(e) hereof, as a
separate item from other Eligible Inventory.

“Projections” has the meaning set forth in Section 4.6.

“Proprietary Rights” has the meaning set forth in Section 4.7.

“Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make US Advances and right to
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the US Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender’s US Revolver
Commitment, by (z) the aggregate US Revolver Commitments of all Lenders, and
(ii) from and after the time that the US Revolver Commitments have been
terminated or reduced to zero, the percentage obtained by dividing (y) the
outstanding principal amount of such Lender’s US Advances by (z) the outstanding
principal amount of all US Advances,

 

Schedule 1.1 – Page 40

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

(b) with respect to a Lender’s obligation to make Canadian Advances and right to
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, (i) prior to the Canadian Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender’s Canadian
Revolver Commitment, by (z) the aggregate Canadian Revolver Commitments of all
Lenders, and (ii) from and after the time that the Canadian Revolver Commitments
have been terminated or reduced to zero, the percentage obtained by dividing
(y) the outstanding principal amount of such Lender’s Canadian Advances by
(z) the outstanding principal amount of all Canadian Advances,

(c) with respect to a Lender’s obligation to participate in US Letters of
Credit, to reimburse the US Issuing Bank, and right to receive payments of fees
with respect thereto, (i) prior to the US Revolver Commitments being terminated
or reduced to zero, the percentage obtained by dividing (y) such Lender’s US
Revolver Commitment, by (z) the aggregate US Revolver Commitments of all
Lenders, and (ii) from and after the time that the US Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
outstanding principal amount of such Lender’s US Advances by (z) the outstanding
principal amount of all US Advances; provided, however, that if all of the US
Advances have been repaid in full and US Letters of Credit remain outstanding,
Pro Rata Share under this clause shall be determined based upon subclause (i) of
this clause as if the US Revolver Commitments had not been terminated or reduced
to zero and based upon the US Revolver Commitments as they existed immediately
prior to their termination or reduction to zero,

(d) with respect to a Lender’s obligation to participate in Canadian Letters of
Credit and Canadian Reimbursement Undertakings, to reimburse the Canadian
Issuing Lender, and right to receive payments of fees with respect thereto,
(i) prior to the Canadian Revolver Commitments being terminated or reduced to
zero, the percentage obtained by dividing (y) such Lender’s Canadian Revolver
Commitment, by (z) the aggregate Canadian Revolver Commitments of all Lenders,
and (ii) from and after the time that the Canadian Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
outstanding principal amount of such Lender’s Canadian Advances by (z) the
outstanding principal amount of all Canadian Advances; provided, however, that
if all of the Canadian Advances have been repaid in full and Canadian Letters of
Credit remain outstanding, Pro Rata Share under this clause shall be determined
based upon subclause (i) of this clause as if the Canadian Revolver Commitments
had not been terminated or reduced to zero and based upon the Canadian Revolver
Commitments as they existed immediately prior to their termination or reduction
to zero, and

(e) with respect to all other matters as to a particular Lender (including the
indemnification obligations arising under Section 15.7 of the Agreement),
(i) prior to the Revolver Commitments being terminated or reduced to zero, the
percentage obtained by dividing (y) such Lender’s Revolver Commitment, by
(z) the aggregate amount of Revolver Commitments of all Lenders, and (ii) from
and after the time that the Revolver Commitments have been terminated or reduced
to zero, the percentage obtained by dividing (y) the outstanding principal
amount of such Lender’s Advances, by (z) the outstanding principal amount of all
Advances; provided, however, that if all of the Advances have been repaid in
full and Letters of Credit

 

Schedule 1.1 – Page 41

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

remain outstanding, Pro Rata Share under this clause shall be determined based
upon subclause (i) of this clause as if the Revolver Commitments had not been
terminated or reduced to zero and based upon the Revolver Commitments as they
existed immediately prior to their termination or reduction to zero.

“Protective Advances” means US Protective Advances and/or Canadian Protective
Advances, as the context requires.

“Quarterly Excess Availability Calculation” has the meaning ascribed thereto in
the definition of Applicable Unused Line Margin.

“Real Property” means any estates or interests in real property now owned or
hereafter acquired by Borrowers or their Subsidiaries and the improvements
thereto.

“Real Property Collateral” means the Real Property identified on Schedule R-1
and any Real Property hereafter acquired by Borrowers or their Subsidiaries.

“Record” means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in perceivable form.

“Register” has the meaning set forth in Section 13.1(h) of the Agreement.

“Registered Loan” has the meaning set forth in Section 13.1(h) of the Agreement.

“Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund that invests in commercial loans and that is managed or
advised by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate,
contain, treat, monitor, assess, evaluate, or in any way address a release or
threatened release of Hazardous Materials in the indoor or outdoor environment,
(b) prevent or minimize a release or threatened release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment in response to a release or
threatened release of Hazardous Materials, (c) restore or reclaim natural
resources or the environment, (d) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities related to
a release or threatened release of Hazardous Materials, or (e) conduct any other
actions with respect to a release or threatened release of Hazardous Materials
required by Environmental Laws.

“Replacement Lender” has the meaning specified therefor in Section 2.14(b) of
the Agreement.

“Report” has the meaning specified therefor in Section 15.16 of the Agreement.

“Reportable Event” has the meaning set forth in Section 4043 of ERISA, other
than such an event for which notice is customarily waived by the PBGC.

“Required Excess Availability” means, as of any date of determination, the
greater of (a) $40,000,000 and (b) 15% of the US Maximum Revolver Amount
(assuming for purposes of this definition that the US Maximum Revolver Amount is
calculated as if the Canadian Revolver Usage is zero).

 

Schedule 1.1 – Page 42

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

“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (e) of the definition of Pro Rata Shares) exceed 51%;
provided, however, that at any time there are 2 or more Lenders, “Required
Lenders” must include at least 2 Lenders.

“Restricted Payment” means (i) any cash dividend or other cash distribution,
direct or indirect, on account of any shares of any class of capital Stock of
any Loan Party or any of its Subsidiaries, as the case may be, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital Stock of any Loan Party or any of its Subsidiaries now or
hereafter outstanding by such Loan Party or Subsidiary, as the case may be,
except for any redemption, retirement, sinking funds or similar payment payable
solely in such shares of that class of stock or in any class of stock junior to
that class, (iii) any cash payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any shares of any class of capital Stock of any Loan
Party or any of its Subsidiaries now or hereafter outstanding, or (iv) any
payment to any Affiliate of any Loan Party (including any consulting or
management fees).

“Revolver Commitment” means the US Revolver Commitment and/or the Canadian
Revolver Commitment, as the context requires.

“Revolver Increase” has the meaning specified therefor in Section 2.1(e).

“Revolver Usage” means the US Revolver Usage and/or the Canadian Revolver Usage,
as the context requires.

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time.

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is subject to a
country sanctions program administered and enforced by OFAC.

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time, or (b) (i) an agency of the government of a
Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or
(iii) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.

“S&P” has the meaning specified therefor in the definition of Cash Equivalents.

 

Schedule 1.1 – Page 43

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

“SEC” means the United States Securities and Exchange Commission and any
successor thereto.

“Security Agreement” means the US Security Agreement and/or the Canadian
Security Agreement, as the context requires.

“Senior Note Debt” means the Senior Note Debt (2010).

“Senior Note Debt (2010)” means the Indebtedness evidenced by the Senior Note
Debt Documents (2010).

“Senior Note Debt Documents” means the Senior Note Debt Documents (2010).

“Senior Note Debt Documents (2010)” means the Senior Note Indenture, the Senior
Notes (2010) and all other documents, agreements, instruments and certificates
executed and delivered in connection with the issuance of the Senior Notes
(2010).

“Senior Note Indenture” means that certain Indenture (and the supplemental
Indenture thereto), dated as of February 3, 2010, among Coleman Cable, the “Note
Guarantors” which may from time to time become party thereto and Deutsche Bank
National Trust Company, as trustee, as in effect on the Closing Date and as
supplemented, amended or otherwise modified from time to time in accordance with
the terms of this Agreement.

“Senior Notes (2010)” means those certain Senior Notes due 2018 bearing interest
at a rate equal to 9% per annum in the aggregate principal amount of
$275,000,000 issued on February 3, 2010 by Coleman Cable to Banc of America
Securities LLC and Wells Fargo Securities, as the initial purchasers, as in
effect on the Closing Date.

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.

“STA” has the meaning specified therefor in Section 1.3 of the Agreement.

“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or
nonvoting, including common stock, preferred stock, or any other “equity
security” (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the SEC under the Exchange Act).

“Subsidiary” of a Person means a corporation, partnership, limited liability
company, or other entity in which that Person directly or indirectly owns or
controls the shares of Stock having ordinary voting power to elect a majority of
the board of directors (or appoint other comparable managers) of such
corporation, partnership, limited liability company, or other entity.

 

Schedule 1.1 – Page 44

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

“Supermajority Lenders” means, at any time, Lenders whose aggregate Pro Rata
Shares (calculated under clause (e) of the definition of Pro Rata Shares) exceed
85%; provided, however, that at any time there are 2 or more Lenders,
“Supermajority Lenders” must include at least 2 Lenders

“Swing Lender” means US Swing Lender and/or Canadian Swing Lender, as the
context requires.

“Swing Loan” means the US Swing Loan and/or the Canadian Swing Loan, as the
context requires.

“Taxes” means any taxes, levies, imposts, duties, fees, assessments,
withholdings or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments and all interest, penalties or similar
liabilities with respect thereto.

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.

“Termination Event” means (i) a Reportable Event with respect to any Benefit
Plan; (ii) the withdrawal of any Loan Parties or any of their Subsidiaries or
ERISA Affiliates from a Benefit Plan during a plan year in which such entity was
a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the
providing of notice of intent to terminate a Benefit Plan pursuant to
Section 4041 of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan or Multiemployer Plan; (v) any event or condition
(a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Loan
Parties or any of their Subsidiaries or ERISA Affiliates from a Multiemployer
Plan.

