Exhibit 10.78
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
December 7, 2010
among
SMITH & WESSON HOLDING CORPORATION,
SMITH & WESSON CORP.,
THOMPSON/CENTER ARMS COMPANY, INC.,
UNIVERSAL SAFETY RESPONSE, INC.,
FOX RIDGE OUTFITTERS, INC.,
BEAR LAKE HOLDINGS, INC.,
K.W. THOMPSON TOOL COMPANY, INC.,
O.L. DEVELOPMENT, INC.,
THOMPSON CENTER HOLDING CORPORATION,
and SMITH & WESSON DISTRIBUTING, INC.,
as Borrowers
and
The Lenders Party Hereto,
and
TD BANK, N.A.
as Administrative Agent
and
SOVEREIGN BANK
as Syndication Agent

 
TD SECURITIES (USA) LLC
As Sole Lead Arranger and Sole Bookrunner

 

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TABLE OF CONTENTS

              Page  
ARTICLE I DEFINITIONS
    2  
Section 1.01. Defined Terms
    2  
Section 1.02. Classification of Loans and Borrowings
    25  
Section 1.03. Terms Generally
    25  
Section 1.04. Accounting Terms; GAAP
    25  
Section 1.05. Currency Equivalents
    26  
ARTICLE II THE CREDITS
    26  
Section 2.01. Revolving Loans
    26  
Section 2.02. Repayments of Loans
    26  
Section 2.03. Swingline Loans
    27  
Section 2.04. Appointment of Borrowers’ Representative
    28  
Section 2.05. Procedure for Borrowing
    28  
Section 2.06. Funding of Loans
    29  
Section 2.07. Interest Elections
    29  
Section 2.08. Interest
    30  
Section 2.09. Alternate Rate of Interest
    30  
Section 2.10. Termination and Reduction of Commitments
    31  
Section 2.11. Optional Prepayment of Loans
    32  
Section 2.12. Fees and Other Charges
    32  
Section 2.13. Payments Generally; Administrative Agent’s Clawback
    33  
Section 2.14. Letters of Credit
    35  
Section 2.15. Sharing Payments by Lenders
    38  
ARTICLE III ILLEGALITY, INCREASED COSTS, BREAK FUNDING AND TAXES
    39  
Section 3.01. Illegality
    39  
Section 3.02. Increased Costs
    39  

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Section 3.03. Break Funding
    40  
Section 3.04. Mitigation Obligations; Replacement of Lenders
    40  
Section 3.05. Taxes
    41  
ARTICLE IV CONDITIONS
    43  
Section 4.01. Effective Date
    43  
Section 4.02. Each Revolving Loan
    47  
Section 4.03. Each Letter of Credit
    47  
ARTICLE V REPRESENTATIONS AND WARRANTIES
    48  
Section 5.01. Existence, Qualification and Power; Compliance with Laws
    48  
Section 5.02. Authorization; No Contravention
    48  
Section 5.03. Governmental Authorization; Other Consents
    48  
Section 5.04. Binding Effect
    49  
Section 5.05. Financial Condition; No Material Adverse Change
    49  
Section 5.06. Properties
    49  
Section 5.07. Litigation and Environmental Matters
    50  
Section 5.08. Compliance with Laws and Agreements
    50  
Section 5.09. Investment Company Status
    50  
Section 5.10. Taxes
    50  
Section 5.11. ERISA
    51  
Section 5.12. Margin Regulations
    51  
Section 5.13. Disclosure
    51  
Section 5.14. Material Agreements
    51  
Section 5.15. Solvency
    51  
Section 5.16. Insurance
    52  
Section 5.17. Capitalization and Subsidiaries
    52  
Section 5.18. Security Interest in Collateral
    52  
Section 5.19. Employment Matters
    53  

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Section 5.20. Affiliate Transactions
    53  
Section 5.21. OFAC; PATRIOT Act
    53  
Section 5.22. Intellectual Property Matters
    53  
Section 5.23. Use of Proceeds
    54  
ARTICLE VI AFFIRMATIVE COVENANTS
    54  
Section 6.01. Financial Statements and Other Information
    54  
Section 6.02. Notices of Material Events
    55  
Section 6.03. Existence; Conduct of Business
    56  
Section 6.04. Payment of Obligations
    56  
Section 6.05. Maintenance of Properties
    56  
Section 6.06. Books and Records; Inspection Rights
    56  
Section 6.07. Compliance with Laws
    57  
Section 6.08. Use of Proceeds and Letters of Credit
    57  
Section 6.09. Insurance
    57  
Section 6.10. Casualty and Condemnation
    58  
Section 6.11. Appraisals
    58  
Section 6.12. Depository Banks
    58  
Section 6.13. Additional Collateral; Further Assurances
    58  
ARTICLE VII NEGATIVE COVENANTS
    59  
Section 7.01. Indebtedness
    59  
Section 7.02. Liens
    61  
Section 7.03. Fundamental Changes
    61  
Section 7.04. Investments, Loans, Advances, Guarantees and Acquisitions
    62  
Section 7.05. Asset Sales
    63  
Section 7.06. Sale and Leaseback Transactions
    64  
Section 7.07. Swap Agreements
    64  
Section 7.08. Restricted Payments; Certain Payments of Indebtedness
    64  

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Section 7.09. Transactions with Affiliates
    65  
Section 7.10. Restrictive Agreements
    65  
Section 7.11. Amendment of Certain Documents
    65  
Section 7.12. Financial Covenants
    66  
ARTICLE VIII EVENTS OF DEFAULT
    66  
Section 8.01. Events of Default
    66  
Section 8.02. Remedies Upon Event of Default
    68  
Section 8.03. Application of Funds
    69  
ARTICLE IX ADMINISTRATIVE AGENT
    70  
Section 9.01. Appointment and Authority
    70  
Section 9.02. Rights as a Lender
    70  
Section 9.03. Exculpatory Provisions
    70  
Section 9.04. Reliance by Administrative Agent
    71  
Section 9.05. Delegation of Duties
    72  
Section 9.06. Resignation of Administrative Agent
    72  
Section 9.07. Non-Reliance on Administrative Agent and Other Lenders
    73  
Section 9.08. No Other Duties, Etc.
    73  
Section 9.09. Administrative Agent May File Proofs of Claim
    73  
Section 9.10. Collateral Matters
    74  
ARTICLE X MISCELLANEOUS
    75  
Section 10.01. Amendments, Etc.
    75  
Section 10.02. Notices; Effectiveness; Electronic Communication
    76  
Section 10.03. No Waiver; Cumulative Remedies
    79  
Section 10.04. Expenses; Indemnity; Damage Waiver
    79  
Section 10.05. Payments Set Aside
    80  
Section 10.06. Successors and Assigns
    81  
Section 10.07. Treatment of Certain Information; Confidentiality
    84  

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Section 10.08. Right of Setoff
    85  
 
       
Section 10.09. Interest Rate Limitation
    85  
 
       
Section 10.10. Counterparts; Integration; Effectiveness
    85  
 
       
Section 10.11. Survival of Representations and Warranties
    86  
 
       
Section 10.12. Severability
    86  
 
       
Section 10.13. Replacement of Lenders
    86  
 
       
Section 10.14. Governing Law, Jurisdiction, Etc
    86  
 
       
Section 10.15. Waiver of Jury Trial
    87  
 
       
Section 10.16. USA PATRIOT Act Notice
    88  
 
       
Section 10.17. Judgment Currency
    88  
 
       
Section 10.18. No Advisory or Fiduciary Responsibility
    88  
 
       
Section 10.19. All Obligations to Constitute Joint and Several Obligations
    89  
 
       
ARTICLE XI AMENDMENT AND RESTATEMENT
    91  
 
       
Section 11.01. Acknowledgements
    91  
 
       
Section 11.02. Effect of this Agreement
    91  

         
Schedule 2.01
  Applicable Percentage    
Schedule 5.06
  Real Property    
Schedule 5.07
  Disclosed Matters    
Schedule 5.14
  Material Agreement    
Schedule 5.16
  Insurance    
Schedule 5.17
  Subsidiaries    
Schedule 5.20
  Affiliate Transactions    
Schedule 6.12
  Deposit and Investment Accounts    
Schedule 7.01(b)
  Indebtedness    
Schedule 7.02(c)
  Liens    
Schedule 7.04(b)
  Investments    
Schedule 7.06
  Sale and Leaseback Transactions    
Schedule 7.10
  Restrictive Agreements    
Schedule 10.02(a) 
  Lenders’ Notice Addresses    
 
       
EXHIBIT A
  ASSIGNMENT AND ASSUMPTION AGREEMENT    
EXHIBIT B
  BORROWING REQUEST    
EXHIBIT C
  COMPLIANCE CERTIFICATE    
EXHIBIT D
  CONVERSION/CONTINUATION NOTICE    
EXHIBIT E-1
  REVOLVING LINE NOTE    
EXHIBIT E-2
  SWINGLINE NOTE    
EXHIBIT F
  JOINDER AGREEMENT    

v

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     AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 7, 2010 (as it
may be amended, restated or modified from time to time, this “Agreement”), by
and among SMITH & WESSON HOLDING CORPORATION, a Nevada corporation (“Holdings”),
SMITH & WESSON CORP., a Delaware corporation (the “S&W Corp.”), THOMPSON/CENTER
ARMS COMPANY, INC., a New Hampshire corporation (“TCAC”), THOMPSON CENTER
HOLDING CORPORATION, a Delaware corporation (“TCHC”), UNIVERSAL SAFETY RESPONSE,
INC., a Delaware corporation (“USR”), FOX RIDGE OUTFITTERS, INC., a New
Hampshire corporation (“FRO”), K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire
corporation (“KWTTC”), O.L. DEVELOPMENT, INC., a New Hampshire corporation
(“OLD”), BEAR LAKE HOLDINGS, INC., a Delaware corporation (“BLH”), and SMITH &
WESSON DISTRIBUTING, INC., a Delaware corporation (“Distributing”) and such
other Persons joined hereto as a Borrower from time to time (each a “Borrower”
and, together the “Borrowers”), TD BANK N.A., a national banking association, in
its capacity as agent for itself and the other Lenders (in said capacity, the
“Administrative Agent”), SOVEREIGN BANK, a Federal savings bank, in its capacity
as Syndication Agent (in said capacity, the “Syndication Agent”), and each
lender from time to time party hereto (collectively, the “Lenders”, and
individually, a “Lender”).
     The parties hereto hereby agree as follows:
     A. Certain of the Borrowers, certain of the Lenders, and the Administrative
Agent are currently party to that certain Credit Agreement dated as of
November 30, 2007, as amended (as amended, the “Existing Credit Agreement”).
     B. The Borrowers have requested that the Existing Credit Agreement be
amended in certain respects as described below to, inter alia, (i) provide for
Revolving Commitments from new Lenders, (ii) extend the maturity date and
(iii) make certain additional modifications to the Existing Credit Agreement.
For the sake of clarity and convenience, the Borrowers have requested that the
Existing Credit Agreement be restated as so amended.
     C. The Borrowers have requested that certain of the Lenders continue to
extend credit to it, and those Lenders, upon the occurrence of the Effective
Date and subject to the terms hereof, will continue to lend monies and/or make
advances, extensions of credit or other financial accommodations to, on behalf
of or for the benefit of the Borrowers.
     D. The parties hereto intend that this Agreement shall not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement and the other Loan Documents (as defined in the Existing Credit
Agreement) or evidence repayment of any such obligations and liabilities, but
rather that this Agreement shall amend and restate in its entirety the Existing
Credit Agreement and re-evidence the obligations of the Borrowers (as defined in
the Existing Credit Agreement) and the other Loan Parties (as defined in the
Existing Credit Agreement) outstanding thereunder, as well as evidence of the
additional obligations of the Borrowers to the Lenders, the LC Issuer and the
Administrative Agent provided for herein.
     In consideration of the mutual covenants herein contained, the parties
hereto hereby agree as follows:

