Exhibit 10.2

 

Execution Version

 

CREDIT AND GUARANTY AGREEMENT

 

dated as of April 18, 2011

 

among

 

DOUGLAS DYNAMICS, L.L.C.

 

as Borrower

 

DOUGLAS DYNAMICS, INC.,

 

DOUGLAS DYNAMICS FINANCE COMPANY,
FISHER, LLC

 

as Guarantors,

 

THE BANKS AND FINANCIAL INSTITUTIONS LISTED HEREIN,
as Lenders,

 

J.P. MORGAN SECURITIES LLC AND CREDIT SUISSE SECURITIES (USA) LLC,
as Joint Bookrunners and Joint Lead Arrangers,

 

JPMORGAN CHASE BANK, N.A.,
as Collateral Agent and Administrative Agent,
and

 

CREDIT SUISSE SECURITIES (USA) LLC,
as Syndication Agent

 

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

 

Senior Secured Term Loan Facility

 

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

 

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

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

SECTION 1.

DEFINITIONS AND INTERPRETATION

1

1.1

Definitions

1

1.2

Accounting Terms

33

1.3

Interpretation, etc.

33

 

 

 

SECTION 2.

LOANS

34

2.1

Term Loans

34

2.2

[RESERVED]

34

2.3

[RESERVED]

34

2.4

Pro Rata Shares; Availability of Funds

34

2.5

Use of Proceeds

35

2.6

Evidence of Debt; Lenders’ Books and Records; Notes

35

2.7

Interest on Loans

36

2.8

Conversion/Continuation

37

2.9

Default Interest

37

2.10

Fees

38

2.11

Scheduled Term Loan Payments

38

2.12

Voluntary Prepayments

38

2.13

Mandatory Prepayments

39

2.14

Application of Prepayments/Reductions

41

2.15

General Provisions Regarding Payments

42

2.16

Reserved

44

2.17

Making or Maintaining Eurodollar Rate Loans

44

2.18

Increased Costs; Capital Adequacy

46

2.19

Taxes; Withholding, etc.

47

2.20

Obligation to Mitigate

50

2.21

Soft-Call Premium

51

2.22

Removal or Replacement of a Lender

51

2.23

Incremental Term Loans

52

 

 

 

SECTION 3.

CONDITIONS PRECEDENT

54

3.1

Closing Date

54

3.2

Notices

56

 

 

 

SECTION 4.

REPRESENTATIONS AND WARRANTIES

57

4.1

Organization; Requisite Power and Authority; Qualification

57

4.2

Capital Stock and Ownership

57

4.3

Due Authorization

57

4.4

No Conflict

57

4.5

Governmental Consents

58

4.6

Binding Obligation

58

4.7

Financial Condition

58

 

i

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

 

 

 

Page

 

 

 

4.8

Projections

59

4.9

No Material Adverse Change

59

4.10

No Restricted Payments

59

4.11

Litigation; Adverse Facts

59

4.12

Payment of Taxes

59

4.13

Properties

59

4.14

Environmental Matters

60

4.15

No Defaults

61

4.16

Governmental Regulation

61

4.17

Margin Regulations

61

4.18

Employee Matters

61

4.19

Employee Benefit Plans

62

4.20

Certain Fees

62

4.21

Solvency

63

4.22

Collateral

63

4.23

Disclosure

63

4.24

Deposit Accounts

64

 

 

 

SECTION 5.

AFFIRMATIVE COVENANTS

64

5.1

Financial Statements and Other Reports

64

5.2

Existence

67

5.3

Payment of Taxes and Claims

67

5.4

Maintenance of Properties

68

5.5

Insurance

68

5.6

Inspections

68

5.7

Lenders Meetings

69

5.8

Compliance with Laws

69

5.9

Environmental

69

5.10

Subsidiaries

70

5.11

Additional Real Estate Assets

71

5.12

Interest Rate Protection

71

5.13

Further Assurances

71

5.14

ERISA

72

5.15

Maintenance of Credit Rating

72

 

 

 

SECTION 6.

NEGATIVE COVENANTS

72

6.1

Indebtedness

72

6.2

Liens

75

6.3

Sales and Leasebacks

76

6.4

No Further Negative Pledges

77

6.5

Restricted Payments

77

6.6

Restrictions on Subsidiary Distributions

79

6.7

Investments

80

6.8

Calculations

81

6.9

Fundamental Changes; Asset Dispositions; Acquisitions

82

6.10

Disposal of Subsidiary Interests

83

6.11

Fiscal Year

83

 

ii

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

 

 

 

Page

 

 

 

6.12

Transactions with Shareholders and Affiliates

83

6.13

Conduct of Business

84

6.14

Permitted Activities of Holdings

84

6.15

Amendments or Waivers of Certain Agreements

84

6.16

Limitation on Payments Relating to Other Debt

85

 

 

 

SECTION 7.

GUARANTY

85

7.1

Guaranty of the Obligations

85

7.2

Contribution by Guarantors

86

7.3

Payment by Guarantors

86

7.4

Liability of Guarantors Absolute

87

7.5

Waivers by Guarantors

88

7.6

Guarantors’ Rights of Subrogation, Contribution, etc.

89

7.7

Subordination of Other Obligations

90

7.8

Continuing Guaranty

90

7.9

Authority of Guarantors or Company

90

7.10

Financial Condition of Company

90

7.11

Bankruptcy, etc.

90

7.12

Discharge of Guaranty Upon Sale of Guarantor

91

 

 

 

SECTION 8.

EVENTS OF DEFAULT

91

8.1

Events of Default

91

 

 

 

SECTION 9.

AGENTS

94

 

 

 

SECTION 10.

MISCELLANEOUS

97

10.1

Notices

97

10.2

Expenses

99

10.3

Indemnity

99

10.4

Set-Off

100

10.5

Amendments and Waivers

100

10.6

Successors and Assigns; Participations

102

10.7

Independence of Covenants

107

10.8

Survival of Representations, Warranties and Agreements

108

10.9

No Waiver; Remedies Cumulative

108

10.10

Marshalling; Payments Set Aside

108

10.11

Severability

108

10.12

Obligations Several; Independent Nature of Lenders’ Rights

108

10.13

Headings

109

10.14

APPLICABLE LAW

109

10.15

CONSENT TO JURISDICTION

109

10.16

WAIVER OF JURY TRIAL

109

10.17

Confidentiality

110

10.18

Usury Savings Clause

111

10.19

Counterparts

111

10.20

Effectiveness

111

10.21

Appointment for Perfection

112

10.22

USA PATRIOT Act

112

 

iii

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

 

 

APPENDICES:

 

A

 

Term Loan Commitments

 

 

 

 

 

SCHEDULES:

 

4.1

 

Organization and Capital Structure

 

 

4.2

 

Capital Stock and Ownership

 

 

4.9

 

Absence of Certain Changes

 

 

4.11

 

Litigation

 

 

4.13

 

Real Estate Assets

 

 

4.14

 

Environmental

 

 

4.18

 

Employee Matters

 

 

4.19

 

Employee Benefit Plans

 

 

4.22

 

Certain Existing Liens

 

 

4.24

 

Deposit Accounts

 

 

6.1

 

Certain Indebtedness

 

 

6.2

 

Certain Liens

 

 

6.7

 

Certain Investments

 

 

6.12

 

Certain Affiliate Transactions

 

 

 

 

 

EXHIBITS:

 

A-1

 

Funding Notice

 

 

A-2

 

Conversion/Continuation Notice

 

 

B

 

Term Loan Note

 

 

C

 

Compliance Certificate

 

 

D

 

Opinion of Counsel for Credit Parties

 

 

E-1

 

Assignment and Assumption

 

 

E-2

 

Affiliated Lender Assignment and Acceptance

 

 

F

 

U.S. Tax Certificate

 

 

G

 

Solvency Certificate

 

 

H

 

Counterpart Agreement

 

 

I

 

Pledge and Security Agreement

 

 

J

 

Mortgage

 

 

K

 

[RESERVED]

 

 

L

 

Intercreditor Agreement

 

 

M

 

Fixed Charge Coverage Compliance Certificate

 

 

N

 

Term Loan Joinder

 

i

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

 

CREDIT AND GUARANTY AGREEMENT

 

CREDIT AND GUARANTY AGREEMENT, dated as of April 18, 2011 (the “Agreement”), by
and among Douglas Dynamics, Inc., a Delaware corporation (“Holdings”), Douglas
Dynamics, L.L.C., a Delaware limited liability company and a direct wholly-owned
Subsidiary of Holdings (the “Company” or the “Borrower”), Fisher, LLC, a
Delaware limited liability company (“Fisher”) and Douglas Dynamics Finance
Company, a Delaware corporation (“DD Finance,” and together with Fisher and
Holdings, each a “Guarantor” and collectively the “Guarantors”) the banks and
financial institutions listed on the signature pages hereof, JPMorgan Chase
Bank, N.A., as collateral agent for the Lenders and the other Secured Parties
and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders.

 

RECITALS:

 

WHEREAS, Borrower has requested, and the Lenders have agreed, to extend a senior
secured term loan to Borrower on the terms and conditions of this Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, such parties hereby
agree as follows:

 

SECTION 1.     DEFINITIONS AND INTERPRETATION

 

1.1          Definitions.  The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:

 

“ABL Priority Collateral” has the meaning assigned to that term in the
Intercreditor Agreement.

 

“ABR Loan” means Loans bearing interest at a rate determined by Alternate Base
Rate.

 

“Accepting Lenders” has the meaning assigned to that term in Section 2.14(d).

 

“Additional Term Loan Commitment” has the meaning assigned to that term in
Section 2.23.

 

“Additional Term Loan Lender” has the meaning assigned to that term in
Section 2.23.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders hereunder and under the other Credit
Documents.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Rate Loan for any
Interest Period, the greater of (a) an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to (i) the LIBO Rate for such
Interest Period multiplied by (ii) the Statutory Reserve Rate and (b) 1.50%.

 

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

 

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

 

“Adverse Proceeding” means any action, suit, proceeding (whether administrative,
judicial or otherwise), governmental investigation or arbitration (whether or
not purportedly on behalf of Holdings or any of its Subsidiaries) at law or in
equity, or before or by any Governmental Authority, domestic or foreign
(including any Environmental Claims), whether pending or, to the knowledge of
Holdings or any of its Subsidiaries, threatened against or affecting Holdings or
any of its Subsidiaries or any property of Holdings or any of its Subsidiaries.

 

“Affected Lender” has the meaning assigned to that term in Section 2.17(b).

 

“Affected Loans” has the meaning assigned to that term in Section 2.17(b).

 

“Affiliate” means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common
control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or otherwise.

 

“Affiliated Lender Assignment and Acceptance”  has the meaning assigned to that
term in Section 10.6(i).

 

“Agent” means each of Administrative Agent and Collateral Agent.

 

“Aggregate Payments” has the meaning assigned to that term in Section 7.2.

 

“Agreement” has the meaning assigned to that term in the preamble hereto.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters BBA LIBOR Rates Page 3750 (or on any successor or substitute
page of such page) at approximately 11:00 a.m. London time on such day.  Any
change in the Alternate Base Rate due to a change in the Prime Rate, the Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Applicable Margin” means, for any day, with respect to any ABR Loan or
Eurodollar Rate Loan, a percentage, per annum, equal to: (i) in the case of ABR
Loans, 3.25% and (ii) in the case of Eurodollar Rate Loans, 4.25%.

 

2

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

 

“Ares Group Investors” means  (i) the Ares Corporate Opportunities Fund, L.P.
(the “Ares Limited Partnership”), (ii) ACOF Management, L.P., (iii) ACOF
Operating Manager, L.P., (iv) Ares Management, Inc., (v) Ares Management LLC,
(vi) any limited partners of any of the foregoing entities and (vii) partners,
members, managing directors, officers or employees of any of those entities
referenced in clauses (ii) through (v), provided that each Person set forth in
clauses (vi) and (vii) shall only constitute an Ares Group Investor so long as
it gives a proxy to, or otherwise agrees that it will vote in a manner
consistent with, the Ares Limited Partnership (except to the extent otherwise
required by ERISA or other applicable law) and the entity to which it is
required to give a proxy to or otherwise vote consistently with continues to own
Capital Stock in Holdings.

 

“Arranger” means J.P. Morgan Securities LLC and Credit Suisse Securities (USA)
LLC, as joint book runners and lead arrangers hereunder.

 

“Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and
leaseback, assignment, conveyance, transfer or other disposition to, or any
exchange of property with, any Person (other than Company or any Guarantor
Subsidiary), in one transaction or a series of transactions, of all or any part
of Holdings’, Company’s, or any of its Subsidiaries’ businesses, assets or
properties of any kind, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, including, without
limitation, the Capital Stock of any of Holdings’ Subsidiaries, other than
(i) inventory sold or leased in the ordinary course of business (excluding any
such sales by operations or divisions discontinued or to be discontinued),
(ii) equipment that is surplus, obsolete, worn-out, or no longer used or useful
in the business of Holdings, Company or any of its Subsidiaries and is sold or
disposed of in the ordinary course of business, (iii) leasehold interests that
are no longer used or useful in the business of Holdings, Company or any of its
Subsidiaries, (iv) dispositions, by means of trade-in, of equipment used in the
ordinary course of business, so long as such equipment is replaced,
substantially concurrently, by like-kind equipment in an effort to upgrade the
Facilities of Company and its Subsidiaries, (v) Cash and Cash Equivalents used
in a manner not prohibited by the Credit Documents or the Revolving Credit
Documents, and (vi) sales of other assets for aggregate consideration of less
than $1,000,000 with respect to any transaction or series of related
transactions and less than $3,000,000 in the aggregate during any calendar year
(provided, that for purposes of calculating the amounts set forth in this clause
(vi), any transactions or series of related transactions involving aggregate
consideration of $50,000 or less may be excluded).

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.6), and accepted by the Administrative Agent, in the form of
Exhibit E-1 or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended.  Such
present value shall be calculated using a discount rate equal to the rate of
interest implicit in such transaction, determined in accordance with GAAP.

 

3

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

 

“Aurora Group Investors” means (i) Aurora Equity Partners II L.P. and Aurora
Overseas Equity Partners II, L.P. (the “Limited Partnerships”), (ii) Aurora
Capital Partners II L.P. and Aurora Overseas Capital Partners II, L.P. (the
“General Partners”), (iii) Aurora Advisors II LLC and Aurora Overseas
Advisors, II, LDC (the “Ultimate General Partners”), (iv) any limited partners
of the Limited Partnerships or any limited partners of the General Partners,
provided that such limited partner gives a proxy to, or otherwise agrees that it
will vote in a manner consistent with, the Limited Partnerships (except to the
extent otherwise required by ERISA or other applicable law) or the General
Partners, (v) any managing director or employee of Aurora Management Partners
LLC, provided that such managing director or employee gives a proxy to, or
otherwise agrees that he or she will vote in a manner consistent with the
Limited Partnerships (except to the extent otherwise required by ERISA or other
applicable law) or the General Partners, (vi) any member of the Advisory Board
of Aurora Management Partners LLC, provided that such member gives a proxy to,
or otherwise agrees that he or she will vote in a manner consistent with, the
Limited Partnerships (except to the extent otherwise required by ERISA or other
applicable law) or the General Partners, (vii) any Affiliate of Aurora
Management Partners LLC, provided that such Affiliate gives a proxy to, or
otherwise agrees that it will vote in a manner consistent with, the Limited
Partnerships or the General Partners, and (viii) any investment fund or other
entity controlled by or under common control with, any one or more of the
Ultimate General Partners or Aurora Management Partners LLC or the principals
that control any one or more of the Ultimate General Partners or Aurora
Management Partners LLC; provided that each Person set forth in clauses
(iv) through (viii) shall only constitute an Aurora Group Investor so long as
the entity to which it is required to give a proxy to or otherwise vote
consistently with continues to own Capital Stock in Holdings.

 

“Authorized Officer” means, as applied to any Person, any individual holding the
position of chairman of the board (if an officer), chief executive officer,
president or one of its vice presidents (or the equivalent thereof), and such
Person’s chief financial officer or treasurer.

 

“Available Excess Cash Flow” means, with respect to any Restricted Payment to be
made pursuant to Section 6.5(f), any Investment to be made pursuant to
Section 6.7(m) or any prepayment, repurchase or redemption of Other Debt
pursuant to Section 6.16 in any Fiscal Year (i) if the Excess Cash Flow Payment
Conditions are satisfied at the time of making the payment and after giving
effect thereto, an amount equal to (a) either (x) if the Leverage Ratio as of
the most recently completed Fiscal Year for which audited financial statements
have been delivered pursuant to Section 5.1(c) is less than or equal to 3.00 to
1.00, 100% of the Consolidated Excess Cash Flow for such most recently completed
Fiscal Year (in the case of the Fiscal Year ended December 31, 2011, calculated
for the period from the Closing Date to December 31, 2011) or (y) if the
Leverage Ratio as of the most recently completed Fiscal Year for which audited
financial statements have been delivered pursuant to Section 5.1(c) is greater
than 3.00 to 1.00, 50% of the Consolidated Excess Cash Flow for such most
recently completed Fiscal Year (in the case of the Fiscal Year ended
December 31, 2011, calculated for the period from the Closing Date to
December 31, 2011), minus (b) the sum of (w) Restricted Payments made pursuant
to Section 6.5(f) after the delivery of such financial statements and on or
prior to the date of determination, plus (x) Investments made pursuant to
Section 6.7(m) after the delivery of such financial statements and on or prior
to the date of determination, plus (y) prepayments, repurchases and redemptions
of Other Debt pursuant to Section 6.16 after the delivery of such

 

4

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

 

financial statements and on or prior to the date of determination, plus (z) the
amount of any Credit Party Purchase consummated during the most recently
completed Fiscal Year and (ii) if the Excess Cash Flow Payment Conditions are
not satisfied at the time of making the payment and after giving effect thereto,
zero.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or any successor statute.

 

“Beneficiary” means each Agent, Lender and Lender Counterparty.

 

“Blocked Account” means any Deposit Account subject to a Blocked Account
Agreement.

 

“Blocked Account Agreement” means an account control agreement on terms
reasonably satisfactory to the Collateral Agent.

 

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

 

“Borrower” has the meaning assigned to that term in the preamble hereto.

 

“Borrower Restricted Information” means confidential information, including
MNPI, that is made available by or on behalf of Borrower to Agent, any Lender or
any potential Lender or Sponsor that has not been made available to all Lenders
and potential Lenders.

 

“Business Day” means (i) any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the States of New York or Wisconsin or is a
day on which banking institutions located in either such state are authorized or
required by law or other governmental action to close and (ii) with respect to
all notices, determinations, fundings and payments in connection with the
Adjusted LIBO Rate or any Eurodollar Rate Loans, the term “Business Day” shall
mean any day which is a Business Day described in clause (i) and which is also a
day for trading by and between banks in Dollar deposits in the London interbank
market.

 

“Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person; provided that for all purposes hereof, the determination of
whether a lease is to be treated as a Capital Lease shall be made without giving
effect to any change in accounting for leases when GAAP resulting from the
implementation of proposed Accounting Standards Update (ASU) Leases (Topic 840)
issued August 17, 2010 or any successor proposal.

 

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

 

5

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

 

“Cash” means money, currency or a credit balance in any demand or deposit
account.

 

“Cash Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iv) certificates of deposit, time deposits or bankers’ acceptances
maturing within one year after such date and issued or accepted by any Lender or
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia that (a) is at least
“adequately capitalized” (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; and (v) shares of any money market mutual fund
that (a) has substantially all of its assets invested continuously in the types
of investments referred to in clauses (i) and (ii) above, (b) has net assets of
not less than $500,000,000, and (c) has the highest rating obtainable from
either S&P or Moody’s.

 

“Change of Control” means, at any time, (i) any Person or “group” (within the
meaning of Rules 13d-3 and 13d-5 under the Exchange Act) beneficially owns,
directly or indirectly, more than 50%, on a fully diluted basis, of the
outstanding Capital Stock (measured only by voting power) of Holdings entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the board of directors (or similar governing body) of Holdings,
(ii) any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under
the Exchange Act) other than Sponsor beneficially owns, directly or indirectly,
more than 35%, on a fully diluted basis, of the outstanding Capital Stock
(measured only by voting power) of Holdings entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the board
of directors (or similar governing body) of Holdings, unless Sponsor
beneficially owns and controls, on a fully diluted basis, more of the
outstanding Capital Stock (measured only by voting power) of Holdings entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the board of directors (or similar governing body) of Holdings
than any other Person or “group” (within the meaning of Rules 13d-3 and 13d-5
under the Exchange Act); or (iii) Holdings shall cease to beneficially own and
control 100% on a fully diluted basis of the economic and voting interests in
the Capital Stock of Company.

 

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), of any of the following (a) the adoption of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
interpretation or application thereof by any Governmental Authority or
(c) compliance by any Lender (or, for purposes of Section 2.18(b), by any
lending office of such Lender or by such Lender’s holding company, if any) with
any request, guideline or

 

6

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

 

directive (whether or not having the force of law) of any Governmental Authority
made or issued after the date of this Agreement; provided that notwithstanding
anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith shall be deemed to be a “Change in Law”
regardless of the date enacted, adopted or issued.

 

“Closing Date” means April 18, 2011.

 

“Collateral” means, collectively, all of the real, personal and mixed property
(including Capital Stock) in which Liens are purported to be granted pursuant to
the Collateral Documents as security for the Obligations.

 

“Collateral Agent” means JPMorgan Chase Bank, N.A. in its capacity as collateral
agent for the Lenders and other Secured Parties under the Collateral Documents
and under the other Credit Documents.

 

“Collateral Documents” means the Pledge and Security Agreement, the Mortgages,
the Blocked Account Agreements, the Intercreditor Agreement and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to
Collateral Agent, for the benefit of Lenders, a Lien on any real, personal or
mixed property of that Credit Party as security for the Obligations (or to
perfect any Liens so granted).

 

“Commitment” means any Term Loan Commitment.

 

“Company” has the meaning assigned to that term in the preamble hereto.

 

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

 

“Consolidated Adjusted EBITDA” means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to the total of
(a) Consolidated Net Income, plus (b) the sum, without duplication, of each of
the following to the extent deducted in the calculation of Consolidated Net
Income for such period (i) Consolidated Interest Expense and non-Cash interest
expense, (ii) provisions for taxes based on income, (iii) total depreciation
expense, (iv) total amortization expense (including amortization of goodwill,
other intangibles, and financing fees and expenses), (v) non-cash impairment
charges, (vi) non-cash expenses resulting from the grant of stock and stock
options and other compensation to management personnel of Company and its
Subsidiaries pursuant to a written incentive plan or agreement, (vii) other
non-Cash items that are unusual or otherwise non-recurring items,
(viii) reimbursement of expenses under the Management Services Agreement in an
amount not to exceed $1,000,000 in any 12-month period, (ix) any extraordinary
losses and non-recurring charges during any period (including severance,
relocation costs, one-time compensation charges and losses or charges associated
with Interest Rate Agreements), (x) restructuring charges or reserves (including
costs related to closure of Facilities); provided any such cash restructuring
charges shall not exceed $5,000,000 in any 12-month period, (xi) any transaction
costs incurred in connection with the issuance, resale or secondary offering of
Securities or any refinancing transaction, in each case whether or not such
transaction is

 

7

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

 

consummated, (xii) any fees and expensed related to any Permitted Acquisitions
and (xiii) for periods ending on or before June 30, 2011, fees, expenses and
other transaction costs incurred by the Company and its Subsidiaries during such
period in connection with the transactions contemplated by the First Amendment
to Revolving Credit Facilities, the Second Amendment, the Qualifying IPO, this
Agreement and the Revolving Credit Documents, minus (c) the sum, without
duplication, of (i) non-Cash items increasing Consolidated Net Income for such
period that are unusual or otherwise non-recurring items, (ii) cash payments
made during such period reducing reserves or liabilities for accruals made in
prior periods but only to the extent such reserves or accruals were added back
to “Consolidated Adjusted EBITDA” in a prior period pursuant to clause
(b)(vii) or (b)(viii) above, and (iii) Restricted Payments made during such
period to Holdings pursuant to Section 6.5(c)(i) (other than any such Restricted
Payments made to Holdings pursuant to Section 6.5(c)(i) for the purpose of
paying fees, expenses and other transaction costs paid in cash during such
period in connection with the transactions contemplated by the First Amendment
to Revolving Credit Facility, the Second Amendment and the Qualifying IPO).

 

“Consolidated Capital Expenditures” means, for any period, the aggregate of all
expenditures of Company and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in
“purchase of property and equipment” or similar items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries, but
excluding expenditures constituting the purchase price for Permitted
Acquisitions and amounts constituting Net Asset Sale Proceeds and Net
Insurance/Condemnation Proceeds which are reinvested in the business of Company
and its Subsidiaries in accordance with Section 2.13(a) or Section 2.13(b),
respectively, by Company and its Subsidiaries during such period.

 

“Consolidated Current Assets” means, as at any date of determination, the total
assets of Company and its Subsidiaries on a consolidated basis that may properly
be classified as current assets in conformity with GAAP, excluding Cash and Cash
Equivalents.

 

“Consolidated Current Liabilities” means, as at any date of determination, the
total liabilities of Company and its Subsidiaries on a consolidated basis that
may properly be classified as current liabilities in conformity with GAAP,
excluding the current portion of long term debt.

 

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive)
equal to: (i) the sum, without duplication, of the amounts for such period of
(a) Consolidated Adjusted EBITDA, plus (b) the Consolidated Working Capital
Adjustment, minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding voluntary repayments financed with Indebtedness and excluding
payments and repayments of Indebtedness under the Revolving Credit Facility or
any other working capital facility), (b) cash Consolidated Capital Expenditures
(net of any proceeds of (y) any related financings with respect to such
expenditures and (z) to the extent not excluded in the calculation of
Consolidated Capital Expenditures, any sales of capital assets used to finance
such expenditures), (c) Consolidated Interest Expense paid in cash for such
period, (d) the portion of taxes based on income actually paid in cash during
such period by Company or any of its Subsidiaries whether for such period or any
other period, (e) Restricted Payments made

 

8

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

 

under Sections 6.5(c)(ii)-(iv) during such period, and (f) Restricted Payments
or Investments made under Section 6.5(d)(i) and Section 6.7(l), as applicable,
and which are for any Fiscal Year, declared (in the case of dividends or
distributions) or paid in cash from June 1 of the applicable Fiscal Year to and
including May 31 of the immediately following Fiscal Year.  Consolidated Excess
Cash Flow shall not be reduced by the amount of any Credit Party Purchase.

 

“Consolidated Fixed Charges” means, for any period, the sum, without
duplication, of the amounts determined for Company and its Subsidiaries on a
consolidated basis equal to (i) Consolidated Interest Expense for such period,
(ii) scheduled payments for such period of principal on Consolidated Total Debt,
(iii) Consolidated Capital Expenditures for such period other than those
financed with secured Indebtedness permitted by Sections 6.1 and 6.2 or made or
incurred pursuant to Section 6.8(b)(ii) of the Revolving Credit Facility,
(iv) the portion of taxes based on income actually paid in cash during such
period by Company or any of its Subsidiaries whether for such period or any
other period and (v) Restricted Payments permitted under Section 6.5(c) or
Section 6.5(f) and which are paid in cash during such period.

 

“Consolidated Interest Coverage Ratio” on any date of determination (the
“Transaction Date”) means the ratio on a pro forma basis, of (a) Consolidated
Adjusted EBITDA for the Test Period to (b) the sum of (i) Consolidated Interest
Expense for such Test Period; provided, that for purposes of such calculation:
(1) Permitted Acquisitions which occurred during the Test Period or subsequent
to the Test Period and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of the Test Period, (2) transactions giving rise
to the need to calculate the Consolidated Interest Coverage Ratio and the
application of the proceeds therefrom (except as otherwise provided in this
definition) shall be assumed to have occurred on the first day of the Test
Period, (3) the incurrence of any Indebtedness (including the issuance of any
Disqualified Capital Stock) during the Test Period or subsequent to the Test
Period and on or prior to the Transaction Date (and the application of the
proceeds therefrom to the extent used to refinance or retire other Indebtedness)
(other than ordinary working capital borrowings) shall be assumed to have
occurred on the first day of the Test Period, (4) the permanent repayment of any
Indebtedness (including the redemption of any Disqualified Capital Stock) during
the Test Period or subsequent to the Test Period and on or prior to the
Transaction Date (other than ordinary working capital borrowings) shall be
assumed to have occurred on the first day of the Test Period, (5) the
Consolidated Interest Expense attributable to interest on any Indebtedness or
dividends on any Disqualified Capital Stock bearing a floating interest (or
dividend) rate shall be computed on a pro forma basis as if the average rate in
effect from the beginning of the Test Period to the Transaction Date had been
the applicable rate for the entire period, unless Company or any of its
Subsidiaries is a party to a Hedge Agreement (which shall remain in effect for
the 12-month period immediately following the Transaction Date) that has the
effect of fixing the interest rate on the date of computation, in which case
such rate (whether higher or lower) shall be used, and (6) amounts attributable
to operations or businesses permanently discontinued or disposed of prior to the
Transaction Date, shall be excluded, except, in the case of a determination of
Consolidated Fixed Charges, only to the extent that the obligations giving rise
to such Consolidated Fixed Charges would no longer be obligations contributing
to Consolidated Fixed Charges subsequent to the Transaction Date.

 

“Consolidated Interest Expense” means, for any period, (i) total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and

 

9

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

 

capitalized interest) payable in cash of Company and its Subsidiaries (but
excluding fees and any original issue discount in connection with this Agreement
and the Revolving Credit Documents) on a consolidated basis with respect to all
outstanding Indebtedness of Company and its Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and net costs under Interest Rate Agreements, minus (ii) the aggregate
amount of interest income of Company and its Subsidiaries during such period
paid in cash.