“Total Commitment” means, with respect to each Lender, its Total Commitment,
and, with respect to all Lenders, their Total Commitments, in each case as such
Dollar or Canadian Dollar amounts are set forth beside such Lender’s name under
the applicable heading on Schedule C-1 attached hereto or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
under the Agreement, as such amounts may be reduced or increased from time to
time pursuant to assignments made in accordance with the provisions of
Section 13.1 of the Agreement.

“UCP 600” means the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce and
in effect as of July 1, 2007 (or such later version thereof as may be in effect
at the time of issuance).

“Unfinanced Capital Expenditures” means for any period Capital Expenditures made
during such period and not financed from the proceeds of Funded Indebtedness.

“United States” means the United States of America.

 

Schedule 1.1 – Page 45

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

“US Advances” has the meaning specified therefor in Section 2.1(a) of the
Agreement.

“US Agent” has the meaning specified therefor in the preamble to the Agreement.

“US Agent’s Account” means the Deposit Account of US Agent identified on
Schedule A-1.

“US Agent’s Liens” means the Liens granted by any US Loan Party to US Agent
under the Loan Documents.

“US Availability” means, as of any date of determination, the amount that US
Borrowers are entitled to borrow as US Advances under Section 2.1 of the
Agreement (after giving effect to all then outstanding US Obligations (other
than US Bank Product Obligations)).

“US Bank Product Obligations” means (a) all obligations, liabilities,
reimbursement obligations, fees, or expenses owing by any US Borrower or any US
Loan Party to any US Bank Product Provider pursuant to or evidenced by a Bank
Product Agreement and irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, (b) all US Hedge Obligations, and (c) all amounts that
either Agent or any Lender is obligated to pay to a US Bank Product Provider as
a result of either Agent or such Lender purchasing participations from, or
executing guarantees or indemnities or reimbursement obligations to, a US Bank
Product Provider with respect to the US Bank Products provided by such US Bank
Product Provider to any US Loan Party; provided, however, in order for any item
described in clauses (a) (b), or (c) above, as applicable, to constitute “US
Bank Product Obligations”, if the applicable Bank Product Provider is any Person
other than Wells Fargo or its Affiliates, then the applicable Bank Product must
have been provided on or after the Closing Date and US Agent shall have received
a Bank Product Provider Letter Agreement within 10 Business Days after the date
of the provision of the applicable Bank Product to any US Loan Party.

“US Bank Product Provider” means any Lender or any of its Affiliates that
provides Bank Products to a US Loan Party; provided, however, that no such
Person (other than Wells Fargo or its Affiliates) shall constitute a US Bank
Product Provider with respect to a Bank Product unless and until US Agent shall
have received a Bank Product Provider Letter Agreement from such Person and with
respect to the applicable Bank Product within 10 days after the provision of
such Bank Product to a Borrower or its Subsidiaries; provided further, however,
that if, at any time, a Lender ceases to be a Lender under the Agreement, then,
from and after the date on which it ceases to be a Lender thereunder, neither it
nor any of its Affiliates shall constitute Bank Product Providers and the
obligations with respect to Bank Products provided by such former Lender or any
of its Affiliates shall no longer constitute Bank Product Obligations.

“US Bank Product Reserve Amount” means, as of any date of determination, the
Dollar amount of reserves that the US Agent has determined in its Permitted
Discretion it is necessary or appropriate to establish (based upon the US Bank
Product Providers’ reasonable determination of the liabilities and obligations
of US Loan Parties in respect of Bank Products) in respect of Bank Products then
provided or outstanding.

 

Schedule 1.1 – Page 46

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

“US Base Rate” means the greatest of (a) the Federal Funds Rate plus  1/2% and
(b) the rate of interest announced, from time to time, within Wells Fargo at its
principal office in San Francisco as its “prime rate”, with the understanding
that the “prime rate” is one of Wells Fargo’s base rates (not necessarily the
lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publications as Wells Fargo may designate.

“US Borrowing” means a borrowing consisting of US Advances made on the same day
by the Lenders (or US Agent on behalf thereof), or by US Swing Lender in the
case of a US Swing Loan, or by US Agent in the case of a US Protective Advance.

“US Borrowing Base” means, as of any date of determination, the following amount
calculated in Dollars as follows:

(1) 85% of the amount of US Eligible Accounts; plus

(2) an amount equal to the lesser of (a) $150,000,000 less the Dollar Equivalent
of the Canadian Advances predicated on Canadian Eligible Inventory (b) the
lesser of (x) 70% of the book value (calculated at the lower of cost or market
on a basis consistent with US Borrowers’ historical accounting practices) of US
Eligible Inventory and (y) 85% times the most recently determined Net
Liquidation Percentage times the value (calculated at the lower of cost or
market on a basis consistent with US Borrowers’ historical accounting practices)
of US Loan Parties’ Inventory (provided, however, that not more than 5% of the
aggregate amount of US Eligible Inventory may consist of Processor Inventory);
plus

(3) the US Transition Amount minus

(4) reserves established by the US Agent from time to time, in its Permitted
Discretion, as a result of changes that the US Agent becomes aware of that have
resulted or would reasonably be expected to result in a diminution in the
quantity, quality or value of any Collateral; provided that prior to
establishing or modifying any such reserve, the US Agent shall have given
Administrative Borrower a reasonable opportunity and a reasonable amount of time
(it being agreed that if Excess Availability is greater than $25,000,000 prior
to giving effect to such reserve, the US Agent will give Administrative Borrower
5 Business Days) to confer with the US Agent regarding the proposed new or
modified reserve. Subject to the foregoing, such reserves may include, without
limitation but without duplication, US Bank Product Reserve Amount, rent
reserves and import, and import duty and freight charge reserves.

Subject to the relevant terms and provisions set forth in this Agreement,
including specifically Section 14, the US Agent at all times shall be entitled
to reduce or increase the advance rates and change the standards of eligibility
under this Agreement, in each case in its Permitted Discretion, including,
without limitation, following the US Agent’s review of any inventory appraisal
and the orderly liquidation values contained therein. Promptly after making any
such adjustments, the US Agent shall notify the Administrative Borrower thereof.

“US Borrowing Base Certificate” means a certificate in the form of Exhibit B-1.

 

Schedule 1.1 – Page 47

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

“US Borrowing Base Excess” has the meaning set forth in Section 2.4(e)(i).

“US Cash Concentration Account” means a deposit account established and
maintained by Administrative Borrower, for itself and as agent for the other US
Loan Parties, over which the US Agent, for itself and for the benefit of the
Lenders, has “control” (as such term is used in Article 9 of the Code), whether
by virtue of such deposit account’s being maintained at the US Agent or, if
required by the US Agent, pursuant to the terms of a Deposit Account Control
Agreement in form and substance reasonably satisfactory to the US Agent.

“US Designated Account” means the Deposit Account of US Borrowers identified on
Schedule D-1.

“US Designated Account Bank” has the meaning specified therefor in Schedule D-1.

“US Eligible Accounts” means the aggregate face amount of the Accounts of each
of the US Loan Parties that conform to the warranties contained herein and at
all times continue to be acceptable to the US Agent in its Permitted Discretion,
less the aggregate amount of all returns, discounts, claims, credits, charges
and allowances of any nature (whether issued, owing, granted or outstanding),
and less the aggregate amount of all reserves for slow paying accounts, foreign
sales, bill and hold (or deferred shipment) transactions and the Lenders’
charges as set forth in this Agreement. Unless otherwise approved in writing by
the US Agent, no Account shall be deemed to be a US Eligible Account if:

(a) the Account arises out of a sale made by any US Loan Party to an Affiliate
or to any employee of any Loan Party;

(b) the Account is unpaid more than 120) days after the original invoice date or
60 days after the original payment due date thereof;

(c) such Account is from the same Account Debtor (or any Affiliate thereof) and
50% or more, in face amount, of other Accounts from such Account Debtor (or any
Affiliate thereof) are due or unpaid more than 120 days after the original
invoice date or 60 days after the original payment due date thereof;

(d) (i) the amount of the Account, when aggregated with all other Accounts of
any Account Debtor, exceeds 20% in face value of all Accounts of the Loan
Parties then outstanding, but only to the extent of such excess, or (ii) the
amount of the Account owing from Account Debtors that pay through the same
Buying Association, when aggregated with all other Accounts which will be paid
through the same Buying Association, exceeds 30% in face value of all Accounts
of the Loan Parties then outstanding, but only to the extent of such excess;

(e) an Account for which (i) the Account Debtor is also a creditor of any Loan
Party, but only to the extent of the amount owed by such Loan Party to the
Account Debtor, (ii) the Account Debtor has disputed its liability on, or the
Account Debtor has made any claim with respect to, such Account or any other
Account due from such Account Debtor to such Loan Party, which has not been
resolved, or (iii) the Account Debtor has or acquires any right of setoff
against such Account, but only to the extent of the amount of such setoff;

 

Schedule 1.1 – Page 48

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

(f) the Account is owing by an Account Debtor that has commenced a voluntary
case under the Bankruptcy Code or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to such Account Debtor in an involuntary
case under the Bankruptcy Code; any petition or other application for relief
under the Bankruptcy Code has been filed by or against the Account Debtor; or
such Account Debtor is generally not paying its debts as they become due (unless
such debts are the subject of a bona fide dispute), or has suspended business,
ceased to be solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs;

(g) the Account arises from a sale to an Account Debtor outside the continental
United States or any province of Canada (provided, that the aggregate amount of
all Accounts owing from Account Debtors located in Canada shall not at any time
exceed $5,000,000), unless the sale is (i) on letter of credit, guaranty or
banker’s acceptance terms, in each case acceptable to the US Agent in its
Permitted Discretion, or (ii) otherwise approved by and acceptable to the US
Agent in its Permitted Discretion;

(h) the Account arises from a sale on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval or consignment basis or is made pursuant to
any other written agreement providing for repurchase or return;

(i) the US Agent believes, in its Permitted Discretion, that collection of such
Account is insecure or that such Account may not be paid by reason of the
Account Debtor’s financial inability to pay;

(j) an Account for which the related Account Debtor is the United States of
America or any department, agency or instrumentality thereof, unless the
applicable US Loan Party duly assigns its rights to payment of such Account to
the US Agent pursuant to the Assignment of Claims Act of 1940, as amended (31
U.S.C. § 3727 et seq.);

(k) an Account for which the goods giving rise thereto have not been shipped and
invoiced to the related Account Debtor or its designee; the services giving rise
to such Account have not been performed by or on behalf of the applicable US
Loan Party and accepted by the related Account Debtor or its designee; or such
Account otherwise does not represent a final sale;

(l) the aggregate face amount of the Account and all other Accounts owing by the
same Account Debtor exceeds a credit limit as to such Account Debtor determined
by the US Agent, in its Permitted Discretion, but only to the extent such
aggregate face amount exceeds such limit;

(m) any Account in which the US Agent does not have a first priority, perfected
security interest;

(n) an Account for which an invoice has not been prepared and delivered to the
related Account Debtor; or

 

Schedule 1.1 – Page 49

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

(o) an Account which the US Agent, at any time and in the exercise of its
Permitted Discretion, determines it to be ineligible.