1

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ARTICLE I
Definitions
     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
     “Account” means all now owned or hereafter acquired or arising accounts, as
defined in the UCC, including any rights to payment for the sale or lease of
goods or rendition of services, whether or not they have been earned by
performance.
     “Accountants” means BDO Seidman, LLP or other independent certified public
accountants of nationally-recognized standing.
     “Account Debtor” means any Person obligated on an Account.
     “Acquisition” means any transaction, or any series of related transactions,
consummated on or after the Effective Date, by which any Borrower (a) acquires
any going business or all or substantially all of the assets of any Person,
whether through purchase of assets, merger or otherwise or (b) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the Equity
Interests of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Equity
Interests having such power only by reason of the happening of a contingency) or
a majority of the outstanding Equity Interests of a Person.
     “Administrative Questionnaire” means the administrative questionnaire in a
form supplied by the Administrative Agent.
     “Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
     “Alternative Currency” means each of Euro, Yen and each other currency
(other than Dollars) that is approved by the Administrative Agent and the LC
Issuer.
     “Applicable Margin” means:
               (a) (i) during the period commencing on the date hereof and
ending on the date of delivery of the Compliance Certificate for the fiscal
quarter ending October 31, 2010, the Applicable Margin for all Loans and unused
line fees shall be set at Level 5 on the grid below, and (ii) at all times
during each Interest Period thereafter the Applicable Margin as of any date of
determination shall be determined based upon the Consolidated Leverage Ratio as
of the Determination Date immediately preceding such date as indicated in the
following table:

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                                      Applicable Margin                 for
Revolving   Applicable Margin             Loan (per annum   for Revolving      
  Consolidated   rates) for Base   Loan (per annum         Leverage   Rate Loans
and   rates) for LIBOR   Unused     Ratio   Swingline Loans   Loans   Revolver
Fee
Level 1
  Greater than 3.00:1.00     2.50 %     3.50 %     0.75 %
 
                           
Level 2
  Greater than 2.50:1.00 but less than or equal to 3.00:1.00     2.25 %     3.25
%     0.625 %
 
                           
Level 3
  Greater than 2.00:1.00 but less than or equal to 2.50:1.00     2.00 %     3.00
%     0.50 %
 
                           
Level 4
  Greater than 1.50:1.00 but less than or equal to 2.00:1.00     1.75 %     2.75
%     0.50 %
 
                           
Level 5
  Greater than 1.00:1.00 but less than or equal to 1.50:1.00     1.50 %     2.50
%     0.375 %
 
                           
Level 6
  Equal to or less than 1.00:1.00     1.25 %     2.25 %     0.25 %

If any Compliance Certificate has not been delivered to the Administrative Agent
within the time periods specified in Section 6.01(c), then until the
Determination Date, the highest rate set forth above shall apply
     “Applicable Percentage” means the initial Applicable Percentage of each
Lender in respect of the Revolving Commitment and the LC Commitment as set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such percentage may be adjusted from time to time in accordance with the
terms hereof.
     “Applicable Revolving Loan Percentage” means the initial Applicable
Percentage of each Lender in respect of each Revolving Loan as set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such percentage may be adjusted from time to time in accordance with the
terms hereof.
     “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

3

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     “Asset Sale” means any sale, transfer or other disposition (including a
sale and leaseback transaction) of any property or asset of any Borrower in
excess of $5,000,000, other than dispositions described in Section 7.05(a).
     “Assignee Group” means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
     “Assignment and Assumption” means an Assignment and Assumption,
substantially in the form of Exhibit A.
     “Bank Products Documents” means all agreements entered into from time to
time by any Borrower in connection with Cash Management Obligations, Swap
Obligations and Foreign Exchange Obligations and shall include the Cash
Management Agreements and Swap Agreements.
     “Base Rate” means, at any time, a fluctuating rate per annum equal to the
higher of (a) the rate published from time to time by The Wall Street Journal as
the U.S. Prime Rate (if such U.S. Prime Rate is expressed as a range, then the
top of such range will be used) or, in the event The Wall Street Journal ceases
publication of such U.S. Prime Rate, the base, reference or other rate then
designated by the Administrative Agent, in its sole discretion, for general
commercial loan reference purposes or (b) the sum of (i) the Federal Funds Rate
plus (ii) one-half of one percent (1/2%). It is acknowledged by the parties to
this Agreement that the Base Rate is a reference rate, not necessarily the
lowest rate of interest charged, which serves as the basis upon which effective
interest rates are calculated for loans making reference thereto. The effective
interest rate for the Revolving Loans, Swingline Loans and LC Borrowings will
change on the date of each change in the U.S. Prime Rate (as published in The
Wall Street Journal, as aforesaid) or, if such U.S. Prime Rate is not so
published, on the date of each change in the rate designated by the
Administrative Agent as provided above.
     “Base Rate Basis” means a simple interest rate equal to the sum of (i) the
Base Rate and (ii) the Applicable Margin applicable to Base Rate Loans. The Base
Rate Basis shall be adjusted automatically as of the opening of business on the
effective date of each change in the Base Rate to account for such change, and
shall also be adjusted to reflect changes of the Applicable Margin applicable to
Base Rate Loans.
     “Base Rate Loans” means Loans the rate of interest applicable as to which
is the Base Rate Basis.
     “Board” means the Board of Governors of the Federal Reserve System of the
United States of America.
     “Bonded Accounts” means any Account arising from a transaction in which
USR’s performance is or has been supported or secured by a performance bond, and
such Account secures, or is subject to, the claim of a bonding company, insurer
or indemnitor.
     “Bonded Contract Equipment” means any Equipment of USR that is to be used
by USR to manufacture Bonded Inventory sold under government contract that is
secured by a performance bond, and that such Equipment secures, or subject to,
the claim of a bonding company, insurer or indemnitor.
     “Bonded Inventory” means any and all Inventory used or to be used by USR in
a transaction in which such USR’s performance is or has been supported or
secured by a performance bond or similar undertaking, and such Inventory
secures, or is subject to, the claim of a bonding company, insurer or
indemnitor.

4

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          “Borrower(s)” has the meaning assigned to it in the Preamble.
          “Borrower Representative” has the meaning assigned to such term in
Section 2.04.
          “Borrowing(s)” means, individually and collectively as the context may
require, Revolving Borrowing(s) and/or a Swingline Loan, but does not include
any LC Borrowings.
          “Borrowing Request” means a written request by the Borrower
Representative for a Revolving Borrowing in accordance with Section 2.05, which
request shall be made in the form of Exhibit B.
          “Business Day” means any day that is not a Saturday, Sunday or other
day on which commercial banks are required or permitted by law to close in the
State of New York,
          “Capital Expenditures” of any Person means, without duplication, any
expenditure or commitment to expend money for any purchase or other acquisition
of any asset which would be classified as a fixed or capital asset on a balance
sheet of such Person prepared in accordance with GAAP.
          “Capital Lease Obligations” of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
          “Cash Management Bank” means (i) TD Bank or (ii) any other financial
institution that, from time to time, enters into a Deposit Account Control
Agreement.
          “Cash Management Agreements” means, collectively, one or more
agreements entered into from time to time by TD Bank with any Borrower and/or
the Borrower Representative relating to cash management services regarding one
or more of the Deposit Accounts, as such agreement(s) may be amended, restated
or modified from time to time.
          “Cash Management Obligations” means any and all obligations of any
Borrower, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Cash
Management Services.
          “Cash Management Services” means any treasury management services
provided to any Borrower by any Lender or any of its Affiliates including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services.
          “Change in Control” means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of Equity
Interests representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of any Borrower;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of any Borrower by Persons who were neither (i) nominated by the
board of directors of such Borrower nor (ii) appointed by directors so
nominated; (c) the acquisition of direct or indirect Control of any Borrower by
any Person or group; or (d) Holdings shall cease to own, directly or indirectly,
free and clear of all Liens or other encumbrances, at least 100% of the
outstanding Equity Interests of any Subsidiary except as may result from any
merger, consolidation or other reorganization permitted under this Agreement,
including Section 7.03.

5

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          “Change in Law” means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by the Administrative Agent,
any Lender, by any lending office of the Administrative Agent or any Lender or
by the Administrative Agent’s or any Lender’s holding company, if any with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
          “Class” means, when used in reference to any Loan or Borrowing,
whether such Loan or the Loans or the Loans comprising such Borrowing, are
Revolving Loans or Swingline Loans.
          “Code” means the Internal Revenue Code of 1986, as amended from time
to time.
          “Collateral” means any and all property owned, leased or operated by a
Person covered by the Collateral Documents and any and all other property of any
Borrower, now existing or hereafter acquired, that may at any time be or become
subject to a security interest or Lien in favor of the Administrative Agent, to
secure the Obligations.
          “Collateral Access Agreement” means any landlord waiver or other
similar agreement between the Administrative Agent and any third party
(including any bailee or consignee) in possession of Collateral or any landlord
of any Borrower for any leased premises where Collateral is located, as any such
waiver or similar agreement may be amended, restated or otherwise modified from
time to time.
          “Collateral Documents” means, collectively, this Agreement, the
Security Agreement, the Mortgages, the Hazardous Materials Indemnity Agreement,
the Environmental Reserve Account Agreement, each Deposit Account Control
Agreement and any other documents now or hereafter executed and delivered to the
Administrative Agent granting a Lien upon the Collateral as security for payment
of the Obligations, as the same may be amended, restated or otherwise modified
from time to time.
          “Commitment(s)” means each and all of the Revolving Commitments and
the LC Commitment, as each such Commitment may be changed from time to time
pursuant to this Agreement.
          “Companies” means Holdings and each of its direct and indirect
Subsidiaries, including, without limitation, S&W Corp., TCAC and USR.
          “Compliance Certificate” means a certificate, signed and certified as
accurate and complete by a Financial Officer of the Borrower Representative, in
substantially the form of Exhibit C or another form which is acceptable to the
Administrative Agent in its Permitted Discretion.
          “consolidated” means the combined financial information and results of
Holdings and all its Subsidiaries taken as a whole, after netting out
intercompany accounts and transactions.
          “consolidating” means the individual financial information and results
of each of Holdings and its Subsidiaries taken on a stand alone basis before
making any adjustments for intercompany accounts and transactions.
          “Consolidated EBITDA” means, for any period, Consolidated Net Income
for such period plus (a) without duplication and to the extent deducted in
determining Consolidated Net Income for such period, the sum of (i) Consolidated
Interest Expense for such period, (ii) income tax expense (with a deduction in
case of income tax benefit) for such period, (iii) all amounts attributable to
depreciation and

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amortization expense for such period, (iv) any extraordinary charges for such
period, (v) any non-cash charges for such period related to stock options and
restricted stock granting, and (vi) any other nonrecurring non-cash charges for
such period (but excluding any non-cash charge in respect of an item that was
included in Consolidated Net Income in a prior period), minus (b) without
duplication and to the extent included in Consolidated Net Income, any
extraordinary gains and any non-cash items of income for such period, all
calculated for the Companies on a consolidated basis in accordance with GAAP.
          Consolidated EBITDA shall be calculated on a Pro Forma Basis to give
effect to Permitted Acquisitions and Asset Sales consummated at any time on or
after the first day of the relevant Test Period as if each Permitted Acquisition
had been effected on the first day of such period and as if each such Asset
Sales had been consummated on the day prior to the first day of such period,
provided, that such calculation of Consolidated EBITDA shall be subject to the
Administrative Agent’s prior written approval of the pro forma calculations.
          “Consolidated Fixed Charge Coverage Ratio” means the ratio, determined
as of the end of each fiscal quarter of Holdings for the most-recently ended
Test Period, of (a) Consolidated EBITDA, plus Consolidated Rental Expense, minus
the unfinanced portion of Capital Expenditures minus cash taxes paid, minus
dividends and distributions paid in cash, to (b) Consolidated Fixed Charges, all
calculated for the Companies on a consolidated basis in accordance with GAAP.
          “Consolidated Fixed Charges” means, with reference to any period,
without duplication, cash Consolidated Interest Expense for such period, plus
Consolidated Rental Expense paid during such period, plus scheduled principal
payments on Indebtedness made during such period, plus Capital Lease Obligation
payments made during such period, all calculated on a consolidated basis for
Holdings and its Subsidiaries for such period in accordance with GAAP.
          “Consolidated Interest Expense” means, with reference to any period,
the interest expense (including that attributable to Capital Lease Obligations)
of Holdings and its Subsidiaries for such period with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing and net costs under Swap Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP), calculated on a consolidated basis for Holdings and its
Subsidiaries for such period in accordance with GAAP.
          “Consolidated Leverage Ratio” means the ratio, determined as at the
end of each fiscal quarter of Holdings, of (a) Total Funded Debt on such date to
(b) Consolidated EBITDA for the Test Period ended on such date (or, if such date
is not the last day of a fiscal quarter, ended on the last day of the fiscal
quarter most recently ended prior to such date), provided that solely for
purposes of Section 7.12, to the extent Holdings or any Subsidiary makes any
Acquisition permitted pursuant to Section 7.04 or disposition of assets outside
the ordinary course of business that is permitted by Section 7.05 during the
Test Period of Holdings most recently ended, the Consolidated Leverage Ratio
shall be calculated after giving pro forma effect thereto (including pro forma
adjustments arising out of events which are directly attributable to the
acquisition or the disposition of assets, are factually supportable and are
expected to have a continuing impact, in each case as determined on a Pro Forma
Basis as certified by the Financial Officer of Holdings).
          “Consolidated Net Income” means, for any period, the consolidated net
income (or loss) of Holdings and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary or is merged into or consolidated with Holdings or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary) in which Holdings or any of its Subsidiaries has an