 

“Consolidated Net Income” means, for any period, (i) the net income (or loss) of
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with GAAP, minus (ii) (a) the
income (or loss) of any Person (other than a Subsidiary of Company) in which any
other Person (other than Company or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during such
period, (b) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Company or is merged into or consolidated with Company
or any of its Subsidiaries or that Person’s assets are acquired by Company or
any of its Subsidiaries, (c) the income of any Subsidiary of Company to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (d) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, and (e) (to the extent not included in clauses (a) through
(d) above) any net extraordinary gains or net extraordinary losses. 
Consolidated Net Income shall not be increased as a result of any cancellation
of indebtedness income realized as a result of any Credit Party Purchase.

 

“Consolidated Secured Debt” means, as at any date of determination, the
Consolidated Total Debt of Company and its Subsidiaries that is secured by Liens
on any of the assets of the Company or any of its Subsidiaries.

 

“Consolidated Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Company and its Subsidiaries
determined on a consolidated basis, without duplication, in accordance with
GAAP; provided, that the amount of revolving Indebtedness to be included at the
date of determination shall be equal to the average of the balances of such
revolving Indebtedness as of the end of each of the prior four calendar quarters
(except that with respect to the first four calendar quarters after the Closing
Date, the amount of revolving Indebtedness to be included shall be based on the
average of the quarter end balances from the Closing Date through the date of
determination); provided, further that notwithstanding any other provision of
this Agreement for all purposes hereof and all calculations required to be made
hereunder the amount of Indebtedness included in Consolidated Total Debt shall
be deemed to be 100% of the outstanding principal amount thereof and shall be
determined without regard to FASB ASC 825.

 

“Consolidated Working Capital” means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.

 

“Consolidated Working Capital Adjustment” means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated

 

10

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

 

Working Capital as of the beginning of such period exceeds (or is less than)
Consolidated Working Capital as of the end of such period.

 

“Contractual Obligation” means, as applied to any Person, any provision of any
indenture, mortgage, deed of trust, or other contract, undertaking, agreement or
other instrument to which that Person is a party or to which such Person or any
of its properties is subject.

 

“Contributing Guarantors” has the meaning assigned to that term in Section 7.2.

 

“Conversion/Continuation Date” means the effective date of a continuation or
conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.

 

“Conversion/Continuation Notice” means a Conversion/Continuation Notice
substantially in the form of Exhibit A-2.

 

“Counterpart Agreement” means a Counterpart Agreement substantially in the form
of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

 

“Credit Date” means the date of a Credit Extension.

 

“Credit Document” means any of this Agreement, the Notes, if any, the Collateral
Documents, and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent or any Lender in
connection herewith.

 

“Credit Extension” means the making of a Loan.

 

“Credit Party” means each Person (other than any Agent or any Lender or any
other representative thereof) from time to time party to a Credit Document.

 

“Credit Party Purchase” has the meaning assigned to that term in
Section 10.6(i).

 

“Currency Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Holdings’ and its Subsidiaries’ operations
and not for speculative purposes.

 

“DD Finance” has the meaning assigned to that term in the preamble.

 

“Declining Lender” has the meaning assigned to that term in Section 2.14(d).

 

“Default” means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.

 

“Deposit Account” means each checking or other demand deposit account maintained
by any of the Credit Parties other than any Excluded Deposit Accounts.  All
funds in each Deposit Account shall be conclusively presumed to be Collateral
and proceeds of Collateral

 

11

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

 

and the Agents and the Lenders shall have no duty to inquire as to the source of
the amounts on deposit in any Deposit Account.

 

“Discharge of ABL Obligations” has the meaning assigned to such term in the
Intercreditor Agreement.

 

“Disqualified Capital Stock” means with respect to any Person, (a) Capital Stock
of such Person that, by its terms or by the terms of any security into which it
is convertible, exercisable or exchangeable, is, or upon the happening of an
event or the passage of time or both would be, required to be redeemed or
repurchased including at the option of the holder thereof by such Person or any
of its Subsidiaries, in whole or in part, on or prior to 91 days following the
Maturity Date and (b) any Capital Stock of any Subsidiary of such Person other
than any common equity with no preferences, privileges, and no redemption or
repayment provisions.  Notwithstanding the foregoing, any Capital Stock of the
Company that would constitute Disqualified Capital Stock solely because the
holders thereof have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale shall not
constitute Disqualified Capital Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions prior to the prepayment of the Loans as are required by this
Agreement.

 

“Dollars” and the sign “$” mean the lawful money of the United States of
America.

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States, any state thereof or the District of Columbia and any other
Subsidiary that is not a “controlled foreign corporation” under Section 957 of
the Internal Revenue Code.

 

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any
Related Fund (any two or more Related Funds being treated as a single Eligible
Assignee for all purposes hereof) and (ii) any commercial bank, insurance
company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses; provided, no Affiliate of
Holdings shall be an Eligible Assignee.

 

“Employee Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, Holdings, any of its Subsidiaries or any
of their respective ERISA Affiliates.

 

“Environmental Claim” means any investigation, written notice, written notice of
violation, written claim, action, suit, proceeding, demand, abatement order or
other written order or written directive (conditional or otherwise), by any
Governmental Authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law;
(ii) in connection with any Hazardous Material or any actual or alleged
Hazardous Materials Activity; or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.

 

“Environmental Laws” means any and all current or future foreign or domestic,
federal or state (or any subdivision of either of them), statutes, ordinances,
orders, rules,

 

12

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

 

regulations, judgments, Governmental Authorizations, or any other requirements
of Governmental Authorities relating to (i) environmental matters, including
those relating to any Hazardous Materials Activity; (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials; or
(iii) occupational safety and health, land use or the protection of the
environment, in any manner applicable to Holdings or any of its Subsidiaries or
any Facility.

 

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

 

“ERISA Affiliate” means, as applied to any Person on or after the date of the
closing of the transactions contemplated by the Purchase Agreement, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.

 

“ERISA Event” means (i) a “reportable event” within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to Holdings, any of
its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan; (vi) the imposition, or the occurrence of any events or
condition that could reasonably be expected to result in the imposition, of
liability on Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan (which fines, penalties, taxes or related charges, for
purposes of Section 4.18, shall be material); (viii) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit Plan
or the assets thereof, or against Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates in connection with any Employee Benefit Plan;
(ix) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or

 

13

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

 

the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

 

“Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.

 

“Event of Default” means each of the conditions or events set forth in
Section 8.1.

 

“Excess Availability” means (i) prior to the Discharge of ABL Obligations, the
lesser of (1) the commitments then in effect under the Revolving Credit Facility
and (2) the borrowing base then in effect under the Revolving Credit Facility,
minus the sum of (a) the principal amount of outstanding loans under the
Revolving Credit Facility, plus (b) the amount available to be drawn on all
letters of credit issued under the Revolving Credit Facility, plus (c) all the
amount of all unreimbursed drawings on letters of credit issued under the
Revolving Credit Facility and (ii) after the Discharge of ABL Obligations,
(a) the amount of unrestricted Cash and Cash Equivalents on Company’s
consolidated balance sheet, plus (b) the amount available to be drawn on any
replacement revolving credit facility, minus any Cash and Cash Equivalents
included in the borrowing base thereof.

 

“Excess Cash Flow Payment Conditions” means the satisfaction of each of the
following conditions both immediately before and immediately after giving effect
to the applicable payment: (x) with respect to mandatory prepayments pursuant to
Section 2.13(d), (i) Excess Availability plus unrestricted Cash and Cash
Equivalents on Company’s consolidated balance sheet not included in the
borrowing base under the Revolving Credit Facility is greater than the greater
of $8,750,000 and 12.5% of the commitments then in effect under the Revolving
Credit Facility and (ii) prior to the making of such payment, the Company shall
have delivered a certificate signed by its chief financial officer or treasurer
certifying that the condition in clause (i) has been satisfied and setting forth
its calculations of Excess Availability in reasonable detail and certifying as
to the amount of Cash and Cash Equivalents on Company’s consolidated balance
sheet as of the date of determination and (y) with respect to all other payments
required or permitted to be made based on Consolidated Excess Cash Flow, (i) no
Default or Event of Default shall have occurred and be continuing, (ii) the
Fixed Charge Coverage Ratio for the four Fiscal Quarter Period ending on the
last day of the most recently completed Fiscal Quarter for which financial
statements have been delivered pursuant to Section 5.1(b), 5.1(c) calculated on
a pro forma basis giving effect to the applicable payment shall be greater than
1.00 to 1.00, (iii) Excess Availability both before and after giving effect to
the applicable payment shall be greater than the greater of $10,500,000 or 15%
of the revolving commitments then in effect under the Revolving Credit Facility,
(iv) in the case of prepayments, redemption and repurchases of Other Debt
pursuant to Section 6.16, the Secured Debt Ratio both immediately before and
after giving effect to the payment is less than 3.50 to 1.00 and (v) prior to
the making of such payment, the Company shall have delivered a Fixed Charge
Coverage Compliance Certificate together with a certificate signed by its chief
financial officer or treasurer certifying that the conditions in subclauses
(i) through (iv) of clause (y) have been satisfied and setting forth a
calculation of Excess Availability, Consolidated Excess Cash Flow and Available
Excess Cash Flow.

 

14

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

 

“Excess Collateral Availability” means (i) prior to the Discharge of ABL
Obligations, the borrowing base then in effect under the Revolving Credit
Facility, minus the sum of (a) the principal amount of outstanding loans under
the Revolving Credit Facility, plus (b) the amount available to be drawn on all
letters of credit issued under the Revolving Credit Facility, plus (c) the
amount of all unreimbursed drawings on letters of credit issued under the
Revolving Credit Facility and (ii) after the Discharge of ABL Obligations,
(a) unrestricted Cash and Cash Equivalents on Company’s consolidated balance
sheet as of the date of determination, plus (b) the amount available to be drawn
on any replacement revolving credit facility, minus any Cash and Cash
Equivalents included in the borrowing base thereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute.

 

“Excluded Deposit Accounts” means, collectively, (a) Deposit Accounts
established solely for the purpose of funding payroll and trust accounts and
funded solely with amounts necessary to cover then outstanding payroll
liabilities and amounts required to be retained in such trust accounts, as well
as minimum balance requirements; (b) Deposit Accounts with amounts on deposit
that, when aggregated with the amounts on deposit in all other Deposit Accounts
for which a Control Agreement has not been obtained (other than those specified
in clause (a) and (c)), do not at any time exceed $4,000,000; (c) Deposit
Accounts, with amounts on deposit which in the aggregate that do not at any time
exceed $1,000,000, held at a financial institution that is not, for United
Stated federal income tax purposes (i) an individual who is a citizen or
resident of the United States or (ii) a corporation, partnership or other entity
treated as a corporation or partnership created or organized in or under the
laws of the United States, or any political subdivision thereof; (d) zero
balance disbursement accounts; and (e) Deposit Accounts, with amounts on deposit
which in the aggregate do not at any time exceed $500,000, the sole proceeds of
which are funds received by a Credit Party from credit card sales; provided
that, in each of the foregoing cases, if reasonably requested by the Collateral
Agent or the Administrative Agent, Company shall provide such Agent with
periodic updates of the account numbers and names of all financial institutions
where such Deposit Accounts are maintained.

 

“Excluded Taxes” means, with respect to any payment made by any Credit Party
under any Credit Document, any of the following Taxes imposed on or with respect
to a Recipient: (a) income or franchise Taxes (however denominated) imposed on
(or measured by) net income by the United States of America or by the
jurisdiction under the laws of which such Recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits Taxes imposed by
the United States of America or any similar Taxes imposed by any other
jurisdiction in which Lender is located or in which the Lender’s applicable
lending office is located, (c) in the case of a Non-U.S. Lender (other than an
assignee pursuant to a request by Company under Section 2.22), any U.S. Federal
withholding Taxes resulting from any law in effect (including FATCA) on the date
such Non-U.S. Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Non-U.S. Lender’s failure to comply
with Section 2.19(f), except to the extent that such Non-U.S. Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from Company with respect
to such withholding Taxes pursuant to Section 2.19(a), and (d) Taxes that would
not have been imposed but for a failure by any Recipient, or any legal or

 

15

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

 

beneficial holder of an interest in any entity (other than an entity that is a
U.S. Person) through which payments by or on account of any Credit Party are
made under any Credit Document, to comply with any applicable reporting
requirement if such compliance is required by FATCA as a precondition to relief
or exemption from such Tax.

 

“Existing Term Loan Credit Agreement” means the Amended and Restated Credit and
Guaranty Agreement dated as of May 21, 2007 providing for a senior secured term
loan facility, by and among Holdings, Borrower, certain subsidiaries of Company
as guarantors and Credit Suisse as administrative agent, as previously amended,
restated, amended and restated, supplemental or modified prior to the Closing
Date.

 

“Facility” means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

 

“Fair Share” has the meaning assigned to that term in Section 7.2.

 

“Fair Share Contribution Amount” has the meaning assigned to that term in
Section 7.2.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the
date of this Agreement and any regulations or official interpretations thereof.

 

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

 

“Financial Plan” has the meaning assigned to that term in Section 5.1(i).

 

“First Amendment to Revolving Credit Facility” means Amendment No. 1 to Credit
and Guaranty Agreement, dated as of April 16, 2010 among Holdings, the Company,
Fisher DD Finance and the lenders party thereto.

 

“First Offer” has the meaning assigned to that term in Section 2.14(d).

 

“First Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the only Lien
to which such Collateral is subject, other than any Permitted Lien.

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year” means the fiscal year of Holdings and its Subsidiaries ending on
December 31 of each calendar year.

 

16

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

 

“Fisher” has the meaning assigned to that term in the preamble.

 

“Fixed Charge Coverage Compliance Certificate” means a Compliance Certificate
substantially in the form of Exhibit M.

 

“Fixed Charge Coverage Ratio” means the ratio of (a) the aggregate amount of
Consolidated Adjusted EBITDA for the Test Period to (b) the aggregate
Consolidated Fixed Charges during the Test Period.

 

“Flood Hazard Property” means any Real Estate Asset subject to a mortgage in
favor of the Collateral Agent, for the benefit of the Lenders, and located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.

 

“Foreign Subsidiary” means any direct or indirect Subsidiary of Company which is
not a Domestic Subsidiary.

 

“Funding Guarantors” has the meaning assigned to that term in Section 7.2.

 

“Funding Notice” means a notice substantially in the form of Exhibit A-1.

 

“GAAP” means, subject to the limitations on the application thereof set forth in
Section 1.2, United States generally accepted accounting principles in effect as
of the date of determination thereof.

 

“Governmental Authority” means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.

 

“Governmental Authorization” means any permit, license, authorization, plan,
directive, consent order or consent decree of or from any Governmental
Authority.

 

“Grantor” has the meaning assigned to that term in the Pledge and Security
Agreement.

 

“Guaranteed Obligations” has the meaning assigned to that term in Section 7.1.

 

“Guarantor” means each of (i) Holdings, and (ii) each Guarantor Subsidiary.

 

“Guarantor Subsidiary” means (i) Fisher, (ii)  DD Finance, (iii) each Domestic
Subsidiary of Holdings (other than Borrower) from time to time party to this
Agreement, and (iv) to the extent no adverse tax consequences to Company could
result therefrom, each Foreign Subsidiary of Holdings from time to time party to
this Agreement.

 

“Guaranty” means the guaranty of each Guarantor set forth in Section 7.

 

17

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

 

“Hazardous Materials” means any chemical, material, waste or substance, exposure
to which is prohibited, limited or regulated by any Governmental Authority.

 

“Hazardous Materials Activity” means any past, current or threatened activity,
event or occurrence involving any Hazardous Materials, including the use,
manufacture, possession, storage, presence, Release, threatened Release,
discharge, placement, generation, transportation, processing, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.

 

“Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement
entered into with a Lender Counterparty.

 

“Highest Lawful Rate” means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received under
the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.

 

“Holdings” has the meaning assigned to that term in the preamble hereto;
provided that after the effective date of a Permitted Holdings Reincorporation,
“Holdings” shall refer to Douglas Dynamics, Inc., as incorporated under the laws
of the state of Wisconsin.

 

“Increased-Cost Lenders” has the meaning assigned to that term in Section 2.22.

 

“Indebtedness” as applied to any Person, means, without duplication, (i) all
indebtedness for borrowed money; (ii) the principal portion of obligations with
respect to Capital Leases; (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money
(excluding accounts payable which are classified as current liabilities in
accordance with GAAP and accrued expenses in each case incurred in the ordinary
course of business); (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such obligations
incurred under ERISA but including earn-outs incurred in connection with a
Permitted Acquisition to the extent required to be reflected on a balance sheet
in accordance with GAAP to the extent such earn-out obligations are not paid
within 30 days after the amount due is finally determined), which purchase price
is due more than six months from the date of incurrence of the obligation in
respect thereof; (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person; (vi) the amount available to be drawn under on any letter
of credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings; (vii) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another; (viii) any obligation of such
Person the primary purpose or intent of which is to provide assurance to an
obligee that the obligation of the obligor thereof will be paid or discharged,
or any agreement relating thereto will be complied with, or the holders thereof
will be protected (in whole or in part) against loss in respect thereof;
(ix) any liability of such Person for an obligation of another through any

 

18

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

 

agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise
acquire such obligation or any security therefore, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (b) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (a) or
(b) of this clause (ix), the primary purpose or intent thereof is as described
in clause (viii) above; (x) all net payment obligations of such Person in
respect of any exchange traded or over the counter derivative transaction,
including, without limitation, any Interest Rate Agreement and Currency
Agreement, whether entered into for hedging or speculative purposes; (xi) the
principal balance outstanding under any synthetic lease, tax retention lease,
off-balance sheet loan or similar off-balance sheet financing product; and
(xii) the indebtedness of any partnership or Joint Venture in which such Person
is a general partner or a joint venturer except to the extent that the terms of
such indebtedness provide that such indebtedness is nonrecourse to such Person.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by any Credit Party under any Credit Document
and (b) Other Taxes.

 

“Indemnitee” has the meaning assigned to that term in Section 10.3(a).

 

“Installment” has the meaning assigned to that term in Section 2.11.

 

“Intellectual Property” means all patents, trademarks, service marks,
tradenames, domain names, trade secrets, copyrights, technology, know-how and
processes used in or necessary for the conduct of the business of Company and
its Subsidiaries.

 

“Intercreditor Agreement” shall mean the Intercreditor Agreement in the form of
Exhibit L.

 

“Interest Payment Date” means with respect to (i) any ABR Loan, the last
Business Day in each of March, June, September and December of each year through
the final maturity date of such Loan; and (ii) any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan; provided, in the case
of each Interest Period of longer than three months “Interest Payment Date”
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period.

 

“Interest Period” means, in connection with a Eurodollar Rate Loan, an interest
period of one-, two-, three- or six-months, as selected by Borrower in the
applicable Funding Notice or Conversion/Continuation Notice, (i) initially,
commencing on the Credit Date or Conversion/Continuation Date thereof, as the
case may be; and (ii) thereafter, commencing on the day on which the immediately
preceding Interest Period expires; provided, (a) if an Interest Period would
otherwise expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless no further Business Day occurs
in such month, in which case such Interest Period shall expire on the
immediately preceding Business Day; (b) any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (c), of this definition, end on the last
Business Day of a

 

19

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

 

calendar month; and (c) no Interest Period with respect to any portion of any
Term Loan shall extend beyond the Maturity Date.

 

“Interest Rate Agreement” means any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement, each of which is for the purpose of
hedging the interest rate exposure associated with Holdings’ and its
Subsidiaries’ operations and not for speculative purposes.

 

“Interest Rate Determination Date” means, with respect to any Interest Period,
the date that is two (2) Business Days prior to the first day of such Interest
Period.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute.

 

“Investment” means (i) any direct or indirect purchase or other acquisition by
Holdings or any of its Subsidiaries of, or of a beneficial interest in, any of
the Securities of any other Person (including any Subsidiary of Holdings);
(ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Holdings from any Person other than
Company or any Guarantor Subsidiary, of any Capital Stock of such Subsidiary;
and (iii) any direct or indirect loan, advance (other than advances to employees
for moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Holdings or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto minus the amount of any return
of capital with respect to such Investment, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.

 

“Investment Fund” means any affiliate of a Sponsor that is a bona fide
diversified debt fund or a bona fide diversified investment vehicle that is
engaged in the making, purchasing, holding or otherwise investing in commercial
loans, bonds and similar extensions of credit in the ordinary course and with
respect to which no Sponsor, directly or indirectly, possesses the power to
direct or cause the direction of the investment policies of any such fund.

 

“Joint Venture” means a joint venture, partnership or other similar arrangement,
whether in corporate, partnership or other legal form; provided, in no event
shall any corporate Subsidiary of any Person be considered to be a Joint Venture
to which such Person is a party.

 

“Lender” has the meaning assigned to that term in the preamble hereto, and shall
include any other Person that becomes a party hereto pursuant to an Assignment
and Assumption, an Affiliated Lender Assignment and Acceptance or a Term Loan
Joinder Agreement, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption or an Affiliated Lender Assignment and
Acceptance.

 

“Lender Counterparty” means each Lender or any Affiliate of a Lender
counterparty to a Hedge Agreement (including any Person who is a Lender (and any
Affiliate

 

20

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

 

thereof) as of the Closing Date but subsequently, whether before or after
entering into a Hedge Agreement, ceases to be a Lender).

 

“Leverage Ratio” means the ratio as of the date of determination of
(i) Consolidated Total Debt, less unrestricted Cash and Cash Equivalents of
Company and its Subsidiaries as of such day in excess of $1,000,000 (up to a
maximum amount of $15,000,000 as of any date of determination), the contents of
which are in a Blocked Account or in a securities account subject to a valid
First Priority Lien in favor of the Collateral Agent and a control agreement in
favor of the Collateral Agent on terms satisfactory to the Collateral Agent in
its sole discretion, to (ii) Consolidated Adjusted EBITDA for the Test Period
most recently ended.

 

“LIBO Rate” means, with respect to any Eurodollar Rate Loan for any Interest
Period, the rate appearing on Reuters BBA Libor Rates Page 3750 (or on any
successor or substitute page of such page providing rate quotations comparable
to those currently provided on such page of such page, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to such
Eurodollar Rate Loan for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

 

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

 

“Loan” means a Term Loan.

 

“Management Services Agreement” means the Second Amended and Restated Joint
Management Services Agreement, dated as of May 10, 2010, between Holdings and
Sponsor, as it may be amended, supplemented or otherwise modified from time to
time.

 

“Margin Stock” has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System as in effect from time to time.

 

“Material Adverse Effect” means a material adverse effect upon (i) the business,
operations, properties, assets or financial condition of Holdings and its
Subsidiaries taken as a whole; (ii) the ability of any Credit Party to perform
its Obligations; (iii) the legality, validity, binding effect or enforceability
against a Credit Party of a Credit Document to which it is a party; or (iv) the
rights, remedies and benefits available to, or conferred upon, any Agent and any
Lender or any Secured Party under any Credit Document.

 

21

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

 

“Maturity Date” means April 18, 2018.

 

“MNPI” means, on any date, material non-public information with respect to any
Credit Party, the Term Loans or any securities issued by a Credit Party that has
not been disclosed to the Lenders (other than Lenders that do not wish to
receive MNPI or any such information that is disclosed to all Lenders in
accordance with the confidentiality provisions of this Agreement) prior to such
date to the extent such information could reasonably be expected to have a
material effect upon, or otherwise be material to, a Lender’s decision to assign
Term Loans to, or acquire Term Loans from, a Sponsor or a Credit Party.

 

“Moody’s” means Moody’s Investor Services, Inc.

 

“Mortgage” means a Mortgage substantially in the form of Exhibit J, as it may be
amended, supplemented or otherwise modified from time to time.

 

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer
plan” as defined in Section 3(37) or Section 4001(a)(3) of ERISA.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, an amount equal
to: (i) Cash payments (including any Cash received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) received by Holdings or any of its Subsidiaries from such
Asset Sale, minus (ii) any bona fide direct costs incurred in connection with
such Asset Sale, including, without limitation, (a) income taxes estimated in
good faith by the seller thereof to be payable by the seller as a result of any
gain recognized in connection with such Asset Sale, (b) payment of the
outstanding principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Loans) that is secured by a Lien on the stock or
assets in question and that is required to be repaid under the terms thereof as
a result of such Asset Sale, (c) brokerage fees and legal expenses incurred
directly attributable to such Asset Sale; and (d) any reserves required to be
established by the seller thereof in accordance with GAAP against liabilities
reasonably anticipated and directly attributable to the Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under
indemnification obligations associated with such Asset Sale.

 

“Net Cash Balance” means, at any time, the (a) sum of all Cash and Cash
Equivalents held by Credit Parties minus (b) the sum of the aggregate principal
amount of loans outstanding under the Revolving Credit Facility plus the
aggregate maximum amount which may be drawn under all letters of credit issued
under the Revolving Credit Facility.

 

“Net Insurance/Condemnation Proceeds” means an amount equal to:  (i) any Cash
payments or proceeds received by Holdings or any of its Subsidiaries (a) under
any casualty insurance policy in respect of a covered loss thereunder or (b) as
a result of the taking of any assets of Holdings or any of its Subsidiaries by
any Person pursuant to the power of eminent domain, condemnation or otherwise,
or pursuant to a sale of any such assets to a purchaser with such power under
threat of such a taking, minus (ii) (a) any actual and reasonable costs incurred
by Holdings or any of its Subsidiaries in connection with the adjustment or
settlement of any claims of Holdings or such Subsidiary in respect thereof, and
(b) any bona fide direct costs

 

22

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

 

incurred in connection with any sale of such assets as referred to in clause
(i)(b) of this definition, including income taxes estimated in good faith by the
seller thereof to be payable as a result of any gain recognized in connection
therewith.

 

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

 

“Note” means a Term Loan Note.

 

“Notice” means a Funding Notice or a Conversion/Continuation Notice.

 

“Obligations” means all obligations of every nature of each Credit Party from
time to time owed to the Agents (including former Agents), the Lenders or any of
them, or to any Lender Counterparties, under any Credit Document, whether for
principal, interest (including interest which, but for the filing of a petition
in bankruptcy with respect to such Credit Party, would have accrued on any
Obligation, whether or not a claim is allowed against such Credit Party for such
interest in the related bankruptcy proceeding), payments for fees, expenses,
indemnification or otherwise.

 

“Obligee Guarantor” has the meaning assigned to that term in Section 7.7.

 

“Organizational Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (ii) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii) with respect to any general partnership, its partnership
agreement, as amended, and (iv) with respect to any limited liability company,
its articles of organization, as amended, and its operating agreement, as
amended.  In the event any term or condition of this Agreement or any other
Credit Document requires any Organizational Document to be certified by a
secretary of state or similar governmental official, the reference to any such
“Organizational Document” shall only be to a document of a type customarily
certified by such governmental official.

 

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

 

“Other Debt” has the meaning assigned to that term in Section 6.16.

 

“Other Taxes” means any present or future stamp, court, documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, or from the registration, receipt or perfection of a security
interest under, or otherwise with respect to, any Credit Document, except any
such Taxes that are Other Connection Taxes imposed with respect to an assignment
(other than an assignment under Section 2.22).

 

23

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

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Pension Plan” means any Employee Benefit Plan which is subject to Section 412
of the Internal Revenue Code or Section 302 of ERISA.

 

“Perfection Deliverables” means, with respect to any Credit Party, or any Person
that becomes a Credit Party pursuant to Section 5.10 and to the extent required
to be delivered under such Section:

 

(i)    evidence satisfactory to Collateral Agent of the compliance by such
Credit Party of its obligations under the Pledge and Security Agreement and the
other Collateral Documents (including, without limitation, its obligations
(A) to execute and deliver (x) UCC financing statements, (y) originals of
securities, instruments and chattel paper and (z) any agreements governing
deposit and/or securities accounts as provided therein, and (B) to file
intellectual property security agreements with the United States Patent and
Trademark Office and the United States Copyright Office);

 

(ii)   (A)          to the extent required to be delivered by the Collateral
Agent, the results of searches, by Persons satisfactory to Collateral Agent, of
all effective UCC financing statements (or equivalent filings), fixture filings
and all judgment and tax lien filings which may have been made with respect to
any personal or mixed property of such Credit Party, and of filings with the
United States Patent and Trademark Office and the United States Copyright
Office, together with copies of all such filings disclosed by such searches, and
(B) UCC termination statements (or similar documents), releases to be filed with
the United States Patent and Trademark Office and the United States Copyright
Office, and other filings duly executed by all applicable Persons for filing in
all applicable jurisdictions and offices as may be necessary to terminate any
effective UCC financing statements (or equivalent filings) and other filings
disclosed in such searches (other than any such financing statements in respect
of Permitted Liens);

 

(iii)  to the extent required to be delivered by the Collateral Agent, opinions
of counsel (which counsel shall be reasonably satisfactory to Collateral Agent)
with respect to the creation and perfection of the security interests in favor
of Collateral Agent in the Collateral of such Credit Party and such other
matters as Collateral Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Collateral Agent; and

 

(iv)  evidence that such Credit Party shall have taken or caused to be taken any
other action, executed and delivered or caused to be executed and delivered any
other agreement, document and instrument (including without limitation, any
intercompany notes evidencing Indebtedness permitted to be incurred pursuant to
Section 6.1(b)) and made or caused to be made any other filing and recording
(other than as set forth herein) reasonably required by Collateral Agent.