“US Eligible Inventory” means (a) the aggregate gross amount of each US Loan
Party’s Inventory (excluding 80% of all work-in-process, except for
work-in-process consisting solely of drawn copper wire located at any facility
of a US Loan Party or a Subsidiary of a US Loan Party (which shall not be
excluded)), valued at the lower of cost (on a FIFO basis) or market, which
(i) is owned solely by such US Loan Party and with respect to which such US Loan
Party has good, valid and marketable title, (ii) is stored on property that is
either (A) owned or leased by such US Loan Party or (B) owned or leased by a
warehouseman that has contracted with such US Loan Party to store Inventory on
such warehouseman’s property or by another bailee of such US Loan Party (other
than a Processor) (provided that, with respect to Inventory stored on property
leased by such US Loan Party, such US Loan Party shall have delivered in favor
of the US Agent an Acknowledgment Agreement from the landlord of such leased
location, and, with respect to Inventory stored on property owned or leased by a
warehouseman or other bailee (other than a Processor), such US Loan Party shall
have delivered to the US Agent an Acknowledgment Agreement executed by such
warehouseman or other bailee (other than a Processor)); or if not so stored,
such Inventory constitutes Processor Inventory or In-Transit Inventory; (iii) is
subject to a valid, enforceable and first priority Lien in favor of US Agent
except, with respect to US Eligible Inventory stored at sites described in
clause (B) above for normal and customary warehouseman, filler, packer and
processor charges); (iv) is located in the continental United States; and (v) is
not obsolete, excess or slow moving and for which a markdown reserve has not
been made, and which otherwise conforms to the warranties contained herein and
which at all times continues to be acceptable to the US Agent in its Permitted
Discretion, less (b) the sum of (i) Inventory of a US Loan Party consisting of
manufacturing supplies (other than raw materials), expense supplies, shipping
supplies or packaging materials, (ii) reserves imposed by the applicable US Loan
Party, (iii) any goods returned or rejected by such US Loan Party’s customers
for which a credit has not yet been issued, (iv) goods in transit to third
parties (other than to such US Loan Party’s agents, warehouses, or other bailees
(other than a Processor) that have furnished an Acknowledgement Agreement to
such US Loan Party and the US Agent or which constitutes Processor Inventory or
In-Transit Inventory), (v) damaged Inventory of a US Loan Party, (vi) any
Inventory of a US Loan Party that the US Agent determines in its Permitted
Discretion to be a no charge or sample item; (vii) a reserve equal to the amount
of all accounts payable of such US Loan Party owed or owing to any filler,
packer, processor or other bailee of such US Loan Party; (viii) any reserves
required by the US Agent in its Permitted Discretion, including, without
limitation, for special order goods, market value declines, shrinkage, import
duty and freight charges, rebates and purchase price variances; (ix) any
Inventory of a US Loan Party which is held by a US Loan Party pursuant to
consignment, sale or return, sale on approval or similar arrangement; and
(x) any Inventory of a US Loan Party that the US Agent determines in its
Permitted Discretion to be ineligible.

“US Hedge Obligations” means any and all obligations or liabilities, whether
absolute or contingent, due or to become due, now existing or hereafter arising,
of a US Loan Party arising under, owing pursuant to, or existing in respect of
Hedge Agreements entered into with one or more of the US Bank Product Providers.

 

Schedule 1.1 – Page 50

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

“US Hedge Provider” means any Lender or any of its Affiliates that enters into a
Hedge Agreement with a US Loan Party; provided, however, that no such Person
(other than Wells Fargo or its Affiliates) shall constitute a US Hedge Provider
unless and until US Agent shall have received a Bank Product Provider Letter
Agreement from such Person and with respect to the applicable Hedge Agreement
within 10 days after the execution and delivery of such Hedge Agreement with a
US Loan Party; provided further, however, that if, at any time, a Lender ceases
to be a Lender under the Agreement, then, from and after the date on which it
ceases to be a Lender thereunder, neither it nor any of its Affiliates shall
constitute US Hedge Providers and the obligations with respect to Hedge
Agreements entered into with such former Lender or any of its Affiliates shall
no longer constitute US Hedge Obligations.

“US Issuing Bank” means Wells Fargo Bank, N.A.

“US Letter of Credit” means a letter of credit (as that term is defined in the
Code) issued by US Issuing Bank.

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

“US Letter of Credit Usage” means, as of any date of determination, the
aggregate undrawn amount of all outstanding US Letters of Credit.

“US LIBOR Rate” means the rate per annum rate appearing on Bloomberg L.P.’s (the
“Service”) Page BBAM1/(Official BBA USD Dollar Libor Fixings) (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service) 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period
and the amount of the LIBOR Rate Loan requested (whether as an initial LIBOR
Rate Loan or as a continuation of a LIBOR Rate Loan or as a conversion of a Base
Rate Loan to a LIBOR Rate Loan) by Borrowers in accordance with the Agreement,
which determination shall be conclusive in the absence of manifest error.

“US Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.

“US Loan Party” means each US Borrower and each Loan Party organized under the
laws of any state of the United States or the District of Columbia.

“US Maximum Revolver Amount” means $250,000,000 less the Dollar Equivalent of
the Canadian Revolver Usage, decreased by the amount of reductions in the US
Revolver Commitments made in accordance with Section 2.4(c) of the Agreement,
and increased by any Revolver Increase.

“US Obligations” means, without duplication, (a) all loans (including the US
Advances (inclusive of US Protective Advances and US Swing Loans)), debts,
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding, regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), reimbursement or
indemnification obligations with respect to US Letters of Credit (irrespective
of whether contingent), premiums, liabilities (including all amounts charged to
the

 

Schedule 1.1 – Page 51

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

US Borrowers’ Loan Account pursuant to the Agreement), obligations (including
indemnification obligations), fees (including the fees provided for in the Fee
Letter), Lender Group Expenses (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 any such Insolvency Proceeding),
guaranties, and all covenants and duties of any other kind and description owing
by any US Loan Party pursuant to or evidenced by the Agreement or any of the
other Loan Documents and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all interest not paid when due and
all other expenses or other amounts that any US Loan Party is required to pay or
reimburse by the Loan Documents or by law or otherwise in connection with the
Loan Documents, and (b) all US Bank Product Obligations. Any reference in the
Agreement or in the other Loan Documents to the US Obligations shall include all
or any portion thereof and any extensions, modifications, renewals, or
alterations thereof, both prior and subsequent to any Insolvency Proceeding.

“US Overadvance” has the meaning specified therefor in Section 2.4(e) of the
Agreement.

“US Protective Advances” has the meaning specified therefor in Section 2.3(d)(i)
of the Agreement.

“US Revolver Commitment” means, with respect to each Lender, its US Revolver
Commitment, and, with respect to all Lenders, their US Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender’s name under
the applicable heading on Schedule C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender under the Agreement, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of Section 13.1 of the Agreement or
pursuant to Section 2.1(e).

“US Revolver Usage” means, as of any date of determination, the sum of (a) the
amount of outstanding US Advances (including, without limitation, US Swing
Loans), plus (b) the amount of the US Letter of Credit Usage.

“US Security Agreement” means a security agreement, dated as of the Closing
Date, executed and delivered by US Loan Parties and US Agent.

“US Swing Lender” means Wells Fargo or any other Lender that, at the request of
Borrowers and with the consent of US Agent agrees, in such Lender’s sole
discretion, to become the US Swing Lender under Section 2.3(b) of the Agreement.

“US Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.

“US Transition Amount” means:

(a) until such time as the US Agent shall have received satisfactory appraisals
of the Appraised Real Property and Appraised Equipment of the US Borrowers, $0,
and

 

Schedule 1.1 – Page 52

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

(b) on and after the date that the US Agent shall have received satisfactory
appraisals of the Appraised Real Property and/or Appraised Equipment of the US
Borrowers, an amount equal to the lesser of:

(i) the sum of (x) 75% multiplied by the fair market value of the US Borrowers’
Appraised Real Property (such amount, the “US Real Property Amount”) and (y) 85%
multiplied by the net orderly liquidation value of the US Borrower’s Appraised
Equipment (such amount, the “US Equipment Amount”) and

(ii) $62,500,000.

The US Transition Amount may be increased, at the option of US Borrowers upon
prior written notice to US Agent, once per calendar year upon the delivery of a
satisfactory appraisal of US Borrowers’ Appraised Real Property and Appraised
Equipment to US Agent, or any time after the consummation of any Permitted
Acquisition, by an amount equal to (i) the sum of (x) 75% multiplied by the fair
market value of (A) US Borrowers’ Appraised Real Property subject to an
appraisal satisfactory to US Agent and to the extent that such Appraised Real
Property was not previously included in an appraisal included in the calculation
of the US Transition Amount or (B) Appraised Real Property of the US Borrowers’
acquired pursuant to a Permitted Acquisition and subject to an appraisal
satisfactory to US Agent (such amount, the “Additional US Real Property Amount”)
and (y) 85% multiplied by the net orderly liquidation value of (A) US Borrowers’
Appraised Equipment subject to an appraisal satisfactory to US Agent and to the
extent that such Equipment was not previously included in an appraisal included
in the calculation of the US Transition Amount or (B) Appraised Equipment of the
US Borrowers’ acquired pursuant to a Permitted Acquisition and subject to an
appraisal satisfactory to US Agent (such amount, the “Additional US Equipment
Amount”). For the avoidance of doubt, in no event shall the US Transition Amount
exceed $62,500,000.