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ownership interest, except to the extent that any such income is actually
received by Holdings or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
          “Consolidated Rental Expense” means for any period, all obligations in
respect of fixed, base and contingent rent paid or due by Holdings or any of its
Subsidiaries, on a consolidated basis, during such period under any rental
agreements or leases of real or personal property (other than Capital Lease
Obligations).
          “Contractual Obligation” means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument, contract,
indenture, mortgage, deed of trust or other undertaking to which such Person is
a party or by which it or any of its property is bound.
          “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.
          “Conversion/Continuation Notice” means a written request by the
Borrower Representative for a conversion or continuation of the interest rate on
a Loan in accordance with Sections 2.05, 2.06 and 2.07, which notice shall be in
the form of Exhibit D.
          “Convertible Notes” means the 4% Senior Convertible Notes due 2026
issued by Holdings, as issuer.
          “Convertible Notes Documents” means the Convertible Notes, the
Convertible Notes Indenture and all other supplements, agreements and
instruments executed in connection therewith, as the same may be amended or
supplemented from time to time to the extent permitted under this Agreement.
          “Convertible Notes Indenture” means that certain Indenture dated as of
December 15, 2006 between Holdings and the Convertible Notes Trustee relating to
the Convertible Notes.
          “Convertible Notes Trustee” means The Bank of New York Trust Company,
N.A., as trustee under the Convertible Notes Indenture.
          “Default” means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
          “Defaulting Lender” means any Lender that (a) has failed to fund any
portion of the Revolving Loans required to be funded by it hereunder within one
Business Day of the date required to be funded by it hereunder, (b) has failed
to fund any portion of its participations in Swingline Loans, (c) has otherwise
failed to pay over to the Administrative Agent or any other Lender any other
amount required to be paid by it hereunder within one Business Day of the date
when due, unless the subject of a good faith dispute or (d) has been deemed
insolvent or become the subject of a bankruptcy, insolvency or similar
proceeding.
          “Deposit Account Agreements” means, collectively, one or more
agreements entered into from time to time by TD Bank with any Borrower and/or
the Borrower Representative relating to the opening and/or establishment of one
or more Deposit Accounts, as such agreement(s) may be amended, restated or
modified from time to time.

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          “Deposit Accounts” means, collectively, those certain deposit accounts
of any Borrower and/or the Borrower Representative maintained with TD Bank from
time to time pursuant to the Deposit Account Agreements and described in and
subject to the Cash Management Agreements.
          “Deposit Account Control Agreement” means any agreement, in form and
substance satisfactory to the Administrative Agent, providing (i) that all items
received or deposited in a deposit account on behalf of any Borrower are pledged
to the Administrative Agent, and that the bank in which such deposit account is
maintained will comply with instructions originated by the Administrative Agent
directing disposition of the funds in such deposit account without further
consent by such Borrower, and (ii) such other substantially similar terms and
conditions to which the Administrative Agent in its sole discretion may consent
in writing.
          “Determination Date” means the third (3rd) Business Day after the
Administrative Agent’s receipt of each Compliance Certificate in accordance with
the requirements of Section 6.01(c).
          “Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 5.07.
          “Dollar” and “$” mean lawful money of the United States.
          “Dollar Equivalent” means, at any time, (a) with respect to any amount
denominated in Dollars, such amount, and (b) with respect to any amount
denominated in any Alternative Currency, the equivalent amount thereof in
Dollars as determined by the Administrative Agent or the LC Issuer, as the case
may be, at such time on the basis of the Spot Rate for the purchase of Dollars
with such Alternative Currency.
          “Domestic Subsidiary” means any Subsidiary that is organized under the
laws of any political subdivision of the United States of America.
          “Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.01).
          “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and (ii) unless an Event of Default has
occurred and is continuing, the Borrower Representative (each such approval not
to be unreasonably withheld or delayed); provided that notwithstanding the
foregoing, “Eligible Assignee” shall not include Holdings or any of Holdings’
Affiliates or Subsidiaries.
          “Environmental Laws” means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
          “Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) material violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

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          “Environmental Reserve Account Agreement” means that certain
Environmental Reserve Account Agreement of even date herewith executed by the
Borrowers and the Administrative Agent, the form and substance of which shall be
reasonably satisfactory to the Administrative Agent, as the same may be amended,
restated, extended, replaced or otherwise modified from time to time.
          “Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
          “ERISA Affiliate” means any trade or business (whether or not
incorporated) that, together with any Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
          “ERISA Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the thirty (30) day notice period is
waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by any Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by any Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by any Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by any Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from any Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
          “EUR” means the official currency of the European Monetary Union.
          “Event of Default” has the meaning assigned to such term in
Article VIII.
          “Excluded Taxes” means, with respect to the Administrative Agent or
any Lender, or any other recipient of any payment to be made by or on account of
any obligation of any Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of the Administrative Agent or any
Lender, in which its applicable lending office is located and (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which any Borrower is located.
          “Existing Letters of Credit” means the following letters of credit
issued by the LC Issuer for the account of a Borrower, as the same may be
extended, renewed or amended from time to time, as more specifically described
below and based upon exchange rates in effect on the date hereof:

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Type
  LC Number   Borrower   Beneficiary   Undrawn Amount as of Effective Date
Standby
  20001443   S&W Corp.   United Casualty and Surety Insurance Company   US
$3,500,000.00
Standby
  20001349   S&W Corp.   Banque Bruxelles Lambert S.A.   EUR139,660.00
(equals US $187,800.80)
Standby
  83009957   S&W Corp.   Banque Bruxelles Lambert S.A.   EUR16,113.08
(equals US $21,667.26)
Standby
  ML20003367   S&W Corp.   Banque
Internationale
ARABE DE TUNI   US $4,662.00
Standby
  ML20003737   S&W Corp.   Bank of Taiwan   US $88,185.30
Standby
  20004064   S&W Corp.   Safety National Casualty Corp.   US $425,000.00
Standby
  20002882   Holdings   Liberty Mutual
Insurance Company   US $70,000.00

          “Federal Funds 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 Officer” means each of the chief financial officer,
principal accounting officer, treasurer or controller of the Borrowers.
          “fiscal quarter” means a three month period which commences on the day
following the end of the prior fiscal quarter and which ends on any of
January 31, April 30, July 31 or October 31.
          “fiscal year” means a twelve month period of four consecutive fiscal
quarters and which ends on April 30.
          “Foreign Exchange Obligations” means any and all obligations in
connection with, or under, any foreign exchange contracts of any Borrower to any
Persons who are the Administrative Agent and/or any Lender (or any Affiliate of
the Administrative Agent or any Affiliate of any Lender) at the time such
contracts were entered into (even if the respective Person subsequently ceases
to be a party to the Credit Agreement for any reason), whether absolute or
contingent and howsoever and whenever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor).
          “Foreign Lender” means a Lender that is not a U.S. Person within the
meaning of Section 7701(a)(30) of the Code.

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          “Foreign Subsidiary” means a Subsidiary other than a Domestic
Subsidiary.
          “Funding Account” means the principal operating account of the
Borrower Representative with TD Bank into which proceeds of the Loans are
deposited pursuant to Section 2.06.
          “Funding Office” means the office of the Administrative Agent located
at 6000 Atrium Way, Mt. Laurel, NJ 08054, or such other office as Administrative
Agent may specify from time to time as its funding office by written notice to
the Borrower Representative.
          “F/X Exposure” means in respect of any Person’s liability under one or
more foreign exchange contracts with any Lender, that amount, as determined by
such Lender from to time to time in its Permitted Discretion, owing to such
Lender by such Person on account of the Foreign Exchange Obligations.
          “GAAP” means generally accepted accounting principles in the United
States of America.
          “German Subsidiary” means Smith & Wesson Training Centre GmbH.
          “Governmental Authority” means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
          “Guarantee” of or by any Person (the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
          “Hazardous Materials” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
          “Hazardous Materials Indemnity Agreement” means the Amended and
Restated Hazardous Materials Indemnity Agreement of even date herewith executed
by the Borrowers in favor of the Administrative Agent, and any other Person who
becomes a party thereto pursuant to the joinder agreement attached thereto and
their successors and assigns, as amended, restated or modified from time to
time.
          “Holdings” has the meaning assigned to it in the preamble.
          “Honor Date” means the date on which any LC Disbursement is made.

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          “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances,
(k) all obligations, contingent or otherwise, of such Person in respect of cash
management services, (l) all obligations, contingent or otherwise, of such
Person in respect of foreign exchange contracts, (m) obligations under any
liquidated earn-out and (n) obligations of such Person to purchase securities or
other property arising out of or in connection with the sale of the same or
substantially similar securities or property or any other Off-Balance Sheet
Liability. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
          “Indemnified Taxes” means Taxes other than Excluded Taxes.
          “Indemnitee” has the meaning assigned to such term in
Section 10.04(b).
          “Information” has the meaning assigned to such term in Section 10.07.
          “Interest Payment Date” means (a) as to any Base Rate Loan (other than
a Swingline Loan), the last day of each month while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any LIBOR Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any LIBOR Loan having an Interest Period longer than three months,
each day that is three months, or a whole multiple thereof, after the first day
of such Interest Period and the last day of such Interest Period, (d) as to any
Loan, the date of any repayment or prepayment made in respect thereof, and
(e) as to any Swingline Loan, the day that such Loan is required to be repaid
and on the Revolving Maturity Date.
          “Interest Period” means with respect to any LIBOR Loan, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months,
thereafter, as the Borrower Representative may elect, provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a LIBOR Loan only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) no Interest Period shall extend beyond the
Revolving Maturity Date and (iii) any Interest Period pertaining to a LIBOR Loan
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and, in the case of
a Revolving Loan, thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.

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          “Inventory” means goods, other than farm products, which: (a) are
leased by a Person as lessor; (b) are held by a Person for sale or lease or to
be furnished under a contract of service; (c) are furnished by a Person under a
contract of service; or (d) consist of raw materials, work in process, or
materials used or consumed in a business.
          “Joinder Agreement” has the meaning assigned to such term in
Section 6.13.
          “Laws” means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, licenses, authorizations and permits of,
and agreements with, any Governmental Authority.
          “LC Borrowing” means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the Honor Date.
          “LC Collateral Account” has the meaning assigned to such term in
Section 2.09(h), and includes any such account established in the name of the
Administrative Agent with TD Bank to cash collateralize LC Exposure.
          “LC Commitment” means an amount equal to the Dollar Equivalent of
$5,000,000.00.
          “LC Disbursement” means a payment made by the LC Issuer pursuant to a
Letter of Credit.
          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all (i) LC Disbursements that have not yet been reimbursed by or on
behalf of any Borrower on the Honor Date, and (ii) all LC Borrowings. The
determination of LC Exposure shall take into account the then current Dollar
Equivalent amount of all Letters of Credit issued in Alternative Currencies.
          “LC Issuer” means TD Bank in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
          “Lead Arranger” means TD Securities (USA) LLC in its capacity as sole
lead arranger and sole bookrunner for the credit facility evidenced by this
Agreement.
          “Lender” has the meaning assigned to such term in the introductory
paragraph hereto, together with any Person that subsequently becomes a Lender by
way of assignment in accordance with the terms of Section 10.06, together with
their respective successors, other than any Person that ceases to be a Lender as
a result of an assignment in accordance with Section 10.06 or an amendment of
this agreement. Unless the context otherwise requires, the term “Lender”
includes the Swingline Lender and the LC Issuer.
          “Lending Office” means, as to any Lender, the office or offices of
such Lender described as such in such Lender’s Administrative Questionnaire, or
such other office or offices as a Lender may from time to time notify the
Borrower Representative and the Administrative Agent.
          “Letter of Credit” means any letter of credit issued pursuant to this
Agreement, and any Existing Letter of Credit.