 

24

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

 

“Permitted Acquisition” means any acquisition by Company or any of its
wholly-owned Guarantor Subsidiaries, whether by purchase, merger or otherwise,
of all or substantially all of the assets of, all of the Capital Stock of, or a
business line or unit or a division of, any Person; provided, that:
(i) immediately prior to, and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing or would result therefrom;
(ii) all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable laws and in conformity with
all applicable Governmental Authorizations; (iii) in the case of the acquisition
of Capital Stock, all of the Capital Stock (except for any such Securities in
the nature of directors’ qualifying shares required pursuant to applicable law)
acquired or otherwise issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned not less than 80% by
Company or a Guarantor Subsidiary thereof, and Company shall have taken, or
caused to be taken, each of the actions (and within the time periods) set forth
in Sections 5.10 and/or 5.11, as applicable; (iv) any Person or assets or
division as acquired in accordance herewith shall be in same business or lines
of business in which Company and/or its Subsidiaries are engaged as of the
Closing Date or any business reasonably related thereto; and (v) each such
Permitted Acquisition shall be effectuated pursuant to the terms of a consensual
merger or stock purchase agreement or other consensual acquisition agreement
between the Company or the applicable Subsidiary and the applicable seller or
Person being so acquired.

 

“Permitted Holdings Reincorporation” means a change of the jurisdiction of
organization of Holdings from Delaware to Wisconsin; provided that (i) no
Default exists or would result therefrom and the representations and warranties
contained in Section 4 and the other Credit Documents (other than any
representation to the effect the Holdings is incorporated in Delaware and not in
Wisconsin) are true and correct in all material respects on and as of that date
to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date, (ii) the person
resulting therefrom shall be named Douglas Dynamics, Inc., and shall be a
corporation organized under the laws of the state of Wisconsin, and shall
expressly confirm its obligations under this Agreement and the other Credit
Documents to which it is a party pursuant to a confirmation in form and
substance reasonably satisfactory to the Administrative Agent, (iii) the
Borrower Representative shall have provided thirty (30) days’ prior written
notice to the Administrative Agent of such Permitted Holdings Reincorporation,
(iv) Holdings shall be in compliance, before and after such Permitted Holdings
Reincorporation, with all its covenants and obligations under this Agreement and
the other the Credit Documents, (v) each other Credit Party shall in connection
therewith expressly confirm its obligations under this Agreement and the other
Credit Documents to which it is a party pursuant to a confirmation in form and
substance reasonably satisfactory to the Administrative Agent, (vi) Holdings
and, to the extent requested by the Administrative Agent, each other Credit
Party, shall have executed and delivered, as applicable, such supplemental
Collateral Documents (including additional UCC and other filings) as the
Administrative Agent shall reasonably request, each in form and substance
reasonably satisfactory to the Administrative Agent, (vii) the Credit Parties
shall have taken all corresponding actions required pursuant to the Revolving
Credit Facility and the Intercreditor Agreement and (viii) Holdings and, to the
extent applicable, each other Credit Party, shall have delivered opinions of
counsel and related officers’ certificates reasonably requested by the
Administrative Agent with respect to the execution and delivery and

 

25

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

 

enforceability of the documents referred to above and the compliance of such
Permitted Holdings Reincorporation with the provisions hereof, and all such
opinions of counsel shall be satisfactory to the Administrative Agent; and
provided, further, that (x) if the foregoing are satisfied, all references
hereunder and under the other Loan Documents to Holdings shall be references to
Holdings as so reincorporated and (y) notwithstanding any provision of
Section 10.5, the Administrative Agent and the Collateral Agent are each hereby
authorized by the Lenders to make any amendments to the Credit Documents that
are necessary to reflect the foregoing.

 

“Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.

 

“Permitted Refinancing” means, with respect to any Indebtedness, extensions,
renewals, refinancings or replacements of such Indebtedness; provided that such
extensions, renewals, refinancings or replacements (i) are on terms and
conditions (including the terms and conditions of any guarantees of or other
credit support for such Indebtedness) not materially less favorable taken as a
whole to Company and its Subsidiaries, the Administrative Agent, the Collateral
Agent or the Lenders than the terms and conditions of the Indebtedness being
extended, renewed, refinanced or replaced, (ii) do not add as an obligor any
Person that would not have been an obligor under the Indebtedness being
extended, renewed replaced or refinanced, (iii) do not result in a greater
principal amount or shorter remaining average life to maturity than the
Indebtedness being extended, renewed replaced or refinanced and (iv) are not
effected at any time when a Default or Event of Default has occurred and is
continuing or would result therefrom.

 

“Person” means and includes natural persons, corporations, limited partnerships,
general partnerships, limited liability companies, limited liability
partnerships, joint stock companies, Joint Ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.

 

“Phase I Report” means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527, (ii) was conducted no more than
six months prior to the date such report is required to be delivered hereunder,
by one or more environmental consulting firms reasonably satisfactory to
Administrative Agent, (iii) includes an assessment of asbestos-containing
materials at such Facility, (iv) is accompanied by (a) an estimate of the
reasonable worst-case cost of investigating and remediating any Hazardous
Materials Activity identified in the Phase I Report as giving rise to an actual
or potential material violation of any Environmental Law or as presenting a
material risk of giving rise to a material Environmental Claim, and (b) a
current compliance audit setting forth an assessment of Holdings’, its
Subsidiaries’ and such Facility’s current and past compliance with Environmental
Laws and an estimate of the cost of rectifying any non-compliance with current
Environmental Laws identified therein and the cost of compliance with reasonably
anticipated future Environmental Laws identified therein.

 

26

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

 

“Pledge and Security Agreement” means the Pledge and Security Agreement dated as
of the Closing Date by Borrower and each Guarantor, substantially in the form of
Exhibit I, as it may be amended, supplemented or otherwise modified from time to
time.

 

“Prepayment Amount” has the meaning assigned to that term in Section 2.14(d).

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank as its prime rate in effect at its office located
at 270 Park Avenue, New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

 

“Principal Office” means, Administrative Agent’s “Principal Office” as set forth
on Appendix B, or such other office as Administrative Agent may from time to
time designate in writing to Borrower and each Lender.

 

“Projections” has the meaning assigned to that term in Section 4.8.

 

“Pro Rata Share” means, with respect to all payments, computations and other
matters relating to the Term Loans of any Lender, the percentage obtained by
dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term
Loan Exposure of all Lenders.

 

“Qualifying IPO” means the consummation of the first underwritten public
offering of the Capital Stock (other than Disqualified Capital Stock) of
Holdings on May 10, 2010 pursuant to a registration statement filed with the
Securities and Exchange Commission in accordance with the Securities Act.

 

“Real Estate Asset” means, at any time of determination, any interest (fee,
leasehold or otherwise) then owned by any Credit Party in any real property.

 

“Real Estate Asset Deliverables” means, with respect to any Real Estate Asset,
and to the extent required to be delivered pursuant to Section 3.1 or
Section 5.11:

 

(i)                           fully executed and notarized Mortgages, in proper
form for recording in all appropriate places in all applicable jurisdictions,
encumbering such Real Estate Asset;

 

(ii)                        at the request of the Collateral Agent, an opinion
of counsel (which counsel shall be reasonably satisfactory to Collateral Agent)
in each state in which such Real Estate Asset is located with respect to the
enforceability of the form(s) of Mortgages to be recorded in such state and such
other matters as Collateral Agent may reasonably request, in each case in form
and substance reasonably satisfactory to Collateral Agent;

 

(iii)                     at the request of the Collateral Agent, (a) ALTA
mortgagee title insurance policies or unconditional commitments therefore issued
by one or more title companies reasonably satisfactory to the Collateral Agent
with respect to such Real Estate Asset, in amounts satisfactory to the
Collateral Agent with respect to such Real Estate Asset, dated as of the date of
the

 

27

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

 

recording of the Mortgage with respect to such Real Estate Asset and otherwise
in form and substance reasonably satisfactory to Collateral Agent (each, a
“Title Policy”), and copies of all recorded documents listed as exceptions to
title or otherwise referred to therein and (b) evidence satisfactory to
Collateral Agent that such Credit Party has paid to the title company or to the
appropriate governmental authorities all expenses and premiums of the title
company and all other sums required in connection with the issuance of each
Title Policy and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Mortgages for such
Real Estate Asset in the appropriate real estate records;

 

(iv)                    a completed Federal Emergency Management Agency Standard
Flood Hazard Determination and evidence of flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, in form and
substance reasonably satisfactory to Collateral Agent;

 

(v)                       at the request of the Collateral Agent, ALTA surveys
of such Real Estate Asset, certified to Collateral Agent and dated as of a date
acceptable to the title company for removal of the survey exceptions in the
Title Policy for such Real Estate Asset, and otherwise in form and substance
reasonably satisfactory to the Collateral Agent;

 

(vi)                  with respect only to any Real Estate Asset described in
Section 5.11 hereof, upon request of the Administrative Agent, a USPAP and
FIRREA appraisal of each such Real Estate Asset prepared by an MAI appraiser
reasonably acceptable to the Administrative Agent on which the Agents and the
Lenders (and their respective permitted assigns) may rely; and

 

(vii)                 a landlord’s agreement, mortgagee agreement or bailee
letter, as applicable, from the lessor of each leased property, mortgagee of
owned property or bailee with respect to any warehouse; provided that the
failure to deliver such landlord’s agreement, mortgagee agreement or bailee
letter shall not be a Default hereunder so long  as the Credit Parties use
commercially reasonable efforts to obtain such landlord’s agreement, mortgagee
agreement or bailee letter.

 

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) the Collateral Agent.

 

“Register” has the meaning assigned to that term in Section 10.6(e).

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

 

28

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

 

“Related Fund” means, with respect to any Lender that is an investment fund, any
other investment fund or similar investment vehicle that invests in commercial
loans and that is managed or advised by (i) the Lender, (ii) an Affiliate of
Lender or (iii) the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

 

“Related Lender Assignment” has the meaning assigned to that term in
Section 10.6(b).

 

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

 

“Release” means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.

 

“Replacement Lender” has the meaning assigned to that term in Section 2.22.

 

“Requisite Lenders” means one or more Lenders having or holding Term Loan
Exposure and representing more than 50% of the sum of the aggregate Term Loan
Exposure of all Lenders.

 

“Restricted Payment” means (i) any dividend or other distribution (including,
for the avoidance of doubt, any payment pursuant to Section 6.5(d)), direct or
indirect, on account of any shares of any class of stock (or of any other
Capital Stock) of Holdings, Company  or any of their respective Subsidiaries now
or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class; (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 stock (or of any other Capital Stock)
of Holdings, Company or any of their respective Subsidiaries now or hereafter
outstanding; (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock (or of any other Capital Stock) of Holdings, Company or any of their
respective Subsidiaries now or hereafter outstanding; (iv) management or similar
fees and other amounts (including reimbursement for expenses) payable to Sponsor
or any of its Affiliates; and (v) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Indebtedness permitted pursuant to Sections 6.1(b),
6.1(e) (in respect of Indebtedness incurred under Sections 6.1(b), 6.1(h) or
6.1(k) (to the extent constituting subordinated Indebtedness)) or 6.1(k) (to the
extent constituting subordinated Indebtedness).

 

“Revolving Credit Documents” means all documents, instruments or agreements
executed and delivered by Holdings or any of its subsidiaries for the benefit of
any agent or lender in connection with the Revolving Credit Facility.

 

29

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

 

“Revolving Credit Facility” means the $70.0 million amended and restated senior
secured revolving credit facility pursuant to the revolving credit agreement
dated as of the Closing Date among Holdings, the Company, Fisher, DD Finance,
the lenders party thereto, JPMorgan Chase Bank, N.A. as administrative agent and
JPMorgan Chase Bank, N.A., as collateral agent, as it may be further amended,
modified, refinanced or replaced from time to time, including amendments
increasing the principal amount of revolving loans available thereunder.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

 

“Second Amendment” means Amendment No. 2 to Credit and Guaranty Agreement, dated
as of April 16, 2010, among the Company and the lenders party thereto.

 

“Second Offer” has the meaning assigned to that term in Section 2.14(d).

 

“Second Priority” means, with respect to any Lien purported to be created in any
Collateral pursuant to any Collateral Document, that such Lien is the only Lien
to which such Collateral is subject, other than any Permitted Lien.

 

“Secured Debt Ratio” means the ratio as of the date of determination of
(i) Consolidated Secured Debt, less unrestricted Cash and Cash Equivalents of
the Company and its Subsidiaries in excess of $1,000,000 (up to a maximum amount
of $15,000,000) as of any date of determination, the contents of which are in a
Blocked Account or in a securities account subject to a valid First Priority
Lien in favor of the Collateral Agent and a control agreement in favor of the
Collateral Agent on terms satisfactory to the Collateral Agent in its sole
discretion, in each case, as of such date, to (ii) Consolidated Adjusted EBITDA
for the Test Period most recently ended.

 

“Secured Parties” has the meaning assigned to that term in the Pledge and
Security Agreement.

 

“Securities” means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and any successor statute.

 

“Solvency Certificate” means a Solvency Certificate of the chief financial
officer of Holdings and Borrower substantially in the form of Exhibit G.

 

“Solvent” means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total

 

30

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

 

amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person’s then existing debts as they become absolute and
matured considering all financing alternatives and potential asset sales
reasonably available to such Person; (ii) such Person’s capital is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person has not incurred and does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due (whether at maturity or
otherwise); and (B) such Person is “solvent” within the meaning given that term
and similar terms under applicable laws relating to fraudulent transfers and
conveyances.  For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.

 

“Sponsor” means, collectively, the Aurora Group Investors, the Ares Group
Investors and the Affiliates (without giving effect to clause (i) of the last
sentence of the definition of such term) of Aurora Management Partners LLC or
Ares Management LLC.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentage shall include those imposed pursuant to such Regulation D. 
Eurodollar Rate Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation.  The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

 

“Subject Transaction” has the meaning assigned to that term in
Section 6.8(c)(i).

 

“Subsidiary” means, with respect to any Person, any corporation, partnership,
limited liability company, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
“qualifying share” of the former Person shall be deemed to be outstanding.

 

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

 

31

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

 

“Term Loan” means an extension of credit by a Lender to Borrower pursuant to
Sections 2.1(a), 2.8 and 2.23, as applicable.

 

“Term Loan Commitment” means the commitment of a Lender to make or otherwise
fund any Term Loan and “Term Loan Commitments” means such commitments of all
Lenders in the aggregate.  The amount of each Lender’s Term Loan Commitment, if
any, is set forth on Appendix A, in the applicable Assignment and Assumption, in
the applicable Affiliated Lender Assignment and Acceptance or in the applicable
Term Loan Joinder Agreement, subject to any adjustment or reduction pursuant to
the terms and conditions hereof.  The aggregate amount of the Term Loan
Commitments as of the Closing Date is $125,000,000.

 

“Term Loan Exposure” means, with respect to any Lender as of any date of
determination, the outstanding principal amount of the Term Loans of such
Lender; provided, at any time prior to the making of the Term Loans, the Term
Loan Exposure of any Lender shall be equal to the principal amount of the Term
Loans of such Lender’s Term Loan Commitment.

 

“Term Loan Joinder Agreement” means the Term Loan Joinder Agreement, 
substantially in the form of Exhibit N hereto.

 

“Term Loan Note” means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.

 

“Term Priority Collateral” has the meaning assigned to that term in the
Intercreditor Agreement.

 

“Terminated Lender” has the meaning assigned to that term in Section 2.22.

 

“Test Period” means, at any time, the four Fiscal Quarters last ended (in each
case taken as one accounting period) for which financial statements have been or
are required to have been delivered, pursuant to Section 5.1(b) or 5.1(c).

 

“Title Policy” has the meaning assigned to that term in the definition of “Real
Estate Asset Deliverables.”

 

“Type of Loan” means an ABR Loan or a Eurodollar Rate Loan.

 

“UCC” means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

 

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Internal Revenue Code.

 

“U.S. Tax Certificate” has the meaning assigned to such term in
Section 2.19(f)(ii)(D)(2).

 

“Withholding Agent” means any Credit Party and the Administrative Agent.

 

32

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

 

“Yield” means, for any loan on any date on which any “Yield” is required to be
calculated hereunder pursuant to Section 2.21, the internal rate of return on
such loan determined by the Administrative Agent in consultation with Borrower
utilizing (a) the greater of (i) if applicable, any minimum Adjusted LIBO Rate
applicable to such loan on such date and (ii) the forward LIBOR curve
(calculated on a quarterly basis) as calculated by the Administrative Agent in
accordance with its customary practice during the period from such date to the
earlier of (x) the date that is four (4) years following such date and (y) the
maturity date of such Term Loan; (b) the “Applicable Margin” for such loan on
such date (other than any component thereof in any minimum Adjusted LIBO Rate
which shall be determined pursuant to clause (a) above); and (c) the issue price
of such loan (after giving effect to any original issue discount or upfront fees
paid to the market in respect of such loan calculated based on an assumed four
(4) year average life to maturity).

 

1.2          Accounting Terms.  Except as otherwise expressly provided herein,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.  Financial statements and other
information required to be delivered by Holdings to Lenders pursuant to
Section 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable).  Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the most recent financial statements referred to in
Section 4.7. Notwithstanding anything to the contrary contained herein, all
calculations with respect to definitions, covenants and other provisions hereof
shall be made without giving effect to FASB ASC 825 (Financial Instruments) or
proposed Accounting Standards Update (ASU) Leases (Topic 840) issued August 17,
2010 or any successor proposal.

 

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

 

33

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

 

SECTION 2.     LOANS

 

2.1          Term Loans.

 

(a)           Loan Commitments.  Subject to the terms and conditions hereof,
(i) each Lender severally agrees to make, on the Closing Date, a Term Loan to
the Company in an amount equal to such Lender’s Term Loan Commitment.  Any
amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid may
not be reborrowed.  Subject to Sections 2.11, 2.12 and 2.13, (i) all amounts
owed hereunder with respect to the Term Loans shall be paid in full no later
than the Maturity Date Each Lender’s Term Loan Commitment shall terminate
immediately and without further action on the Closing Date after giving effect
to the funding of such Lender’s Term Loan Commitment on such date.

 

(b)           Borrowing Mechanics for Term Loans. Company shall deliver to
Administrative Agent a fully executed and delivered Funding Notice no later than
10:00 a.m. (New York City time) at least (x) three (3) Business Days in advance
of the Closing Date in the case of a Eurodollar Rate Loan to be made on the
Closing Date or (y) one (1) Business Day in advance of the Closing Date in the
case of an ABR Loan to be made on the Closing Date.  Promptly upon receipt by
Administrative Agent of such Funding Notice, Administrative Agent shall notify
each Lender of the proposed borrowing.

 

(c)           Funding on the Closing Date. Each Lender shall make its Term Loan
available to Administrative Agent not later than 12:00 p.m. (New York City time)
on the Closing Date by wire transfer of same day funds in Dollars, at
Administrative Agent’s Principal Office.  Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of the Term Loans available to
Company on the Closing Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received by Administrative Agent from
Lenders to be credited to the account of Company at Administrative Agent’s
Principal Office or to such other account as may be designated in such Funding
Notice.

 

2.2          [RESERVED]

 

2.3          [RESERVED]

 

2.4          Pro Rata Shares; Availability of Funds.

 

(a)           Pro Rata Shares.  All Loans shall be made, and all participations
purchased, by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in such other Lender’s obligation to make a Loan
requested hereunder or purchase a participation required hereby nor shall any
Term Loan Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in such other Lender’s obligation to make a Loan
requested hereunder or purchase a participation required hereby.

 

(b)           Availability of Funds.  Unless Administrative Agent shall have
been notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender’s Loan requested on such

 

34

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

 

Credit Date, Administrative Agent may assume that such Lender has made such
amount available to Administrative Agent on such Credit Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make available
to Borrower a corresponding amount on such Credit Date.  If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three (3) Business Days and thereafter at the Alternate Base Rate.  If
such Lender does not pay such corresponding amount forthwith upon Administrative
Agent’s demand therefor, Administrative Agent shall promptly notify Borrower and
Borrower shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the rate applicable to such
Loan.  Nothing in this Section 2.4(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Term Loan Commitments hereunder or to prejudice
any rights that Borrower may have against any Lender as a result of any default
by such Lender hereunder.

 

2.5          Use of Proceeds.  The proceeds of Term Loans drawn on the Closing
Date shall be used to repay outstanding obligations under the Existing Term Loan
Credit Agreement and pay transaction expenses.  The proceeds of the Term Loans
made pursuant to Section 2.23 shall be used for general corporate purposes of
Borrower and its Subsidiaries. No portion of the proceeds of any Credit
Extension shall be used in any manner that causes or might cause such Credit
Extension or the application of such proceeds to violate Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof or to violate the Exchange Act.

 

2.6          Evidence of Debt; Lenders’ Books and Records; Notes.

 

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

 

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

 

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

 

35

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

 

(d)           Notes. Any Lender may request that Loans made by it be evidenced
by a promissory note.  In such event, Borrower shall prepare, execute and
deliver to such Lender a Term Loan Note payable to such Lender (or, if requested
by such Lender, to such Lender and its registered assigns).  Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.6) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

2.7          Interest on Loans.

 

(a)           Except as otherwise set forth herein, each Term Loan shall bear
interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:

 

(i)    if an ABR Loan, at the Alternate Base Rate plus the Applicable Margin; or

 

(ii)   if a Eurodollar Rate Loan, at the Adjusted LIBO Rate plus the Applicable
Margin.

 

(b)           The basis for determining the rate of interest with respect to any
Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be
selected by Borrower and notified to Administrative Agent and Lenders pursuant
to the applicable Funding Notice or Conversion/Continuation Notice, as the case
may be.  If on any day a Loan is outstanding with respect to which a
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be an ABR Loan.

 

(c)           In connection with Eurodollar Rate Loans there shall be no more
than ten (10) Interest Periods outstanding at any time.  In the event Borrower
fails to specify between an ABR Loan or a Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a
Eurodollar Rate Loan) will be automatically converted into an ABR Loan on the
last day of the then-current Interest Period for such Loan (or if outstanding as
an ABR Loan will remain as, or (if not then outstanding) will be made as, an ABR
Loan).  In the event Borrower fails to specify an Interest Period for any
Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice, Borrower shall be deemed to have selected an Interest Period of one
month.  As soon as practicable after 10:00 a.m. (New York City time) on each
Interest Rate Determination Date, Administrative Agent shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties) the interest rate that shall apply to the Eurodollar Rate
Loans for which an interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Borrower and each Lender.

 

(d)           Interest payable pursuant to Section 2.7(a) shall be computed
(i) in the case of ABR Loans at times when the Alternate Base Rate is based on
the Prime Rate on the basis of a 365-day or 366-day year, as the case may be,
and (ii) in the case of Eurodollar Rate

 

36

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

 

Loans, and ABR Loans at times when the Alternate Base Rate is based on the
Federal Funds Effective Rate, on the basis of a 360-day year, in each case for
the actual number of days elapsed in the period during which it accrues.  In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period applicable to such Loan or, with respect to an ABR
Loan being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such ABR Loan, as the case may be, shall be included,
and the date of payment of such Loan or the expiration date of an Interest
Period applicable to such Loan or, with respect to an ABR Loan being converted
to a Eurodollar Rate Loan, the date of conversion of such ABR Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided, if a Loan
is repaid on the same day on which it is made, one day’s interest shall be paid
on that Loan.

 

(e)           Except as otherwise set forth herein, interest on each Loan shall
be payable in arrears on and to (i) each Interest Payment Date applicable to
such Loan; (ii) upon any prepayment of such Loan that is a Eurodollar Rate Loan,
whether voluntary or mandatory, to the extent accrued on the amount being
prepaid; and (iii) at maturity, including final maturity.

 

2.8          Conversion/Continuation.

 

(a)           Subject to Section 2.17 and so long as no Default or Event of
Default shall have occurred and then be continuing, Borrower shall have the
option:

 

(i)    to convert at any time all or any part of any Term Loan equal to
$2,000,000 and integral multiples of $500,000 in excess of that amount from one
Type of Loan to another Type of Loan; provided, a Eurodollar Rate Loan may only
be converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Borrower shall pay all amounts due under
Section 2.17 in connection with any such conversion; or

 

(ii)   upon the expiration of any Interest Period applicable to any Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $2,000,000 and
integral multiples of $500,000 in excess of that amount as a Eurodollar Rate
Loan.

 

(b)           Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to an ABR Loan) and at least three (3) Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan).  Except as otherwise provided herein,
a Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable, and Borrower shall be bound to effect a conversion or continuation
in accordance therewith.

 

2.9          Default Interest.  Automatically upon the occurrence and during the
continuance of an Event of Default under Sections 8.1(a), 8.1(f) or 8.1(g) and,
upon the notice from the Administrative Agent following the occurrence and
during the continuation of any other Event of Default, the principal amount of
all Loans outstanding and, to the extent permitted by applicable law, any
interest payments on the Loans not paid when due and any fees and other amounts
then

 

37

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

 

due and payable hereunder, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for ABR Loans; provided, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become ABR
Loans and shall thereafter bear interest payable upon demand at a rate which is
2% per annum in excess of the interest rate otherwise payable hereunder for ABR
Loans.  Payment or acceptance of the increased rates of interest provided for in
this Section 2.9 is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent, Collateral Agent or any Lender.

 

2.10        Fees.

 

(a)           Company agrees to pay to the Administrative Agent for the account
of each Lender a ticking fee in an amount equal to 2.125% of the aggregate Term
Loan Commitments funded on the Closing Date, which fee shall (i) accrue during
the period commencing on the date on which the Term Loan Commitments are
allocated in respect of the Term Loans (such date, the “Allocation Date”) and
ending on the Closing Date, (ii) be calculated on a per annum basis and computed
on the basis of the actual number of days elapsed over a 360-day year and
(iii) be payable to the Lenders (in a ratable amount based on such Lender’s
allocated Term Loan Commitment as of the Allocation Date) on the Closing Date.

 

(b)           Company agrees to pay to Arranger and Agents such other fees and
other payments in the amounts and at the times separately agreed upon.

 

2.11        Scheduled Term Loan Payments.  The principal amounts of the Term
Loans shall be repaid in consecutive quarterly installments in amounts equal to
0.25% of the Term Loans funded on the Closing Date, on the last day of each
Fiscal Quarter commencing June 30, 2011, with the balance of the Term Loans
payable on the Maturity Date (each of such consecutive quarterly installments
and the payment of the balances on the Maturity Date, an “Installment”).

 

Notwithstanding the foregoing, (y) such Installments shall be reduced pro rata
in connection with any voluntary or mandatory prepayments of the Term Loans in
accordance with Sections 2.12, 2.13 and 2.14, as applicable; and (z) the Term
Loans, together with all other amounts owed hereunder with respect thereto,
shall, in any event be paid in full no later than the Maturity Date.

 

2.12        Voluntary Prepayments.

 

(a)           Any time and from time to time:

 

(i)    with respect to ABR Loans, Borrower may prepay any such Loans on any
Business Day in whole or in part, in an aggregate minimum amount of $2,000,000
and integral multiples of $500,000 in excess of that amount; and

 

38

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

 

(ii)   with respect to Eurodollar Rate Loans, Borrower may prepay any such Loans
on any Business Day in whole or in part in an aggregate minimum amount of
$2,000,000 and integral multiples of $500,000 in excess of that amount;

 

(b)           All such prepayments shall be made:

 

(i)    upon not less than one (1) Business Day’s prior written or telephonic
notice in the case of ABR Loans; and

 

(ii)   upon not less than three (3) Business Days’ prior written or telephonic
notice in the case of Eurodollar Rate Loans;

 

in each case given to Administrative Agent by 12:00 p.m. (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly notify each
Lender).  Upon the giving of any such notice (which notice shall be irrevocable,
except that if a notice of prepayment is given conditioned upon a refinancing
(in whole or in part) of the Obligations and such financing is not consummated,
then such notice of prepayment may be revoked), the principal amount of the
Loans specified in such notice shall become due and payable on the prepayment
date specified therein.  Any such voluntary prepayment shall be applied as
specified in Section 2.14(a).

 

2.13        Mandatory Prepayments.

 

(a)           Asset Sales.  No later than the first Business Day following the
date of receipt by Holdings or any of its Subsidiaries of any Net Asset Sale
Proceeds of Term Priority Collateral (or, after the Discharge of ABL
Obligations, Net Asset Sale Proceeds of any Collateral) , Company shall offer to
prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in an aggregate
amount equal to such Net Asset Sale Proceeds; provided, so long as no Default or
Event of Default shall have occurred and be continuing on or as of such first
Business Day, Company shall have the option (exercisable upon written notice
thereof to Administrative Agent on or prior to such first Business Day),
directly or through one or more of its Subsidiaries, to invest Net Asset Sale
Proceeds within three hundred and sixty five (365) days of receipt thereof in
long-term productive assets of the general type used in the business of Company
and its Subsidiaries or to make capital expenditures in connection with
improvement of capital assets of Company or any of its Subsidiaries (it being
expressly agreed that any Net Asset Sale Proceeds not so invested shall be
immediately offered to be applied as set forth in Sections 2.14(b) and 2.14(d));
provided, further, pending any such investment at any time that Net Asset Sale
Proceeds not so invested shall equal or exceed $5,000,000 in the aggregate, an
amount equal to all such Net Asset Sale Proceeds shall be deposited by Company,
unless waived by Administrative Agent in its sole discretion, in a deposit
account maintained at Administrative Agent as part of the Collateral (it being
understood that, (x) so long as no Default or Event of Default shall have
occurred and be continuing, Administrative Agent shall release or consent to the
release of such funds to Company upon delivery to Administrative Agent of a
certificate of an officer of Company certifying that such funds shall, upon
release of such funds, be applied in accordance this Section 2.13(a) and (y) to
the extent such amounts are not applied in accordance with, and at the times
required by, this Section 2.13(a), all such funds then held by Administrative
Agent shall be immediately applied by Administrative Agent, or immediately

 

39

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

 

paid over to Administrative Agent to be applied, as set forth in
Section 2.14(b)); provided, further, that notwithstanding the foregoing, the Net
Asset Sale Proceeds from any sale leaseback transaction permitted pursuant to
Section 6.1(n) hereof shall be offered to be applied as set forth in
Sections 2.15(b) and 2.14(d).  In the event that prior to the Discharge of the
ABL Obligations Holdings, Company or its Subsidiaries consummates an Asset Sale
consisting of the sale of all or substantially all of the Capital Stock of a
Subsidiary or is a sale of a division or line of business, then, for purposes of
determining the amount of any prepayment required to be made or offered
hereunder, a portion of the proceeds of such Asset Sale in an amount equal to
(i) the net book value of all accounts receivable included in such Asset Sale
plus (ii) the appraised fair market value of all inventory included in such
Asset Sale (based on the most recent appraisal delivered under the Revolving
Credit Facility) shall be treated as ABL Priority Collateral and shall not give
rise to a prepayment hereunder.