The US Transition Amount shall be reduced (a) on the last day of each fiscal
quarter beginning on the last day of the fiscal quarter during which the US
Transition Amount is initially determined and made available, by an amount equal
to the sum of (i) the initial US Real Property Amount and the initial US
Additional Real Property Amount divided by 40 and (ii) the initial US Equipment
Amount and the initial US Additional Equipment Amount divided by 28 and (b) at
the time of any sale or other disposition (including an involuntary disposition)
by any US Borrower of any Appraised Real Property or Appraised Equipment owned
by such US Borrower, by an amount equal to the greater of (i) the Net Cash
Proceeds of such sale or other disposition or (ii) an amount equal to the 75%
(with respect to a sale or other disposition of Appraised Real Property) or 85%
(with respect to a sale or other disposition of Appraised Equipment) multiplied
by the appraised value of such assets used to establish the US Transition
Amount.

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association.

 

Schedule 1.1 – Page 53

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

“WFCF” means Wells Fargo Capital Finance, LLC, a Delaware limited liability
company.

“WF Canada” means Wells Fargo Capital Finance Corporation Canada, an Ontario
corporation.

 

Schedule 1.1 – Page 54

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

EXHIBIT A-1

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this “Assignment Agreement”) is
entered into as of                                          between
                                         (the “Assignor”) and
                                         (the “Assignee”). Reference is made to
the Credit Agreement described in Annex I hereto (the “Credit Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement.

1. In accordance with the terms and conditions of Section 13 of the Credit
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor’s rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and the Assignor’s
portion of the Commitments, all to the extent specified on Annex I.

2. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim and (ii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby;
(b) makes no representation or warranty and assumes no responsibility with
respect to (i) any statements, representations or warranties made in or in
connection with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any Guarantor or the performance or
observance by any Borrower or any Guarantor of any of their respective
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto, and (d) represents and warrants that the amount set
forth as the Purchase Price on Annex I represents the amount owed by any
Borrower to the Assignor with respect to the Assignor’s share of the Advances
assigned hereunder, as reflected on the Assignor’s books and records.

3. The Assignee (a) confirms that it has received copies of the Credit Agreement
and the other Loan Documents, together with copies of the financial statements
referred to therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment Agreement; (b) agrees that it will, independently and without
reliance upon either Agent, the Assignor, or any other Lender, based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking any action under the Loan
Documents; (c) confirms that it is an Eligible Transferee; (d) appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to such Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(e) agrees that 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; [and (f) attaches the forms prescribed by the
Internal Revenue Service of the

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

United States certifying as to the Assignee’s status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement or such other documents as
are necessary to indicate that all such payments are subject to such rates at a
rate reduced by an applicable tax treaty].

4. Following the execution of this Assignment Agreement by the Assignor and the
Assignee, the Assignor will deliver this Assignment Agreement to the
[US][Canadian] Agent for recording by the [US][Canadian] Agent. The effective
date of this Assignment Agreement (the “Settlement Date”) shall be the latest to
occur of (a) the date of the execution and delivery hereof by the Assignor and
the Assignee, (b) the receipt by [US][Canadian] Agent for its sole and separate
account a processing fee in the amount of [Cdn]$3,500 (if required by the Credit
Agreement), (c) the receipt of any required consent of the [US][Canadian] Agent,
and (d) the date specified in Annex I.

5. As of the Settlement Date (a) the Assignee shall be a party to the Credit
Agreement and, to the extent of the interest assigned pursuant to this
Assignment Agreement, have the rights and obligations of a Lender thereunder and
under the other Loan Documents, and (b) the Assignor shall, to the extent of the
interest assigned pursuant to this Assignment Agreement, relinquish its rights
and be released from its obligations under the Credit Agreement and the other
Loan Documents, provided, however, that nothing contained herein shall release
any assigning Lender from obligations that survive the termination of the Credit
Agreement, including such assigning Lender’s obligations under Article 15 and
Section 17.9(a) of the Credit Agreement.

6. Upon the Settlement Date, the Assignee shall pay to the Assignor the Purchase
Price (as set forth in Annex I). From and after the Settlement Date, Agents
shall make all payments that are due and payable to the holder of the interest
assigned hereunder (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued up to but excluding the
Settlement Date and to the Assignee for amounts which have accrued from and
after the Settlement Date. On the Settlement Date, the Assignor shall pay to the
Assignee an amount equal to the portion of any interest, fee, or any other
charge that was paid to the Assignor prior to the Settlement Date on account of
the interest assigned hereunder and that are due and payable to the Assignee
with respect thereto, to the extent that such interest, fee or other charge
relates to the period of time from and after the Settlement Date.

7. This Assignment Agreement may be executed in counterparts and by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument. This Assignment Agreement may be executed and delivered by
telecopier or other electronic method of transmission all with the same force
and effect as if the same were a fully executed and delivered original manual
counterpart.

8. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

-2-

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

IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and
Annex I hereto to be executed by their respective officers, as of the first date
written above.

 

[NAME OF ASSIGNOR] as Assignor By  

 

  Name:   Title: [NAME OF ASSIGNEE] as Assignee By  

 

  Name:   Title:

 

ACCEPTED THIS      DAY OF                     

[WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as US Agent

By  

 

  Name:   Title:]

[WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA,

an Ontario corporation, as Canadian Agent

By  

 

  Name:   Title:]

 

-3-

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

[COLEMAN CABLE, INC.,

as Administrative Borrower

By  

 

  Name:   Title:]

 

-4-

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

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

ANNEX I

 

1.      Borrowers: Coleman Cable, Inc., Technology Research Corporation and
Woods Industries (Canada) Inc. 2.      Name and Date of Credit Agreement:     

Second Amended and Restated Credit Agreement, dated as of August 4, 2011, by and
among Coleman Cable, Inc., Technology Research Corporation and Woods Industries
(Canada) Inc., as Borrowers, the lenders from time to time a party thereto (the
“Lenders”), Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, as the US agent for the Lenders and Wells Fargo Capital Finance
Corporation Canada, an Ontario corporation, as the Canadian agent for the
Lenders

3.      Date of Assignment Agreement:              

 

   4.      Amounts:           

(a)       Assigned Amount of [US][Canadian] Revolver Commitment

   $                        

 

       

(b)      Assigned Amount of [US][Canadian] Advances

   $                        

 

   5.      Settlement Date:              

 

   6.      Purchase Price    $                        

 

   7.      Notice and Payment Instructions, etc.      

Assignee:     Assignor:

 

   

 

 

   

 

 

   

 

 

Annex 1 – Page 1

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

8. Agreed and Accepted:

 

[ASSIGNOR]     [ASSIGNEE]

By:

 

 

    By:  

 

Title:

 

 

    Title:  

 

 

Accepted:

[WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as US Agent

By  

 

  Name:   Title:]

[WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA,

an Ontario corporation, as Canadian Agent

By  

 

  Name:   Title:]

[COLEMAN CABLE, INC.,

as Administrative Borrower

By  

 

  Name:   Title:]

 

Annex 1 – Page 2

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

EXHIBIT B-1

FORM OF US BORROWING BASE CERTIFICATE

Wells Fargo Capital Finance, LLC, as US Agent

under the below referenced Credit Agreement

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606

The undersigned, Coleman Cable, Inc., a Delaware corporation (“Administrative
Borrower”), pursuant to Section 5.1(e) of that certain Second Amended and
Restated Credit Agreement dated as of August 4, 2011 (as amended, restated,
modified, supplemented, refinanced, renewed, or extended from time to time, the
“Credit Agreement”), entered into among Administrative Borrower, Technology
Research Corporation, a Florida corporation (“TRC; together with Administrative
Borrower, each a “US Borrower” and collectively the “US Borrowers”), Woods
Industries (Canada) Inc., an Ontario corporation (“Canadian Borrower”; together
with the US Borrowers, each a “Borrower” and collectively the “Borrowers”), the
lenders signatory thereto from time to time (“Lenders”), Wells Fargo Capital
Finance, LLC, a Delaware limited liability company, as the US agent for the
lenders (in such capacity, together with its successors and assigns, if any, in
such capacity, “US Agent”) and Wells Fargo Capital Finance Corporation Canada,
an Ontario corporation, as the Canadian agent for the lenders (in such capacity,
together with its successors and assigns, if any, in such capacity, “Canadian
Agent”), hereby certifies to US Agent that the following items attached hereto
as Exhibit A, calculated in accordance with the terms and definitions set forth
in the Credit Agreement for such items are true and correct, and that Borrowers
are in compliance with and, after giving effect to any currently requested
Advances, will be in compliance with, the terms, conditions, and provisions of
the Credit Agreement

All initially capitalized terms used in this US Borrowing Base Certificate have
the meanings set forth in the Credit Agreement unless specifically defined
herein.

 

-1-

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

Additionally, the undersigned hereby certifies and represents and warrants to
the US Agent, Canadian Agent and the Lenders on behalf of Borrowers that (i) as
of the date hereof, each representation or warranty contained in or pursuant to
any Loan Document, any agreement, instrument, certificate, document or other
writing furnished at any time under or in connection with any Loan Document, and
as of the effective date of any advance, continuation or conversion requested
above is true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date in which case
such representation or warranty shall be true and correct in all material
respects as of such earlier date), (ii) no Default or Event of Default has
occurred and is continuing on the date hereof, nor will any thereof occur after
giving effect to the request above, and (iii) all of the foregoing is true and
correct as of the effective date of the calculations set forth above and that
such calculations have been made in accordance with the requirements of the
Credit Agreement.