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          “Letter of Credit Availability Period” means the period from and
including the Effective Date and ending on the sixth Business Day before the
earlier of the Revolving Maturity Date and the date of termination of the
Revolving Commitment.
          “‘Letter of Credit Documents” means collectively, any letter of credit
application and other related documents executed by any Borrower in form
satisfactory to the LC Issuer in connection with each Letter of Credit,
including, without limitation, the Existing Letters of Credit, and any letter of
credit application and other related documents executed by any Borrower in form
satisfactory to the LC Issuer in connection with any Letter of Credit.
          “Letter of Credit Fee” as defined in Section 2.12(c).
          “Liabilities” of any Person shall mean and include all obligations of
such Person which in accordance with GAAP shall be classified on a balance sheet
of such Person as liabilities of such Person, and in any event shall include all
(i) obligations of such Person for borrowed money or which has been incurred in
connection with the acquisition of property or assets, (ii) obligations secured
by any Lien or other charge upon property or assets owned by such Person, even
though such Person has not assumed or become liable for the payment of such
obligations, (iii) obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of the seller,
lender, or lessor under such agreement in the event of default are limited to
repossession or sale of property, (iv) obligations under guaranties, and
(v) obligations under any capitalized lease.
          “LIBOR” means, in the case of Dollars, the rate of interest in
Dollars, or in the case of an Alternative Currency, the rate of interest in such
Alternative Currency (rounded upwards, at the Administrative Agent’s option, to
the next 100th of one percent) equal to the British Bankers’ Association LIBOR
(“BBA LIBOR”) for the equivalent Interest Period as published by Bloomberg (or
such other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately
11:00 A.M. (London Time) 2 London Banking Days prior to the first day of such
Interest Period; provided, however, if more than one BBA LIBOR is specified, the
applicable rate shall be the arithmetic mean of all such rates. If, for any
reason, such rate is not available, the term LIBOR shall mean, with respect to
any Interest Period, the rate of interest per annum determined by the
Administrative Agent to be the average rate per annum which deposits in Dollars
or in such Alternative Currency, as applicable, are offered for such Interest
Period by major banks in London, England at approximately 11:00 A.M. (London
time) to London Banking Days prior to the reset date. Notwithstanding the
foregoing, LIBOR Loans shall be deemed to constitute eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to any Lender. LIBOR shall be adjusted automatically on and as of the
effective date of any change in the LIBOR Reserve Percentage for each Loan
comprising part of the same Borrowing (including conversions, extensions and
renewals), to a per annum interest rate determined pursuant to the following
formula:
          (IMAGE) [p18349p1834901.gif]

Adjusted LIBOR Rate = LIBOR 1 Minus LIBOR Reserve Percentage

          “LIBOR Basis” means an interest rate equal at all time to the sum of
(a) the Adjusted LIBOR Rate, plus (b) the Applicable Margin for LIBOR Loans. The
LIBOR Basis shall apply to Interest Periods of one (1), two (2), three (3) or
six (6) months, and, once determined, shall remain unchanged during the
applicable Interest Period, except for changes to reflect the adjustments in the
LIBOR Reserve Percentage and the Applicable Margin.

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          “LIBOR Loan” means any Loan the rate of interest applicable to which
is based on the LIBOR Basis.
          “LIBOR Reserve Percentage” means, for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board, as such Regulation may be amended from time to time or any
successor Regulation, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special or marginal reserves)
applicable with respect to eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of LIBOR Loans is determined),
whether or not any Lender has any eurocurrency liabilities subject to such
reserve requirement at that time.
          “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 Documents” means collectively, (i) this Agreement, (ii) the
Notes, (iii) the Letters of Credit, (iv) the Letter of Credit Documents, (v) the
Collateral Documents, (vi) each Assignment and Assumption and (vii) any and all
other agreements, instruments, certificates or reports executed by any Borrower
in connection with this Agreement, as amended from time to time, including any
replacements therefor.
          “Loan(s)” means any and all loans and advances made by the Lenders
pursuant to this Agreement, including, without limitation, any Revolving Loans
and Swingline Loans.
          “London Banking Days” means any day on which commercial banks are open
for general business (including dealings in foreign exchange and foreign
currency deposits) in London, England.
          “Master Account” means that certain deposit account (account number
8245726051) of the Borrower Representative maintained with TD Bank and described
in and subject to the Cash Management Agreements, and such other account(s) as
the Borrowers (or the Borrower Representative) and TD Bank may, from time to
time, designate as master account(s).
          “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
Holdings and the Subsidiaries taken as a whole, (b) the ability of any Borrower
to perform any of its obligations under the Loan Documents to which it is a
party, (c) a material portion of the Collateral, or the Administrative Agent’s
Liens (on behalf of itself and the Lenders) on the Collateral or the priority of
such Liens, or (d) the rights of or benefits available to the Administrative
Agent and the Lenders thereunder.
          “Material Agreement” means those agreements described on
Schedule 5.14.
          “Material Foreign Subsidiary” means any Foreign Subsidiary that has
aggregate assets greater than $500,000.
          “Material Indebtedness” means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of Holdings or its Subsidiaries in an aggregate principal amount
exceeding $2,000,000. For purposes of determining Material Indebtedness, the
“obligations” of Holdings or any Subsidiary in respect of any Swap Agreement

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at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that Holdings or such Subsidiary would be required to pay if such
Swap Agreement were terminated at such time.
          “Maximum Rate” has the meaning assigned to such term in Section 10.09.
          “Moody’s” means Moody’s Investors Service, Inc. or any successor
thereto.
          “Mortgages” means (i) those mortgages granted on November 30, 2007, as
amended, in favor of the Administrative Agent with respect to the Mortgaged
Premises, and (ii) any mortgage, deed of trust or other agreement which conveys
or evidences a Lien in favor of the Administrative Agent to secure the
Obligations, on real property of a Borrower, including any amendment,
modification or supplement thereto.
          “Mortgaged Premises” means the parcels of land with improvements
thereon located at 2100 Roosevelt Avenue, Springfield, Massachusetts 01104; 299
Page Boulevard, Springfield, Massachusetts 01104; 19 Aviation Drive, Houlton,
Maine 04730, and 400 North Main Street, Rochester, New Hampshire.
          “Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
          “Note(s)” means any and all of the Revolving Line Notes and the
Swingline Note.
          “Obligations” means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Exposure, all Cash Management Obligations, all
Swap Obligations, all Foreign Exchange Obligations, all accrued and unpaid fees
and all expenses, reimbursements, indemnities and other obligations of the
Borrowers arising under the Loan Documents to the Administrative Agent, the
Lenders, the LC Issuer, any indemnified party, any holder of Cash Management
Obligations, and any holder of Swap Obligations, including, without limitation,
any Foreign Exchange Obligations.
          “Off-Balance Sheet Liability” of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or obligation
under any sale and leaseback transaction which is not a Capital Lease
Obligation, (c) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (d) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheet of such
Person (other than operating leases).
          “Organization Documents” means (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
          “Other Taxes” means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.

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          “Participant” has the meaning set forth in Section 10.06(d).
          “PBGC” means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
          “Perfection Certificate” means that certain Perfection Certificate of
even date herewith substantially in the form of Exhibit 4 to the Security
Agreement delivered to the Administrative Agent by the Borrowers, as may have
been amended or updated from time to time.
          “Permitted Acquisition” means any Acquisition by Holdings or any
Subsidiary in a transaction that satisfies each of the following requirements:
               (a) receipt by the Administrative Agent of an officer’s
certificate of the Borrower Representative certifying that both before and after
giving effect to such Acquisition, each of the representations and warranties in
the Loan Documents is true and correct (except (i) any such representation or
warranty which relates to a specified prior date and (ii) to the extent the
Administrative Agent has been notified in writing by the Borrower Representative
that any representation or warranty is not correct and the Administrative Agent
has explicitly waived in writing compliance with such representation or
warranty) and no Default or Event of Default exists, will exist, or would result
therefrom;
               (b) as soon as available, but not less than forty-five (45) days
prior to the closing date of such Acquisition, the Borrower Representative shall
have provided the Administrative Agent (i) notice of such Acquisition,
specifying the purchase price and closing date, together with a general
description of the acquisition target’s business, (ii) copies of all business
and financial information reasonably requested by the Administrative Agent, from
time to time, including financial statements of the Companies on a Pro Forma
Basis reflecting the financial impact of the Acquisition, (iii) drafts of any
purchase and sale agreement, together with any available schedules and exhibits,
(iv) if available, at least three (3) years of audited financial statements with
respect to the acquisition target (or, if the acquisition target is a start-up
company, any available financial statements of such acquisition target plus
stand-alone projections for such acquisition target), and (v) intentionally
omitted;
               (c) if such Acquisition is an acquisition of assets or Equity
Interests of any foreign Person, such Acquisition is a Permitted Foreign
Subsidiary Loan and Investment;
               (d) if such Acquisition is an acquisition of the Equity Interests
of a Person, the Acquisition is structured so that the acquired Person shall
become a wholly-owned Subsidiary of Holdings, and shall become a Borrower
pursuant to the terms of this Agreement if such Subsidiary is a Domestic
Subsidiary;
               (e) if such Acquisition is an acquisition of assets, the
Acquisition is structured so that a Borrower shall acquire such assets;
               (f) if such Acquisition is an acquisition of Equity Interests,
such Acquisition will not result in any violation of Regulations T, U or X;
               (g) if such Acquisition involves a regulated business, such as
firearm manufacturing, the Borrower Representative has provided evidence
reasonably satisfactory to the Administrative Agent that acquisition target is
compliant with all applicable regulations and has all licenses, permits and
governmental approvals necessary to operate its business and that the acquiring
Borrower has obtained the necessary consents to the transfer of such licenses,
permits and governmental approvals;

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               (h) no Borrower shall, as a result of or in connection with any
such Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could have a
Material Adverse Effect;
               (i) in connection with an Acquisition of the Equity Interests of
any Person, all Liens on property of such Person shall be terminated unless the
Administrative Agent in its Permitted Discretion consents otherwise, and in
connection with an Acquisition of the assets of any Person, all Liens on such
assets shall be terminated; and
               (j) the Financial Officer of Holdings shall certify (and provide
the Administrative Agent with a pro forma calculation in form and substance
reasonably satisfactory to the Administrative Agent) to the Administrative Agent
that, immediately after giving effect to the completion of such Acquisition, on
a consolidated basis, the Companies will be in compliance with all financial
covenants set forth in Section 7.12 hereof.
          “Permitted Discretion” means a determination made in good faith and in
the exercise of reasonable (from the perspective of prudent banking practices)
business judgment.
          “Permitted Encumbrances” means:
               (a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.10;
               (b) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than thirty
(30) days or are being contested in compliance with Section 5.06;
               (c) pledges and deposits made in the ordinary course of business
in compliance with workers’ compensation, unemployment insurance and other
social security laws or regulations;
               (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
               (e) judgment liens in respect of judgments that do not constitute
an Event of Default under Section 8.01(k);
               (f) Liens granted by USR to Zurich America Insurance Company, its
subsidiaries and affiliates pursuant to an Agreement of Indemnity dated July 20,
2009, in USR’s Bonded Accounts, Bonded Inventory and Bonded Contract Equipment;
and
               (g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of any Borrower;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness other than provided in (f) above.
          “Permitted Foreign Subsidiary Loan and Investment” means, so long as
the aggregate of the following do not exceed $20,000,000.00 at any time
outstanding:

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               (a) an investment of cash or property by a Borrower in a Foreign
Subsidiary (other than the German Subsidiary) made on or after the Effective
Date;
               (b) a loan by a Borrower to a Foreign Subsidiary (other than the
German Subsidiary), a Guarantee by a Borrower of Indebtedness of a Foreign
Subsidiary (other than the German Subsidiary) or a pledge, security interest or
hypothecation by a Borrower to secure Indebtedness of a Foreign Subsidiary
(other than the German Subsidiary), in each case made on or after the Effective
Date; and
               (c) an investment of cash or property by a Borrower in, or loan
from a Borrower to a Foreign Subsidiary (other than the German Subsidiary) for
the purpose of making for one or more Permitted Acquisitions.
          “Permitted Investments” means:
               (a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
               (b) investments in commercial paper maturing within two hundred
seventy (270) days from the date of acquisition thereof and having, at such date
of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
               (c) investments in certificates of deposit, banker’s acceptances
and time deposits maturing within one hundred eighty (180) days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $500,000,000;
               (d) fully collateralized repurchase agreements with a term of not
more than thirty (30) days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria described in
clause (c) above;
               (e) money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the Investment
Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have
portfolio assets of at least $5,000,000,000; and
               (f) Permitted Acquisitions.
          “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
          “Plan” means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which any
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
          “Pro Forma Basis” means on a pro forma basis with such adjustments as
would be permitted to be reflected in pro forma financial information complying
with the requirements of GAAP and Article XI of Regulation S-X under the
Securities Act.