 

(b)           Insurance/Condemnation Proceeds.  No later than the first Business
Day following the date of receipt by Holdings or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds
received with respect to Term Priority Collateral (or, after the Discharge of
ABL Obligations, Net Insurance/Condemnation Proceeds of any Collateral), Company
shall offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in
an aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided,
so long as no Default or Event of Default shall have occurred and be continuing
on or as of such first Business Day, Company shall have the option (exercisable
upon written notice thereof to Administrative Agent on or prior to such first
Business Day), directly or through one or more of its Subsidiaries to invest
such Net Insurance/Condemnation Proceeds within three hundred and sixty five
(365) days of receipt thereof in long-term productive assets of the general type
used in the business of Holdings and its Subsidiaries, which investment may
include the repair, restoration or replacement of the applicable assets thereof
(it being expressly agreed that any Net Insurance/Condemnation Proceeds not so
invested shall immediately be offered to be applied as set forth in
Sections 2.14(b) and 2.14(d)); provided, further, pending any such investment at
any time that Net Insurance/Condemnation Proceeds not so invested shall equal or
exceed $5,000,000 in the aggregate, an amount equal to all such Net
Insurance/Condemnation Proceeds shall be deposited by Company, unless waived by
Administrative Agent in its sole discretion, in a deposit account maintained at
Administrative Agent (it being understood that, (x) so long as no Default or
Event of Default shall have occurred and be continuing, Administrative Agent
shall release or consent to the release of such funds to Company upon delivery
to Administrative Agent of a certificate of an officer of Company certifying
that such funds shall, upon release of such funds, be applied in accordance this
Section 2.13(b) and (y) to the extent such amounts are not applied in accordance
with, and at the times required by, this Section 2.13(b), all such funds then
held by Administrative Agent shall be immediately applied by Administrative
Agent, or immediately paid over to Administrative Agent to be applied, as set
forth in Section 2.14(b)).

 

(c)           Issuance of Debt.  No later than the first Business Day following
the date of receipt by Holdings or any of its Subsidiaries of any Cash proceeds
from (i) the incurrence of any Indebtedness of Holdings or any of its
Subsidiaries (other than with respect to any Indebtedness permitted to be
incurred pursuant to Section 6.1) or (ii) the incurrence of any Indebtedness
permitted to be incurred pursuant to Section 6.1(k), Company shall, in each
case, offer to prepay the Loans as set forth in Sections 2.14(b) and 2.14(d) in
an aggregate amount equal to 100% of such proceeds, net of underwriting
discounts and commissions and other

 

40

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

 

reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses and in the case of Indebtedness permitted pursuant to
Section 6.1(k), Indebtedness used in connection with a Permitted Acquisition or
refinancing other Indebtedness incurred in connection with a Permitted
Acquisition.

 

(d)           Consolidated Excess Cash Flow.  In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year
2011 but in the case of such Fiscal Year, calculated for the period from the
Closing Date to December 31, 2011), Company shall, no later than one hundred
fifty (150) days after the end of such Fiscal Year, offer to prepay the Loans as
set forth in Sections 2.14(b) and 2.14(d) in an aggregate amount equal to 50% of
such Consolidated Excess Cash Flow; provided, however, that if the Leverage
Ratio as of the last day of the most recently completed Fiscal Year for which
financial statements have been delivered pursuant to Section 5.1(c) is less than
or equal to 3.00 to 1.00, Company shall not be required to offer to prepay the
Loans pursuant to this Section 2.13(d); provided, further that Company shall not
be required to make any offer to prepay the Loans pursuant to this
Section 2.13(d) at any time if after giving effect to such prepayment, the
Excess Cash Flow Payment Conditions for mandatory prepayments pursuant to this
Section 2.13(d) would not be satisfied.  In the event that Company is not
required to offer to make a payment during the first 150 days of a Fiscal Year
because the Excess Cash Flow Payment Conditions for such payment were not
satisfied and after the 150 days Company satisfies the Excess Cash Flow Payment
Conditions, then within 10 Business Days of satisfying such Excess Cash Flow
Payment Conditions, Company shall make an offer to prepay in accordance with
this Section 2.13(d).

 

(e)           Prepayment Certificate.  Concurrently with any prepayment of the
Loans pursuant to Sections 2.13(a) through 2.13(d), Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds or Consolidated Excess
Cash Flow as the case may be.  In the event that Company shall subsequently
determine that the actual amount received exceeded the amount set forth in such
certificate, Company shall promptly make an additional prepayment of the Loans
and Company shall concurrently therewith deliver to Administrative Agent a
certificate of an Authorized Officer demonstrating the derivation of such
excess.

 

2.14        Application of Prepayments/Reductions.

 

(a)           Application of Voluntary Prepayments.  Any prepayment of any Loan
pursuant to Section 2.12 shall be applied to prepay Term Loans on a pro rata
basis to the remaining scheduled Installments of principal of the Term Loans.

 

(b)           Application of Mandatory Prepayments.  Subject to Section 2.14(d),
any prepayment of any Loan pursuant to Section 2.13 shall be applied to prepay
Term Loans on a pro rata basis to the remaining scheduled Installments of
principal of the Term Loans.

 

(c)           Application of Prepayments of Loans to ABR Loans and Eurodollar
Rate Loans.  Any prepayment thereof shall be applied first to ABR Loans to the
full extent thereof before application to Eurodollar Rate Loans, in each case in
a manner which minimizes the amount of any payments required to be made by
Borrower pursuant to Section 2.17(c).

 

41

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

 

(d)           Lender Opt-out.  With respect to any prepayment of Term Loans
pursuant to Section 2.13, any Lender, at its option, may elect not to accept
such prepayment.  Upon the dates set forth in Section 2.13 for any such
prepayment of Term Loans, Borrower shall notify the Administrative Agent of the
amount that is available to prepay the Term Loans (the “Prepayment Amount”). 
Promptly after the date of receipt of such notice, the Administrative Agent
shall provide written notice (the “First Offer”) to the Lenders of the amount
available to prepay the Term Loans.  Any Lender declining such prepayment (a
“Declining Lender”) shall give written notice thereof to the Administrative
Agent by 11:00 a.m. no later than two (2) Business Days after the date of such
notice from the Administrative Agent.  On such date the Administrative Agent
shall then provide written notice (the “Second Offer”) to the Lenders other than
the Declining Lenders (such Lenders being the “Accepting Lenders”) of the
additional amount available (due to such Declining Lenders’ declining such
prepayment) to prepay Term Loans owing to such Accepting Lenders, such available
amount to be allocated on a pro rata basis among the Accepting Lenders that
accept the Second Offer.  Any Lender declining prepayment pursuant to such
Second Offer shall give written notice thereof to the Administrative Agent by
11:00 a.m. no later than one (1) Business Day after the date of such notice of a
Second Offer.  Borrower shall prepay the Loans as set forth in Section 2.13
within one Business Day after its receipt of notice from the Administrative
Agent of the aggregate amount of such prepayment.  Amounts remaining after the
allocation of accepted amounts with respect to the First Offer and the Second
Offer to Accepting Lenders shall be retained by Borrower.

 

2.15        General Provisions Regarding Payments.

 

(a)           Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or other Obligations) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set off or counterclaim.  Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the Administrative Agent
at its offices at 270 Park Avenue, New York, New York, except that payments
pursuant to Sections 2.17, 2.18, 2.19, 10.2 and 10.3 shall be made directly to
the Persons entitled thereto.  The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension.  All payments hereunder shall be made in dollars.

 

(b)           All payments in respect of the principal amount of any Loan shall
be accompanied by payment of accrued interest on the principal amount being
repaid or prepaid. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

 

42

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

 

(c)           If any Lender shall, by exercising any right of set off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Term Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Term Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Term Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Term Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Term Loans to any
assignee or participant, other than to Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply) except that
the provisions of this Section 2.15(c) shall not apply to a transfer to a
Sponsor or a Credit Party pursuant to Section 10.6(i).  Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct
creditor of Borrower in the amount of such participation.

 

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

 

(e)           If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.1, 2.4, 2.15(d), 10.3 or 10.4, then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

 

(f)            Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes ABR Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.

 

(g)           If an Event of Default shall have occurred and not otherwise been
waived, and the maturity of the Obligations shall have been accelerated pursuant
to Section 8.1, all

 

43

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

 

payments or proceeds received by Agents hereunder in respect of any of the
Obligations, shall be applied in accordance with the application arrangements
described in Section 7.2 of the Pledge and Security Agreement.

 

2.16        Reserved.

 

2.17        Making or Maintaining Eurodollar Rate Loans.

 

(a)           Inability to Determine Applicable Interest Rate.  If prior to the
commencement of any Interest Period for a Eurodollar Rate Loan:

 

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

 

(ii)   the Administrative Agent is advised by the Requisite Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) for such Interest Period;

 

then the Administrative Agent shall give notice thereof to Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) requests the
conversion of any Loan to, or continuation of any Loan as, a Eurodollar Rate
Loan shall be ineffective and (ii) if any Funding Notice requests a Eurodollar
Rate Loan, such borrowing shall be made as an ABR if the circumstances giving
rise to such notice affect only one Type of Loan, then the other Type of Loans
shall be permitted.

 

(b)           Illegality or Impracticability of Eurodollar Rate Loans.  In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Borrower and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful), or (ii) has become impracticable, as a result of contingencies
occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any
such event, such Lender shall be an “Affected Lender” and it shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Borrower
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly transmit to each other Lender).  Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (2) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by Borrower pursuant to a
Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case
may be) an ABR Loan, (3) the Affected Lender’s

 

44

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

 

obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected
Loans”) shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (4) the Affected Loans shall automatically convert into ABR
Loans on the date of such termination.  Notwithstanding the foregoing, to the
extent a determination by an Affected Lender as described above relates to a
Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding
Notice or a Conversion/Continuation Notice, Borrower shall have the option,
subject to the provisions of Section 2.17(c), to rescind such Funding Notice or
Conversion/Continuation Notice as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Administrative Agent of
such rescission on the date on which the Affected Lender gives notice of its
determination as described above (which notice of rescission Administrative
Agent shall promptly transmit to each other Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.17(b) shall affect the
obligation of any Lender other than an Affected Lender to make or maintain Loans
as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms
hereof.

 

(c)           Compensation for Breakage or Non-Commencement of Interest
Periods.  In the event of (a) the payment of any principal of any Eurodollar
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
Eurodollar Rate Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay any
Eurodollar Rate Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Rate Loan other
than on the last day of the Interest Period applicable thereto as a result of a
request by Borrower pursuant to Section 2.20, then, in any such event, Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Rate Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to Borrower and shall be conclusive absent manifest
error.  Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

(d)           Booking of Eurodollar Rate Loans.  Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.

 

(e)           Assumptions Concerning Funding of Eurodollar Rate Loans. 
Calculation of all amounts payable to a Lender under this Section 2.17 and under
Section 2.18 shall be made as though such Lender had actually funded each of its
relevant Eurodollar Rate Loans through

 

45

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

 

the purchase of a Eurodollar deposit bearing interest at the rate obtained
pursuant to clause (i) of the definition of Adjusted LIBO Rate in an amount
equal to the amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of such Lender to a domestic office
of such Lender in the United States of America; provided, however, each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.17 and under Section 2.18.

 

2.18        Increased Costs; Capital Adequacy.

 

(a)           If any Change in Law shall:

 

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

 

(ii)                                 
                                                                                                                                                                                               
impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Rate Loans made by such Lender; or

 

(iii)                              
                                                                                                                                                                                               
subject any Recipient to any Taxes on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto (other than (A) Indemnified Taxes
and (B) Other Connection Taxes on gross or net income, profits or revenue
(including value-added or similar Taxes));

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making or maintaining any Eurodollar Rate Loan
(or of maintaining its obligation to make any such Loan) or to reduce the amount
of any sum received or receivable by such Recipient hereunder (whether of
principal, interest or otherwise), then Borrower will pay to such Recipient, as
the case may be, such additional amount or amounts as will compensate such
Recipient, as the case may be, for such additional costs incurred or reduction
suffered.

 

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

 

(c)           A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to
Borrower and shall be conclusive absent manifest

 

46

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

 

error.  Borrower shall pay such Lender, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.

 

(d)           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 Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender,
notifies Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

2.19        Taxes; Withholding, etc.

 

(a)           Withholding of Taxes; Gross-Up.  Each payment by any Credit Party
under any Credit Document shall be made without withholding for any Taxes,
unless such withholding is required by any law.  If any Withholding Agent
determines, in its sole discretion exercised in good faith, that it is so
required to withhold Taxes, then such Withholding Agent may so withhold and
shall timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law.  If such Taxes are Indemnified
Taxes, then the amount payable by such Credit Party shall be increased as
necessary so that, net of such withholding (including such withholding
applicable to additional amounts payable under this Section), the applicable
Recipient receives the amount it would have received had no such withholding
been made.

 

(b)           Payment of Other Taxes by Borrower.  Borrower shall timely pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

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

 

(d)           Indemnification by the Credit Parties.  The Credit Parties shall
jointly and severally indemnify each Recipient for the full amount of any
Indemnified Taxes that are paid or payable by such Recipient in connection with
any Credit Document (including amounts paid or payable under this
Section 2.19(d)) and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority.  The indemnity under this
Section 2.19(d) shall be paid within 10 days after the Recipient delivers to any
Credit Party a certificate stating the amount of any Indemnified Taxes so paid
or payable by such Recipient and describing the basis for the indemnification
claim.  Such certificate shall be conclusive of the amount so paid or payable
absent manifest error.  Such Recipient shall deliver a copy of such certificate
to the Administrative Agent.

 

47

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

 

(e)           Indemnification by the Lenders.  Each Lender shall severally
indemnify the Administrative Agent and the Collateral Agent for the full amount
of any Taxes (but, in the case of any Indemnified Taxes, only to the extent that
any Credit Party has not already indemnified the Administrative Agent or the
Collateral Agent for such Indemnified Taxes and without limiting the obligation
of the Credit Parties to do so) attributable to such Lender that are paid or
payable by the Administrative Agent or the Collateral Agent in connection with
any Credit Document and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  The indemnity under this
Section 2.19(e) shall be paid within 10 days after the Administrative Agent or
the Collateral Agent delivers to the applicable Lender a certificate stating the
amount of Taxes so paid or payable by the Administrative Agent or the Collateral
Agent.  Such certificate shall be conclusive of the amount so paid or payable
absent manifest error.

 

(f)            Status of Lenders.  (i)  Any Lender that is entitled to an
exemption from, or reduction of, any applicable withholding Tax with respect to
any payments under any Credit Document shall deliver to Borrower and the
Administrative Agent, at the time or times reasonably requested by Borrower or
the Administrative Agent, such properly completed and executed documentation
reasonably requested by Borrower or the Administrative Agent as will permit such
payments to be made without, or at a reduced rate of, withholding.  In addition,
any Lender, if requested by Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by law or reasonably requested by Borrower
or the Administrative Agent as will enable Borrower or the Administrative Agent
to determine whether or not such Lender is subject to any withholding (including
backup withholding) or information reporting requirements.  Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 2.19(f)(ii)(A) through (E) below) shall not be required if
in the Lender’s judgment such completion, execution or submission would subject
such Lender to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Lender.  Upon the reasonable
request of such Borrower or the Administrative Agent, any Lender shall update
any form or certification previously delivered pursuant to this
Section 2.19(f).  If any form or certification previously delivered pursuant to
this Section expires or becomes obsolete or inaccurate in any respect with
respect to a Lender, such Lender shall promptly (and in any event within 10 days
after such expiration, obsolescence or inaccuracy) notify such Borrower and the
Administrative Agent in writing of such expiration, obsolescence or inaccuracy
and update the form or certification if it is legally eligible to do so.

 

(ii)   Without limiting the generality of the foregoing, if Borrower is a U.S.
Person, any Lender with respect to such Borrower shall, if it is legally
eligible to do so, deliver to such Borrower and the Administrative Agent (in
such number of copies reasonably requested by such Borrower and the
Administrative Agent) on or prior to the date on which such Lender becomes a
party hereto, duly completed and executed copies of whichever of the following
is applicable:

 

48

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

 

(A)  in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that
payments made to such Lender under the Credit Documents are exempt from U.S.
Federal backup withholding tax;

 

(B)   in the case of a Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States is a party (1) with respect to payments of
interest under any Credit Document, IRS Form W-8BEN establishing an exemption
from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest”
article of such tax treaty and (2) with respect to any other applicable payments
under this Agreement, IRS Form W-8BEN establishing an exemption from, or
reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or
“other income” article of such tax treaty;

 

(C)   in the case of a Non-U.S. Lender for whom payments under this Agreement
constitute income that is effectively connected with the conduct of a trade or
business in the United States by such Lender, IRS Form W-8ECI;

 

(D)  in the case of a Non-U.S. Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Internal Revenue Code both
(1) IRS Form W-8BEN and (2) a certificate substantially in the form of Exhibit F
(a “U.S. Tax Certificate”) to the effect that such Lender is not (a) a “bank”
within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (b) a
“10 percent shareholder” of Borrower within the meaning of
Section 881(c)(3)(B) of the Internal Revenue Code and (c) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code;

 

(E)   in the case of a Non-U.S. Lender that is not the beneficial owner of
payments made under this Agreement (including a partnership or a participating
Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms
prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that
would be required of each such beneficial owner or partner of such partnership
if such beneficial owner or partner were a Lender; provided, however, that if
the Lender is a partnership and one or more of its partners are claiming the
exemption for portfolio interest under Section 881(c) of the Internal Revenue
Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners;
or

 

(F)   any other form prescribed by law as a basis for claiming exemption from,
or a reduction of, U.S. Federal withholding Tax together with such supplementary
documentation necessary to enable Borrower or

 

49

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

 

the Administrative Agent to determine the amount of Tax (if any) required by law
to be withheld.

 

(iii)  If a payment made to a Lender under any Credit Document would be subject
to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as
applicable), such Lender shall deliver to the Withholding Agent, at the time or
times prescribed by law and at such time or times reasonably requested by the
Withholding Agent, such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such
additional documentation reasonably requested by the Withholding Agent as may be
necessary for the Withholding Agent to comply with its obligations under FATCA,
to determine that such Lender has or has not complied with such Lender’s
obligations under FATCA and, as necessary, to determine the amount to deduct and
withhold from such payment.  Solely for purposes of this Section 2.19(f)(iii),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(g)           Treatment of Certain Refunds.  If any party determines, in its
sole discretion exercised in good faith, that it has received a refund of any
Taxes as to which it has been indemnified pursuant to this Section 2.19
(including additional amounts paid pursuant to this Section 2.19), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including any Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund).  Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid to such indemnified party pursuant to the
previous sentence (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event such indemnified party is required
to repay such refund to such Governmental Authority.  Notwithstanding anything
to the contrary in this Section 2.19(g), in no event will any indemnified party
be required to pay any amount to any indemnifying party pursuant to this
Section 2.19(g) if such payment would place such indemnified party in a less
favorable position (on a net after-Tax basis) than such indemnified party would
have been in if the indemnification payments or additional amounts giving rise
to such refund had never been paid.  This Section 2.19(g) shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes which it deems confidential) to the
indemnifying party or any other Person.

 

2.20        Obligation to Mitigate.  Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans, as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender to receive payments under Section 2.17,
2.18 or 2.19, it will, to the extent not inconsistent with the internal policies
of such Lender and any applicable legal or regulatory restrictions, use
reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions,
including any Affected Loans, through another office of such Lender, or (b) take
such other measures as such Lender may deem reasonable, if as a result thereof
the circumstances which would cause such Lender to be an Affected Lender

 

50

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

 

would cease to exist or the additional amounts which would otherwise be required
to be paid to such Lender pursuant to Section 2.17, 2.18 or 2.19 would be
materially reduced and if, as determined by such Lender in its sole discretion,
the making, issuing, funding or maintaining of such Loans through such other
office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Loans or the interests of such Lender; provided,
such Lender will not be obligated to utilize such other office pursuant to this
Section 2.20 unless Borrower agrees to pay all incremental expenses incurred by
such Lender as a result of utilizing such other office as described in clause
(i) above.  A certificate as to the amount of any such expenses payable by
Borrower pursuant to this Section 2.20 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Borrower (with a
copy to Administrative Agent) shall be conclusive absent manifest error.

 

2.21        Soft-Call Premium.  In the event that, at any time on or prior to
March 24, 2012, (i) this Agreement is amended or modified or any provision of
this Agreement is waived and such amendment or modification to this Agreement or
such waiver has the effect of reducing the interest rate or the Yield applicable
to the Loans (other than any waiver of default interest) or (ii) Borrower makes
any mandatory or voluntary prepayment of the Loans with the proceeds of any term
loan Indebtedness under any credit facility (including, without limitation, any
new or additional term loans under this Agreement) which term indebtedness has a
lower Yield than the Yield of the Loans, then, Borrower agrees to pay to the
Administrative Agent, (x) in the case of clause (i), for the account of each
Lender that agrees to such amendment (or that is removed pursuant to the last
paragraph of Section 2.22) a fee in an amount equal to 1.00% of such Lender’s
Loans outstanding on the effective date of such amendment and (y) in the case of
clause (ii), for the account of each Lender a fee in an amount equal to 1.00% of
such Lender’s Loans that are being prepaid as a result of such prepayment.

 

2.22        Removal or Replacement of a Lender.  Anything contained herein to
the contrary notwithstanding, in the event that: (a)(i) any Lender (an
“Increased-Cost Lender”) shall give notice to Representative that such Lender is
an Affected Lender or that such Lender is entitled to receive payments under
Section 2.17, 2.18 or 2.19, (ii) the circumstances which have caused such Lender
to be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and (iii) such Lender shall fail to withdraw such notice
within five (5) Business Days after Borrower’s request for such withdrawal; or
(b) in connection with any proposed amendment, modification, termination, waiver
or consent with respect to any of the provisions hereof as contemplated by
Section 10.5(b), the consent of Requisite Lenders shall have been obtained but
the consent of one or more of such other Lenders (each a “Non-Consenting
Lender”) whose consent is required shall not have been obtained; then, with
respect to each such Increased-Cost Lender or Non-Consenting Lender (the
“Terminated Lender”), Borrower may, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, or Administrative
Agent may, elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans, if any, in full to
one or more Eligible Assignees (each a “Replacement Lender”) in accordance with
the provisions of Section 10.6 and Terminated Lender shall pay any fees payable
thereunder in connection with such assignment; provided, (1) on the date of such
assignment, the Replacement Lender shall pay to Terminated Lender an amount
equal to the sum of (A) an amount equal to the principal of, and all accrued
interest on, all outstanding Loans of the Terminated Lender and (B) an amount
equal to all accrued, but theretofore unpaid fees owing to

 

51

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

 

such Terminated Lender pursuant to Section 2.10; (2) on the date of such
assignment, Borrower shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.17(c), 2.18 or 2.19, or otherwise as if it were a
prepayment; and (3) in the event such Terminated Lender is a Non-Consenting
Lender, each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a Non-Consenting
Lender.  Upon the prepayment of all amounts owing to any Terminated Lender, if
any, such Terminated Lender shall no longer constitute a “Lender” for purposes
hereof; provided, any rights of such Terminated Lender to indemnification
hereunder shall survive as to such Terminated Lender.

 

2.23        Incremental Term Loans.

 

(a)           Request and Conditions.  Borrower may by written notice to the
Administrative Agent elect to request the establishment of one or more (but in
no event more than three (3)) additional term loan commitments (the “Additional
Term Loan Commitments”) by an aggregate amount not in excess of $60,000,000. 
Each such notice shall specify (a) the date (each, an “Increased Amount Date”)
on which Borrower proposes that the Additional Term Loan Commitments shall be
effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent or such earlier
date as may reasonably be acceptable to the Administrative Agent and (b) the
identity of each Lender or other Person that is an Eligible Assignee (each, a
“Additional Term Loan Lender”) to whom Borrower proposes any portion of such
Additional Term Loan Commitments be allocated and the amounts of such
allocations; provided that any Lender approached to provide all or a portion of
the Additional Term Loan Commitments may elect or decline, in its sole
discretion, to provide an Additional Term Loan Commitment.  Such Additional Term
Loan Commitments shall become effective, as of such Increased Amount Date;
provided that; (1) the minimum amount of Additional Term Loan Commitments that
may be requested for any Increased Amount Date shall be $10,000,000 and integral
multiples of $1,000,000 in excess of that amount; (2) no Default or Event of
Default shall exist on such Increased Amount Date before or after giving effect
to such Additional Term Loan Commitments; (3) both before and after giving
effect to the making of any Additional Term Loan Commitments, each of the
conditions set forth in Section 3.2 shall be satisfied; (4) the terms of the
Additional Term Loan Commitments shall be reasonably satisfactory to the
Administrative Agent and in compliance with the terms and provisions of this
Section; (5) the Additional Term Loan Commitments, as applicable, shall be
effected pursuant to one or more Term Loan Joinder Agreements executed and
delivered by Borrower, and the Administrative Agent, and each of which shall be
recorded in the Register and shall be subject to the requirements set forth in
Section 2.19(c); and (6) Borrower shall deliver or cause to be delivered any
legal opinions or other documents reasonably requested by Administrative Agent
or Collateral Agent in connection with any such transaction.  Administrative
Agent shall notify Lenders promptly upon receipt of Borrower’s notice of each
Increased Amount Date for any Additional Term Loan Commitments.

 

(b)           Terms.  The terms and provisions of the Additional Term Loan
Commitments shall be identical to the existing Term Loan Commitments; provided
that: (1) the Applicable Margin for such loans shall be determined by Borrower
and the applicable Additional Term Loan Lenders and the interest rate for the
Loans pursuant to the Additional Term Loan Commitments shall be determined by
reference to the Alternate Base Rate and Adjusted LIBO Rate; provided, further
however, that if the initial yield on such Loans pursuant to the Additional

 

52

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

 

Term Loan Commitments (as determined by the Administrative Agent to be equal to
the sum of (x) the margin above the Adjusted LIBO Rate on such Loans, (y) if
such Loans are initially made at a discount or the Lenders making the same
receive an upfront fee (other than any customary arrangement, underwriting or
similar fees that are paid to the arranger of such Loans in its capacity as
such) directly or indirectly from Holdings, Borrower or any Subsidiary for doing
so (the amount of such discount or fee, expressed as a percentage of such Term
Loans, being referred to herein as “Incremental OID”), the amount of such
Incremental OID divided by the lesser of (A) the average life to maturity of
such Loans and (B) four, and (z) the greater of (A) any amount by which the
minimum Adjusted LIBO Rate applicable to such Loans exceeds the minimum Adjusted
LIBO Rate then applicable to the Loans made on the Closing Date, and (B) any
amount by which the minimum Alternate Base Rate applicable to such Loans
pursuant to the Additional Term Loan Commitment exceeds the minimum Alternate
Base Rate then applicable to the Loans made on the Closing Date) exceeds the sum
of (1) the Applicable Margin then in effect for Eurodollar Rate Loans that were
Loans made on the Closing Date, and (2) the upfront fees divided by four, by
more than 50 basis points (the amount of such excess above 50 basis points being
referred to herein as the “Incremental Net Yield”), then the Applicable Margin
then in effect for the Loans made on the Closing Date shall automatically be
increased by the Incremental Net Yield, effective upon the making of the Loans
under such Additional Loan Commitment, provided that to the extent the
Applicable Margin applicable to the other Loans outstanding immediately prior to
the making of the Loans pursuant to such Additional Term Loan Commitment is so
increased, the Applicable Margin on the Loans advanced after the Closing Date
but prior to the relevant Increased Amount Date shall be increased such that the
difference between the Applicable Margin applicable to the Loans made on the
Closing Date and such subsequent Loans remains constant (or, if such Applicable
Margin of both such series of Loans was equal, such Applicable Margin remains
equal); provided, further that all determinations by the Administrative Agent as
to Incremental Net Yield or other matters contemplated by this Section 2.23
shall be conclusive absent manifest error,  and (2) the weighted average life to
maturity of any Additional Terms Loan shall be no earlier than the weighted
average life to maturity of the Term Loans made on the Closing Date.  Loans made
pursuant to the Additional Term Loan Commitments will constitute Obligations
hereunder for all purposes of this Agreement and the Collateral Documents and
will be secured by the Collateral securing the other Obligations.  The parties
hereto acknowledge and agree that the Administrative Agent may hereunder or
pursuant to any Term Loan Joinder Agreement, without the consent of any other
Lenders, effect such amendments to this Agreement and the other Credit Documents
as may be necessary or appropriate, in the opinion of the Administrative Agent,
to effect the provisions of this Section 2.23, including, without limitation,
conforming amendments (which may be in the form of an amendment and restatement)
to provide for the Additional Term Loan Commitments to share ratably in the
benefits of this Agreement and the other Credit Documents (including the accrued
interest and fees in respect thereof) with the Term Loans; provided that such
amendments may not alter the obligations of the Credit Parties under the Credit
Documents except as provided in this Section. In addition, unless otherwise
specifically provided herein, all references in Loan Documents to Term Loans
shall be deemed, unless the context otherwise requires, to include references to
Term Loans made pursuant to new Term Loan Commitments made pursuant to this
Agreement.