 

COLEMAN CABLE, INC.,

as Administrative Borrower

By:  

 

Name:  

 

Title:   Chief Financial Officer

 

-2-

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

EXHIBIT A

See attached.

 

-3-

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

EXHIBIT B-2

FORM OF CANADIAN BORROWING BASE CERTIFICATE

Wells Fargo Capital Finance Corporation Canada, as Canadian Agent

under the below referenced Credit Agreement

40 King Street West

Suite 2500, Toronto, ON M5H 3Y2

Canada

The undersigned, Woods Industries (Canada) Inc., an Ontario corporation
(“Canadian Borrower”), pursuant to Section 5.1(f) of that certain Second Amended
and Restated Credit Agreement dated as of August 4, 2011 (as amended, restated,
modified, supplemented, refinanced, renewed, or extended from time to time, the
“Credit Agreement”), entered into among Canadian Borrower, Coleman Cable, Inc.,
a Delaware corporation (“Coleman Cable”), Technology Research Corporation, a
Florida corporation (“TRC; together with Coleman Cable, each a “US Borrower” and
collectively the “US Borrowers”; US Borrowers, together with the Canadian
Borrower, each a “Borrower” and collectively the “Borrowers”), the lenders
signatory thereto from time to time (“Lenders”), Wells Fargo Capital Finance,
LLC, a Delaware limited liability company, as the US agent for the lenders (in
such capacity, together with its successors and assigns, if any, in such
capacity, “US Agent”) and Wells Fargo Capital Finance Corporation Canada, an
Ontario corporation, as the Canadian agent for the lenders (in such capacity,
together with its successors and assigns, if any, in such capacity, “Canadian
Agent”), hereby certifies to Canadian Agent that the following items attached
hereto as Exhibit A, calculated in accordance with the terms and definitions set
forth in the Credit Agreement for such items are true and correct, and that
Borrowers are in compliance with and, after giving effect to any currently
requested Advances, will be in compliance with, the terms, conditions, and
provisions of the Credit Agreement

All initially capitalized terms used in this Canadian Borrowing Base Certificate
have the meanings set forth in the Credit Agreement unless specifically defined
herein.

 

-1-

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

Additionally, the undersigned hereby certifies and represents and warrants to
the US Agent, Canadian Agent and the Lenders on behalf of Borrowers that (i) as
of the date hereof, each representation or warranty contained in or pursuant to
any Loan Document, any agreement, instrument, certificate, document or other
writing furnished at any time under or in connection with any Loan Document, and
as of the effective date of any advance, continuation or conversion requested
above is true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date in which case
such representation or warranty shall be true and correct in all material
respects as of such earlier date), (ii) no Default or Event of Default has
occurred and is continuing on the date hereof, nor will any thereof occur after
giving effect to the request above, and (iii) all of the foregoing is true and
correct as of the effective date of the calculations set forth above and that
such calculations have been made in accordance with the requirements of the
Credit Agreement.

 

WOODS INDUSTRIES (CANADA) INC.,

as Canadian Borrower

By:  

 

Name:  

 

Title:   Chief Financial Officer

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

Exhibit A

See attached.

 

-3-

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

EXHIBIT B-3

FORM OF BANK PRODUCTS PROVIDER LETTER AGREEMENT

[Letterhead of Specified Bank Products Provider]

[Date]

[Wells Fargo Capital Finance, LLC, as US Agent

under the below referenced Credit Agreement

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606]

[Wells Fargo Capital Finance Corporation Canada, as Canadian Agent

under the below referenced Credit Agreement

40 King Street West

Suite 2500, Toronto, ON M5H 3Y2

Canada]

Reference hereby is made to that certain Second Amended and Restated Credit
Agreement, dated as of August 4, 2011 (as amended, restated, or otherwise
modified from time to time, the “Credit Agreement”), among Coleman Cable, Inc.,
a Delaware corporation (“Coleman Cable”), Technology Research Corporation, a
Florida corporation (“TRC; together with Coleman Cable, each a “US Borrower” and
collectively the “US Borrowers”), Woods Industries (Canada) Inc., an Ontario
corporation (“Canadian Borrower”; together with the US Borrowers, each a
“Borrower” and collectively the “Borrowers”), the lenders signatory thereto (the
“Lenders”), Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, as the US agent for the Lenders (“US Agent”) and Wells Fargo Capital
Finance Corporation Canada, an Ontario corporation, as the Canadian agent for
the Lenders (“Canadian Agent”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.

Reference is also made to that certain [describe the Bank Product Agreement or
Agreements] (the “Specified Bank Product Agreement [Agreements]”) dated as of
[                    ] by and between [Lender or Affiliate of Lender] (the
“Specified Bank Products Provider”) and [identify the Loan Party or Subsidiary].

1. Appointment of Agent. The Specified Bank Products Provider hereby designates
and appoints [US][Canadian] Agent, and [US][Canadian] Agent by its signature
below hereby accepts such appointment, as its agent under the Credit Agreement
and the other Loan Documents. The Specified Bank Products Provider hereby
acknowledges that it has reviewed Sections 15.1, 15.2, 15.3, 15.4, 15.6, 15.7,
15.8, 15.9, 15.11, 15.12, 15.13, 15.14, 15.15, and 17.5 of the Credit Agreement
(collectively such sections are referred to herein as the “Agency Provisions”),
including, as applicable, the defined terms referenced therein (but only to the
extent used therein), and agrees to be bound by the provisions thereof. The
Specified Bank Products Provider and [US][Canadian] Agent each agree that the
Agency Provisions which govern the relationship, and certain representations,
acknowledgements, appointments, rights,

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

restrictions, and agreements, between the [US][Canadian] Agent, on the one hand,
and the Lenders or the Lender Group, on the other hand, shall, from and after
the date of this letter agreement also apply to and govern, mutatis mutandis,
the relationship between the [US][Canadian] Agent, on the one hand, and the
Specified Bank Product Provider with respect to the Bank Products provided
pursuant to the Specified Bank Product Agreement[s], on the other hand.

2. Acknowledgement of Certain Provisions of Credit Agreement. The Specified Bank
Products Provider hereby acknowledges that it has reviewed the provisions of
Sections 2.4(b), 14.1, 15.10, 15.11, and 17.5 of the Credit Agreement,
including, as applicable, the defined terms referenced therein, and agrees to be
bound by the provisions thereof. Without limiting the generality of any of the
foregoing referenced provisions, the Specified Bank Product Provider understands
and agrees that its rights and benefits under the Loan Documents consist solely
of it being a beneficiary of the Liens and security interests granted to
[US][Canadian] Agent and the right to share in Collateral as set forth in the
Credit Agreement.

3. Reporting Requirements. [US][Canadian] Agent shall have no obligation to
calculate the amount due and payable with respect to any Bank Products. On a
monthly basis (not later than the 10th Business Day of each calendar month) or
as more frequently as [US][Canadian] Agent shall request, the Specified Bank
Products Provider agrees to provide [US][Canadian] Agent with a written report,
in form and substance satisfactory to Agent, detailing Specified Bank Products
Provider’s reasonable determination of the credit exposure (and mark-to-market
exposure) of Borrowers and their Subsidiaries in respect of the Bank Products
provided by the Specified Bank Products Provider pursuant to the Specified Bank
Products Agreement[s]. If [US][Canadian] Agent does not receive such written
report within the time period provided above, Agent shall be entitled to assume
that the reasonable determination of the credit exposure of Borrowers and their
Subsidiaries with respect to the Bank Products provided pursuant to the
Specified Bank Products Agreement[s] is zero.

4. Bank Product Reserve Conditions. The Specified Bank Products Provider further
acknowledges and agrees that [US][Canadian] Agent shall have the right, but
shall have no obligation to establish, maintain, relax or release reserves in
respect of any of the Bank Product Obligations and that if reserves are
established there is no obligation on the part of the [US][Canadian] Agent to
determine or insure whether the amount of any such reserve is appropriate or
not. If [US][Canadian] Agent so chooses to implement a reserve, the Specified
Bank Products Provider acknowledges and agrees that [US][Canadian] Agent shall
be entitled to rely on the information in the reports described above to
establish the [US][Canadian] Bank Product Reserve Amount.

5. Bank Product Obligations. From and after the delivery to [US][Canadian] Agent
of this letter agreement duly executed by the Specified Bank Product Provider
and the acknowledgement of this letter agreement by [US][Canadian] Agent and
Borrowers, the obligations and liabilities of Borrowers and their Subsidiaries
to the Specified Bank Product Provider in respect of Bank Products evidenced by
the Specified Bank Product Agreement[s] shall constitute [US][Canadian] Bank
Product Obligations (and which, in turn, shall constitute Obligations), and the
Specified Bank Product Provider shall constitute a [US][Canadian] Bank Product
Provider until such time as the Specified Bank Products Provider or its
affiliate is no longer a Lender. The Specified Bank Products Provider
acknowledges that other Bank Products (which may or may not be the Specified
Bank Products) may exist at any time.

 

-2-

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

6. Notices. All notices and other communications provided for hereunder shall be
given in the form and manner provided in Section 11 of the Credit Agreement,
and, if to [US][Canadian] Agent, shall be mailed, sent, or delivered to
[US][Canadian] Agent in accordance with Section 11 in the Credit Agreement, if
to Borrowers, shall be mailed, sent, or delivered to Borrowers in accordance
with Section 11 in the Credit Agreement, and, if to the Specified Bank Products
Provider, shall be mailed, sent or delivered to the address set forth below, or,
in each case as to any party, at such other address as shall be designated by
such party in a written notice to the other party.