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          “Refinancing Indebtedness” means high yield indebtedness issued by
Holdings in the aggregate principal amount not to exceed $50,000,000 to the
holders of the Convertible Notes, refinancing an equal principal amount of the
Convertible Notes outstanding as of the Effective Date, provided that (A) the
Borrower Representative shall notify the Administrative Agent of the issuance of
such indebtedness, and such indebtedness shall be unsecured, (B) the aggregate
combined principal amount of such indebtedness and the remaining Convertible
Notes shall not, at any time, exceed the principal amount of the Convertible
Notes outstanding as of the Effective Date, and (C) such indebtedness shall not
mature or be redeemable prior to the date that is six (6) months following the
Revolving Maturity Date.
          “Refinancing Indebtedness Documents” means any indenture entered into
in respect of the Refinancing Indebtedness and all other supplements, agreements
and instruments executed in connection therewith, as the same may be amended or
supplemented from time to time to the extent permitted under this Agreement.
          “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.
          “Report” means reports prepared by the Administrative Agent or another
Person showing the results of appraisals, field examinations or audits
pertaining to the Borrowers’ assets from information furnished by or on behalf
of the Borrowers, after the Administrative Agent has exercised its rights of
inspection pursuant to this Agreement.
          “Required Lenders” means, as of any date of determination, at least
two Lenders holding more than 66.67% of all Commitments or, if the commitment of
each Lender to make Loans and the obligation of the LC Issuer to issue Letters
of Credit have been terminated hereunder, at least two Lenders holding in the
aggregate more than 66.67% of all outstanding Loans and LC Exposure; provided
that the Commitments of, and the portion of all outstanding Loans and LC
Exposure held by any Defaulting Lender shall be excluded for the purposes of
making a determination of Required Lenders.
          “Requirement of Law” means as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
          “Restricted Payment” means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests of
Holdings or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests of Holdings or any Subsidiary or any option, warrant
or other right to acquire any such Equity Interests of Holdings or any
Subsidiary.
          “Revolving Availability” means, at any time, an amount equal to
(a) the Revolving Commitment minus (b) the Revolving Exposure.
          “Revolving Borrowing(s)” means Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of LIBOR Loans, as to
which a single Interest Period is in effect.
          “Revolving Commitment” means the commitment of the Lenders to make
Revolving Loans and to acquire participation in Swingline Loans hereunder, as
such commitment may be reduced from time to time pursuant to Section 2.10. The
initial amount of the Lenders’ Revolving Commitment is

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$115,000,000. Each Lender’s Revolving Commitment is set forth on Schedule 2.01
or in the Assignment Assumption to which such Lender becomes a party hereto, as
applicable as such amount may be adjusted from time to time in accordance with
this Agreement.
          “Revolving Credit Lender” means, at any time, any Lender that has a
Revolving Commitment at such time.
          “Revolving Exposure” means, at any time, the sum of (x) the
outstanding principal amount of Revolving Loans and (y) the Swingline Exposure
at such time.
          “Revolving Line Notes” means those certain Revolving Line of Credit
Notes of even date herewith made by the Borrowers to the order of the Lenders in
their respective Applicable Revolving Loan Percentage in the original aggregate
principal amount of $115,000,000, substantially in the form of Exhibit E-1, as
the same may be amended, restated, extended, replaced or otherwise modified from
time to time.
          “Revolving Loan” means a Loan made pursuant to Section 2.01 and
evidenced by the Revolving Line Notes.
          “Revolving Loan Availability Period” means the period from and
including the Effective Date to but excluding the earlier of the Revolving
Maturity Date and the date of termination of the Revolving Commitment.
          “Revolving Maturity Date” means December 7, 2014 or any earlier date
on which the Revolving Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
          “S&P” means Standard & Poor’s Ratings Services, a division of
McGraw-Hill, Inc. or any successor thereto.
          “S&W Corp.” has the meaning assigned to it in the preamble.
          “Securities Act” means the Securities Act of 1933, as amended from
time to time.
          “Security Agreement” means the Amended and Restated Pledge and
Security Agreement of even date herewith made by the Borrowers in favor of the
Administrative Agent, as amended, restated or modified from time to time.
          “Secured Parties” means, collectively, the Administrative Agent, the
Lenders, the LC Issuer, the Persons holding the Cash Management Obligations, the
Persons holding the Swap Obligations, the Persons holding the Foreign Exchange
Obligations, each co-agent or sub-agent appointed by the Administrative Agent
from time to time pursuant to Section 9.05, and the other Persons the
Obligations to which are or are purported to be secured by the Collateral under
the terms of the Collateral Documents.
          “Spot Rate” has the meaning assigned to it in Section 1.05.
          “Subsidiary” means, of a Person, a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned by such Person or any other Person which is
or is required to be consolidated with such Person in the consolidated financial
statements of such Person in accordance with GAAP. Unless the context

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otherwise requires, all references herein to a “Subsidiary” or to “Subsidiaries”
shall refer to a Subsidiary or Subsidiaries of Holdings.
          “Swap Agreement” means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc. or any International
Foreign Exchange Master Agreement (any such master agreement, together with any
related schedules, a “Master Agreement”), including any such obligations or
liabilities under any Master Agreement; provided, that no phantom stock or
similar plan providing for payments only on account of services provided by
current or former directors, officers, employees or consultants of any Borrower
or any Subsidiaries shall be deemed a Swap Agreement.
          “Swap Obligations” means any and all obligations under (a) any and all
Swap Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction, of any Borrower
to Persons who are the Administrative Agent and/or any Lender (or any Affiliate
of the Administrative Agent or any Affiliate of any Lender) at the time such
contracts were entered into (even if the respective Person subsequently ceases
to be a party to the Credit Agreement for any reason), whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor).
          “Swap Termination Value” means in respect of any Borrower’s liability
to any Lender or any Affiliate of any Lender under one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) that would be
payable by such Person thereunder and (b) for any date prior to the date
referenced in clause (a), the amount(s) determined as the mark-to-market values
for such Swap Agreements, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such
Swap Agreements (which may include a Lender or any Affiliate of a Lender).
          “Swingline Exposure” means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Revolving Loan Percentage of
the total Swingline Exposure at such time.
          “Swingline Lender” means TD Bank, in is capacity as lender of
Swingline Loans hereunder.
          “Swingline Loan” means a Loan made pursuant to Section 2.03.
          “Swingline Note” means that certain Swingline Note of even date
herewith made by the Borrowers to the order of the Swingline Lender in the
original principal amount of $5,000,000.00, substantially in the form of
Exhibit E-2, as the same may be amended, restated, extended, replaced or
otherwise modified from time to time.

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          “Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
          “TCAC” has the meaning assigned to it in the preamble.
          “TCHC” has the meaning assigned to it in the preamble.
          “TD Bank” means TD Bank, N.A. (as successor-in-interest to TD
Banknorth, N.A.), a national banking association and a Lender.
          “Test Period” means, at any time, the four consecutive fiscal quarters
of the Borrowers then last ended (in each case taken as one accounting period).
          “Title Company” means any title insurance company as shall be retained
by the Borrowers and reasonably acceptable to the Administrative Agent.
          “Title Policy” means with respect to each Mortgage, a policy of title
insurance (or pro forma or marked-up title insurance commitment having the
effect of a policy of title insurance) insuring the Lien of such Mortgage as a
valid first mortgage Lien on the Mortgaged Premises and fixtures described
therein subject to Permitted Encumbrances in the amount equal to not less than
100% of the fair market value of such Mortgaged Premises and fixtures, which
fair market value shall be determined by the Administrative Agent and the
Borrowers in their reasonable judgment and which policy (or such pro forma or
marked-up commitment) shall (A) be issued by the Title Company, (B) to the
extent necessary, include such reinsurance arrangements as shall be reasonably
acceptable to the Administrative Agent and approved by the Borrowers, (C) have
been supplemented by such endorsements (unless endorsements are not available or
are prohibitively expensive) as shall be reasonably requested by the
Administrative Agent, and (D) evidence reasonably acceptable to the
Administrative Agent of payment by the Borrowers of all Title Policy premiums,
search and examination charges, escrow charges and related charges, mortgage
recording taxes, fees, charges, costs and expenses required for the recording of
the Mortgages and issuance of the Title Policies referred to herein.
          “Total Funded Debt” means, at any date, without duplication, the
aggregate principal amount of all Indebtedness of the Companies at such date
(excluding undrawn amount of Letters of Credit, Foreign Exchange Obligations,
other Swap Obligations and Cash Management Obligations), determined on a
consolidated basis in accordance with GAAP, provided, however, for purposes of
calculating the financial covenants set forth in Section 7.12, any Guarantee and
Off-Balance Sheet Liability shall be deemed to be fully funded. In the case of
any Guarantee, the amount deemed fully funded shall be the greater of (x) the
amount then due on the Guarantee, or (y) the maximum principal amount of the
indebtedness then subject to such Guarantee. In the case of any Off-Balance
Sheet Liability, the amount deemed fully funded shall be the amount that would
be due if such Off-Balance Sheet Liability was due on the date of determination.
          “Total Percentage” means, with respect to any Lender, a percentage
equal to a fraction the numerator of which is the aggregate amount of such
Lender’s Revolving Commitment and LC Commitment under this Agreement and the
denominator of which is the aggregate amount of all Commitments of all Lenders.
If the Commitments have terminated or expired, the Total Percentage shall be
determined based upon such Lender’s percentage share of the aggregate unpaid
principal amount of all Loans and LC Exposure on any date of determination.

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          “Transactions” means the execution, delivery and performance by the
Borrowers of this Agreement, the borrowing of Loans and other credit extensions,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
          “Type” when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the LIBOR Basis or the Base Rate.
          “UCC” or “Uniform Commercial Code” means unless otherwise specified,
the Uniform Commercial Code as in effect in the State of New York on the date of
this Agreement, as the same may be amended or otherwise modified.
          “Unreimbursed Amount” has the meaning assigned to it in
Section 2.14(i).
          “Unused Revolver Fee” has the meaning assigned to it in
Section 2.12(a).
          “Unutilized Revolving Commitment” means, at any time, the Revolving
Commitment less the outstanding principal amount of the Revolving Loans.
          “USR” means Universal Safety Response, Inc. (formerly known as
SWAC-USR II, Inc.), a Delaware corporation, successor by merger to Universal
Safety Response, Inc., a New York corporation, successor by merger to SWAC-USR
I, Inc., a Delaware corporation.
          “Withdrawal Liability” means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
          SECTION 1.02. Classification of Loans and Borrowings. For purposes of
this Agreement, Loans may be classified and referred to by Class (e.g., a
“Revolving Loan”) or by Type (e.g., a “LIBOR Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Borrowing”).
          SECTION 1.03. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower Representative notifies the Administrative Agent that the
Borrowers request an amendment to any provision hereof to eliminate the effect
of any change occurring

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after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower
Representative that the Required Lenders request an amendment to any provision
hereof for such purpose), regardless of whether any such notice is given before
or after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
     SECTION 1.05. Currency Equivalents. Any amount specified in this Agreement
(other than in Articles II, III, IX and X) or any of the other Loan Documents to
be in Dollars shall also include the equivalent of such amount in any currency
other than Dollars, such equivalent amount thereof in the applicable currency to
be determined by the Administrative Agent at such time on the basis of the Spot
Rate (as defined below) for the purchase of such currency with Dollars. For
purposes of this Section 1.05, the “Spot Rate” for a currency means the rate
determined by the Administrative Agent to be the rate quoted by the Person
acting in such capacity as the spot rate for the purchase by such Person of such
currency with another currency through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two (2) Business Days prior to
the date of such determination; provided that the Administrative Agent may
obtain such spot rate from another financial institution designated by the
Administrative Agent if the Person acting in such capacity does not have as of
the date of determination a spot buying rate for any such currency.
ARTICLE II
The Credits
     SECTION 2.01. Revolving Loans. Subject to the terms and conditions set
forth herein, each Revolving Credit Lender severally agrees to make Revolving
Loans in Dollars to the Borrowers from time to time during the Revolving Loan
Availability Period in such amount of such Revolving Credit Lender’s Applicable
Revolving Loan Percentage in an aggregate principal amount at any one time
outstanding that will not result in the Revolving Exposure exceeding the
Revolving Commitment. During the Revolving Loan Availability Period the
Borrowers may borrow, prepay and reborrow the Revolving Loans. The Revolving
Loans may from time to time be LIBOR Loans or Base Rate Loans, as determined by
the Borrowers in accordance with Section 2.07.
     SECTION 2.02. Repayments of Loans.
          (a) Maturity of Loans. The Borrowers shall pay to the Administrative
Agent, for the account of the Revolving Credit Lenders, all then outstanding
principal, interest, fees and other amounts with respect to Revolving Loans on
the Revolving Maturity Date. The Borrowers shall pay to the Administrative Agent
for the account of the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two (2) Business Days after such Swingline Loan is made;
provided, that on each date that a Revolving Borrowing is made, the Borrowers
shall repay all Swingline Loans then outstanding. Notwithstanding anything to
the contrary in the prior sentence, the Borrowers shall repay Swingline Loans
pursuant to Section 2.02(b)(ii), below.