 

53

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

 

SECTION 3.     CONDITIONS PRECEDENT

 

3.1          Closing Date.  The obligation of any Lender to make a Credit
Extension on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:

 

(a)           Credit Documents.  Administrative Agent shall have received
(i) sufficient copies of this Agreement, executed and delivered by each
applicable Credit Party, the Agents and Lenders having Term Loan Commitments
hereunder and, (ii) Notes, if any, requested by any Lender pursuant to
Section 2.6(c) in connection with its Term Loan Commitments, executed and
delivered by Borrower.

 

(b)           Organizational Documents; Incumbency.  Administrative Agent shall
have received (i) copies of each Organizational Document for each Credit Party,
certified as of a recent date prior to the Closing Date by the appropriate
governmental official or, as applicable, by an officer of such Credit Party;
(ii) signature and incumbency certificates of the officers of each Credit Party
executing the Credit Documents to which it is a party; (iii) resolutions of the
Board of Directors or similar governing body of each Credit Party approving and
authorizing the execution, delivery and performance of this Agreement and the
other Credit Documents to which it is a party, certified as of the Closing Date
by its secretary or an assistant secretary as being in full force and effect
without modification or amendment; (iv) a good standing certificate from the
applicable Governmental Authority of each Credit Party’s jurisdiction of
incorporation, organization or formation and in each jurisdiction in which it is
qualified as a foreign corporation or other entity to do business, each dated a
recent date prior to the Closing Date; and (v) such other documents as
Administrative Agent may reasonably request.

 

(c)           Governmental Authorizations and Consents.

 

(i)                     Each Credit Party shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated under
this Agreement and each of the foregoing shall be in full force and effect and
in form and substance reasonably satisfactory to Administrative Agent.

 

(ii)                  Each of the Lenders shall have received, at least five
(5) Business Days in advance of the Closing Date, all documentation and other
information required by Governmental Authorities under applicable
“know-your-customer” and anti-money laundering rules and regulations, including,
without limitation, as required by the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
PATRIOT ACT) Act of 2001.

 

(d)           Term Priority Collateral.  The Administrative Agent shall be
satisfied with the valid perfected First Priority security interest in favor of
Collateral Agent, for the benefit of Secured Parties, in the Term Priority
Collateral.

 

(e)           ABL Priority Collateral.  The Administrative Agent shall be
satisfied with the valid perfected Second Priority security interest in favor of
Collateral Agent, for the benefit of Secured Parties, in the ABL Priority
Collateral of each Credit Party.

 

54

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

 

(f)            Opinion of Counsel to Credit Parties.  Lenders and their
respective counsel shall have received originally executed copies of the
favorable written opinion of Foley & Lardner LLP, counsel for Credit Parties, in
form and substance satisfactory to the Administrative Agent, dated as of the
Closing Date (and each Credit Party hereby instructs such counsel to deliver
such opinion to Agents and Lenders).

 

(g)           Fees.  Borrower shall have paid to Arranger and Agents the fees
and other amounts payable on the Closing Date referred to in Section 2.10.

 

(h)           Solvency Certificate.  On the Closing Date, Administrative Agent
shall have received a Solvency Certificate dated as of the Closing Date and
addressed to Administrative Agent and Lenders, in form, scope and substance
satisfactory to Administrative Agent, with appropriate attachments and
demonstrating that after giving effect to the transactions contemplated by the
Credit Documents and the Revolving Credit Documents, Borrower is and will be,
and Holdings and its Subsidiaries (on a consolidated basis) are and will be
Solvent.

 

(i)            No Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the opinion of Administrative Agent, singly or
in the aggregate, could reasonably be expected to restrain, prevent or impose
materially burdensome conditions on the transactions contemplated by this
Agreement or the other Credit Documents.

 

(j)            No Material Adverse Effect.  Since December 31, 2010, there shall
not have occurred a material adverse effect upon the business, operations,
properties, assets or financial condition of Company and its Subsidiaries, taken
as a whole.

 

(k)           Existing Term Loan Credit Agreement Prepayments.  The
Administrative Agent shall be satisfied that, concurrently with the borrowing of
the Term Loans on the Closing Date, the Existing Term Loan Credit Agreement will
be terminated, all Liens securing obligations under the Existing Term Loan
Credit Agreement will be released, and all obligations under the Existing Term
Loan Credit Agreement repaid in full.

 

(l)            Completion of Proceedings.  All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be satisfactory in form
and substance to Administrative Agent and such counsel, and Administrative Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably request.

 

(m)          Revolving Credit Facility.  Borrower shall have entered into the
Revolving Credit Facility and the Revolving Credit Documents shall be
satisfactory to the Administrative Agent.

 

(n)           Blocked Account Agreement.  Enter into a Blocked Account Agreement
with respect to each Deposit Account of any Credit Party.

 

55

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

 

(o)           Closing Date Certificate.  The Administrative Agent shall have
received a certificate signed by the chief financial officer of Borrower dated
the Closing Date, certifying (A) that the conditions specified in
Section 3.1(a) have been satisfied, (B) that the representations and warranties
contained in Section 4 are true and correct and (C) that no event shall have
occurred and be continuing or would result from the consummation of the Credit
Extensions on the Closing Date that would constitute an Event of Default or a
Default.

 

(p)           Funding Notice.  Administrative Agent shall have received a fully
executed and delivered Funding Notice.

 

(q)           Representations and Warranties.  As of the Closing Date, the
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects on and as of the
Closing Date to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an earlier
date, in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date.

 

(r)            Event of Default or a Default.  As of the Closing Date, no event
shall have occurred and be continuing or would result from the consummation of
the Credit Extensions that would constitute an Event of Default or a Default.

 

(s)           Real Estate Asset Deliverables.  With respect to any Term Priority
Collateral that is a Real Estate Asset, Collateral Agent shall have received all
Real Estate Asset Deliverables other than those listed in clause (vi) of such
definition.

 

(t)            Ratings.   The Company shall have obtained ratings for the credit
facility hereunder from each of S&P and Moody’s.

 

(u)           Financial Statements.  The Administrative Agent shall have
received (a) GAAP audited consolidated balance sheets and related statements of
income, stockholders’ equity and cash flows of the Company for the 2010, 2009
and 2008 fiscal years (and, to the extent available, the related unaudited
consolidating financial statements) and (b) GAAP unaudited consolidated and (to
the extent available) consolidating balance sheets and related statements of
income and cash flows of the Company for each subsequent fiscal quarter ended 30
days before the Closing Date.

 

Each Lender, by delivering its signature page to this Agreement on the Closing
Date, shall be deemed to have acknowledged receipt of, and consented to and
approved, each Credit Document and each other document required to be approved
on the Closing Date.

 

3.2          Notices.  Any Notice shall be executed by an Authorized Officer in
a writing delivered to Administrative Agent.  In lieu of delivering a Notice,
Borrower may give Administrative Agent telephonic notice by the required time of
any proposed borrowing, conversion/continuation, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the
applicable Notice to Administrative Agent on or before the applicable date of
borrowing, continuation/conversion.  Neither Administrative Agent nor any Lender
shall incur any liability to Borrower in acting upon any telephonic notice
referred to

 

56

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

 

above that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized on behalf of Borrower or for
otherwise acting in good faith.

 

SECTION 4.     REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Agreement and to make each Credit
Extension to be made thereby, each Credit Party represents and warrants to each
Lender, on the Closing Date and on each Credit Date, that the following
statements are true and correct:

 

4.1          Organization; Requisite Power and Authority; Qualification.  Each
of Holdings and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization as identified
in Schedule 4.1 (subject to such changes as are permitted by Section 6.9 and to
any Permitted Holdings Reincorporation), (b) has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Credit Documents to
which it is a party and to carry out the transactions contemplated thereby, and
(c) is qualified to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so qualified or in
good standing has not had, and could not be reasonably expected to have, a
Material Adverse Effect.

 

4.2          Capital Stock and Ownership.  The Capital Stock of each of Holdings
and its Subsidiaries has been duly authorized and validly issued and is fully
paid and non-assessable, except in the case of any corporation organized in the
state of Wisconsin or any other corporation licensed to do business in the state
of Wisconsin, subject to personal liability which may be imposed on shareholders
by former Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for
debts incurred prior to June 14, 2006 (for debts incurred on or after such date,
such Section has been repealed).  Except as set forth on Schedule 4.2, as of the
date hereof, there is no existing option, warrant, call, right, commitment or
other agreement to which Holdings or any of its Subsidiaries is a party
requiring, and there is no membership interest or other Capital Stock of
Holdings or any of its Subsidiaries outstanding which upon conversion or
exchange would require, the issuance by Holdings or any of its Subsidiaries of
any additional membership interests or other Capital Stock of Holdings or any of
its Subsidiaries or other Securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase, a membership interest or
other Capital Stock of Holdings or any of its Subsidiaries.  Schedule 4.2
correctly sets forth the ownership interest of Holdings and each of its
Subsidiaries in their respective Subsidiaries as of the Closing Date.

 

4.3          Due Authorization.  The execution, delivery and performance of the
Credit Documents have been duly authorized by all necessary action on the part
of each Credit Party that is a party thereto.

 

4.4          No Conflict.  The execution, delivery and performance by Credit
Parties of the Credit Documents to which they are parties and the consummation
of the transactions contemplated by the Credit Documents do not and will not
(a) violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, any of

 

57

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

 

the Organizational Documents of Holdings or any of its Subsidiaries; (b) violate
any order, judgment or decree of any court or other agency of government binding
on Holdings or any of its Subsidiaries except to the extent such violation could
not be reasonably expected to have a Material Adverse Effect; (c) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Holdings or any of its Subsidiaries
except to the extent such violation could not reasonably be expected to have a
Material Adverse Effect; (d) result in or require the creation or imposition of
any Lien upon any of the properties or assets of Holdings or any of its
Subsidiaries (other than any Liens created under any of the Credit Documents in
favor of Collateral Agent, on behalf of Secured Parties); or (e) require any
approval of stockholders, members or partners or any approval or consent of any
Person under any Contractual Obligation of Holdings or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Closing Date and disclosed in writing to Lenders.

 

4.5          Governmental Consents.  The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except to the extent
obtained on or before the Closing Date, and except for filings and recordings
with respect to the Collateral made or to be made, or otherwise delivered to
Collateral Agent for filing and/or recordation, as of the Closing Date.

 

4.6          Binding Obligation.  Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and is the legally
valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors’ rights generally or by equitable principles relating
to enforceability.

 

4.7          Financial Condition.  Holdings has heretofore delivered to
Administrative Agent the audited consolidated balance sheet of Company and its
Subsidiaries for the Fiscal Years ended December 31, 2008, December 31, 2009 and
December 31, 2010, and the related audited consolidated statements of income,
stockholders’ equity and cash flows of each of such companies for each such
Fiscal Year then ended, together with all related notes and schedules thereto. 
All such statements of Company and its Subsidiaries were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
of the entities described in such financial statements as at the respective
dates thereof and the results of operations and cash flows of the entities
described therein for each of the periods then ended, subject, in the case of
such unaudited financial statements, to changes resulting from audit and normal
year-end adjustments and the absence of footnotes.  As of the Closing Date,
neither Company nor any of its Subsidiaries has any contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
and which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
and its Subsidiaries taken as a whole.

 

58

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

 

4.8          Projections.  On and as of the Closing Date, the projections of
Holdings and its Subsidiaries for (x) the period Fiscal Year 2011 through and
including Fiscal Year 2015 and (y) the Fiscal Quarters beginning with the second
Fiscal Quarter of 2011 through and including the fourth Fiscal Quarter of 2011
(collectively, the “Projections”) previously delivered to Administrative Agent
are based on good faith estimates and assumptions made by the management of
Holdings, it being recognized, however, that projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by the Projections may differ from the projected results and that the
differences may be material.

 

4.9          No Material Adverse Change.  Since December 31, 2010, except as set
forth in Schedule 4.9, no event, circumstance or change has occurred that has
caused or evidences, or could reasonably be expected to cause, either in any
case or in the aggregate, a Material Adverse Effect.

 

4.10        No Restricted Payments.  Neither Holdings nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Payment or agreed to do so except
as permitted pursuant to Section 6.5.

 

4.11        Litigation; Adverse Facts.  Except as set forth in Schedule 4.11
hereto, there are no Adverse Proceedings, individually or in the aggregate, that
could reasonably be expected to have a Material Adverse Effect.  Neither
Holdings nor any of its Subsidiaries (a) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (b) is subject to
or in default with respect to any final judgments, writs, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

4.12        Payment of Taxes.  Except as otherwise permitted under Section 5.3,
all tax returns and reports of Holdings and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes shown on such tax
returns to be due and payable and all assessments, fees and other governmental
charges upon Holdings and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable.  Neither Holdings nor any of its Subsidiaries knows
of any proposed tax assessment against Holdings or any of its Subsidiaries other
than those which are being actively contested by Holdings or such Subsidiary in
good faith and by appropriate proceedings and for which reserves or other
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.

 

4.13        Properties.

 

(a)           Title.  Each of Holdings and its Subsidiaries has (i) good,
marketable and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), and (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements delivered to the Administrative Agent, in each case
except for assets disposed of (x) since the date of such financial statements
and prior to the Closing Date in the

 

59

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

 

ordinary course of business or (y) as otherwise permitted under Section 6.9 and
except for such defects that neither individually nor in the aggregate could
reasonably be expected to have a Material Adverse Effect.  All such properties
and assets are free and clear of Liens other than Permitted Liens.

 

(b)           Real Estate.  As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Real Estate Assets, and (ii) all
leases or subleases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof), if any, affecting each Real Estate Asset
of any Credit Party, regardless of whether such Credit Party is the landlord or
tenant (whether directly or as an assignee or successor in interest) under such
lease or sublease.  Each agreement listed in clause (ii) of the immediately
preceding sentence is in full force and effect and Holdings does not have
knowledge of any default that has occurred and is continuing thereunder, and
each such agreement constitutes the legally valid and binding obligation of each
applicable Credit Party, enforceable against such Credit Party in accordance
with its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors’
rights generally or by equitable principles.

 

(c)           Intellectual Property.  Company and its Subsidiaries own or have
the valid right to use all material Intellectual Property, and all Intellectual
Property is free and clear of any and all Liens other than Liens securing the
Obligations and Liens permitted pursuant to Section 6.2(i).  Any registrations
in respect of the Intellectual Property are in full force and effect and are
valid and enforceable. The conduct of the business of Company and its
Subsidiaries as currently conducted, and as currently contemplated to be
conducted, including, but not limited to, all products, processes or services,
made, offered or sold by Company and its Subsidiaries, does not and will not
infringe upon, violate, misappropriate or dilute any intellectual property of
any third party which infringement, violation, misappropriation or dilution
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of Holdings, Company or any of its Subsidiaries, no third party is infringing
upon or misappropriating, violating or otherwise diluting any Intellectual
Property where such infringement, misappropriation, violation or dilution could
reasonably be expected to have a Material Adverse Effect.  Neither Holdings,
Company nor any of its Subsidiaries is enjoined from using any material
Intellectual Property, and except as could reasonably be expected to have a
Material Adverse Effect, there is no pending or, to the knowledge of Holdings,
Company or any of its Subsidiaries, threatened claim or litigation contesting
(i) any right of Company or any of its Subsidiaries to own or use any
Intellectual Property, or (ii) the validity or enforceability of any
Intellectual Property.

 

4.14        Environmental Matters.  Except as set forth in Schedule 4.14 hereto:
(i) neither Holdings nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written order, consent
decree or settlement agreement with any Person relating to any Environmental
Law, any Environmental Claim, or any Hazardous Materials Activity which
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect; (ii) as of the Closing Date, or except as otherwise reported to
the Administrative Agent after the Closing Date, neither Holdings nor any of its
Subsidiaries has received within the last ten (10) years any letter or request
for information under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. § 9604), or any comparable state law;
(iii) there are and, to each of Holdings’ and its Subsidiaries’ knowledge,

 

60

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

 

have been, no conditions, occurrences, or Hazardous Materials Activities which
would reasonably be expected to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries, which individually or in the aggregate
would reasonably be expected to have a Material Adverse Effect; and (iv) neither
Holdings nor any of its Subsidiaries nor, to any Credit Party’s knowledge, any
predecessor of Holdings or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and none of Holdings’ or any of its Subsidiaries’
operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent, which individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect.  Notwithstanding anything to the
contrary in this Section 4.14, compliance with all current or reasonably
foreseeable future requirements pursuant to or under Environmental Laws would
not be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect and no event or condition has occurred or is occurring with
respect to Holdings or any of its Subsidiaries relating to any Environmental
Law, any Release of Hazardous Materials, or any Hazardous Materials Activity,
including, without limitation, any matter included in Schedule 4.14, which
individually or in the aggregate has had, or would reasonably be expected to
have, a Material Adverse Effect.

 

4.15        No Defaults.  Neither Holdings nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations
or covenants contained in (i) any of its Contractual Obligations (other than the
Credit Documents and the Revolving Credit Documents), and no condition exists
which, with the giving of notice or the lapse of time or both, could constitute
such a default, except where the consequences, direct or indirect, of such
default or defaults, if any, could not reasonably be expected to have a Material
Adverse Effect and (ii) any Credit Document and any Revolving Credit Document.

 

4.16        Governmental Regulation.  Neither Holdings nor any of its
Subsidiaries is subject to regulation under the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.  Neither
Holdings nor any of its Subsidiaries is a “registered investment company” or a
company “controlled” by a “registered investment company” or a “principal
underwriter” of a “registered investment company” as such terms are defined in
the Investment Company Act of 1940.

 

4.17        Margin Regulations.  Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. 
Neither the making of the Loans nor the pledge of the Collateral pursuant to the
Collateral Documents, violates Regulation T, U or X of the Board of Governors of
the Federal Reserve System.  No part of the proceeds of the Loans made to such
Credit Party 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, or is inconsistent with, the
provisions of Regulation T, U or X of said Board of Governors.

 

4.18        Employee Matters.  Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
Material Adverse Effect.  Except as set forth in Schedule 4.18, there is (a) no
unfair labor practice complaint pending

 

61

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

 

against Holdings or any of its Subsidiaries, or to the best knowledge of
Holdings and Company, threatened against any of them before the National Labor
Relations Board and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement that is so pending against Holdings or
any of its Subsidiaries or to the best knowledge of Holdings and Company,
threatened against any of them, and the hours worked by and payments made to
employees of Holdings or any of its Subsidiaries have not violated the Fair
Labor Standards Act or any other law dealing with such matters, (b) no strike or
work stoppage in existence or threatened involving Holdings or any of its
Subsidiaries, and (c) to the best knowledge of Holdings and Company, no union
representation question existing with respect to the employees of Holdings or
any of its Subsidiaries and, to the best knowledge of Holdings and Company, no
union organization activity that is taking place; which in each case in clause
(a), (b) or (c) above (including, without limitation, any matter included in
Schedule 4.18), could either individually or in the aggregate reasonably be
expected to have a Material Adverse Effect.

 

4.19        Employee Benefit Plans.  Holdings, each of its Subsidiaries and each
of their respective ERISA Affiliates are in material compliance with all
applicable provisions and requirements of ERISA and the Internal Revenue Code
and the regulations and published interpretations thereunder with respect to
each Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan in all material respects.  Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
has received a favorable determination letter from the Internal Revenue Service
indicating that such Employee Benefit Plan is so qualified and nothing has
occurred subsequent to the issuance of such determination letter which
reasonably would be expected to cause such Employee Benefit Plan to lose its
qualified status.  No liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Employee Benefit Plan or any trust
established under Title IV of ERISA has been or reasonably is expected to be
incurred by Holdings, any of its Subsidiaries or any of their ERISA Affiliates. 
Except as set forth in Schedule 4.19 (and except for changes in matters
identified in Schedule 4.19 that are not, individually or in the aggregate,
material), no ERISA Event has occurred or is reasonably expected to occur. 
Except as set forth in Schedule 4.19, and except to the extent required under
Section 4980B of the Internal Revenue Code or similar state laws, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Holdings, any of
its Subsidiaries or any of their respective ERISA Affiliates.  Except as set
forth in Schedule 4.19 (and except for changes in matters identified in
Schedule 4.19 that are not, individually or in the aggregate, material), the
present value of the aggregate benefit liabilities under each Pension Plan
sponsored, maintained or contributed to by Holdings, any of its Subsidiaries or
any of their ERISA Affiliates, (determined as of the end of the most recent plan
year on the basis of the actuarial assumptions specified for funding purposes in
the most recent actuarial valuation for such Pension Plan), did not exceed the
aggregate current value of the assets of such Pension Plan.  Neither Holdings,
its Subsidiaries nor their respective ERISA Affiliates maintains, contributes to
or is required to contribute to any Multiemployer Plan and has not incurred any
liability in respect of any Multiemployer Plan that has not been satisfied in
full.

 

4.20        Certain Fees.  Except as otherwise disclosed in writing to
Administrative Agent and Arranger, no broker’s or finder’s fee or commission
will be payable with respect hereto or any of the transactions contemplated
hereby, and Company hereby indemnifies Lenders, Agents

 

62

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

 

and Arranger against, and agrees that it will hold Lenders, Agents and Arranger
harmless from, any claim, demand or liability for any such broker’s or finder’s
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.

 

4.21        Solvency.  Borrower is, and Holdings and its Subsidiaries (on a
consolidated basis), are, and, upon the incurrence of any Obligation by any
Credit Party on any date on which this representation and warranty is made, will
be, Solvent.

 

4.22        Collateral.

 

(a)           Collateral Documents. The security interests created in favor of
Collateral Agent under the Collateral Documents constitute, as security for the
obligations purported to be secured thereby, a legal, valid and enforceable
security interest in all of the Collateral referred to therein in favor of
Collateral Agent for the benefit of the Lenders.  The security interests in and
Liens upon the Collateral described in the Collateral Documents are valid and
perfected First Priority or Second Priority Liens (in accordance with the
priorities set forth in the Intercreditor Agreement) to the extent such security
interests and Liens can be perfected by such filings and recordations.  No
consents, filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests purported to be created by
any of the Collateral Documents or to give third parties constructive notice
thereof, other than (i) such as have been obtained and which remain in full
force and effect or will be completed promptly following the date of creation of
the Lien and (ii) the periodic filing of UCC continuation statements in respect
of UCC financing statements filed by or on behalf of Collateral Agent.

 

(b)           Absence of Third Party Filings.  Except such as may have been
filed in favor of Collateral Agent as contemplated by Section 4.23(a) above and
except as set forth on Schedule 4.22 annexed hereto or, after the Closing Date,
as may have been filed with respect to a Lien permitted by Section 6.2, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing with respect to a Lien covering
all or any part of the Collateral is on file with the United States Patent and
Trademark Office or United States Copyright Office or any other Governmental
Authority.

 

4.23        Disclosure.  No representation or warranty of Holdings and its
Subsidiaries contained in any Credit Document or in any other documents,
certificates or written statements, nor any of the other reports, financial
statements, certificates or other information furnished by or on behalf of
Holdings or any of its Subsidiaries to the Administrative Agent or any Lender in
connection with the negotiation of this Agreement or delivered hereunder
contains any untrue statement of a material fact or omits (when taken as a
whole) to state a material fact (known to Holdings or Company, in the case of
any document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made.  Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Holdings or Company to be reasonable at
the time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual

 

63

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

 

results during the period or periods covered by any such projections may differ
from the projected results.  There is no fact known to Holdings or Company
(other than matters of a general economic nature) that, individually or in the
aggregate, has had, or could reasonably be expected to result in, a Material
Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.

 

4.24        Deposit Accounts.

 

Annexed hereto as Schedule 4.24 is a list of all Deposit Accounts maintained by
the Credit Parties as of the Closing Date, which Schedule includes, with respect
to each deposit account (i) the name and address of the depository; (ii) the
account number(s) maintained with such depository; and (iii) a contact person at
such depository.

 

SECTION 5.     AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that so long as any Commitment is in
effect and until payment in full of all Obligations, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.

 

5.1          Financial Statements and Other Reports.  Holdings will deliver to
Administrative Agent and Collateral Agent for each Lender:

 

(a)           [RESERVED]

 

(b)           Quarterly Financial Statements. Within two (2) Business Days after
the date on which Holdings files or is required to file its Form 10-Q under the
Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings is
not required to file a Form 10-Q under the Exchange Act, within fifty (50) days
after the end of each of the first three Fiscal Quarters of each Fiscal Year
(commencing with the Fiscal Quarter ending March 31, 2011)), (i) the
consolidated and consolidating balance sheets of Holdings and its Subsidiaries
as at the end of such Fiscal Quarter and the related consolidated (and with
respect to statements of income, consolidating) statements of income and cash
flows of Holdings and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year, all prepared
in accordance with GAAP and in reasonable detail and certified by the chief
financial officer, senior vice president-finance, treasurer or controller of
Company or Holdings that they fairly present, in all material respects, the
consolidated financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments and the absence of footnotes, and (ii) a narrative report describing
the financial condition and results of operations of Holdings and its
Subsidiaries for such Fiscal Quarter in form and substance reasonably
satisfactory to Administrative Agent;

 

64

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

 

(c)           Annual Financial Statements.  Within two (2) Business Days after
the date on which Holdings files or is required to file its Form 10-K under the
Exchange Act (but without giving effect to any extension pursuant to Rule 12b-25
under the Exchange Act (or any successor rule) or otherwise) (or, if Holdings is
not required to file a Form 10-K under the Exchange Act, within one hundred
(100) days after the end of each Fiscal Year (commencing with the Fiscal Year
ending December 31, 2011), (i) the consolidated and consolidating balance sheets
of Holdings and its Subsidiaries as at the end of such Fiscal Year and the
related consolidated (and with respect to statements of income, consolidating)
statements of income, stockholder’s equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year, all prepared in
accordance with GAAP and in reasonable detail and certified by the chief
financial officer, senior vice president-finance, treasurer or controller of
Company or Holdings that they fairly present, in all material respects, the
consolidated financial condition of Holdings and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated, and (ii) a narrative report describing the financial
condition and results of operations of Holdings and its Subsidiaries in form and
substance reasonably satisfactory to Administrative Agent; (iii) with respect to
such consolidated financial statements a report thereon of independent certified
public accountants of recognized national standing selected by Holdings, and
reasonably satisfactory to Administrative Agent (which report shall be
unqualified as to going concern and scope of audit, and shall state that such
consolidated financial statements fairly present, in all material respects, the
consolidated financial position of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards) together with a written statement by such independent
certified public accountants stating (1) that their audit examination has
included a review of the terms of the Credit Documents, and (2) whether, in
connection therewith, any condition or event that constitutes a Default or an
Event of Default under Section 6.8 or otherwise with respect to accounting
matters has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof;

 

(d)           Compliance Certificate.  Together with each delivery of financial
statements of Holdings and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate;

 

(e)           Statements of Reconciliation after Change in Accounting
Principles.  If, as a result of any change in accounting principles and policies
from those used in the preparation of the financial statements referred to in
Section 4.7, the consolidated financial statements of Holdings and its
Subsidiaries delivered pursuant to Section 5.1(b) or 5.1(c) will differ in any
material respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made, then, together with the first delivery of
such financial statements after such change, one or more statements of
reconciliation for all such prior financial statements in form and substance
reasonably satisfactory to Administrative Agent;

 

65

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

 

(f)            Notice of Default, etc.  Promptly upon, and in any event within
five (5) days after, any officer of Holdings or any of its Subsidiaries
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to Holdings or any of its
Subsidiaries with respect thereto; (ii) that any Person has given any notice to
Holdings or any of its Subsidiaries or taken any other action with respect to
any claimed default or event or condition of the type referred to in
Section 8.1(b); or (iii) of the occurrence of any event or change that has
caused or evidences or would reasonably be expected to have, either in any case
or in the aggregate, a Material Adverse Effect; a certificate of its Authorized
Officers specifying the nature and period of existence of such condition, event
or change, or specifying the notice given and action taken by any such Person
and the nature of such claimed Event of Default, Default, default, event or
condition, and what action Holdings or the applicable Subsidiary has taken, is
taking and proposes to take with respect thereto;

 

(g)           Notice of Litigation.  Promptly upon, and in any event within five
(5) days after, any officer of Holdings or any of its Subsidiaries obtaining
knowledge of (i) the institution of, or non-frivolous threat of, any Adverse
Proceeding not previously disclosed in writing by Company to Lenders, or
(ii) any material development in any Adverse Proceeding that, in the case of
either (i) or (ii) if adversely determined, could be reasonably expected to have
a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Holdings or any of its
Subsidiaries to enable Lenders and their counsel to evaluate such matters;

 

(h)           ERISA.  (i) Promptly upon and in any event within five (5) days of
becoming aware of the occurrence of or forthcoming occurrence of any ERISA
Event, a written notice specifying the nature thereof, what action Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto; and (ii) with reasonable promptness, copies of
(1) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to each Pension
Plan and (2) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;

 

(i)            Financial Plan.  As soon as practicable and in any event no later
than 90 days after the beginning of each Fiscal Year, a monthly consolidated and
consolidating plan and financial forecast for such Fiscal Year (a “Financial
Plan”), including a forecasted consolidated balance sheet and forecasted
consolidated and consolidating statements of income and consolidated statement
of cash flows of Holdings and its Subsidiaries for such Fiscal Year, together
with pro forma Compliance Certificates for each such Fiscal Year and an
explanation of the assumptions on which such forecasts are based;

 

(j)            Insurance Report.  As soon as practicable and in any event by the
last day of each calendar year, a report in form and substance reasonably
satisfactory to Administrative Agent outlining all material insurance coverage
maintained as of the date of such report by

 

66

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

 

Holdings and its Subsidiaries and all material insurance coverage planned to be
maintained by Holdings and its Subsidiaries in the immediately succeeding
calendar year;

 

(k)           Accountants’ Reports.  Promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all reports
submitted to Holdings or Company by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants, including
any comment letter submitted by such accountants to management in connection
with their annual audit;

 

(l)            [RESERVED];

 

(m)          Environmental Reports and Audits.  As soon as practicable following
receipt thereof, copies of all environmental audits and reports, whether
prepared by personnel of Company or any of its Subsidiaries or by independent
consultants, with respect to environmental matters at any Facility or which
relate to any environmental liabilities of Holdings or its Subsidiaries which,
in any such case, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect; and

 

(n)           Other Information.  (A) Promptly upon their becoming available,
copies of (i) all financial statements, reports, notices and proxy statements
sent or made available generally by Holdings to holders of its Indebtedness or
to holders of its public equity securities or by any Subsidiary of Holdings to
its security holders other than Holdings or another Subsidiary of Holdings,
(ii) all regular and periodic reports and all registration statements and
prospectuses, if any, filed by Holdings or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, (iii) all press releases and other
statements made available generally by Holdings or any of its Subsidiaries to
the public concerning material developments in the business of Holdings or any
of its Subsidiaries, and (B) such other information and data with respect to
Holdings or any of its Subsidiaries (including, without limitation, financial
statements with respect to Holdings and its Subsidiaries) as from time to time
may be reasonably requested by Administrative Agent or any Lender.