 

If to Specified Bank

Products Provider:

   

 

      

 

          

 

             Attn:   

 

             Fax No.:   

 

    

7. Miscellaneous. This letter agreement is for the benefit of the [US][Canadian]
Agent, the Specified Bank Products Provider, the Borrowers and each of their
respective successors and assigns (including any successor agent pursuant to
Section 15.9 of the Credit Agreement, but excluding any successor or assignee of
a Specified Bank Products Provider that does not qualify as a [US][Canadian]
Bank Product Provider). Unless the context of this letter agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or.” This letter agreement may be
executed in any number of counterparts and by different parties on separate
counterparts. Each of such counterparts shall be deemed to be an original, and
all of such counterparts, taken together, shall constitute but one and the same
agreement. Delivery of an executed counterpart of this letter by telefacsimile
or other means of electronic transmission shall be equally effective as delivery
of a manually executed counterpart.

8. Governing Law.

(a) THE VALIDITY OF THIS LETTER AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL
MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS LETTER AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE COURTS,
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS, LOCATED IN THE

 

-3-

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

COUNTY OF NEW YORK, STATE OF NEW YORK. EACH OF BORROWERS, SPECIFIED BANK
PRODUCTS PROVIDER, AND [US][CANADIAN] AGENT WAIVE, TO THE EXTENT PERMITTED UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 8(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER, SPECIFIED
BANK PRODUCTS PROVIDER, AND [US][CANADIAN] AGENT EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF EACH BORROWER, SPECIFIED BANK
PRODUCTS PROVIDER, AND [US][CANADIAN] AGENT EACH REPRESENTS TO THE OTHERS THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS LETTER AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.

[signature pages to follow]

 

-4-

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

Sincerely, [SPECIFIED BANK PRODUCTS PROVIDER] By  

 

    Name:     Title:

 

Acknowledged, accepted, and agreed

as of the date first written above:

COLEMAN CABLE, INC. By:  

 

Name:  

 

Title:  

 

TECHNOLOGY RESEARCH CORPORATION By:  

 

Name:  

 

Title:  

 

WOODS INDUSTRIES (CANADA) INC. By:  

 

Name:  

 

Title:  

 

 

Acknowledged, accepted, and agreed

as of the date first written above:

[WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as US

Agent]

 

-5-

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

[WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA,

an Ontario corporation, as Canadian Agent]

By  

 

  Name:   Title:

 

-6-

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

EXHIBIT C-1

FORM OF COMPLIANCE CERTIFICATE

[on Coleman Cable, Inc.’s letterhead]

 

To: Wells Fargo Capital Finance, LLC, as US Agent

under the below referenced Credit Agreement

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606

Wells Fargo Capital Finance Corporation Canada, as Canadian Agent

under the below referenced Credit Agreement

40 King Street West

Suite 2500, Toronto, ON M5H 3Y2

Canada

 

Re: Compliance Certificate dated                     

Ladies and Gentlemen:

Reference hereby is made to that certain Second Amended and Restated Credit
Agreement, dated as of August 4, 2011 (as amended, restated, or otherwise
modified from time to time, the “Credit Agreement”), among Coleman Cable, Inc.,
a Delaware corporation (“Coleman Cable”), Technology Research Corporation, a
Florida corporation (“TRC; together with Coleman Cable, each a “US Borrower” and
collectively the “US Borrowers”), Woods Industries (Canada) Inc., an Ontario
corporation (“Canadian Borrower”; together with the US Borrowers, each a
“Borrower” and collectively the “Borrowers”), the lenders signatory thereto (the
“Lenders”), Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, as the US agent for the Lenders (“US Agent”) and Wells Fargo Capital
Finance Corporation Canada, an Ontario corporation, as the Canadian agent for
the Lenders (“Canadian Agent”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.

Pursuant to Section 5.1(d) of the Credit Agreement, the undersigned chief
financial officer and the chief executive officer of Coleman Cable hereby
certifies that:

1. The financial information of Coleman Cable and its Subsidiaries furnished in
Schedule 1 attached hereto and/or previously delivered electronically to Agents
and the Lenders pursuant to the last paragraph of Section 5.1 of the Credit
Agreement, has been prepared in accordance with GAAP (except for year-end
adjustments and the lack of footnotes), and fairly presents in all material
respects the financial condition of Coleman Cable and its Subsidiaries.

2. Such officer has reviewed the terms of the Credit Agreement and has made, or
caused to be made under his/her supervision, a review in reasonable detail of
the transactions and condition of Coleman Cable and its Subsidiaries during the
accounting period covered by the financial statements delivered pursuant to
Section 5.1 of the Credit Agreement.

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

3. Such review has not disclosed the existence on and as of the date hereof, and
the undersigned does not have knowledge of the existence as of the date hereof,
of any event or condition that constitutes a Default or Event of Default, except
for such conditions or events listed on Schedule 2 attached hereto, specifying
the nature and period of existence thereof and what action Coleman Cable and its
Subsidiaries have taken, are taking, or propose to take with respect thereto.

4. The representations and warranties of Coleman Cable and its Subsidiaries set
forth in the Credit Agreement and the other Loan Documents are true and correct
in all material respects on and as of the date hereof (except to the extent they
relate to a specified date in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date),
except as set forth on Schedule 3 attached hereto.

5. Coleman Cable and its Subsidiaries are in compliance with the applicable
covenants contained in Section 7 of the Credit Agreement as demonstrated on
Schedule 4 hereof.

[Signature page follows]

 

-2-

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

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned
this      day of                     ,            .

 

COLEMAN CABLE, INC. By:  

 

Name:  

 

Title:   Chief Financial Officer By:  

 

Name:  

 

Title:   Chief Executive Officer

 

-3-

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

SCHEDULE 1

Financial Information

[Previously delivered to Agents and Lenders electronically pursuant to the last
paragraph of Section 5.1 of the Credit Agreement.]

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

SCHEDULE 2

Default or Event of Default

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

SCHEDULE 3

Representations and Warranties

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

SCHEDULE 4

Financial Covenants

Fixed Charge Coverage Ratio.

Borrowers have a Fixed Charge Coverage Ratio for the 12 month period ending on
the last day of                     , of     :1.0, which [is/is not] greater
than or equal to the amount set forth in Section 7 of the Credit Agreement for
the corresponding period.

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

EXHIBIT D

FORM OF ACKNOWLEDGMENT AGREEMENT

[Wells Fargo Capital Finance, LLC, as US Agent

under the below referenced Credit Agreement

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606]

[Wells Fargo Capital Finance Corporation Canada, as Canadian Agent

under the below referenced Credit Agreement

40 King Street West

Suite 2500, Toronto, ON M5H 3Y2

Canada]

Ladies and Gentlemen:

[                    , (“Subsidiary”), a wholly-owned subsidiary of] Coleman
Cable, Inc. (the “Company”) now does or hereafter may store certain of its
goods, merchandise, inventory, or other of its personal property at premises
(the “Premises”) owned or leased by                     , including, without
limitation, such Premises described on Exhibit A attached hereto.

The Company and its direct and indirect subsidiaries (collectively, the “Loan
Parties”) have entered or may enter into certain financing arrangements with
certain financial institutions (the “Secured Parties”) and [Wells Fargo Capital
Finance, LLC, as US Agent][Wells Fargo Capital Finance Corporation Canada, as
Canadian Agent] for itself and the Secured Parties (in such capacity, the
“Collateral Agent”) and, as a condition to the Secured Parties making any such
financing arrangements with the Loan Parties, the Secured Parties require, among
other things, liens on all of the Loan Parties’ personal property located on the
Premises (“Collateral”).

To induce the Secured Parties (together with their respective agents and
assigns) to provide said financing arrangements, and for other good and valuable
consideration, the undersigned hereby agrees that:

(i) upon payment in full of all outstanding normal and customary storage charges
and sales commissions payable by [Subsidiary][the Company] to the undersigned,
the undersigned will not assert against any of [Subsidiary’s] [the Company’s]
assets any statutory or possessory liens, including, without limitation, rights
of levy or distraint for rent, all of which it hereby waives;

(ii) the Collateral shall be identifiable as being owned by [Subsidiary][the
Company] and kept reasonably separate and distinct from other property in the
undersigned’s possession;

(iii) none of the Collateral located on the Premises shall be deemed to be
fixtures;

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

(iv) if the Loan Parties default on their obligations to the Secured Parties or
the Collateral Agent and, as a result, the Collateral Agent, on behalf of itself
and the Secured Parties, undertakes to enforce its security interest in the
Collateral, the undersigned will cooperate with the Collateral Agent in its
efforts to assemble all of the Collateral located on the Premises and will
permit the Collateral Agent, upon payment in full of all outstanding normal and
customary warehouse charges payable by [Subsidiary][the Company] to the
undersigned, to either remain on the Premises for sixty (60) days after the
Collateral Agent declares the default, or, at the Collateral Agent’s option, to
remove the Collateral from the Premises within a reasonable time, not to exceed
sixty (60) days after the Collateral Agent declares the default, provided that
the Collateral Agent leaves the Premises in the same condition as existed
immediately prior to such sixty (60) day period, and the Collateral Agent shall
indemnify the undersigned for any damages arising out of its temporary occupancy
of the Premises, and the undersigned will not hinder the Collateral Agent’s
actions in enforcing its liens on the Collateral.

Any notice(s) required or desired to be given hereunder shall be directed to the
party to be notified at the address stated herein.

The agreements contained herein shall continue in full force and effect until
all of the Loan Parties’ obligations and liabilities to the Secured Parties and
the Collateral Agent are paid and satisfied in full and all financing
arrangements among the Secured Parties, the Collateral Agent and the Loan
Parties have been terminated.

The undersigned will notify all successor owners, transferees, purchasers and
mortgagees of the existence of this agreement. The agreements contained herein
may not be modified or terminated orally and shall be binding upon the
successors, assigns and personal representatives of the undersigned, upon any
successor owner or transferee of any of Premises, and upon any purchasers,
including any mortgagee, from the undersigned.

Executed and delivered this      day of                     , 201    .