  (b)   Mandatory Repayments of Loans.

  (i)   The Borrowers hereby agree to promptly deposit, or cause to be promptly
deposited, into the Deposit Accounts all cash, checks, electronic funds
transfers and all other funds and payments received by the Borrowers. All funds
from time to time deposited into the Deposit Accounts shall be

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      subject to full cash dominion by the Administrative Agent and shall be
deemed received by the Administrative Agent in accordance with Section 2.13(a)
of the Credit Agreement. Subject to the terms and provisions of the Deposit
Account Agreements and the Cash Management Agreements, the Administrative Agent
shall determine the collected funds in the Master Account on each Business Day.
Such collected funds shall be used to pay the fees and charges owed to TD Bank
pursuant to the Deposit Account Agreements and the Cash Management Agreements,
and then shall be used to pay checks and all other forms of debit activity that
are properly drawn on the Deposit Account(s) and presented for payment. Subject
to Section 3.03 of the Credit Agreement, to the extent there remain excess
collected funds in the Master Account after the payment of the fees, charges and
checks as described in the previous sentence, all such excess collected funds
(the “Excess Collected Funds”) shall be automatically applied, on each Business
Day to repay Swingline Loans to the extent then outstanding. After the
application of the collected funds in accordance with this Section 2.02(b)(i),
so long as no default or Event of Default has occurred and is continuing, any
Excess Collected Funds shall remain on deposit in the Master Account, or at the
written request of the Borrower Representative, all or a portion of such
remaining balance shall be deposited into one or more securities and/or deposit
accounts of the Borrowers maintained with the Administrative Agent.

  (ii)   Notwithstanding anything in this Agreement to the contrary, if at any
time the Revolving Exposure exceeds the Revolving Commitment, the Borrowers
shall repay immediately the Revolving Loans in an aggregate amount equal to such
excess. All such amounts repaid and applied to repay the Revolving Loans shall
be applied first to repay Revolving Loans that are Base Rate Loans and, then, to
repay Revolving Loans that are LIBOR Loans, in each case without a corresponding
reduction in the Revolving Commitment.

     SECTION 2.03. Swingline Loans.
          (a) To the extent there are insufficient collected funds in the Master
Account as determined on any Business Day to pay the fees and charges and other
account activity described in the fourth sentence of Section 2.06(b)(i) for such
Business Day, the Borrowers shall be deemed to have given notice to the
Administrative Agent and the Swingline Lender, and automatically and irrevocably
requested, the borrowing of a Swingline Loan from the Swingline Lender in the
amount of such insufficiency (the “Insufficiency”). So long as no Default or
Event of Default has occurred and is continuing, and subject to the terms and
conditions of this Agreement, the Swingline Lender agrees to make a Swingline
Loan to the Borrowers on such Business Day in the amount of the Insufficiency;
provided, however, the making of such Swingline Loan shall not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000
or (ii) the Revolving Exposure exceeding the Revolving Commitment; provided,
further, however, that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. The proceeds of each
Swingline Loan shall be credited to the Master Account by the Swingline Lender.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Swingline Loans. Each such
Swingline Loan shall be a Base Rate Loan. Each Swingline Loan shall be

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subject to all the terms and conditions applicable to Revolving Loans, except
that all payments thereon shall be payable to the Swingline Lender for its our
account.
          (b) The Swingline Lender may by written notice given to the
Administrative Agent not later than 11:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which the Lenders will
participate. Promptly upon such notice, the Administrative Agent will give
notice thereof to each Lender, specifying in such notice such Lender’s
Applicable Revolving Loan Percentage of such Swingline Loan or Loans. Each
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Lender’s Applicable Revolving Loan Percentage of such
Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation
to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner provided in Section 2.06 with respect to
Revolving Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, through the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amount so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower Representative of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the Swingline Lender.
Any amounts received by the Swingline Lender from the Borrowers (or other party
on behalf of the Borrowers) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale or participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interest may appear; provided, however, that
any such payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent that such payment is
required to be refunded to the Borrowers for any reason. The purchase or
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrowers of any default in the payment thereof.
     SECTION 2.04. Appointment of Borrowers’ Representative. Each other Borrower
hereby irrevocably appoints Holdings as its representative (the “Borrower
Representative”), and Holdings shall act under this Agreement as the
representative of each Borrower for all purposes, including, without being
limited to, requesting borrowings and receiving account statements and other
notices and communications to the Borrowers (or any of them) from the
Administrative Agent or any Lender. The Administrative Agent and the Lenders may
rely, and shall be fully protected in relying, on any request for borrowing,
disbursement instruction, report, information or any other notice or
communication made or given by Holdings, whether in its own name, on behalf of
any Borrower, on behalf of “the Borrowers,” and neither the Administrative Agent
nor any Lender shall have any obligation to make any inquiry or request any
confirmation from or on behalf of any Borrower as to the binding effect on it of
any such request, instruction, report, information, notice or communication, nor
shall the joint and several character of the Borrowers’ liability for the
Obligations be affected.
     SECTION 2.05. Procedure for Borrowing. Each Revolving Borrowing, each
conversion of Revolving Loans of one Type to the other, and each continuation of
LIBOR Loans shall be made upon delivery by the Borrower Representative of an
irrevocable notice to the Administrative Agent, by facsimile, or by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent. Each Borrowing Request and Conversion/Continuation Notice
must be received

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by the Administrative Agent not later than 2:00 p.m. New York time (i) three
(3) Business Days prior to the requested date of any borrowing of, conversion to
or continuation of LIBOR Loans, (ii) three (3) Business Days prior to the
conversion of a LIBOR Loan to a Base Rate Loan, and (iii) one (1) Business Day
prior to the requested date of any borrowing of any Base Rate Loan. Each written
notice of borrowing or conversion shall specify (i) whether the requested
borrowing is to be a Revolving Borrowing, a conversion of Revolving Loans from
one Type to the other, or a continuation of a LIBOR Loan, (ii) the requested
date of the borrowing, continuation or conversion, as the case may be (which
shall be a Business Day), (iii) the principal amount of the Revolving Loan to be
borrowed, continued or converted, (iv) if applicable, the duration of the
Interest Period applicable thereto; and (vi) if applicable, the Type of
Revolving Loans to be borrowed or to which existing Revolving Loans are to be
converted. Each borrowing of, conversion to or continuation of LIBOR Loans shall
be in an amount equal to $250,000 or whole multiples of $100,000 in excess
thereof. If the Borrower Representative fails to specify a Type of Revolving
Loan in a Borrowing Request or Conversion/Continuation Notice or if the Borrower
Representative fails to give timely notice requesting a conversion or
continuation, then the Revolving Loans, as the case may be, shall be made as, or
converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loan
shall be effective as of the last day of the Interest Period then in effect with
respect to the applicable LIBOR Loan. If the Borrower Representative requests a
borrowing of, conversion to or continuation of a LIBOR Loan in any such
borrowing or conversion notice, but fails to specify an Interest Period, the
Borrower Representative will be deemed to have specified an Interest Period of
one month. Notwithstanding any contrary provision hereof, if a Default has
occurred and is continuing and the Administrative Agent so notifies the Borrower
Representative, then, so long as a Default is continuing (i) no outstanding
Revolving Loan may be converted to or continued as a LIBOR Loan and (ii) unless
repaid, each LIBOR Loan shall be converted to a Base Rate Loan at the end of the
Interest Period applicable thereto. All Swingline Loans shall be made as
provided in Section 2.03.
     SECTION 2.06. Funding of Loans. (a) Following receipt of a Borrowing
Request or a Conversion/Continuation Notice, subject to the terms and provisions
of this Agreement, the Administrative Agent shall promptly notify each Lender of
the amount of its Applicable Revolving Loan Percentage, under the applicable
Loan or the applicable Loans, and if no timely notice of a conversion or
continuation is provided by the Borrower Representative, the Administrative
Agent shall notify each Lender of the details of any automatic conversion to
Base Rate Loans described in Section 2.05. In the case of Revolving Borrowing,
(i) each appropriate Lender shall make the amount of its Loan available to the
Administrative Agent in Dollars in immediately available funds at the
Administrative Agent’s Office not later than 2:00 p.m. on the Business Day
specified in the applicable Borrowing Request or Conversion/Continuation Notice
and (ii) upon satisfaction or waiver of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Borrowing, Section 4.01),
the Administrative Agent shall make all funds so received available to the
Borrower Representative in like funds as received by the Administrative Agent
either by (A) crediting the account of the applicable Borrower or Borrowers on
the books of the Administrative Agent with the amount of such funds or (B) wire
transfer of such funds, in each case in accordance with instructions provided to
(and reasonably acceptable to) the Administrative Agent by the Borrower
Representative.
          (b) The Administrative Agent shall make each Loan to be made by it
hereunder on the proposed date thereof available to the Borrower Representative
by promptly crediting the amounts in immediately available funds, to the Funding
Account.
     SECTION 2.07. Interest Elections. (a) Each borrowing of Loans initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a LIBOR Loan, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower Representative may elect to convert
such Revolving Loan to a different Type or to continue a LIBOR Loan and, in the
case of converting to or continuing a LIBOR Loan, shall elect an Interest Period
therefor, all as provided in

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Section 2.05. The Borrower Representative may elect different options with
respect to different portions of the affected Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Swingline Loans, which may not be converted or
continued.
          (b) Notwithstanding any other provision of this Agreement, (i) the
Borrower Representative shall not be entitled to request, or to elect to convert
or continue any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date and (ii) at no time shall the
aggregate number of all LIBOR Loans then outstanding exceed five (5).
     SECTION 2.08. Interest. (a) Each Base Rate Loan (including each Swingline
Loan) shall bear interest at the Base Rate Basis.
          (b) Each LIBOR Loan shall bear interest at the LIBOR Basis for the
Interest Period in effect for such Loan.
          (c) Notwithstanding the foregoing, during the occurrence and
continuance of an Event of Default, the Administrative Agent may, at its option,
or shall, at the request of the Required Lenders, by notice to the Borrower
Representative, declare that all Revolving Loans and Swingline Loans shall bear
interest at 2% above the rate otherwise applicable to such Loan. Each LC
Borrowing shall bear interest at 2% above the Base Rate Basis and be payable on
demand.
          (d) Borrowers shall pay accrued interest on each Loan in arrears on
each Interest Payment Date for such Loan and upon termination of the applicable
maturity date of such Loan; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any LIBOR Loan prior to
the end of the current Interest Period therefor, accrued interest on such Loan
shall be payable on the effective date of such conversion.
          (e) All interest hereunder shall be computed on the basis of a year
consisting of (i) in the case of Base Rate Loans, 365 or 366 days, as the case
may be, or (ii) in the case of LIBOR Loans, 360 days; and in each instance under
(i) and (ii) above, shall be payable for the actual number of days elapsed. The
applicable Base Rate or LIBOR Basis shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.
          (f) If, for any fiscal quarter, the Consolidated Leverage Ratio set
forth in the Compliance Certificate with respect to the applicable Test Period
shall be determined to have been incorrectly reported, then at the Required
Lender’s election, the Applicable Margins may be retroactively adjusted to
reflect any higher rate that would have been applicable had the Consolidated
Leverage Ratio been correctly reported on such Compliance Certificate. The
Borrowers shall pay on demand the unpaid interest that should have been paid had
the correct Applicable Margins been in effect for the interest periods affected
thereby.
     SECTION 2.09. Alternate Rate of Interest. (a) If prior to the commencement
of any Interest Period for a LIBOR Loan:

  (i)   any Lender determines in its Permitted Discretion (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining the LIBOR Basis for such Interest Period; or

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  (ii)   any Lender determines in its Permitted Discretion the LIBOR Basis for
such Interest Period will not adequately and fairly reflect the cost to such
Lender of making or maintaining its Loans included in such Borrowing for such
Interest Period; or

          (b) if after the Effective Date, any Lender shall have determined that
the adoption or modification of any Change of law that has or would have the
effect of making it unlawful for the Lender to honor its obligations to make
LIBOR Loans or to continue to make or maintain LIBOR Loans,
then the Administrative Agent shall give notice thereof to the Borrower
Representative by telephone or facsimile as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower Representative that
the circumstances giving rise to such notice no longer exist, any Borrowing
Request that requests the borrowing of, or any Conversion/Continuation Notice
that elects a continuation of or conversion to a LIBOR Loan, shall be
ineffective and such Borrowing shall be made as, converted to or continued as a
Base Rate Loan.
     SECTION 2.10. Termination and Reduction of Commitments. (a) Unless
otherwise terminated under Article VIII or clause (b) of this Section, the
Revolving Commitment shall terminate upon the expiration of the Revolving Loan
Availability Period.
          (b) The Borrower Representative may at any time terminate the
Revolving Commitment upon (i) the payment in full of all outstanding Loans,
together with accrued and unpaid interest thereon and on any Letters of Credit,
(ii) the payment in full of the accrued and unpaid fees with respect to the
Revolving Commitment, and (iii) the payment in full of all reimbursable expenses
and other Obligations together with accrued and unpaid interest thereon.
          (c) Intentionally Omitted.
          (d) The Borrower Representative shall notify the Administrative Agent
of any election to terminate the Revolving Commitment under paragraph (b) or
(c) of this Section at least five (5) Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Each notice delivered by the Borrower Representative pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower Representative may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower Representative (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving
Commitment shall be permanent.
          (e) The Administrative Agent shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the
Borrowers to the Administrative Agent and the Lenders resulting from each Loan
made by the Lenders, including the amounts of principal and interest payable and
paid to the Lender from time to time hereunder.
          (f) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder the Class and Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to the
Administrative Agent and the Lenders hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder.
          (g) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Loan made by

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such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
          (h) The entries made in the accounts maintained pursuant to paragraph
(e), (f) or (g) of this Section shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.
          (i) The Loans shall be evidenced by the Notes.
     SECTION 2.11. Optional Prepayment of Loans. (a) Prepayments. The Borrowers
shall have the right at any time and from time to time, to prepay any Loan in
whole or in part, subject to: (i) as to Revolving Loans, prior notice in
accordance with paragraph (c) of this Section; and (ii) the payment of any
applicable fees payable under Section 3.03.
          (b) Application of Prepayments. So long as no Default or Event of
Default has occurred and is then continuing, the Borrowers shall have the right
to specify how principal prepaid pursuant to Section 2.11(a) shall be applied.
All such amounts prepaid and applied to prepay the Revolving Loans shall be
applied first to repay Revolving Loans that are Base Rate Loans and, then, to
repay Revolving Loans that are LIBOR Loans, in each case without a corresponding
reduction in the Revolving Commitment.
          (c) The Borrower Representative shall notify the Administrative Agent
by telephone (confirmed by facsimile or by electronic communication, if
arrangements for doing so have been approved by the Administrative Agent) of any
prepayment hereunder (i) in the case of prepayment of a LIBOR Loan, not later
than 10:00 a.m., New York time, three (3) Business Days before the date of
prepayment, or (ii) in the case of prepayment of a Base Rate Loan not later than
10:00 a.m., New York time, the day of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Loan or portion thereof to be prepaid. Each partial prepayment of any Loan
shall be in an amount equal to $100,000.00 or whole multiples of $100,000.00 in
excess thereof. Prepayments shall be accompanied by accrued interest and the
payment of any applicable fees payable under Section 3.03.
     SECTION 2.12. Fees and Other Charges. (a) Unused Revolver Fee. The
Borrowers agree to pay to the Administrative Agent for the account of the
Revolving Credit Lenders in accordance with their Applicable Revolving Loan
Percentage a commitment fee (the “Unused Revolver Fee”) for the period from and
including the Effective Date to the last day of the Revolving Loan Availability
Period, which shall accrue at the rate designated on the grid in the definition
“Applicable Margin” on the average daily amount of the Unutilized Revolving
Commitment. The rate of the Unused Revolver Fee shall be reset on each
Determination Date. The accrued Unused Revolver Fee shall be payable in arrears
on the last day of each October, January, April and July and on the date on
which the Revolving Commitment terminates. The Unused Revolver Fee shall be
computed on the basis of a year of three hundred sixty (360) days and shall be
payable for the actual number of days elapsed.
          (b) Letter of Credit Fee. The Borrowers agree to pay to the
Administrative Agent for the account of the LC Issuer a letter of credit fee in
respect of each Letter of Credit (“Letter of Credit Fee”), at a per annum rate
equal to 0.75% of the undrawn face amount of the Letter of Credit, payable in
advance (i) on the issuance date, and (ii) on each anniversary date thereof. In
addition, the Borrowers agree to pay the Administrative Agent for the account of
the LC Issuer standard fees with respect to the issuance, administration,
amendment, renewal or extension of any Letter of Credit or the processing of

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any presentation or payment made thereunder. Any other fees payable under this
Section 2.12(c) shall be payable within ten (10) days after demand. All Letter
of Credit Fees shall be computed on the basis of a three hundred sixty (360) day
year and shall be payable for the actual number of days elapsed.
          (c) Arrangement Fee. The Borrowers shall pay to the Administrative
Agent an arrangement fee in accordance with a certain fee letter (the “Fee
Letter”) by and among the Administrative Agent, TD Bank, the Lead Arranger and
the Borrower Representative.
          (d) Agency Fee. The Borrowers shall pay to the Administrative Agent
the annual agency fee in accordance with the Fee Letter.
          (e) Upfront Fee. The Borrowers shall pay to the Administrative Agent
for the accounts of all Lenders (including TD Bank in its capacity as a Lender)
the upfront fees in accordance with the Fee Letter.
          (f) Late Charge. The Borrowers agree to pay the Administrative Agent
for the account of the Lenders holding such Obligations, with respect to any
payment of principal, interest or fees due under this Agreement that is not made
within ten (10) days after its due date, a late charge equal to six percent (6%)
of the amount past due.
          (g) Non-Refundability. All fees payable under this Section 2.12 shall
be paid on the dates due, in immediately available funds, to the Administrative
Agent. All fees paid under this Section 2.12 shall not be refundable under any
circumstances.
     SECTION 2.13. Payments Generally; Administrative Agent’s Clawback.
          (a) General. All payments to be made by the Borrowers shall be made
without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders and/or LC Issuer to which such payment is owed, at the
Funding Office in Dollars and in immediately available funds not later than
11:00 a.m. New York time on the date specified herein. The Administrative Agent
will promptly distribute to each Lender and the LC Issuer its Applicable
Percentage of such payment in like funds as received by wire transfer to such
Lender and/or LC Issuer. All payments received by the Administrative Agent after
11:00 a.m. New York time shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue. If any
payment to be made by the Borrowers (other than payments on the LIBOR Loans)
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day. If any payment on a LIBOR Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to this paragraph, such
extension of time shall be reflected in computing interest or fees, as the case
may be.
          (b) Funding Account. The Borrowers hereby irrevocably authorize the
Administrative Agent to charge to the Funding Account, or if the funds therein
are insufficient, so long as the Revolving Availability as a result thereof will
be greater than $0, to advance to the Funding Account as a Revolving Loan that
is a Base Rate Loan and simultaneously charge to the Funding Account, a sum
sufficient to pay when due all scheduled payments of principal and all interest
accrued on the Obligations and to pay when due all costs, fees and expenses at
any time owed by the Borrowers to the Administrative Agent, the Lenders, the LC
Issuer and/or the other Secured Parties hereunder. The Administrative Agent

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will account to the Borrower Representative monthly with a statement of Loans,
charges and payments made pursuant to this Agreement, and such account rendered
by the Administrative Agent shall be deemed final, binding and conclusive upon
the Borrowers unless the Administrative Agent is notified by the Borrower
Representative in writing to the contrary within thirty (30) days of the date
each accounting is mailed to the Borrower Representative. Such notice shall only
be deemed an objection to those items specifically objected to therein.
     (c) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.06 and may, in reliance upon such assumption, make
available to the Borrowers a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender agrees to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent at the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation. If such Lender
pays its share of the applicable Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Loan included in such Borrowing.

  (ii)   Payments by the Borrowers; Presumptions by Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrower
Representative prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the LC Issuer hereunder
that the Borrowers will not make such payment, the Administrative Agent may
assume that the Borrowers have made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the LC Issuer, as the case may be, the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Lenders or the LC
Issuer, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or the LC
Issuer in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.     (iii)   A notice of the
Administrative Agent to any Lender or the Borrower Representative with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

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

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          (e) Obligations of Lenders Several. The obligations of the Lenders
hereunder to make Loans, to fund participations in Swingline Loans and to make
payments pursuant to Section 10.04(c) are several and not joint. The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Loan, to purchase its participation or to make its payment under
Section 10.04(c).
          (f) Funding Source. Nothing herein shall be deemed to obligate any
Lender to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by any Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
          (g) Insufficient Funds. If at any time insufficient funds are received
by and available to the Administrative Agent to pay fully all amounts of
principal, LC Disbursements, LC Borrowings, interest and fees then due
hereunder, such funds shall be applied (i) first, toward 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, toward payment of principal, LC Disbursements and LC Borrowings
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal, LC Disbursements and LC Borrowings then due to
such parties.
     SECTION 2.14. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, any Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the LC Issuer at
any time and from time to time during the Letter of Credit Availability Period
denominated in Dollars or in one or more Alternative Currencies. In the event of
any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any Letter of Credit Document, the terms and conditions
of this Agreement shall control. The Existing Letters of Credit shall be deemed
Letters of Credit issued hereunder, and subject to the terms of this Agreement.
All payments applicable to the Letters of Credit shall be payable to the LC
Issuer solely for its own account.
          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower for whose
account the Letter of Credit is to be issued shall hand deliver or facsimile (or
transmit by electronic communication, if arrangements for doing so have been
approved by the LC Issuer) to the LC Issuer (with a copy to the Administrative
Agent), reasonably in advance of the requested date of issuance, amendment,
renewal or extension, a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the LC Issuer, the Borrower for whose account the
Letter of Credit is to be issued also shall submit a letter of credit
application on the LC Issuer’s standard form in connection with any request for
a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrowers shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension the LC
Exposure shall not exceed the LC Commitment.
          (c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in

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the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five (5) Business Days prior to the
Revolving Maturity Date.
          (d) Reimbursement. The LC Issuer shall, promptly after its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. If, after such examination, the LC Issuer shall make
any LC Disbursement in respect of a Letter of Credit, the LC Issuer shall notify
the Borrower Representative and Administrative Agent thereof. The Borrowers
shall reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 2:00 p.m., New York time, on
the date that such LC Disbursement is made, if the Borrower Representative shall
have received notice of such LC Disbursement prior to 10:00 a.m., New York time,
on such date, or, if such notice has not been received by the Borrower
Representative prior to such time on such date, then not later than 3:00 p.m.,
New York time, on (i) the Business Day that the Borrower Representative receives
such notice, if such notice is received prior to 1:00 p.m., New York time, on
the day of receipt, or (ii) the Business Day immediately following the day that
the Borrower Representative receives such notice, if such notice is not received
prior to such time on the day of receipt. In the case of any Letter of Credit
denominated in an Alternative Currency, the Borrowers shall reimburse the LC
Issuer in Dollars. In each such case, the LC Issuer shall notify the Borrower
Representative and the Administrative Agent of the Dollar Equivalent amount of
the drawing promptly following the determination thereof. Any failure of the LC
Issuer to furnish notice to the Borrower Representative as described in the
first sentence of this Section 2.14(d) shall not relieve the Borrowers of their
obligation to reimburse the LC Issuer with respect to any such LC Disbursement.
The liability of the Borrowers with respect to LC Disbursements and LC
Borrowings shall be joint and several.
          (e) Obligations Absolute. The Borrowers’ obligation to reimburse LC
Disbursements as provided in paragraph (d) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the LC Issuer under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrowers’ obligations hereunder. Neither
the LC Issuer nor any of its Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the LC Issuer; provided that the foregoing shall
not be construed to excuse the LC Issuer from liability to the Borrowers to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrowers to the extent permitted by
applicable law) suffered by the Borrowers that are caused by the LC Issuer’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the LC Issuer (as finally determined by a court of
competent jurisdiction), the LC Issuer shall be deemed to have exercised care in
each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the LC Issuer may, in its Permitted Discretion,
either accept and make payment upon such documents without responsibility for
further investigation,