 

To the extent that any of the documents required to be delivered pursuant to
Sections 5.1(b), (c) or (n) are also filed with the Securities and Exchange
Commission, Borrower may fulfill such delivery requirements by providing the
Administrative Agent, in writing, an internet link to a corresponding Securities
and Exchange Commission filing that contains information and financial
statements that conform with the requirements of such Sections.

 

5.2          Existence.  Except as otherwise permitted under Section 6.9, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect (i) its existence and (ii) all rights
and franchises, licenses and permits material to the business of Holdings and
its Subsidiaries (on a consolidated basis).

 

5.3          Payment of Taxes and Claims.  Each Credit Party will, and will
cause each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all

 

67

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

 

claims (including claims for labor, services, materials and supplies) for sums
that have become due and payable which, if unpaid, might become a Lien upon any
of its properties or assets; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made
therefor.  No Credit Party will, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Holdings or any of its Subsidiaries).

 

5.4          Maintenance of Properties.  Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties owned by Holdings, Company or its Subsidiaries or used or useful in
the business of Company and its Subsidiaries (including all Intellectual
Property) and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof.

 

5.5          Insurance.  Each Credit Party will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained, with financially sound and
reputable insurers having a financial strength rating of at least A- VII by A.M.
Best Company, such commercial general liability insurance, business interruption
insurance and property insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Company and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for such Persons.  Without limiting the generality of the
foregoing, each Credit Party will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and
(b) replacement value property insurance on the Collateral under such policies
of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses.  Each such policy of insurance shall (i) in the case of each
commercial general liability insurance policy, name the Administrative Agent,
the Collateral Agent and the Lenders as an additional insured thereunder as its
interests may appear, (ii) in the case of each property or business interruption
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to Collateral Agent, that names the Collateral Agent, on
behalf of Lenders as the loss payee thereunder and (iii) provide for at least
thirty (30) days’ prior written notice to Collateral Agent of any material
modification or cancellation of such policy.

 

5.6          Inspections.  Each Credit Party will, and will cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent, Collateral Agent or any Lender (and, in the case of any
Lender, accompanied by Administrative Agent or Collateral Agent) to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect the Collateral, or otherwise to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its
and their properties, assets, affairs,

 

68

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

 

finances and accounts with its and their officers and independent public
accountants (it being understood that, prior to the occurrence and continuance
of an Event of Default, (x) any such discussions or meetings shall be limited to
Administrative Agent and (y) in the case of discussions or meetings with the
independent public accountants, only if Company has been given the opportunity
to participate in such discussions or meetings), all upon reasonable notice and
at such reasonable times during normal business hours and as often as may
reasonably be requested.

 

5.7          Lenders Meetings.  Holdings and Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each calendar year to be held at
Company’s corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.

 

5.8          Compliance with Laws.  Each Credit Party will comply, and shall
cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

 

5.9          Environmental.

 

(a)           Environmental Disclosure.  Each Credit Party will, and will cause
each of its Subsidiaries to, deliver to Administrative Agent and Lenders:

 

(i)    as soon as practicable following receipt thereof, copies of all material
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Holdings or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims; provided, however, that this
Section 5.9(a)(i) shall not apply to communications covered by valid claims of
attorney client privilege or to attorney work product generated by legal counsel
to Holdings or any of its Subsidiaries;

 

(ii)   promptly upon the occurrence thereof, written notice describing in
reasonable detail (1) any Release required to be reported to any federal, state
or local governmental or regulatory agency under any applicable Environmental
Laws, (2) any remedial action taken by Holdings or any other Person in response
to (A) any Hazardous Materials Activities the existence of which has a
reasonable possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (B) any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (3) Holdings or any
of its Subsidiaries’ discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any Environmental
Laws;

 

69

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

 

(iii)  as soon as practicable following the sending or receipt thereof by
Holdings or any of its Subsidiaries, a copy of any and all written
communications to or from any Governmental Authority or any Person bringing an
Environmental Claim against Holdings or any of its Subsidiaries with respect to:
(1) any Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of giving rise to a Material Adverse Effect, (2) any
Release required to be reported to any Governmental Authority, and (3) any
written request for information from any Governmental Authority stating such
Governmental Authority is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity; and

 

(iv)  with reasonable promptness, such other documents and information as from
time to time may be reasonably requested by Administrative Agent in relation to
any matters disclosed pursuant to this Section 5.9(a).

 

(b)           Hazardous Materials Activities, Etc.  Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and
(ii) make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge any obligations it may have to
any Person thereunder where failure to do so would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

5.10        Subsidiaries.  In the event that any Person becomes a Domestic
Subsidiary of Company, Company shall (a) promptly, and in any event within ten
(10) days, cause such Domestic Subsidiary to become a Guarantor hereunder and a
Grantor under the Pledge and Security Agreement by executing and delivering to
Administrative Agent and Collateral Agent a Counterpart Agreement, and (b) take
all such actions and execute and deliver, or cause to be executed and delivered,
all Perfection Deliverables and such documents, instruments, agreements,
opinions and certificates as are similar to those described in
Sections 3.1(b) and 3.1(f), and any other actions required by the Pledge and
Security Agreement.  In the event that any Person becomes a Foreign Subsidiary
of Company, and the ownership interests of such Foreign Subsidiary are owned by
Company or by any Domestic Subsidiary thereof, Company shall, or shall cause
such Domestic Subsidiary to, promptly, and in any event within ten (10) days,
deliver all such documents, instruments, agreements, and certificates as are
similar to those described in Section 3.1(b), and Company shall take, or shall
cause such Domestic Subsidiary to take, all of the actions referred to in clause
(i) of the definition of “Perfection Deliverables” necessary to grant and to
perfect a First Priority of Second Priority Lien (in accordance with the
priorities set forth in the Intercreditor Agreement) in favor of Collateral
Agent, for the benefit of Secured Parties, under the Pledge and Security
Agreement in 66% (or a greater percentage if the pledge of a greater percentage
could not result in adverse tax consequences to Borrower) of the voting equity
interests and 100% of the non-voting equity interests (if any) of such Foreign
Subsidiary. With respect to each such Subsidiary, Company shall promptly send to
Administrative Agent written notice setting forth with respect to such Person
(i) the date on which such Person became a Subsidiary of Company, and (ii) all
of the data required to be set forth in Schedules 4.1 and 4.2 with respect to
all Subsidiaries of Company; provided, such

 

70

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

 

written notice upon Administrative Agent’s approval of the contents therein
shall be deemed to supplement Schedule 4.1 and 4.2 for all purposes hereof. 
Notwithstanding anything to the contrary in this Section 5.10, the requirements
of this Section 5.10 shall not apply to any property or Subsidiary created or
acquired after the Closing Date, as to which the Collateral Agent has determined
in its sole discretion that the collateral value thereof is insufficient to
justify the difficulty, time and/or expense of obtaining a perfected security
interest therein.  The Collateral Agent is hereby authorized by the Lenders to
enter into such amendments to the Collateral Documents as the Collateral Agent
deems necessary to effectuate the provisions of this Section 5.10.

 

5.11        Additional Real Estate Assets.  In the event that any Credit Party
acquires, or any Person that becomes a Credit Party holds, a Real Estate Asset
that is (a) a fee interest with a fair market value equal to or greater than
$500,000 or (b) a leasehold interest with a value that Administrative Agent in
its sole discretion, after consultation with Company, determines is material,
and such interest has not otherwise been made subject to a perfected First
Priority or Second Priority Lien (in accordance with the priorities set forth in
the Intercreditor Agreement) of the Collateral Documents in favor of Collateral
Agent, for the benefit of Secured Parties, then such Credit Party shall,
promptly, and in any event within ten (10) days of such Credit Party acquiring
such Real Estate Asset or such Person becoming a Credit Party, take all such
actions and execute and deliver, or cause to be executed and delivered, all Real
Estate Asset Deliverables and Perfection Deliverables with respect to each such
Real Estate Asset to create in favor of Collateral Agent, for the benefit of
Secured Parties, a valid and, subject to any filing and/or recording referred to
herein, perfected First Priority or Second Priority Lien (in accordance with the
priorities set forth in the Intercreditor Agreement) in such Real Estate Assets,
and reports and other information reasonably satisfactory to Administrative
Agent regarding environmental matters (including, without limitation, a Phase I
Report) with respect to such Real Estate Assets.  In addition to the foregoing,
Company shall, at the request of Requisite Lenders, deliver, from time to time
(but, prior to the occurrence and during the continuance of a Default or Event
of Default, not more than once every two calendar years), to Administrative
Agent such appraisals of Real Estate Assets with respect to which Collateral
Agent has been granted a Lien.  Notwithstanding anything to the contrary in this
Section 5.11, the requirements of this Section 5.11 shall not apply to any Real
Estate Asset acquired after the Closing Date, as to which the Collateral Agent
has determined in its sole discretion that the collateral value thereof is
insufficient to justify the difficulty, time and/or expense of obtaining a
perfected security interest therein.  The Collateral Agent is hereby authorized
by the Lenders to enter into such amendments to the Collateral Documents as the
Collateral Agent deems necessary to effectuate the provisions of this
Section 5.11.

 

5.12        Interest Rate Protection.  Commencing ninety (90) days after the
Closing Date, Company shall maintain in effect at all times one or more Interest
Rate Agreements in form and substance reasonably satisfactory to Administrative
Agent to the extent necessary so that, at all times, interest on at least 25% of
the aggregate outstanding principal amount of the Term Loans is either fixed
rate or covered by such Interest Rate Agreements.

 

5.13        Further Assurances.  At any time or from time to time upon the
request of Administrative Agent or Collateral Agent, each Credit Party will, at
its expense, promptly execute, acknowledge and deliver such further documents
and do such other acts and things as

 

71

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

 

Administrative Agent or Collateral Agent may reasonably request in order to
effect fully the purposes of the Credit Documents.  In furtherance and not in
limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent or Collateral Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and are
secured by substantially all of the assets of Holdings, and its Subsidiaries and
all of the outstanding Capital Stock of Company and its Subsidiaries (in each
case subject to limitations contained in the Credit Documents with respect to
Foreign Subsidiaries).

 

5.14        ERISA.  Neither Holdings, its Subsidiaries or their respective ERISA
Affiliates shall establish, maintain, contribute to, or become required to
contribute to any Multiemployer Plan.

 

5.15        Maintenance of Credit Rating.  Holdings shall use its commercially
reasonable efforts (including the timely payment of all customary amounts and
the timely submission of all customary documentation) to ensure that (i) the
credit facility provided for under this Agreement shall at all times have a
credit rating assigned by S&P and Moody’s and (ii) Borrower shall at all times
have a corporate credit rating assigned by S&P and Moody’s; provided, however,
that in the event either S&P or Moody’s ceases to exist, ceases to be in the
business of issuing ratings in respect of credit facilities, or the rating of
such facilities is not otherwise obtainable from such agencies, then Holdings
shall use its commercially reasonable efforts (including the timely payment of
all customary amounts and the timely submission of all customary documentation)
to ensure that such facilities are rated by another nationally recognized
statistical rating agency acceptable to Administrative Agent.

 

SECTION 6.     NEGATIVE COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Commitment is in
effect and until payment in full of all Obligations, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.

 

6.1          Indebtedness.  Each of Holdings and Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to any Indebtedness, except:

 

(a)           the Obligations;

 

(b)           Company may become and remain liable with respect to Indebtedness
to any of its wholly-owned Guarantor Subsidiaries, and any wholly-owned
Guarantor Subsidiary of Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Guarantor Subsidiary of
Company; provided, (i) all such Indebtedness under this subclause (b) shall be
(x) evidenced by promissory notes and all such notes shall be subject to a First
Priority or Second Priority Lien (in accordance with the priorities set forth in
the Intercreditor Agreement) pursuant to the Pledge and Security Agreement and
(y) unsecured and subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or an
intercompany subordination agreement that in any such case, is reasonably
satisfactory to Administrative Agent, and (ii) any payment by any such
Subsidiary under any guaranty of the Obligations shall result in a pro tanto
reduction of the

 

72

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

 

amount of any Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;

 

(c)           [RESERVED];

 

(d)           Indebtedness of Company and its Subsidiaries arising in respect of
netting services or overdraft protections with deposit accounts; provided, that
such Indebtedness is extinguished within three (3) Business Days of its
incurrence;

 

(e)           guaranties by Company of Indebtedness of a Guarantor Subsidiary or
guaranties by a Subsidiary of Company of Indebtedness of Company or a Guarantor
Subsidiary with respect, in each case, to Indebtedness otherwise permitted to be
incurred pursuant to this Section 6.1;

 

(f)            Indebtedness of Company and its Subsidiaries existing on the
Closing Date and described in Schedule 6.1, but not any extensions, renewals,
refinancings or replacements of such Indebtedness except (i) renewals and
extensions expressly provided for in the agreements evidencing any such
Indebtedness as the same are in effect on the date of this Agreement and
(ii) refinancings and extensions of any such Indebtedness if the terms and
conditions thereof are not materially less favorable (taken as a whole) to the
obligor thereon or to the Lenders than the Indebtedness being refinanced or
extended, and the average life to maturity thereof is greater than or equal to
that of the Indebtedness being refinanced or extended and, prior to the issuance
thereof, the Administrative Agent shall have received a certificate of an
Authorized Officer of Company describing the terms of such refinancing or
extension and certifying the requirements of this clause (f)(ii) have been
satisfied; provided, such Indebtedness permitted under the immediately preceding
clause (i) or (ii) above shall not (A) include Indebtedness of an obligor that
was not an obligor with respect to the Indebtedness being extended, renewed or
refinanced or (B) exceed in a principal amount the Indebtedness being renewed,
extended or refinanced;

 

(g)           purchase money Indebtedness of Company and its Subsidiaries and
Capital Leases (other than in connection with sale-leaseback transactions) of
Company and its Subsidiaries, in each case incurred in the ordinary course of
business to provide all or a portion of the purchase price or cost of
construction of an asset or an improvement of an asset not constituting part of
the Collateral; provided, that (A) such Indebtedness when incurred shall not
exceed the purchase price or cost of improvement or construction of such asset,
(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,
(C) such Indebtedness shall be secured only by the asset acquired, constructed
or improved in connection with the incurrence of such Indebtedness and (D) the
aggregate principal amount of all such Indebtedness shall not exceed $7,500,000
at any time outstanding;

 

(h)           other Indebtedness of Company and its Subsidiaries, which is
unsecured, in an aggregate principal amount not to exceed $20,000,000 at any
time outstanding;

 

73

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

 

(i)            Indebtedness of Company under any Hedge Agreement entered into
(i) in order to satisfy the requirements of Section 5.12 or (ii) in the ordinary
course of business and not for speculative purposes;

 

(j)            Indebtedness evidenced by the Revolving Credit Documents in an
aggregate amount not to exceed an amount equal to $121.0 million (less the
amount of all permanent reductions of the commitments under the Revolving Credit
Facility) and any Permitted Refinancing of the Revolving Credit Facility;

 

(k)           additional senior unsecured or subordinated unsecured Indebtedness
of the Company, the terms and conditions of which (i) shall provide for a
maturity date no earlier than 180 days after the Maturity Date hereunder and
with no scheduled amortization or other scheduled payments of principal prior to
such date, (ii) shall be no more restrictive (without taking into account fees
or interest rates), taken as a whole, than those set forth in the Credit
Documents as in effect at the time such Indebtedness is incurred, except that
this clause (ii) shall not prohibit Company and its subsidiaries from issuing
high-yield senior unsecured notes or high-yield subordinated unsecured notes
pursuant to indentures containing customary covenants for the issuance of high
yield debt securities in a public offering at such time and (iii) shall
otherwise be reasonably satisfactory to Administrative Agent; provided, that
(A) after giving pro forma effect to the incurrence of such Indebtedness (and,
if applicable, giving pro forma effect to any Subject Transaction pursuant to
Section 6.8(c)), (1) the Secured Debt Ratio is less than 3.50 to 1.00 and
(2) the Consolidated Interest Coverage Ratio is greater than or equal to 2.0 to
1.0 and (B) no Default or Event of Default has occurred or is continuing at the
time of incurrence or would result from the incurrence of such Indebtedness and
(C) prior to the issuance thereof, the Administrative Agent shall have received
a certificate of an Authorized Officer of the Company describing the terms of
such Indebtedness and certifying the requirements of this clause (k) have been
satisfied; provided, further, that Indebtedness permitted pursuant to this
clause (k) shall only be permitted if proceeds of such Indebtedness are used in
connection with a Permitted Acquisition or incurred to refinance other
Indebtedness incurred in connection with a Permitted Acquisition and to the
extent such proceeds are not so used in connection with a Permitted Acquisition
or a refinancing of other Indebtedness incurred in connection with a Permitted
Acquisition, the Company shall make a mandatory offer to prepay the Loans in
accordance with Section 2.13(c);

 

(l)            Indebtedness of a Person existing at the time such Person becomes
a Subsidiary of Company following the Closing Date, which Indebtedness is in
existence at the time such Person becomes a Subsidiary and is not created in
connection with or in contemplation of such Person becoming a Subsidiary;
provided that the aggregate principal amount of all such Indebtedness in the
aggregate shall not exceed $10,000,000 at any time outstanding;

 

(m)          to the extent constituting Indebtedness, deferred compensation
arrangements in an aggregate amount not to exceed $1,400,000 at any time
outstanding; and

 

(n)           Capital Leases of Company entered into in connection with
sale-leaseback transactions permitted by Section 6.3; provided, that (A) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the

 

74

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

 

time of such refinancing and (B) such Indebtedness shall be secured only by the
facility which is the subject of such Capital Lease.

 

6.2          Liens.  Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Holdings, Company or any such Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, except:

 

(a)           Liens in favor of Collateral Agent for the benefit of Secured
Parties granted pursuant to any Credit Document;

 

(b)           Liens imposed by law for Taxes that are not yet required to be
paid pursuant to Section 5.3;

 

(c)           statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each
case incurred in the ordinary course of business (i) for amounts not yet overdue
or (ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five (5) days) are being contested in good
faith by appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;

 

(d)           deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

 

(e)           easements, rights-of-way, restrictions, encroachments, minor
defects or irregularities in title and other similar charges, in each case which
do not and will not interfere in any material respect with the use or value of
the property or asset to which it relates or which appear on any Title Policy
required to be delivered to the Collateral Agent pursuant to Section 3.1 or
5.11;

 

(f)            any interest or title of a lessor or sublessor under any
operating or true lease of real estate entered into by Company or its
Subsidiaries in the ordinary course of its business covering only the assets so
leased;

 

(g)           purported Liens evidenced by the filing of precautionary UCC
financing statements relating solely to operating leases of personal property
entered into in the ordinary course of business;

 

(h)           any attachment or judgment Lien not constituting an Event of
Default under Section 8.1(h);

 

75

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

 

(i)            non-exclusive licenses of Intellectual Property granted by
Company or any of its Subsidiaries in the ordinary course of business consistent
with past practice and not interfering in any respect with the ordinary conduct
of the business of Company or such Subsidiary;

 

(j)            bankers liens and rights of set-off with respect to customary
depositary arrangements entered into in the ordinary course of business of
Company and its Subsidiaries;

 

(k)           Liens granted by Company or its Subsidiaries existing on the
Closing Date and described in Schedule 6.2; provided, that (A) no such Lien
shall at any time be extended to cover property or assets other than the
property or assets subject thereto on the Closing Date and (B) the principal
amount of the Indebtedness secured by such Liens shall not be extended, renewed,
refunded, replaced or refinanced except as otherwise permitted by
Section 6.1(f);

 

(l)            Liens securing (i) Indebtedness permitted pursuant to
Section 6.1(g), provided, any such Lien shall encumber only the asset acquired,
constructed or improved with the proceeds of such Indebtedness and
(ii) Indebtedness permitted pursuant to Section 6.1(n), provided any such Lien
shall encumber only the facility that is the subject of such Capital Lease;

 

(m)          Liens securing Indebtedness permitted under Section 6.1(l);
provided that such Liens are of a type described in Section 6.2(l)(i) and are
not created in contemplation of or in connection with such Person becoming a
Subsidiary, such Liens will not apply to any other property of Holdings or any
of its Subsidiaries, and such Liens will secure only those obligations secured
by such Liens on the date such Person becomes a Subsidiary; and

 

(n)           Liens securing Indebtedness permitted under Section 6.1(j) as long
as such Liens are subject to an intercreditor agreement on terms satisfactory to
the Administration Agent and Collateral Agent.

 

6.3          Sales and Leasebacks.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries to directly or indirectly, become or
remain liable as lessee or as a guarantor or other surety with respect to any
lease, whether an operating lease or a Capital Lease, of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, (a) which
Holdings or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (b) which Holdings or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by such Credit Party to any Person (other than Holdings or
any of its Subsidiaries) in connection with such lease; provided that Company
and its Subsidiaries may (i) become and remain liable as lessee, guarantor or
other surety with respect to any such lease which is a Capital Lease permitted
pursuant to Section 6.1(g), and (ii) so long as no Default or Event of Default
has occurred or is continuing or shall be caused thereby, sale-leaseback
transactions in respect of up to any manufacturing Facilities owned by Company
as of the Closing Date; provided, further, that (A) the material terms and
conditions of such sale-leaseback transaction (including any Capital Lease in
connection with such transaction) shall be reasonably satisfactory to the
Administrative Agent, (B) Collateral Agent is granted a valid First Priority or
Second Priority Lien (in accordance with the priorities set forth in the
Intercreditor Agreement) in Company’s leasehold interest in connection with such
transaction, (C) the lessor

 

76

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

 

(or lenders under any Capital Lease) in connection with such transaction shall
agree to provide Collateral Agent access to the Collateral located at such
facility pursuant to an agreement reasonably satisfactory to Administrative
Agent and the Collateral Agent (the terms of which shall include subordination
and non-disturbance provisions with respect to any such Collateral, and other
terms as may be reasonably required by Administrative Agent or the Collateral
Agent), (D) the amount of consideration payable to Company or its Subsidiaries
(and the aggregate principal amount of Indebtedness in respect of any Capital
Leases) in any such transaction shall not exceed the fair market value of any
such facility (determined in good faith by the board of directors of Company (or
similar governing body)), and shall not exceed $30,000,000 in the aggregate and
(E) the Net Asset Sale Proceeds with respect to any such Capital Lease shall be
applied to repay Indebtedness to the extent required pursuant to
Section 2.14(b).

 

6.4          No Further Negative Pledges.  Except (i) pursuant to this
Agreement, (ii) pursuant to the terms of Indebtedness permitted under
Section 6.1(h), 6.1(j) or 6.1(k), (iii) with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to a permitted Asset Sale, (iv) pursuant
to customary non-assignment or no-subletting clauses in leases, licenses or
contracts entered into in the ordinary course of business, which restrict only
the assignment of such lease, license or contract, as applicable, or (v) in
connection with purchase money financing or Capital Leases permitted under
Section 6.1(g), 6.1(l) or 6.1(n) (in each case, provided the prohibition applies
only to the asset being acquired or constructed, or which is the subject of such
Capital Lease), each of Holdings and Company shall not, and shall not permit any
of its Subsidiaries to, enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.

 

6.5          Restricted Payments.  Each of Holdings and Company shall not, and
shall not permit any of its Subsidiaries or Affiliates through any manner or
means or through any other Person to, directly or indirectly, declare, order,
pay, make or set apart, or agree to declare, order, pay, make or set apart, or
agree to declare, order, pay, make or set apart, any sum for any Restricted
Payment except that:

 

(a)           Subsidiaries of Company may make Restricted Payments (i) to
Company or to any parent entity of such Subsidiary which is a wholly-owned
Guarantor Subsidiary and (ii) on a pro rata basis to the equity holders of any
other Guarantor Subsidiary;

 

(b)           (i) so long as no Default or Event of Default shall have occurred
and be continuing or shall be caused thereby, Company and its Subsidiaries may
make prepayments and regularly scheduled payments of principal and interest in
respect of any Indebtedness permitted under Sections 6.1(b), (ii) Company and
its Subsidiaries may make scheduled payments and mandatory prepayments of
principal, and regularly scheduled payments of interest in respect of and, so
long as no Default or Event of Default shall have occurred and be continuing,
voluntary repayments of, any Indebtedness permitted under Section 6.1(h),
(iii) Company and its Subsidiaries may make mandatory prepayments and regularly
scheduled payments of principal and interest in respect of any Indebtedness
permitted under Section 6.1(k) (to the extent constituting subordinated
Indebtedness) or 6.1(n), but only to the extent such payments are permitted by
the terms, and subordination provisions (if any) applicable to, such
Indebtedness, and (iv) Company and its Subsidiaries may make payments in respect
of guarantees permitted

 

77

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

 

under Section 6.1(e) to the extent the Indebtedness guaranteed thereby is
permitted to be paid under this Section 6.5 (in each case under the foregoing
subclauses (i), (ii) and (iii) in accordance with the terms of, and only to the
extent required by, and subject to the subordination provisions contained in,
the indenture or other agreement pursuant to which such Indebtedness as issued);

 

(c)           Company may make Restricted Payments to Holdings to the extent
reasonably necessary to permit Holdings (in each case so long as Holdings
applies the amount of any such Restricted Payment for such purpose within five
(5) days of receipt of such amount) (i) to pay general administrative and
corporate overhead costs and expenses (including, without limitation, expenses
arising by virtue of Holdings’ status as a public company (including fees and
expenses related to filings with the Securities and Exchange Commission,
roadshow expenses, printing expenses and fees and expenses of attorneys and
auditors)), (ii) so long as no Default or Event of Default, in each case, in
respect of Section 8.1(a), 8.1(f) or 8.1(g) shall have occurred and be
continuing or shall be caused thereby, to reimburse Sponsor for expenses
incurred in performing the obligations under the Management Services Agreement
after giving effect to any amendment, restatement or other modification thereto
in accordance with Section 6.15(a) hereof, in an amount not to exceed $1,000,000
in any Fiscal Year (provided that, to the extent that such expenses for any
Fiscal Year exceed such cap, such excess may be carried over to be reimbursed to
Sponsor in the following Fiscal Year to the extent that reimbursement would
otherwise be permitted under this clause (ii) if such expenses were incurred in
such following Fiscal Year), (iii) to discharge the consolidated tax liabilities
of Holdings and its Subsidiaries and (iv) so long as no Default or Event of
Default shall have occurred and be continuing or shall be caused thereby, to
allow Holdings to repurchase shares of, or options to purchase shares of,
Capital Stock of Holdings from employees, officers or directors of Holdings,
Company or any Subsidiaries thereof in any aggregate amount not to exceed
$1,000,000 in any calendar year or $5,000,000 in the aggregate since the Closing
Date;

 

(d)           (i) Company may make Restricted Payments to Holdings (so long as
Holdings applies such payment to the payment of dividends to its shareholders
within sixty (60) days of the receipt of such amount) in an aggregate amount not
to exceed (A) $5,250,000 in any Fiscal Quarter of 2011 (calculated without
regard to a one-time Restricted Payment not to exceed $8,000,000 on or about the
Closing Date), (B) $5,500,000 in any Fiscal Quarter of 2012, (C) $5,750,000 in
any Fiscal Quarter of 2013, (D) $6,000,000 in any Fiscal Quarter of 2014,
(E) $6,250,000 in any Fiscal Quarter of 2015 and (F) $6,500,000 in any Fiscal
Quarter of 2016 and thereafter; provided that, notwithstanding the foregoing,
any Restricted Payment under this Section 6.5(d)(i) may only be made so long as
(w) no Default or Event of Default has occurred or is continuing or shall be
caused thereby after giving effect to such Restricted Payment, (x) after giving
effect to such Restricted Payment, Excess Collateral Availability is greater
than the greater of $10,500,000 and 15% of the commitments under the Revolving
Credit Facility at the time of determination and (y) after giving effect to such
Restricted Payment, Excess Availability is at least the greater of $7,000,000
and 10% of the commitments under the Revolving Credit Facility at the time, and
(z) the Administrative Agent shall have received a certificate of Company’s
chief financial officer or treasurer certifying that the conditions set forth in
this Section 6.5(d)(i) have been satisfied and setting for the calculations of
Excess Collateral Availability and Excess Availability in reasonable detail; and
(ii) Holdings may make Restricted Payments in an amount equal to the actual
amount of Restricted Payments made by Company to Holdings pursuant to
Section 6.5(d)(i) that have not previously been distributed by

 

78

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

 

Holdings, so long as no Default or Event of Default shall have occurred and be
continuing or shall be caused thereby; provided, however, that notwithstanding
anything to the contrary contained in this Section 6.5(d), this
Section 6.5(d)(ii) shall not prohibit the payment of any dividend within 60 days
after the date of declaration of such dividend if such dividend was permitted
under this Section 6.5(d)(ii) on the date of declaration;

 

(e)           (i) so long as no Default or Event of Default, in each case, in
respect of Section 8.1(a), 8.1(f) or 8.1(g) shall have occurred and be
continuing or shall be caused thereby, Holdings may make Restricted Payments to
Sponsor to the extent of Restricted Payments received by Holdings from Company
pursuant to Section 6.5(c)(ii) and (ii) so long as no Default or Event of
Default shall have occurred and be continuing or shall be caused thereby
Holdings may make Restricted Payments as described in Section 6.5(c)(iv);

 

(f)            additional Restricted Payments in any Fiscal Year in an aggregate
amount not to exceed the Available Excess Cash Flow as of the date of such
payment (calculated after giving effect to any Investments pursuant to
Section 6.7(m) on such date, any prepayments, repurchases or redemptions of
Other Debt on such date and any Credit Party Purchases on such date but without
giving effect to the Restricted Payment proposed to be made on such date); and

 

(g)           Company may pay a one time special dividend on or about the
Closing Date in an amount not to exceed $8,000,000 and Holdings may use the
proceeds of such dividend to pay a dividend to its shareholders as long as such
payment is made within sixty (60) days of the receipt of such proceeds.