 

[Premises Owner/Lessee] By:  

 

Title:  

 

Address:  

 

 

-2-

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

EXHIBIT A

LOCATION OF PREMISES

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

EXHIBIT E

FORM OF LANDLORD AGREEMENT

COLLATERAL ACCESS AGREEMENT

THIS COLLATERAL ACCESS AGREEMENT (this “Agreement”), executed and delivered as
of this      day of                     ,             , by and among
[                                        ] (“Landlord”), [                    ]
(“Company”), and [WELLS FARGO CAPITAL FINANCE, LLC, in its capacity as US agent]
[WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, in its capacity as Canadian
agent] (“Agent”) for certain financial institutions (“Lenders”).

W I T N E S S E T H

WHEREAS, Agent, Lenders, Company and certain affiliates of Company are entering,
and may from time to time hereafter enter, into various agreements, instruments
and documents (collectively the “Loan Documents”) providing for Lenders to make
or cause to be made certain financial accommodations for the benefit of Company;
and

WHEREAS, to secure payment and performance of all of Company’s obligations and
liabilities to Lenders under the Loan Documents (the “Obligations”), Lenders
have required that Company grant to Agent a security interest in all of
Company’s existing and hereafter acquired property, including without
limitation, cash, cash equivalents, goods, inventory, machinery, equipment, and
furniture and trade fixtures (such as equipment bolted to floors), together with
all additions, substitutions, replacements and improvements to, and proceeds of,
the foregoing, but excluding building fixtures (such as plumbing, lighting and
HVAC systems) (collectively, such property, other than the excluded building
fixtures, the “Collateral”); and

WHEREAS, all or some of the Collateral is now or from time to time hereafter may
be located at the premises known as [                                        ]
(the “Premises”) and legally described on Exhibit A hereto, which Premises are
owned and leased by Landlord to Company pursuant to a certain [Lease] dated
                    ,              (said Lease, together with any and all
renewals, extensions, amendments, modifications, substitutions, and replacements
thereof, being hereinafter referred to as the “Lease”); and

WHEREAS, as a condition to making loans or advances under the Loan Documents,
Lenders have required Landlord to execute and deliver this Agreement;

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, Landlord hereby covenants and agrees with Agent and Lenders as
follows:

1. Estoppel. Landlord hereby certifies, as of the date hereof, that (a) the
Lease is in full force and effect, (b) the Lease has not been modified,
supplemented or amended in any way, and (c) there is no default by Company in
the performance of any of its obligations under the Lease, and there is no fact
or circumstance which, with the giving of notice or the passage of time, would
become a default.

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

2. Default Under the Lease. Landlord agrees to provide Agent with (a) a copy of
any cancellation, amendment, consent, or waiver under the Lease, and (b) written
notice of any default by Company under the Lease (a “Default Notice”) at the
same time as it sends such notice to Company; provided, that (i) Agent shall
have at least thirty (30) days following receipt of such Default Notice to cure
such default before the Lease terminates, and (ii) Agent shall not be under any
obligation to cure any default by Company under the Lease. No action by Agent
pursuant to this Agreement shall constitute or be deemed to be an assumption by
Agent of any obligation under the Lease, and Agent shall not have any obligation
to Landlord.

3. Personal Property. Landlord agrees that the Collateral is and shall remain
personal property notwithstanding the manner or mode of the attachment of any
item of Collateral to the Premises, and is not, and shall not become, or be
deemed to be, fixtures.

4. Right of Access. Agent may have access to the Premises at any time during
normal business hours for the purpose of inspecting, appraising, repossessing,
removing, preparing for sale, advertising, displaying, selling (including
conducting “going out of business” sales), disposing or otherwise dealing with
the Collateral or any part thereof in accordance with the terms and conditions
of the Loan Documents without objection, delay, hindrance or interference by
Landlord; provided that if the “Access Termination Date” (as defined below) has
occurred, Agent’s right to access the Premises under this Agreement shall be
subject to the following: (i) such access period shall commence when Agent
provides written notice to Landlord of its election to access the Premises as
provided above and shall terminate no later than 120 days following the Access
Termination Date (such notice by Agent, the “Access Notice”; such period
commencing on delivery of such Access Notice and ending 120 days following the
Access Termination Date, the “Access Period”), and (ii) during the Access Period
(which period of access may be terminated by Agent at any time), Agent will pay
to Landlord an access fee for each day during such Access Period equal to the
“Per Diem Fee” (as defined below). The access fee shall be payable monthly in
advance based on the number of days in a month during such Access Period that
Agent estimates for access with a settlement at the end of such month for the
actual days of access. “Access Termination Date” means the date Agent receives
written certification from Landlord that the Lease has been terminated and
Company has no right of access to the Premises. “Per Diem Fee” means, for any
day of a month during the Access Period, the current, non-default basic rent due
for such month under the Lease (exclusive of past due rent or charges), divided
by 30. Agent shall reimburse Landlord for the cost of any repair of any physical
injury to the Premises caused by Agent’s removal of the Collateral but Agent
shall not be liable for any diminution in value of the Premises caused by the
absence of Collateral actually removed or by any necessity of replacing the
Collateral. Under no circumstances shall Agent be liable for any past due rent
owing by Company to Landlord. The right of access provided in this Section 4 is
a contractual right granted by Landlord to Agent and is not intended to limit
Agent’s rights, if any, to obtain access to the Premises in any other manner
provided under applicable law.

5. Waiver. Landlord waives each and every right which Landlord now has or
hereafter may have, under the laws of the State in which the Premises are
located, or by virtue of the Lease, or by virtue of Company’s occupation of the
Premises, to levy or distrain upon, for rent, in

 

-2-

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

arrears, in advance or both or for any monetary obligation arising by reason of
default under the Lease, or to claim or assert any lien, security interest,
right, claim or title to any or all of the Collateral, which now or hereafter
may be, or may be installed, on said Premises. Agent and Landlord hereby agree
that the provisions of this Section 5 are made in favor, and shall inure to the
benefit, of only Agent, Lenders and their respective successors and assigns, and
to no other persons.

6. Continued Effectiveness. Agent and Lenders may, without affecting the
validity of this Agreement, extend, amend or in any way modify the terms of the
Loan Documents. This Agreement shall continue in force until all of Company’s
obligations and liabilities to Agent and Lenders are paid and satisfied in full
and all obligations of Agent and Lenders under the Loan Documents have been
terminated. This Agreement shall inure to the benefit of the successors and
assigns of Agent and Lenders and shall be binding upon the heirs, personal
representatives, successors and assigns of Landlord and Company.

7. Notices. All notices given under this Agreement shall be sent either by U.S.
Mail, postage prepaid, certified, return receipt requested, or by Federal
Express or other overnight courier service, at the following address:

 

If to Agent:  

  [WELLS FARGO CAPITAL FINANCE, LLC

  111 South Wacker Drive, 30th Floor

  Chicago, Illinois 60606

  Attn: Portfolio Manager—Coleman Cable

  Fax No. (312) 332-0424]

 

  [WELLS FARGO CAPITAL FINANCE

  CORPORATION CANADA

  40 King Street West

  Suite 2500, Toronto, ON M5H 3Y2

  Canada

  Attention:       Fax No.:     ]   If to Landlord:  

 

      

 

      

 

       Attention:       Fax No.:     If to Company:  

 

      

 

      

 

       Attention:       Fax No.:    

[Signature Page Follows]

 

-3-

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

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of
the day and year specified at the beginning hereof.

 

LANDLORD:

 

[                                         ]

By  

 

Title  

 

AGENT:

[WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as US Agent]

 

[WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA,

an Ontario corporation, as Canadian Agent]

By

 

 

Title  

 

COMPANY:

 

__________________                                     

By  

 

Title  

 

 

-4-

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

EXHIBIT A

LEGAL DESCRIPTION

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

EXHIBIT G

FORM OF LICENSOR CONSENT

[[Company] Letterhead]

[Licensor]

[Address]

 

RE: Financing Acknowledgement

Gentlemen:

In connection with certain credit facilities provided or to be provided to or
for the benefit of [Company] (“Company”) by certain financial institutions,
Wells Fargo Capital Finance, LLC (as “US Agent” for the such financial
institutions) and Wells Fargo Capital Finance Corporation Canada (as “Canadian
Agent” for the such financial institutions) has requested that you acknowledge
and agree for the benefit of [US][Canadian] Agent that:

(1) There is no current default or event of default under that certain License
Agreement dated                     between                      and Company
(the “License Agreement”) and such License Agreement is currently in full force
and effect. The granting of the security interest referenced below shall not
constitute a default under the License Agreement.

(2) As Company and its affiliates are granting the [US][Canadian] Agent a
security interest in all of their assets and properties, you agree that, if
Company is in default under the loan agreements, the [US][Canadian] Agent shall
have the right, as a result of its security interest, to sell any remaining
inventory of licensed products under the terms of the License Agreement and
manufacture a reasonable quantity of such products from existing inventory for
sale to existing customers. Such right shall be for a 180-day term beginning on
the date of the first sale by [US][Canadian] Agent of the licensed products
(with such 180-day term tolled during any stay imposed by a governmental
authority on the sale of such products by the [US][Canadian] Agent). All other
covenants, conditions and restrictions in the License Agreement shall remain in
full force and effect, including the payment of royalties. The Agent will have a
first priority lien on any inventory or products produced under the authority of
this paragraph and you will not assert any rights in the inventory or products
that are superior or equal to the Agent’s rights.

(3) The [US][Canadian] Agent will be simultaneously given a copy of any notice
that you give to Company under the License Agreement at the address set forth
below and that [US][Canadian] Agent will have the same rights as Company to make
good any monetary default within the period set forth under the License
Agreement.

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

Your prompt cooperation and assistance are appreciated. Please sign below to
indicate your acknowledgment of and agreement to the referenced terms. [Wells
Fargo Capital Finance, LLC][Wells Fargo Capital Finance Corporation Canada], as
[US][Canadian] Agent, shall be entitled to rely on and enforce the terms in this
letter.