 

6.6          Restrictions on Subsidiary Distributions.  Each of Holdings and
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary of Company to (a) pay dividends or make any other distributions on
any of such Subsidiary’s Capital Stock owned by Company or by any other
Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such
Subsidiary to Company or to any other Subsidiary of Company, (c) make loans or
advances to Company or to any other Subsidiary of Company, or (d) transfer any
of its property or assets to Company or to any other Subsidiary of Company other
than restrictions (i) existing under this Agreement or the Revolving Credit
Documents (as in effect on the Closing Date), (ii) in agreements evidencing
Indebtedness permitted by Sections 6.1(g) and 6.1(l) that impose restrictions on
the property so acquired, (iii) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, Joint
Venture agreements and similar agreements entered into in the ordinary course of
business, (iv) restrictions in agreements evidencing Indebtedness secured by
Liens permitted by Section 6.2(m) that impose restrictions on the property
securing such Indebtedness, (v) customary restrictions on assets that are the
subject of an Asset Sale permitted by Section 6.9 or a Capital Lease permitted
by Section 6.1(n) and (vi) in agreements evidencing Indebtedness permitted by
Section 6.1(h) or 6.1(k), in each case, so long as such restrictions are not
more restrictive, taken as a whole, than the restrictions set forth in this
Agreement or are customary for the issuance of high yield debt securities in a
public offering at such time.

 

79

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

 

6.7          Investments.  Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including without limitation any Joint Venture,
except:

 

(a)           Investments in Cash and Cash Equivalents;

 

(b)           Investments by Holdings in Company;

 

(c)           Investments made by Company or any of its Subsidiaries in
Subsidiary Guarantors which are wholly-owned Subsidiaries of Company;

 

(d)           Investments received by Company or any of its Subsidiaries in
connection with the bankruptcy or reorganization of, or settlement of delinquent
accounts and disputes with, customers or suppliers of such Person, in each case
in the ordinary course of business;

 

(e)           accounts receivable arising, and trade credit granted, in the
ordinary course of business of Company and its Subsidiaries, and any Securities
received by Company or any of its Subsidiaries in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss, and any prepayments and
other credits to suppliers made in the ordinary course of business;

 

(f)            intercompany loans to the extent permitted under Section 6.1(b);

 

(g)           Consolidated Capital Expenditures by Company or any of its
Subsidiaries permitted by Section 6.8(b) of the Revolving Credit Facility;

 

(h)           loans and advances by Company or any of its Subsidiaries to
employees of Company and its Subsidiaries made in the ordinary course of
business in an aggregate principal amount not to exceed $2,000,000 at any time
outstanding;

 

(i)            Investments by Company or any of its Subsidiaries made in
connection with Permitted Acquisitions permitted pursuant to Section 6.9(d);

 

(j)            Investments by Company or any of its Subsidiaries constituting
non-Cash consideration received by Company and its Subsidiaries in connection
with permitted Asset Sales pursuant to subsection 6.9(c);

 

(k)           Company and its Subsidiaries may continue to own the Investments
owned by them as of the Closing Date and described in Schedule 6.7;

 

(l)            other Investments by Company or any of its Subsidiaries in an
aggregate amount not to exceed at any time outstanding $10,000,000 (minus any
Restricted Payments made pursuant to Section 6.5(f)), if no Default or Event of
Default has occurred or is continuing or would result therefrom; and

 

(m)          additional Investments (other than acquisition of any Person or any
division or line of business of any Person) by Company or any of its
Subsidiaries in an aggregate amount not to exceed the Available Excess Cash Flow
as of such date (calculated after giving

 

80

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

 

effect to any Restricted Payments made pursuant to Section 6.5(f) on such date,
any prepayments, repurchases or redemptions of Other Debt on such date made
pursuant to Section 6.16 and any Credit Party Purchases on such date but without
giving effect to such proposed Investment).

 

Notwithstanding the foregoing, in no event shall any Credit Party make any
Investment which results in or facilitates in any manner any Restricted Payment
not otherwise permitted under the terms of Section 6.5.

 

6.8          Calculations.

 

(a)           [RESERVED]

 

(b)           [RESERVED]

 

(c)           Certain Calculations.

 

(i)    With respect to any period during which a Permitted Acquisition or an
Asset Sale has occurred (each, a “Subject Transaction”), including for purposes
of determining the Leverage Ratio, the Secured Debt Ratio, the Consolidated
Interest Coverage Ratio, the Fixed Charge Coverage Ratio and Excess Availability
in Available Excess Cash Flow, Section 2.13(d), Section 6.1(k), Section 6.9(d),
clause (5) of the proviso to Section 10.6(i), Consolidated Adjusted EBITDA and
the components of Consolidated Fixed Charges, as applicable, all financial
ratios and other financial calculations pursuant to the Credit Documents shall
be calculated with respect to such period on a pro forma basis (including pro
forma adjustments arising out of events which are directly attributable to a
specific transaction, are factually supportable and are expected to have a
continuing impact, in each case determined on a basis consistent with Article 11
of Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost
savings resulting from head count reduction, closure of Facilities and similar
restructuring charges, which pro forma adjustments shall be certified by the
chief financial officer of Company) using the historical audited financial
statements of any business so acquired or to be acquired or sold or to be sold
and the consolidated financial statements of Holdings and its Subsidiaries which
shall be reformulated as if such Subject Transaction, and any Indebtedness
incurred or repaid in connection therewith, had been consummated or incurred or
repaid at the beginning of such period.

 

(ii)   With respect to any period commencing prior to the Closing Date,
Consolidated Adjusted EBITDA shall be calculated with respect to the portion of
such period prior to the Closing Date based on the historical Consolidated
Adjusted EBITDA of the Company during such time, Consolidated Capital
Expenditures shall be calculated with respect to the portion of such period
prior to the Closing Date based on the historical Consolidated Capital
Expenditures of the Company during such time, and the other components of
Consolidated Fixed Charges (other than Consolidated Interest Expense) shall be
calculated with respect to the portion of such period prior to the

 

81

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

 

Closing Date on a pro forma basis as if the Closing Date occurred on the first
day of such period.

 

(iii)  With respect to any period commencing prior to the Closing Date,
Consolidated Interest Expense shall be calculated with respect to the portion of
such period prior to the Closing Date on a pro forma basis as if the Closing
Date occurred on the first day of such period (and assuming that the
Indebtedness incurred on the Closing Date was incurred on the first day of such
period and, such Indebtedness bears interest during the portion of such period
prior to the Closing Date at the weighted average of the interest rates
applicable to outstanding Indebtedness during the portion of such period on and
after the Closing Date and that no Indebtedness was repaid during the portion of
such period prior to the Closing Date).

 

6.9          Fundamental Changes; Asset Dispositions; Acquisitions.  Each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction of merger or consolidation,
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
exchange, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, or acquire by purchase or otherwise the
business, or all or substantially all of the property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business or other business unit of any Person, except:

 

(a)           any Subsidiary of Holdings may be merged with or into Company or
with or into any wholly-owned Guarantor Subsidiary of Company, or be liquidated,
wound up or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly-owned
Guarantor Subsidiary of Company; provided, in the case of such a merger, Company
or such wholly-owned Guarantor Subsidiary of Company, as applicable shall be the
continuing or surviving Person;

 

(b)           sales or other dispositions of assets that do not constitute Asset
Sales;

 

(c)           Asset Sales, the proceeds of which (valued at the principal amount
thereof in the case of non-Cash proceeds consisting of notes or other debt
Securities and valued at fair market value in the case of other non-Cash
proceeds) (i) do not exceed $5,000,000 in the aggregate in any calendar year and
(ii) when aggregated with the proceeds of all other Asset Sales, do not exceed
$15,000,000 in the aggregate from the Closing Date to the date of determination;
provided (1) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof (and in respect of a transaction of
greater than $2,500,000, as determined in good faith by the board of directors
of Company (or similar governing body)), (2) no less than 80% thereof shall be
paid in Cash, and (3) the Net Asset Sale Proceeds thereof shall be applied as
required by Section 2.13(a);

 

(d)           Permitted Acquisitions if no Default or Event of Default has
occurred and is continuing and (i) the consideration for which consists solely
of common Capital Stock of

 

82

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

 

Holdings, (ii) (A) the aggregate consideration paid does not exceed $50,000,000
in the aggregate in any calendar year and (B) Excess Availability is at least
the greater of $10,500,000 and 15% of the commitments then in effect under the
Revolving Credit Facility for 30 days prior to the date of such Permitted
Acquisition and on the date of such Permitted Acquisition after giving pro forma
effect thereto or (iii) (A) before and after giving effect to any such Permitted
Acquisition, the Fixed Charge Coverage Ratio is greater than 1.0 to 1.0 for the
most recently completed four Fiscal Quarter period for which financial
statements have been delivered pursuant to Section 5.1(b), 5.1(c) or 3.1(u),
calculated to give effect to such Permitted Acquisition in accordance with
Section 6.8(c) as if such Permitted Acquisition occurred on the first day of
such four Fiscal Quarter period, as demonstrated in a Fixed Charge Coverage
Compliance Certificate delivered to the Administrative Agent prior to such
Permitted Acquisition and (B) Excess Availability is at least the greater of
$10,500,000 and 15% of the commitments then in effect under the Revolving Credit
Facility for 30 days prior to the date of the acquisition and on the date of the
acquisition after giving pro forma effect thereto;

 

(e)           Investments made in accordance with Section 6.7; and

 

(f)            sale and leaseback transactions permitted pursuant to
Section 6.3.

 

6.10        Disposal of Subsidiary Interests.  Each of Holdings and Company
shall not, and shall not permit any of its Subsidiaries to (a) directly or
indirectly issue, sell, assign, pledge or otherwise encumber or dispose of any
Capital Stock of any of its Subsidiaries, except to qualify directors if
required by applicable law or (b) permit any of its Subsidiaries directly or
indirectly to issue, sell, assign, pledge or otherwise encumber or dispose of
any Capital Stock of any of its Subsidiaries, except (i) Company may issue
Capital Stock to Holdings, (ii) Subsidiaries may issue Capital Stock to Company
or to a Guarantor Subsidiary of Company (subject to the restrictions on such
disposition otherwise imposed under Section 6.9) or to qualify directors if
required by applicable law and (iii) Company or any Subsidiary may sell or
otherwise dispose of the Capital Stock of its Subsidiaries in an Asset Sale
permitted by Section 6.9.

 

6.11        Fiscal Year.  Each of Holdings and Company shall not, and shall not
permit any of its Subsidiaries to, change its Fiscal Year-end from December 31;
provided, that the Fiscal Year-end of Holdings and its Subsidiaries may be
changed to the end of any Fiscal Quarter with the prior written consent of, and
following receipt of any information requested by, Administrative Agent
(including, without limitation, reconciliation statements for the immediately
preceding three years described in Section 5.1(e)).

 

6.12        Transactions with Shareholders and Affiliates.  Each of Holdings and
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service or the making of any loan) with any holder of 10% or more of any class
of Capital Stock of Holdings or any of its Subsidiaries or with any Affiliate of
Holdings or of any such holder, on terms that are less favorable to Holdings or
that Subsidiary, as the case may be, than those that might be obtained at the
time from a Person who is not such a holder or Affiliate; provided, the
foregoing restriction shall not apply to (a) any transaction expressly permitted
under this Agreement; (b) reasonable and customary fees paid to, and customary
indemnification of, members of the board of directors (or similar governing
body) of

 

83

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

 

Holdings and its Subsidiaries; (c) compensation arrangements for officers and
other employees of Holdings and its Subsidiaries entered into in the ordinary
course of business; (d) transactions described in Schedule 6.12; and (e) any
transaction between Credit Parties.

 

6.13        Conduct of Business.  From and after the Closing Date, each of
Holdings and Company shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than (i) the businesses engaged in by Company on
the Closing Date and similar or related businesses and (ii) such other lines of
business as may be consented to by Requisite Lenders.

 

6.14        Permitted Activities of Holdings.  Holdings shall not (a) incur,
directly or indirectly, any Indebtedness other than the Indebtedness (i) under
the Credit Documents and (ii) under the Revolving Credit Documents; (b) create
or suffer to exist any Lien upon any property or assets now owned or hereafter
acquired by it other than the Liens created under the Collateral Documents to
which it is a party; (c) engage in any business or activity or own any assets
other than (i) holding 100% of the Capital Stock of Company; (ii) performing its
obligations and activities incidental thereto under the Credit Documents, and to
the extent not inconsistent therewith, the Revolving Credit Documents;
(iii) making Restricted Payments to the extent permitted by Section 6.5 of this
Agreement and Section 6.5 of the Revolving Credit Facility; (iv) making
Investments to the extent permitted by Section 6.7 of this Agreement and
Section 6.7 of the Revolving Credit Facility; (v) issuances of its Capital
Stock; (vi) conducting activities arising by virtue of its status as a public
company, including without limitation, compliance with its reporting obligations
and other requirements applicable to public companies; and (vii) retaining Cash
in a deposit account subject to a Blocked Account Agreement in the amount of any
Restricted Payments received from the Company pursuant to Section 6.5(d)(i);
(d) consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person; (e) sell or otherwise dispose of
any Capital Stock of any of its Subsidiaries; (f) create or acquire any
Subsidiary or make or own any Investment in any Person other than Company; or
(g) fail to hold itself out to the public as a legal entity separate and
distinct from all other Persons.

 

6.15        Amendments or Waivers of Certain Agreements.

 

(a)           Each of Holdings and Company shall not, and shall not permit any
of its Subsidiaries to, terminate or agree to any amendment, restatement,
supplement or other modification to, or waiver of, any of its rights under any
Revolving Credit Document, any Organizational Document or the Management
Services Agreement, or make any payment consistent with an amendment thereof or
change thereto (which amendment or other modification, in the case of (i) an
Organizational Document or any Revolving Credit Document, is adverse in any
material respect to the rights or interests of the Lenders (provided that with
respect to any termination, amendment, restatement, supplement or other
modification to, or waiver of any Revolving Loan Document, none of the following
amendments shall be deemed adverse for purposes of this clause (i): (A) any
waiver of any default or event of default or any other waiver or amendment
permitting or increasing (or having the effect of permitting or increasing)
borrowing availability under the Borrowing Base (without increasing the
commitments under the Revolving Credit Facility), (B) payment of customary fees
in connection with any waiver or amendment, or (C) any amendment implementing
incremental or additional loans and/or commitments under the Revolving Loan
Documents to the extent the Indebtedness

 

84

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

 

in respect thereof is permitted under Section 6.1 and provided, further, that
with respect to the Organizational Documents of Holdings, Holdings shall be
permitted to effect a Permitted Holdings Reincorporation) and (ii) the
Management Services Agreement, involves the imposition of additional fees or any
increase in fees payable thereunder (other than as set forth in this
Section 6.15) or is adverse in any respect to the rights or interests of the
Lenders), without in each case obtaining the prior written consent of Requisite
Lenders to such amendment, restatement, supplement or other modification or
waiver.  Each of Holdings and Company shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any Indebtedness
permitted to be incurred under Section 6.1 which is subordinated to the
Obligations, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on or fees in respect of such Indebtedness, change (to earlier dates) any
dates upon which payments of principal or interest are due thereon, change any
event of default or condition to an event of default with respect thereto (other
than to eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Indebtedness (or a trustee or other representative on their behalf) which would
be adverse to Holdings or Company, any of their Subsidiaries, or Lenders.

 

6.16        Limitation on Payments Relating to Other Debt.  Each of Holdings and
Company shall not, and shall not permit any of its Subsidiaries through any
manner or means or through any other Person to, directly or indirectly, declare,
order, make or offer to make, any voluntary prepayment, repurchase or redemption
of, or otherwise defease, the Indebtedness permitted to be incurred under
Section 6.1(k) (such Indebtedness, “Other Debt”), or segregate funds for any
such voluntary prepayment, repurchase, redemption or defeasance, or enter into
any derivative or other transaction with any financial institution, commodities
or stock exchange or clearinghouse (a “Derivatives Counterparty”) obligating
Holdings, the Company or any Subsidiary to make payments to such Derivatives
Counterparty as a result of any change in market value of Other Debt, other than
(a) any prepayment, repurchase or redemption of Other Debt pursuant to a
Permitted Refinancing thereof and (b) prepayments, repurchases or redemptions of
Other Debt in an aggregate amount not to exceed the Available Excess Cash Flow
as of such date (calculated after giving effect to any Restricted Payments made
pursuant to Section 6.5(f) on such date, any Investments made pursuant to
Section 6.7(m) on such date and any Credit Party Purchases on such date but
without giving effect to such proposed prepayment, repurchase or redemption).

 

SECTION 7.     GUARANTY

 

7.1          Guaranty of the Obligations.  Subject to the provisions of
Section 7.2, Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty to the Beneficiaries the due and punctual payment in
full of all Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the

 

85

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

 

automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a))
(collectively, the “Guaranteed Obligations”).

 

7.2          Contribution by Guarantors.  All Guarantors desire to allocate
among themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty.  Accordingly,
in the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal
its Fair Share as of such date.  “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to
(a) the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed.  “Fair
Share Contribution Amount” means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any comparable applicable provisions of state law; provided, solely for
purposes of calculating the “Fair Share Contribution Amount” with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor.  “Aggregate Payments” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to
(1) the aggregate amount of all payments and distributions made on or before
such date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2.  The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor.  The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder.  Each
Guarantor is a third party beneficiary to the contribution agreement set forth
in this Section 7.2.

 

7.3          Payment by Guarantors.  Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guaranteed Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)),
Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed

 

86

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

 

Obligations (including interest which, but for Company’s becoming the subject of
a case under the Bankruptcy Code, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy case) and all other Guaranteed Obligations then owed
to Beneficiaries as aforesaid.

 

7.4          Liability of Guarantors Absolute.  Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations.  In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor agrees as follows:

 

(a)           this Guaranty is a guaranty of payment when due and not of
collectability.  This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;

 

(b)           Administrative Agent may enforce this Guaranty upon the occurrence
and during the continuance of an Event of Default notwithstanding the existence
of any dispute between Company and any Beneficiary with respect to the existence
and continuance of such Event of Default;

 

(c)           the obligations of each Guarantor hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including any
other Guarantor) of the obligations of Company, and a separate action or actions
may be brought and prosecuted against such Guarantor whether or not any action
is brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions;

 

(d)           payment by any Guarantor of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge any
Guarantor’s liability for any portion of the Guaranteed Obligations which has
not been paid.  Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any
Guarantor’s covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to pay
the portion of the Guaranteed Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by such Guarantor,
limit, affect, modify or abridge any other Guarantor’s liability hereunder in
respect of the Guaranteed Obligations;

 

(e)           any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed

 

87

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

 

Obligations, or any other obligation of any Person (including any other
Guarantor) with respect to the Guaranteed Obligations; (v) enforce and apply any
security now or hereafter held by or for the benefit of such Beneficiary in
respect hereof or the Guaranteed Obligations and direct the order or manner of
sale thereof, or exercise any other right or remedy that such Beneficiary may
have against any such security, in each case as such Beneficiary in its
discretion may determine consistent herewith and any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against Company or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Credit Documents;
and

 

(f)            this Guaranty and the obligations of Guarantors hereunder shall
be valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce an agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Credit
Documents, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guaranteed Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) hereof, any of the other Credit Documents or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document or any agreement relating to such other
guaranty or security; (iii) the Guaranteed Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received from any
source (other than payments received pursuant to the other Credit Documents or
from the proceeds of any security for the Guaranteed Obligations, except to the
extent such security also serves as collateral for indebtedness other than the
Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Guaranteed Obligations; (v) any Beneficiary’s
consent to the change, reorganization or termination of the corporate structure
or existence of Holdings or any of its Subsidiaries and to any corresponding
restructuring of the Guaranteed Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Guaranteed Obligations; (vii) any defenses, set-offs or counterclaims
which Company may allege or assert against any Beneficiary in respect of the
Guaranteed Obligations, including failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
any Guarantor as an obligor in respect of the Guaranteed Obligations.

 

7.5          Waivers by Guarantors.  Each Guarantor hereby waives, for the
benefit of Beneficiaries: (a) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other

 

88

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

 

Guarantor) of the Guaranteed Obligations or any other Person, (ii) proceed
against or exhaust any security held from Company, any such other guarantor or
any other Person, (iii) proceed against or have resort to any balance of any
deposit account or credit on the books of any Beneficiary in favor of Company or
any other Person, or (iv) pursue any other remedy in the power of any
Beneficiary whatsoever; (b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of Company or any other
Guarantor including any defense based on or arising out of the lack of validity
or the unenforceability of the Guaranteed Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
Company or any other Guarantor from any cause other than payment in full of the
Guaranteed Obligations; (c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the principal; (d) any
defense based upon any Beneficiary’s errors or omissions in the administration
of the Guaranteed Obligations, except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise, which are
or might be in conflict with the terms hereof and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (ii) the benefit of any
statute of limitations affecting such Guarantor’s liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit
to Company and notices of any of the matters referred to in Section 7.4 and any
right to consent to any thereof; and (g)any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

 

7.6          Guarantors’ Rights of Subrogation, Contribution, etc.  Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the Term
Loan Commitments shall have terminated, each Guarantor hereby waives and agrees
not to assert any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any other Guarantor
or any of its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Company with respect to the Guaranteed Obligations, (b) any right
to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against Company, and (c) any benefit
of, and any right to participate in, any collateral or security now or hereafter
held by any Beneficiary.  In addition, until the Guaranteed Obligations shall
have been indefeasibly paid in full and the Term Loan Commitments shall have
terminated, each Guarantor shall withhold exercise of any right of contribution
such Guarantor may have against any other guarantor (including any other
Guarantor) of the Guaranteed Obligations, including, without limitation, any
such right of contribution as contemplated by Section 7.2.  Each Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or

 

89

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

 

indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor.  If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guaranteed
Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of
Beneficiaries and shall forthwith be paid over to Administrative Agent for the
benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.

 

7.7          Subordination of Other Obligations.  Any Indebtedness of Company or
any Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”)
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations but without affecting, impairing or
limiting in any manner the liability of the Obligee Guarantor under any other
provision hereof.

 

7.8          Continuing Guaranty.  This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guaranteed Obligations shall have been
paid in full and the Term Loan Commitments shall have terminated.  Each
Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guaranteed Obligations.

 

7.9          Authority of Guarantors or Company.  It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.

 

7.10        Financial Condition of Company.  Any Credit Extension may be made to
Company or continued from time to time without notice to or authorization from
any Guarantor regardless of the financial or other condition of Company at the
time of any such grant or continuation, as the case may be.  No Beneficiary
shall have any obligation to disclose or discuss with any Guarantor its
assessment, or any Guarantor’s assessment, of the financial condition of
Company.  Each Guarantor has adequate means to obtain information from Company
on a continuing basis concerning the financial condition of Company and its
ability to perform its obligations under the Credit Documents, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations.  Each Guarantor hereby waives and
relinquishes any duty on the part of any Beneficiary to disclose any matter,
fact or thing relating to the business, operations or conditions of Company now
known or hereafter known by any Beneficiary.

 

7.11        Bankruptcy, etc.  (a)  So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in

 

90

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

 

commencing any bankruptcy, reorganization or insolvency case or proceeding of or
against Company or any other Guarantor.  The obligations of Guarantors hereunder
shall not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any case or proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Company or any other Guarantor or by any defense which Company or any other
Guarantor may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.

 

(b)           Each Guarantor acknowledges and agrees that any interest on any
portion of the Guaranteed Obligations which accrues after the commencement of
any case or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or
proceeding had not been commenced) shall be included in the Guaranteed
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guaranteed Obligations which are guaranteed by Guarantors pursuant hereto should
be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations.  Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Administrative Agent, or allow the
claim of Administrative Agent in respect of, any such interest accruing after
the date on which such case or proceeding is commenced.

 

(c)           In the event that all or any portion of the Guaranteed Obligations
are paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guaranteed Obligations for all purposes hereunder.

 

7.12        Discharge of Guaranty Upon Sale of Guarantor.  If all of the Capital
Stock of any Guarantor (other than Holdings) or any of its successors in
interest hereunder shall be sold or otherwise disposed of (including by merger
or consolidation) in accordance with the terms and conditions hereof, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale.

 

SECTION 8.     EVENTS OF DEFAULT

 

8.1          Events of Default.  If any one or more of the following conditions
or events shall occur:

 

(a)           Failure to Make Payments When Due.  Failure by Company to pay
(i) when due any principal of any Loan, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise or (ii) any interest on any Loan or any fee or any other amount due
hereunder within five (5) days after the date due; or

 

91

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

 

(b)           Default in Other Agreements.  (i) Failure of any Credit Party or
any of their respective Subsidiaries to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
aggregate principal amount of $10,000,000 or more, in each case beyond the grace
period, if any, provided therefor; or (ii) breach or default by any Credit Party
with respect to any other term (other than Section 6.8(a) of the Revolving
Credit Facility) of (1) one or more items of such Indebtedness or (2) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, or any other event or circumstance shall occur, in each case
beyond the grace period, if any, provided therefor, if the effect of such breach
or default or event or circumstance is to cause, or to permit the holder or
holders of that Indebtedness (or a trustee on behalf of such holder or holders),
to cause, that Indebtedness to become or be declared due and payable (or
redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be, or to require an offer to purchase or
redeem such Indebtedness be made (other than any due on sale provision with
respect to any Indebtedness permitted to be repaid hereunder and which is so
repaid in full); or

 

(c)           Breach of Certain Covenants.  Failure of any Credit Party to
perform or comply with any term or condition contained in Sections 2.6, 2.14,
5.1(f), 5.1(g), 5.2(i), 5.14, 5.15 or 6; or

 

(d)           Breach of Representations, etc.  Any representation, warranty or
certification made or deemed made by any Credit Party in any Credit Document or
in any statement or certificate at any time given by any Credit Party or any of
its Subsidiaries in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect as of the date made or
deemed made; or

 

(e)           Other Defaults Under Credit Documents.  Any Credit Party shall
default in the performance of or compliance with any term contained herein or
any of the other Credit Documents, other than any such term referred to in any
other Section of this Section 8.1, and such default shall not have been remedied
or waived within thirty (30) days after the earlier of (i) an officer of such
Credit Party becoming aware of such default or (ii) receipt by Company of notice
from Administrative Agent or any Lender of such default; or

 

(f)            Involuntary Bankruptcy; Appointment of Receiver, etc.  (i) A
court of competent jurisdiction shall enter a decree or order for relief in
respect of Holdings or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Holdings or any of its
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries, or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Holdings or any of its Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Holdings or any of
its

 

92

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

 

Subsidiaries, and any such event described in this clause (ii) shall continue
for sixty (60) days without having been dismissed, bonded or discharged; or

 

(g)           Voluntary Bankruptcy; Appointment of Receiver, etc.  (i) Holdings
or any of its Subsidiaries shall have an order for relief entered with respect
to it or shall commence a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or Holdings or any of its Subsidiaries shall make any assignment for
the benefit of creditors; or (ii) Holdings or any of its Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the board of directors (or similar
governing body) of Holdings or any of its Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in this Section 8.1(g) or in
Section 8.1(f) above; or

 

(h)           Judgments and Attachments.  Any money judgment, writ or warrant of
attachment or similar process involving in the aggregate at any time an amount
in excess of $10,000,000 (to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against Holdings or any of its Subsidiaries or any of
their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days (or in any event later than five
(5) days prior to the date of any proposed sale thereunder); or

 

(i)            Dissolution.  Any order, judgment or decree shall be entered
against any Credit Party decreeing the dissolution or split up of such Credit
Party; or

 

(j)            Employee Benefit Plans.  (i) There shall occur one or more ERISA
Events or (ii) there shall exists any fact or circumstance that results or
reasonably could be expected to result in the imposition of a Lien or security
interest with respect to any Employee Benefit Plan under Section 412(n) of the
Internal Revenue Code or under ERISA, in either case involving or that might
reasonably be expected to involve in the aggregate at any time an amount in
excess of $10,000,000; or

 

(k)           Change of Control.  A Change of Control shall occur; or

 

(l)            Guaranties, Collateral Documents and other Credit Documents.  At
any time after the execution and delivery thereof, (i) the Guaranty for any
reason, other than the satisfaction in full of all Obligations or upon the
release of such Guaranty with respect to a Subsidiary of the Company in
connection with an Asset Sale permitted hereby, shall cease to be in full force
and effect (other than in accordance with its terms) or shall be declared to be
null and void or any Guarantor shall repudiate its obligations thereunder,
(ii) this Agreement or any Collateral Document ceases to be in full force and
effect (other than by reason of a release of Collateral in accordance with the
terms hereof or thereof or the satisfaction in full of the Obligations in
accordance with the terms hereof) or shall be declared null and void, or
Collateral Agent shall not have or shall cease to have a valid and perfected
Lien in any Collateral purported

 

93

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

 

to be covered by the Collateral Documents with the priority required by the
relevant Collateral Document, in each case for any reason other than the failure
of Collateral Agent or any Secured Party to take any action within its control,
or (iii) any Credit Party shall contest the validity or enforceability of any
Credit Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Credit Document
to which it is a party;

 

THEN, (1) upon the occurrence of any Event of Default described in
Section 8.1(f) or 8.1(g), automatically, and (2) upon the occurrence and during
the continuance of any other Event of Default, upon notice to Company by
Administrative Agent (which notice may be given by the Administrative Agent in
its discretion and shall be given by Administrative Agent upon the request of
the Requisite Lenders), (A) the Term Loan Commitments, if any, of each Lender
having such Term Loan Commitments shall immediately terminate; (B) each of the
following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by each Credit Party: (I) the unpaid principal amount of
and accrued interest on the Loans and (II) all other Obligations; and
(C) Administrative Agent may cause Collateral Agent to enforce any and all Liens
and security interests created pursuant to Collateral Documents.

 

SECTION 9.     AGENTS

 

Each of the Lenders hereby irrevocably appoints JPMorgan Chase Bank, N.A. as
Administrative Agent hereunder and authorizes the Administrative Agent to take
such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof, together with such actions and powers
as are reasonably incidental thereto. Each of the Lenders hereby irrevocably
appoints JPMorgan  Chase Bank, N.A. as Collateral Agent hereunder and authorizes
the Collateral Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Collateral Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.  Each of the
Lenders hereby authorizes the Collateral Agent to enter into each of the
Collateral Documents and authorizes both the Administrative Agent and Collateral
Agent to enter into the Intercreditor Agreement.

 

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

 

Neither the Administrative Agent nor the Collateral Agent shall have any duties
or obligations except those expressly set forth herein.  Without limiting the
generality of the foregoing, (a) neither the Administrative Agent nor the
Collateral Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing, (b) neither the Administrative Agent nor the Collateral Agent shall
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby
that the Administrative Agent or

 

94

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

 

the Collateral Agent, as applicable is required to exercise in writing as
directed by the Requisite Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.5), and (c) except as expressly set forth herein, neither the
Administrative Agent nor the Collateral Agent shall have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating to
Holdings, Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent, Collateral Agent or any of
their respective Affiliates in any capacity.  Neither the Administrative Agent
nor the Collateral Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Requisite Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 10.5) or in the absence of its own gross
negligence or willful misconduct.  Neither the Administrative Agent nor the
Collateral Agent shall be deemed not to have knowledge of any Default or Event
of Default unless and until written notice thereof is given to the
Administrative Agent or the Collateral Agent, as applicable by Borrower or a
Lender, and neither the Administrative Agent nor the Collateral Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Credit Document, (ii) the contents of any certificate, report or other
document delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or other Credit Document or any other agreement, instrument or
document, (v) the creation, perfection or priority of Liens on the Collateral or
the existence of the Collateral, or (vi) the satisfaction of any condition set
forth in Section 3 or elsewhere herein or in any other Credit Document, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent or the Collateral Agent, as applicable.

 

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

 

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

 

95

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

 

Subject to the appointment and acceptance of a successor Administrative Agent or
Collateral Agent, as applicable as provided in this paragraph, the
Administrative Agent and the Collateral Agent may resign at any time by
notifying the Lenders and Borrower.  Upon any such resignation, the Requisite
Lenders shall have the right, in consultation with Borrower, to appoint a
successor.  If no successor shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent or Collateral Agent, as applicable gives notice of
its resignation, then the retiring Administrative Agent or Collateral Agent, as
applicable may, on behalf of the Lenders appoint a successor Administrative
Agent or Collateral Agent, as applicable which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank.  Upon the acceptance of
its appointment as Administrative Agent or Collateral Agent, as applicable
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent or Collateral Agent, as applicable, and the retiring Administrative Agent
or Collateral Agent, as applicable shall be discharged from its duties and
obligations hereunder.  The fees payable by Borrower to a successor
Administrative Agent or Collateral Agent, as applicable shall be the same as
those payable to its predecessor unless otherwise agreed between Borrower and
such successor.  After the Administrative Agent’s or the Collateral Agent’s
resignation hereunder, the provisions of this Article and Sections 10.2 and 10.3
shall continue in effect for the benefit of such retiring Administrative Agent
or Collateral Agent, as applicable, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent or Collateral Agent, as applicable.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent, the Collateral Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Collateral Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.

 

Each Lender hereby further authorizes Administrative Agent or Collateral Agent,
as applicable, on behalf of and for the benefit of Lenders, to be the agent for
and representative of Lenders with respect to the Guaranty, the Collateral and
the Collateral Documents. Subject to Section 10.5, without further written
consent or authorization from Lenders, Administrative Agent or Collateral Agent,
as applicable may execute any documents or instruments necessary to (i) release
any Lien encumbering any item of Collateral that is the subject of a sale or
other disposition of assets permitted hereby or to which Requisite Lenders (or
such other Lenders as may be required to give such consent under Section 10.5)
have otherwise consented or (ii) release any Guarantor from the Guaranty
pursuant to Section 7.12 or with respect to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented.

 

Anything contained in any of the Credit Documents to the contrary
notwithstanding, Company, Administrative Agent, Collateral Agent and each Lender
hereby agree that (i) no Lender shall have any right individually to realize
upon any of the Collateral or to enforce the

 

96

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

 

Guaranty, it being understood and agreed that all powers, rights and remedies
hereunder may be exercised solely by Administrative Agent, on behalf of Lenders
in accordance with the terms hereof and all powers, rights and remedies under
the Collateral Documents may be exercised solely by Collateral Agent, and
(ii) in the event of a foreclosure by Collateral Agent on any of the Collateral
pursuant to a public or private sale, Collateral Agent or any Lender may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Lender or
Lenders in its or their respective individual capacities unless Requisite
Lenders shall otherwise agree in writing) shall be entitled, for the purpose of
bidding and making settlement or payment of the purchase price for all or any
portion of the Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale.

 

SECTION 10.       MISCELLANEOUS

 

10.1        Notices.

 

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

 

(i)    if to Borrower or any other Credit Party, to it at Douglas
Dynamics, Inc., 7777 North 73rd Street, Milwaukee, WI 53223, Attention:  Chief
Executive Officer and President, (Fax: 414-354-8448), with a copy to Aurora
Capital Group, 10877 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90024,
Attention:  Secretary, Fax: 310-824-2791;

 

(ii)   if to the Administrative Agent or the Collateral Agent, to JPMorgan Chase
Bank, Loan and Agency Services Group, 10 S Dearborn, Flr 07, Chicago, IL 
60603-2003, (Telecopy No. 888-303-9732), Email: 
jpm.agency.servicing1@jpmchase.com;

 

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

 

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

 

(c)           Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.  All notices and other

 

97

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

 

communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.

 

(d)           Borrower hereby acknowledges that (a) the Administrative Agent
will make available to the Lenders materials and/or information provided by or
on behalf of Borrower hereunder (collectively, the “Borrower Materials”) by
posting Borrower Materials on Intralinks or another similar electronic system
(the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders
(i.e., Lenders that do not wish to receive material non-public information with
respect to Borrower or its securities) (each, a “Public Lender”). Borrower
hereby agrees that (w) all Borrower Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Borrower Materials “PUBLIC,” Borrower shall be
deemed to have authorized the Administrative Agent and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to Borrower or its securities for purposes of United States federal and
state securities laws (provided, however, that to the extent such Borrower
Materials constitute confidential information, they shall be treated as set
forth in Section 10.17); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated as
“Public Investor;” and (z) the Administrative Agent shall be entitled to treat
any Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not marked as “Public Investor.”
Notwithstanding the foregoing, the following Borrower Materials shall be marked
“PUBLIC”, unless Borrower notifies the Administrative Agent promptly that any
such document contains material non-public information: (1) the Credit Documents
and (2) notification of changes in the terms of the Credit Documents.

 

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

 

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

 

98

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

 

10.2        Expenses.  Borrower shall pay (i) all reasonable out of pocket
expenses incurred by the Administrative Agent, the Collateral Agent and their
respective Affiliates, including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent and the Collateral Agent, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent, the Collateral
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made hereunder, including all such out-of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans.  All
amounts due under this Section shall be payable promptly after written demand
therefor.

 

10.3        Indemnity.

 

(a)           Borrower shall indemnify the Administrative Agent, the Collateral
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or the use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
Holdings, Borrower or any of their Subsidiaries, or any Environmental Liability
related in any way to Holdings, Borrower or any of their Subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or its directors, officers or employees.  This
Section 10.3(a) shall not apply with respect to Taxes other than any Taxes that
represent losses or damages arising from any non-Tax claim.

 

(b)           To the extent that Borrower fails to pay any amount required to be
paid by it to the Administrative Agent or the Collateral Agent under
paragraph (a) of this Section or under Section 10.2, each Lender severally
agrees to pay to the Administrative Agent or the Collateral Agent, as the case
may be, such Lender’s pro rata share based upon such Lender’s Term Loan Exposure
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent in its
capacity as such.

 

99

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

 

(c)           To the extent permitted by applicable law, Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, any Loan
or the use of the proceeds thereof.

 

(d)           All amounts due under this Section shall be payable promptly after
written demand therefor.

 

10.4        Set-Off.  In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Agent, each
Lender and each of their respective Affiliates is hereby authorized by each
Credit Party at any time or from time to time, without notice to any Credit
Party or to any other Person (other than Administrative Agent), any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by such Agent,
Lender or Affiliate to or for the credit or the account of any Credit Party
against and on account of the obligations and liabilities of any Credit Party to
such Agent, Lender or Affiliate hereunder, and under the other Credit Documents,
including all claims of any nature or description arising out of or connected
hereto, or with any other Credit Document, irrespective of whether or not
(a) such Lender shall have made any demand hereunder or (b) the principal of or
the interest on the Loans or any other amounts due hereunder shall have become
due and payable pursuant to Section 2 and although such obligations and
liabilities, or any of them, may be contingent or unmatured.

 

10.5        Amendments and Waivers.

 

(a)           Requisite Lenders’ Consent.  Subject to Section 10.5(b) and
10.5(c) and except as otherwise expressly contemplated by Section 2.23 hereof,
by Section 5.7 of the Intercreditor Agreement and by the definition of
“Permitted Holdings Reincorporation”, no amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders.

 

(b)           Affected Lenders’ Consent.  Without the written consent of each
Lender that would be affected thereby, no amendment, modification, termination,
or consent shall be effective if the effect thereof would:

 

(i)    extend the scheduled final maturity of any Loan or Note;

 

(ii)   waive, reduce or postpone any scheduled repayment (but not prepayment);

 

(iii)  reduce the rate of interest on any Loan (other than any waiver of any
increase in the interest rate applicable to any Loan pursuant to Section 2.9) or
any fee payable hereunder;

 

100

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

 

(iv)  extend the time for payment of any such interest or fees;

 

(v)   reduce or forgive the principal amount of any Loan;

 

(vi)  amend, modify, terminate or waive any provision of this Section 10.5(b),
Section 10.5(c) or Section 2.16 hereof, or Section 7.2 of the Pledge and
Security Agreement;

 

(vii) amend the definition of “Requisite Lenders” or “Pro Rata Share”;

 

(viii)                release all or substantially all of the Collateral or all
or substantially all of the Guarantors from the Guaranty except as expressly
provided in the Credit Documents;

 

(ix)   consent to the assignment or transfer by any Credit Party of any of its
rights and obligations under any Credit Document; or

 

(x)    modify the term “Interest Period” so as to permit intervals in excess of
six (6) months.

 

(c)           Other Consents.  No amendment, modification, termination or waiver
of any provision of the Credit Documents, or consent to any departure by any
Credit Party therefrom, shall:

 

(i)    increase any Term Loan Commitment of any Lender over the amount thereof
then in effect without the consent of such Lender; provided, no amendment,
modification or waiver of any condition precedent, covenant, Default or Event of
Default shall constitute an increase in any Term Loan Commitment of any Lender;
or

 

(ii)   amend, modify, terminate or waive any provision of Section 9 as the same
applies to any Agent, or any other provision hereof as the same applies to the
rights or obligations of any Agent, in each case without the consent of such
Agent.

 

(d)           Execution of Amendments, etc.  Administrative Agent may, but shall
have no obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender.  Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.  No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or demand
in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by a
Credit Party, on such Credit Party.

 

101

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

 

10.6        Successors and Assigns; Participations.

 

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

 

(b)           Each Lender shall have the right at any time to sell, assign or
transfer all or a portion of its rights and obligations under this Agreement,
including, without limitation, all or a portion of its Commitment or Loans owing
to it or other Obligation (provided, however, that each such assignment shall be
of a uniform, and not varying, percentage of all rights and obligations under
and in respect of any Loan and any related Commitments):

 

(i)                                     to any Person meeting the criteria of
clause (i) of the definition of the term of “Eligible Assignee” (a “Related
Lender Assignment”) upon the giving of notice to Borrower and Administrative
Agent and, for any assignment of a Term Loan Commitment, the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed);
and

 

(ii)                                  to any Person meeting the criteria of
clause (ii) of the definition of the term of “Eligible Assignee” (other than a
Person described in the foregoing subclause (i)) and (except in the case of
assignments made by or to JPMorgan Chase Bank, N.A.) consented to by Borrower
and Administrative Agent (such consent not to be (x) unreasonably withheld or
delayed or, (y) in the case of Borrower, not required at any time during
syndication of the Loans to persons identified by the Administrative Agent to
Borrower on or prior to the Closing Date or at any time an Event of Default
under Section 8.1(a), 8.1(f) or 8.1(g) shall have occurred and then be
continuing, provided that Borrower shall be deemed to have consented to any
proposed assignment unless Borrower shall object within five (5) Business Days
after having received notice of the proposed assignment); and

 

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

 

(i)    except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the

 

102

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

 

entire remaining amount of the assigning Lender’s Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $1,000,000 unless each of Borrower and the Administrative Agent otherwise
consent, provided that no such consent of Borrower shall be required if an Event
of Default has occurred and is continuing;

 

(ii)   each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

 

(iii)  the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

 

(iv)  the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Credit Parties and
their Related Parties or their respective securities) will be made available and
who may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

 

(d)           Subject to acceptance and recording thereof pursuant to
paragraph (e) of this Section, from and after the effective date specified in
each Assignment and Assumption the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.17, 2.18, 2.19, 10.2 and 10.3).  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 10.6 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (g) of this Section.

 

(e)           The Administrative Agent, acting for this purpose as an agent of
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).  The entries in the Register shall be conclusive,

 

103

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

 

and Borrower, the Administrative Agent, the Collateral Agent and the Lenders
shall treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by Borrower, the Collateral Agent and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

 

(f)            Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register; provided that if either the assigning Lender or the assignee shall
have failed to make any payment required to be made by it pursuant to
Section 2.1, 2.16, 10.3(b) or 10.4, the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the information
therein in the Register unless and until such payment shall have been made in
full, together with all accrued interest thereon.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(g)           Any Lender may, without the consent of Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged; (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations; (C) Borrower, the
Administrative Agent, the Collateral Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement; and (D) notwithstanding anything to
the contrary herein or in any other Credit Document, in the case of any
participation to Sponsor, none of the Ares Limited Partnership, the Limited
Partnerships, and to the extent holding any Capital Stock in Holdings, any other
Ares Group Investor or Aurora Group Investor, (i) shall be deemed to be a
“Lender” for purposes of voting on any matters (including the granting of any
consents or waivers), (ii) shall be deemed to vote pro rata with the other
Lenders in any matter requiring a Requisite Lender vote in any Credit Document,
(iii) shall have a right to receive any information not prepared by Borrower
from any Agent or any other Lender under or in connection with the Credit
Documents otherwise delivered or required to be delivered to each Lender or
attend any meetings or conference call with any Agent or any Lender in which
Borrower does not participate, (iv) have any right to make or bring any claim,
in its capacity as Lender, against any Agent or any Lender with respect to such
duties and obligations of such Persons under the Credit Documents or (v) have
any right whatsoever to require any Agent or any Lender to take any action or
refrain from taking any action with respect to this Agreement or any Credit
Document.  Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.5 that affects such Participant.  Borrower agrees that

 

104

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

 

each Participant shall be entitled to the benefits of Sections 2.17, 2.18 and
2.19 (subject to the requirements and limitations therein, including the
requirements under Section 2.19(f) (it being understood that the documentation
required under Section 2.19(f) shall be delivered to the participating Lender))
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 10.6; provided that such
Participant (A) agrees to be subject to the provisions of Sections 2.16, 2.20,
2.22 and 10.4 as if it were an assignee under paragraph (b) of this Section; and
(B) shall not be entitled to receive any greater payment under Sections 2.18 and
2.19, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 10.4 as though it
were a Lender, provided such Participant agrees to be subject to Section 10.4 as
though it were a Lender.  Each Lender that sells a participation shall, acting
solely for this purpose as an agent of Borrower, maintain a register on which it
enters the name and address of each Participant and the principal amounts (and
stated interest) of each Participant’s interest in the Loans or other
obligations under this Agreement (the “Participant Register”); provided that no
Lender shall have any obligation to disclose all or any portion of the
Participant Register to any Person (including the identity of any Participant or
any information relating to a Participant’s interest in any Commitments, Loans
or its other obligations under any Credit Document) except to the extent that
such disclosure is necessary to establish that such Commitment, Loan or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations.  The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.

 

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

 

(i)            Sponsor and Credit Party Provisions. Notwithstanding
Section 10.6(b) and Section 10.6(c), (x) so long as no Default or Event of
Default has occurred and is continuing, any Lender may assign all or a portion
of its Term Loans to a Sponsor (other than a natural person) in accordance with
this Section 10.6(i) (and any Sponsor (other than an Investment Fund) shall not
assign any Term Loan pursuant to Section 10.6(b) or acquire a participation in a
Term Loan or sell a participation in its Term Loans unless the conditions set
forth in subparagraph (1) and, solely in the case of an assignment, subparagraph
(2) below are satisfied) and (y) any Credit Party may, from time to time,
purchase or prepay Loans (a “Credit Party Purchase”), in each case, on a non-pro
rata basis through Dutch auction procedures open to all applicable Lenders on a
pro rata basis in accordance with customary procedures to be agreed between
Borrower and the Administrative Agent; provided that:

 

105

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

 

(1)                                  except as previously disclosed in writing
to the Administrative Agent and the Lenders, such Sponsor represents and
warrants as of the date of any assignment or participation to or from such
Sponsor pursuant to this Section 10.6, that such Sponsor does not have any MNPI
or any Borrower Restricted Information;

 

(2)                                  the assigning Lender or the Lender to whom
such assignment is being made, as the case may be, and the Sponsor (other than
any Investment Fund) purchasing such Lender’s Term Loans or assigning Term Loans
to such Lender, as applicable, shall execute and deliver to the Administrative
Agent an assignment agreement substantially in the form of Exhibit E-2 hereto
(an “Affiliated Lender Assignment and Acceptance”) in lieu of an Assignment and
Assumption;

 

(3)                                  no Loan may be assigned to a Sponsor (other
than any Investment Fund) pursuant to this Section 10.6(i), if after giving
effect to such assignment, the Sponsors (other than any Investment Fund) in the
aggregate would own (or hold participations in) in excess of 15% of all Term
Loans then outstanding;

 

(4)                                  any Loans acquired by any Credit Party
shall automatically and without any further action on the part of any Person be
retired and cancelled immediately upon the acquisition thereof; and

 

(5)                                  in the case of any Credit Party Purchase
(A) no Default or Event of Default has occurred and is continuing, (B) no loans
under the Revolving Credit Facility are outstanding for the 30 days prior to the
date of such Credit Party Purchase and on the date of such Credit Party Purchase
after giving effect thereto, (C) Excess Availability is at least the greater of
$10,500,000 and 15% of the commitments then in effect under the Revolving Credit
Facility for 30 days prior to the date of such Credit Party Purchase and on the
date of such Credit Party Purchase after giving pro forma effect thereto, (D) no
Credit Party has any MNPI or any Borrower Restricted Information and
(E) Borrower on the date such Credit Party Purchase is made, shall deliver to
the Administrative Agent a certificate of an Authorized Officer of Borrower
stating that each of the conditions to such Credit Party Purchase contained in
this clause (5) has been satisfied or waived.

 

(i)    Notwithstanding anything to the contrary in this Agreement, no Sponsor
(other than any Investment Fund) shall have any right to (a) attend (including
by telephone) any meeting or discussions (or portion thereof) among the
Administrative Agent, the Collateral Agent or any Lender to which
representatives of the Credit Parties are not invited, (b) receive any
information or material prepared by Administrative Agent, the Collateral Agent
or any Lender or any communication by or among

 

106

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

 

Administrative Agent and/or one or more Lenders, except to the extent such
information or materials have been made available to any Credit Party or its
representatives (and in any case, other than the right to receive notices of
prepayments and other administrative notices in respect of its Loans required to
be delivered to Lenders pursuant to Section 2), or (c) make or bring (or
participate in, other than as a passive participant in or recipient of its pro
rata benefits of) any claim, in its capacity as a Lender, against the
Administrative Agent, the Collateral Agent or any other Lender with respect to
any duties or obligations or alleged duties or obligations of such Agent or any
other such Lender under the Credit Documents.

 

(ii)   Notwithstanding anything in Section 10.1 or the definition of “Requisite
Lenders” to the contrary, for purposes of determining whether the Requisite
Lenders have (a) consented (or not consented) to any amendment, modification,
waiver, consent or other action with respect to any of the terms of any Credit
Document or any departure by any Credit Party therefrom, (b) otherwise acted on
any matter related to any Credit Document, or (c) directed or required the
Administrative Agent, Collateral Agent or any Lender to undertake any action (or
refrain from taking any action) with respect to or under any Credit Document all
Loans held by any Sponsor (other than an Investment Fund) shall be deemed to be
not outstanding for all purposes of calculating whether the Requisite Lenders
have taken any actions.

 

(iii)  Additionally, if there is any assignment of any Loan pursuant to this
Section 10.6(i), each Credit Party and each Sponsor (other than any Investment
Fund) that becomes a Lender hereunder hereby agree that if a case under Title 11
of the United States Code is commenced against any Credit Party, such Credit
Party shall seek (and each such Sponsor (other than any Investment Fund) shall
consent) to provide that the vote of any Sponsor (other than any Investment
Fund) (in its capacity as a Lender) with respect to any plan of reorganization
of such Credit Party shall not be counted except that any Sponsor’s (other than
any Investment Fund) vote (in its capacity as a Lender) may be counted to the
extent any such plan of reorganization proposes to treat the Obligations held by
such Sponsor (other than any Investment Fund) in a manner that is less favorable
in any material respect to such Sponsor (other than any Investment Fund) than
the proposed treatment of similar Obligations held by Lenders that are not
Affiliates of Borrower. Each Sponsor (other than any Investment Fund) that
becomes a Lender hereby irrevocably appoints the Administrative Agent (such
appointment being coupled with an interest) as such Person’s attorney-in-fact,
with full authority in the place and stead of such Sponsor (other than any
Investment Fund) and in the name of such Sponsor (other than any Investment
Fund), from time to time in the Administrative Agent’s discretion to take any
action and to execute any instrument that the Administrative Agent may deem
reasonably necessary to carry out the provisions of this paragraph.

 

10.7        Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.

 

107

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

 

10.8        Survival of Representations, Warranties and Agreements.  All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension. 
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.17,
9.3(b) and 9.6 shall survive the payment of the Loans and the termination
hereof.

 

10.9        No Waiver; Remedies Cumulative.  No failure or delay on the part of
Arranger, any Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege.  The rights, powers and remedies given to Arranger, each
Agent and each Lender hereby are cumulative and shall be in addition to and
independent of all rights, powers and remedies existing by virtue of any statute
or rule of law or in any of the other Credit Documents.  Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.

 

10.10      Marshalling; Payments Set Aside.  Neither any Agent nor any Lender
shall be under any obligation to marshal any assets in favor of any Credit Party
or any other Person or against or in payment of any or all of the Obligations. 
To the extent that any Credit Party makes a payment or payments to
Administrative Agent, the Collateral Agent or Lenders (or to Administrative
Agent or the Collateral Agent, on behalf of Lenders), or Administrative Agent,
the Collateral Agent or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.

 

10.11      Severability.  In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

 

10.12      Obligations Several; Independent Nature of Lenders’ Rights.  The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment of any other Lender hereunder.  Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.

 

108

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

 

10.13      Headings.  Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.

 

10.14      APPLICABLE LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION.

 

10.15      CONSENT TO JURISDICTION.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE
CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES AGENTS AND
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.

 

10.16      WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED.  THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY HERETO ACKNOWLEDGES THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
WHICH EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE
DEALINGS.  EACH PARTY HERETO FURTHER WARRANTS

 

109

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

 

AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

 

10.17      Confidentiality.  Each of the Administrative Agent, the Collateral
Agent and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by a
Governmental Authority or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Credit Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii)  any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Credit Parties
and their obligations, (g) with the consent of Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent or
any Lender on a non-confidential basis from a source other than Borrower.  For
the purposes of this Section, “Information” means all information received from
Borrower relating to Borrower or its business, other than any such information
that is available to the Administrative Agent or any Lender on a
non-confidential basis prior to disclosure by Borrower; provided that, in the
case of information received from Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 10.17 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE COMPANY AND ITS AFFILIATES AND THEIR RELATED PARTIES OR THEIR
RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE
SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE

 

110

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

 

WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

 

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

 

10.18      Usury Savings Clause.  Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate.  If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect.  In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Borrower shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect.  Notwithstanding the foregoing, it is the intention of
Lenders and Company to conform strictly to any applicable usury laws. 
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender’s option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Borrower.

 

10.19      Counterparts.  This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.  Delivery of an executed counterpart of a signature page of
this Agreement by facsimile or electronic file shall be effective as delivery of
a manually executed counterpart of this Agreement.

 

10.20      Effectiveness.  This Agreement shall become effective upon the
execution of a counterpart hereof by each Credit Party, the Administrative
Agent, the Collateral Agent and the Lenders.  This Agreement, the other Credit
Documents and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the

 

111

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

 

parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.

 

10.21      Appointment for Perfection.  Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Lenders, in assets which, in accordance with
Article 9 of the UCC or any other applicable law can be perfected only by
possession.  Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with
such Collateral in accordance with the Administrative Agent’s instructions.

 

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

 

[Remainder of Page Intentionally Left Blank]

 

112

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

 

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

 

 

 

DOUGLAS DYNAMICS, INC.

 

 

 

 

 

By:

/s/ Robert L. McCormick

 

 

Name:

Robert L. McCormick

 

 

Title:

Vice President, Chief Financial Officer, Treasurer and Secretary

 

 

 

 

 

DOUGLAS DYNAMICS, L.L.C.

 

 

 

 

 

By:

/s/ Robert L. McCormick

 

 

Name:

Robert L. McCormick

 

 

Title:

Vice President, Chief Financial Officer, Treasurer and Secretary

 

 

 

 

 

 

DOUGLAS DYNAMICS FINANCE COMPANY

 

 

 

 

 

By:

/s/ Robert L. McCormick

 

 

Name:

Robert L. McCormick

 

 

Title:

Vice President, Chief Financial Officer, Treasurer and Secretary

 

 

 

 

 

 

FISHER, LLC

 

 

 

 

 

By:

/s/ Robert L. McCormick

 

 

Name:

Robert L. McCormick

 

 

Title:

Vice President, Chief Financial Officer, Treasurer and Secretary

 

 

 

 

113

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

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent, as Collateral Agent and as a Lender

 

 

 

 

 

By:

/s/ Richard Marcus

 

 

Name: Richard Marcus

 

 

Title:   Authorized Officer

 

114

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

 

APPENDIX A

TO CREDIT AND GUARANTY AGREEMENT

 

Term Loan Commitments

 

Lender

 

Term Loan Commitment

 

Pro Rata Share

 

JPMorgan Chase Bank, N.A.

 

$

125,000,000

 

100.000000000

%

 

 

$

 

 

 

%

 

 

$

 

 

 

%

 

 

$

 

 

 

%

 

 

$

 

 

 

%

 

 

$

 

 

 

%

 

 

 

 

 

 

Total

 

$

125,000,000

 

100.000000000

%

 

115

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