 

Sincerely,

 

[Company]

 

AGREED TO AND ACCEPTED:

 

By:  

 

Name:  

 

Title:  

 

Address for notices to [US][Canadian] Agent:

[Wells Fargo Capital Finance, LLC

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606

Attn: Portfolio Manager—Coleman Cable

Fax No. (312) 332-0424]

[Wells Fargo Capital Finance Corporation Canada

 

 

 

Attn:   Fax No.     ]

 

cc: [Wells Fargo Capital Finance, LLC][Wells Fargo Capital Finance Corporation
Canada], as [US][Canadian] Agent

 

-2-

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

EXHIBIT L-1

FORM OF LIBOR NOTICE

[Wells Fargo Capital Finance, LLC, as US Agent

under the below referenced Credit Agreement

111 South Wacker Drive, 30th Floor

Chicago, Illinois 60606]

[Wells Fargo Capital Finance Corporation Canada, as Canadian Agent

under the below referenced Credit Agreement

40 King Street West

Suite 2500, Toronto, ON M5H 3Y2

Canada]

Ladies and Gentlemen:

Reference hereby is made to that certain Second Amended and Restated Credit
Agreement, dated as of August 4, 2011 (as amended, restated, or otherwise
modified from time to time, the “Credit Agreement”), among Coleman Cable, Inc.,
a Delaware corporation (“Coleman Cable”), Technology Research Corporation, a
Florida corporation (“TRC; together with Coleman Cable, each a “US Borrower” and
collectively the “US Borrowers”), Woods Industries (Canada) Inc., an Ontario
corporation (“Canadian Borrower”; together with the US Borrowers, each a
“Borrower” and collectively the “Borrowers”), the lenders signatory thereto (the
“Lenders”), Wells Fargo Capital Finance, LLC, a Delaware limited liability
company, as the US agent for the Lenders (“US Agent”) and Wells Fargo Capital
Finance Corporation Canada, an Ontario corporation, as the Canadian agent for
the Lenders (“Canadian Agent”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the Credit Agreement.

This LIBOR Notice represents [US Borrowers’] [Canadian Borrower’s] request to
elect the LIBOR Option with respect to outstanding [US][Canadian] Advances in
the amount of [Cdn]$             (the “LIBOR Rate Advance”)[, and is a written
confirmation of the telephonic notice of such election given to [US][Canadian]
Agent].

The LIBOR Rate Advance will have an Interest Period of [1, 2, 3, or 6] month(s)
commencing on                     .

This LIBOR Notice further confirms [US Borrowers’] [Canadian Borrower’s]
acceptance, for purposes of determining the rate of interest based on the LIBOR
Rate under the Credit Agreement, of the LIBOR Rate as determined pursuant to the
Credit Agreement.

[Each US Borrower] [Canadian Borrower] represents and warrants that (i) as of
the date hereof, each representation or warranty contained in or pursuant to any
Loan Document, and as of the effective date of any advance, continuation or
conversion requested above, is true and correct in all material respects (except
to the extent any representation or warranty expressly related to an earlier
date in which case, such representation or warranty shall

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

be true and correct in all material respects as of such earlier date), and
(ii) no Default or Event of Default has occurred and is continuing on the date
hereof, nor will any thereof occur after giving effect to the request above.

[Signature page follows]

 

Page 2

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

Dated:  

 

[COLEMAN CABLE, INC. By:  

 

Name:  

 

Title:  

 

TECHNOLOGY RESEARCH CORPORATION By:  

 

Name:  

 

Title:  

 

  ] [WOODS INDUSTRIES (CANADA) INC.   By:  

 

Name:  

 

Title:  

 

  ]

 

Acknowledged by:

[WELLS FARGO CAPITAL FINANCE, LLC,

a Delaware limited liability company, as US Agent]

 

[WELLS FARGO CAPITAL FINANCE CORPORATION CANADA,

an Ontario corporation, as Canadian Agent]

By  

 

Name:  

 

Title:  

 

 

Page 3

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

EXHIBIT J-1

FORM OF JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of                     ,
201    , is by and among                     , a                      (the
“Joining Loan Party”), Wells Fargo Capital Finance, LLC, a Delaware limited
liability company, as the US agent for the Lenders (“US Agent”) and Wells Fargo
Capital Finance Corporation Canada, an Ontario corporation, as the Canadian
agent for the Lenders (“Canadian Agent”; together with US Agent, collectively
the “Agents”), pursuant to Section 5.16(b) of that certain Second Amended and
Restated Credit Agreement (together with all amendments, restatements,
modifications, renewals, extensions, supplements and replacements from time to
time, the “Credit Agreement”) dated as of August 4, 2011, by and among Coleman
Cable, Inc., a Delaware corporation (the “Company”), Technology Research
Corporation, a Florida corporation (“TRC”; together with Coleman Cable, each a
“US Borrower” and collectively the “US Borrowers”), Woods Industries (Canada)
Inc., an Ontario corporation (“Canadian Borrower”; together with the US
Borrowers, each a “Borrower” and collectively the “Borrowers”), the Lenders
party thereto and the Agents. All of the defined terms in the Credit Agreement
are incorporated herein by reference.

The Joining Loan Party hereby agrees as follows with the Agents, for the benefit
of the Lenders:

1. The Joining Loan Party hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Joining Loan Party will be deemed to be a party
to, and hereby ratifies, as of the date hereof, and agrees to be bound by, all
of the terms, provisions and conditions of: [Revise list of documents as
necessary per Section 5.16(b)]

(a) [that certain Guaranty Agreement (Canadian Obligations) dated as of
                    , 2011, executed by the US Borrowers and Patco Electronics,
Inc. (“Patco”) in favor of Canadian Agent (as amended, restated or otherwise
modified from time to time, the “Canadian Guaranty”), as a “Guarantor” for all
purposes of the Canadian Guaranty and the other Loan Documents, and shall have
all of the obligations of a Guarantor thereunder as if it had executed the
Canadian Guaranty;

(b) that certain Guaranty Agreement (US Obligations) dated as of
                    , 2011 and executed by Patco, Inc. in favor of US Agent (as
amended, restated or otherwise modified from time to time, the “US Guaranty”,
and together with the Canadian Guaranty, each a “Guaranty” and collectively the
“Guaranties”), as a “Guarantor” for all purposes of the US Guaranty and the
other Loan Documents, and shall have all of the obligations of a Guarantor
thereunder as if it had executed the US Guaranty;

(c) that certain Second Amended and Restated Security Agreement dated as of
                    , 2011 and executed by US Borrowers and Patco in favor of US
Agent (as amended, restated or otherwise modified from time to time, the “US
Security Agreement”), as an “Obligor” for all purposes of the US Security
Agreement and the other Loan Documents, and shall have all of the obligations of
an Obligor thereunder as if it had executed the US Security Agreement;

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

(d) that certain General Security Agreement dated as of                     ,
2011 and executed by Canadian Borrower in favor of Canadian Agent (as amended,
restated or otherwise modified from time to time, the “Canadian Security
Agreement”), as a “Debtor” for all purposes of the Canadian Security Agreement
and the other Loan Documents, and shall have all of the obligations of a Debtor
thereunder as if it had executed the Canadian Security Agreement;

(e) that certain Second Amended and Restated Pledge Agreement dated as of
                    , 2011 and executed by US Borrowers and Patco in favor of US
Agent (as amended, restated or otherwise modified from time to time, the “US
Pledge Agreement”), as a “Pledgor” for all purposes of the US Pledge Agreement
and the other Loan Documents, and shall have all of the obligations of a Pledgor
thereunder as if it had executed the US Pledge Agreement; and

(f) that certain Contribution Agreement dated as of                     , 2011
and executed by US Borrowers and Patco (as amended, restated or otherwise
modified from time to time, the “Contribution Agreement”), as a “Contributing
Party” for all purposes of the Contribution Agreement and the other Loan
Documents, and shall have all of the obligations of a Contributing Party
thereunder as if it had executed the Contribution Agreement.]

The Joining Loan Party 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 and in the Loan Documents applicable to it as a Loan Party, including
without limitation (i) all of the representations and warranties set forth in
Section 4 of the Credit Agreement and (ii) all of the affirmative and negative
covenants set forth in Sections 5 and 6 of the Credit Agreement.

2. Without limiting generality of the foregoing terms of paragraph 1, the
Joining Loan Party hereby grants to the [US][Canadian] Agent, for the benefit of
the Lenders, a continuing security interest in, and a right of set off against
any and all right, title and interest of the Joining Loan Party in and to the
Collateral (as such term is defined in the [US][Canadian] Security Agreement) of
the Joining Loan Party.

3. The Joining Loan Party acknowledges and confirms that it has received a copy
of the Credit Agreement and the schedules and exhibits thereto and a copy of
each other Loan Document it is becoming party to pursuant to paragraph 1 above
and the schedules and exhibits, if any, thereto. The schedules to the [list
applicable Loan Documents] are amended to provide the information shown on the
attached Schedule A.

4. [The Joining Loan Party hereby agrees that upon becoming a Guarantor it will
assume all Guaranteed Obligations as set forth in the Canadian Guaranty and the
US Canadian Guaranty.]

5. The Joining Loan Party agrees that at any time and from time to time, upon
the written request of either Agent, it will execute and deliver such further
documents and do such further acts and things as such Agent may reasonably
request in order to effect the purposes of this Agreement.

 

-2-

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

6. This Agreement may be executed in two or more counterparts, each of which
shall constitute an original but all of which when taken together shall
constitute one contract. Delivery of an executed counterpart of this Agreement
by telefacsimile or other means of electronic transmission shall be equally
effective as delivery of a manually executed counterpart.

7. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW PROVISIONS THEREOF other than Section 5-1401 of the New York
General Obligations Law.

[Signature page follows]

 

-3-

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

IN WITNESS WHEREOF, the Joining Loan Party has caused this Agreement to be duly
executed by its authorized officers, and each Agent, for the benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.

 

[JOINING LOAN PARTY] By:  

 

Name:  

 

Title:  

 

WELLS FARGO CAPITAL FINANCE, LLC, as US Agent By:  

 

Name:  

 

Title:  

 

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as Canadian Agent By:  

 

Name:  

 

Title:  

 

Signature Page to Joinder Agreement