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regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
          (f) Termination of LC Commitment. Unless otherwise terminated under
Article VIII or the next sentence, the LC Commitment shall terminate upon the
expiration of the Letter of Credit Availability Period. The Borrower
Representative may at any time terminate the LC Commitment (i) upon the
cancellation and return of all outstanding Letters of Credit (or alternatively,
with respect to each such letter of Credit, the furnishing to the Administrative
Agent of a cash deposit, equal to 105% of the LC Exposure as of such date), and
(ii) the payment in full of all accrued and unpaid fees and expenses with
respect to the LC Commitment.
          (g) <Intentionally omitted.>
          (h) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower Representative receives notice
from the Administrative Agent demanding that the Borrowers cash collateralize
the LC Exposure, the Borrowers shall deposit in an account with TD Bank in the
name of Administrative Agent and for the benefit of the LC Issuer and the
Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the LC
Exposure as of such date plus accrued and unpaid interest thereon; provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to any Borrower described in Section 8.01(h) or (i). Such deposit
shall be held by the Administrative Agent as collateral for the payment and
performance of the Obligations. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account and the Borrowers hereby grant the Administrative Agent a security
interest in the LC Collateral Account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
Permitted Discretion of the Administrative Agent and at the Borrowers’ joint and
several risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent for LC Borrowing for
which have not been repaid and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrowers for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other Obligations. If the Borrowers are required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers within three (3) Business Days after all such Events
of Defaults have been waived.
          (i) Payment. If the Borrowers fail to reimburse the LC Issuer in
accordance with Section 2.14(d) for the amount of the unreimbursed drawing
(expressed in Dollars in the amount of the Dollar Equivalent thereof, in the
case of a Letter of Credit denominated in an Alternative Currency) (the
“Unreimbursed Amount”), such amount shall be deemed to have been incurred by the
Borrowers from the LC Issuer as an LC Borrowing in the amount of the
Unreimbursed Amount, which LC Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the rate set forth in
Section 2.08(c).
          (j) <Intentionally omitted.>
          (k) <Intentionally omitted.>
          (l) Role of LC Issuer. The Borrowers agree that, in paying any drawing
under a Letter of Credit, the LC Issuer shall not have any responsibility to
obtain any document (other than any sight draft, certificates and documents
expressly required by the Letter of Credit) or to ascertain or inquire

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as to the validity or accuracy of any such document or the authority of the
Person executing or delivering any such document. The Borrowers hereby assume
all risks of the acts or omissions of any beneficiary or transferee with respect
to its use of any Letter of Credit; provided, however, that this assumption is
not intended to, and shall not, preclude the Borrowers’ pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement. None of the LC Issuer, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of the LC Issuer shall be liable or responsible for any of the matters described
in clauses (i) through (iv) of Section 2.14(e); provided, however, that anything
in such clauses to the contrary notwithstanding, a Borrower may have a claim
against the LC Issuer, and the LC Issuer may be liable to a Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by such Borrower which such Borrower proves were
caused by the LC Issuer’s willful misconduct or gross negligence or the LC
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the LC Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the LC Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
          (m) Applicability of ISP and UCP. Unless otherwise expressly agreed by
the LC Issuer and the Borrowers when a Letter of Credit is issued, (i) the rules
of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of
the Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce at the time of issuance,
shall apply to each commercial Letter of Credit.
     SECTION 2.15. Sharing Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of (x) Obligations in respect of any the Loans or LC Exposure due and
payable to such Lender hereunder and under the other Loan Documents at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of the Obligations in respect of the Loans and LC Exposure due
and payable to all Lenders hereunder and under the other Loan Documents at such
time) of payments on account of the Obligations in respect of the Loans and LC
Exposure due and payable to all Lenders hereunder and under the other Loan
Documents at such time obtained by all the Lenders at such time or (y)
Obligations in respect of any of the Loans and LC Exposure owing (but not due
and payable) to such Lender hereunder and under the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations owing (but not due and payable) to such Lender at
such time to (ii) the aggregate amount of the Obligations in respect of the
Loans and LC Exposure owing (but not due and payable) to all Lenders hereunder
and under the other Loan Documents at such time) of payment on account of the
Obligations in respect of the Loans owing (but not due and payable) to all
Lenders hereunder and under the other Loan Documents at such time obtained by
all of the Lenders at such time then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Loans and
participations in LC Exposure of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of Obligations in respect of the Loans then due and payable to the Lenders or
owing (but not due and payable) to the Lenders, as the case may be, 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

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      rescinded and the purchase price restored to the extent of such recovery,
without interest; and     (ii)   the provisions of this section shall not be
construed to apply to (x) any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or subparticipations in LC Exposure to any assignee or
participant, other than to a Borrower or any Subsidiary thereof (as to which the
provisions of this section shall apply).

     Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.
ARTICLE III
Illegality, Increased Costs, Break Funding and Taxes
     SECTION 3.01. Illegality. If any Change in Law has made it unlawful, or any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund LIBOR Loans, or to determine
or charge interest rates based upon the LIBOR, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrower Representative through the
Administrative Agent, any obligation of such Lender to make or continue LIBOR
Loans or to convert Base Rate Loans to LIBOR Loans shall be suspended until such
Lender notifies (and each Lender agrees that it will provide promptly such
notice) the Administrative Agent and the Borrower Representative that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrowers shall, upon demand from such Lender (with a copy to
the Administrative Agent), convert all LIBOR Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such LIBOR Loans to such day, or immediately,
if such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any
such conversion, the Borrowers shall also pay accrued interest on the amount so
converted.
     SECTION 3.02. Increased Costs. (a) If any Change in Law shall:

  (i)   impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the LIBOR Basis); or     (ii)   impose on any Lender or the London interbank
market any other condition affecting this Agreement or LIBOR Loans made by such
Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to any Lender of participating
in, issuing or maintaining any Letter of Credit or to reduce the amount of any
sum received or receivable by any Lender hereunder (whether of principal,
interest or otherwise),

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then the Borrowers will pay to such Lender such additional amount or amounts to
compensate such Lender for such additional costs incurred or reduction suffered.
          (b) Capital Requirements. 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, as a consequence of this Agreement or the Loans made or Letters
of Credit issued 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 the
Borrowers will pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered.
          (c) Certificates for Reimbursement. 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 the Borrower Representative and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount
shown as due on any such certificate within ten (10) days after receipt thereof.
          (d) Delay in Requests. 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 the Borrowers
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than two hundred seventy (270) days
prior to the date that such Lender notifies the Borrower Representative 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 two hundred seventy (270) day period referred to above shall be
extended to include the period of retroactive effect thereof.
     SECTION 3.03. Break Funding. In the event of (a) the payment of any
principal of any LIBOR Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion of any LIBOR Loan other than on the last day of the Interest Period
applicable thereto or (c) the failure to borrow, convert, continue or prepay any
LIBOR Loan on the date specified in any notice delivered pursuant hereto, then,
in any such event, the Borrowers shall compensate the Lenders for the loss, cost
and expense attributable to such event. In the case of a LIBOR 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 LIBOR Basis 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 such Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower Representative and
shall be conclusive absent manifest error. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.
     SECTION 3.04. Mitigation Obligations; Replacement of Lenders.

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          (a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.02, or any Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.05, then such Lender shall use reasonable
efforts to designate a different Lending Office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.02 or 3.05, as the case may be, in the future, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be materially disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
          (b) Replacement of Lenders. If any Lender requests compensation under
Section 3.02, or if any Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 3.05, the Borrowers may replace such Lender in accordance with
Section 10.13.
     SECTION 3.05. Taxes. (a) Payments Free of Taxes. Any and all payments by or
on account of any obligation of any Borrower hereunder shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if any Borrower shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, the LC Issuer or the applicable Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrowers shall make such deductions and (iii) the Borrowers shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
          (b) Payment of Other Taxes by the Borrowers. In addition, the
Borrowers shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
          (c) Indemnification by the Borrowers. The Borrowers shall indemnify
the Administrative Agent and each Lender (and in the case of any such party that
is a pass-through entity for purposes of the Indemnified Tax or Other Tax in
question, any of the beneficial owners of such party) within ten (10) days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent or any Lender on or with respect to any
payment by or on account of any obligation of any Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower Representative by the
Administrative Agent shall be conclusive absent manifest error.
          (d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority,
such Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
          (e) Status of Lenders. Any Lender (and, if a pass-through entity, any
of its beneficial owners) that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which any Borrower is
resident for tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Loan Document shall, to
the

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extent it may lawfully do so, deliver to the Borrower Representative (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower Representative or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, any Lender (and, if a pass-through
entity, any of its beneficial owners), if requested by the Borrower
Representative or the Administrative Agent, shall, to the extent it may lawfully
do so, deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower Representative or the Administrative Agent
as will enable the Borrowers or the Administrative Agent to determine whether or
not any payment made hereunder or under any other Loan Document to such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in this subclause (e), no Lender (or,
in the case of a Lender that is a pass-through entity, its owners) will be
required to provide any documentation with regard to any tax imposed by a
jurisdiction other than the United States if in such party’s good faith sole
discretion, such submission would subject it to unreimbursed expense or would
otherwise be disadvantageous to such party.
     Without limiting the generality of the foregoing, in the event that any
Borrower is resident for tax purposes in the United States, any Foreign Lender
(and, if a pass-through entity, any of its beneficial owners) shall, to the
extent it may lawfully do so, deliver to the Borrower Representative and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the reasonable
request of the Borrower Representative or the Administrative Agent, but only if
such Foreign Lender or beneficial owner is legally entitled to do so), whichever
of the following is applicable:

  (i)   duly completed copies of Internal Revenue Service Form W-8BEN (or any
successor thereto) claiming eligibility for benefits of an income tax treaty to
which the United States is a party,     (ii)   duly completed copies of Internal
Revenue Service Form W-8ECI (or any successor thereto),     (iii)   in the case
of a Foreign Lender (or, in the case of a pass-through entity, any of its
beneficial owners) claiming the benefits of the exemption for portfolio interest
under Section 881(c) of the Code, (x) a certificate to the effect that such
Foreign Lender or beneficial owner is not (A) a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in Section 881(c)(3)(C) of the Code and (y) duly
completed copies of Internal Revenue Service Form W-8BEN (or any successor
thereto), and/or     (iv)   any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in United States federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit the Borrowers to determine the
withholding or deduction required to be made.

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          From time to time, each Lender shall promptly notify the
Administrative Agent of any change in such Lender’s or beneficial owner’s
circumstances that would modify or render invalid any claimed exemption or
reduction.
          A Lender that is a United States person within the meaning of Code
section 7701(a)(30) shall deliver a duly completed IRS Form W-9 to the Borrower
Representative and the Administrative Agent at the times described above with
respect to the other withholding forms; provided, however, that a Lender or
Assignee that the Borrowers may treat as an “exempt recipient” within the
meaning of Treasury Regulations section 1.6049-4(c) (without regard to the third
sentence thereof) shall not be required to provide an IRS Form W-9, except to
the extent required under Treasury Regulations section 1.1441-1.
          (f) Treatment of Certain Refunds. If the Administrative Agent or any
Lender determines, in its good faith sole discretion, that it has received a
refund (in cash or as an offset against other taxes otherwise then due and
payable) of any Taxes or Other Taxes as to which it has been indemnified by any
Borrower or with respect to which any Borrower has paid additional amounts
pursuant to this section, it shall pay to such Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by such Borrower under this Section 3.05 with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent or such Lender, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that such Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority other than penalties, interest and other charges
arising out of the willful misconduct or gross negligence of Administrative
Agent or such Lender) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such amount to such
Governmental Authority. This subsection shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to any
Borrower or any other Person. Notwithstanding anything to the contrary, in no
event will any Lender be required to pay any amount to any Borrower the payment
of which would place such Lender in a less favorable net after-tax position than
such Lender would have been in if the additional amounts giving rise to such
refund of any Indemnified Taxes or Other Taxes had never been paid.
          (g) Notwithstanding anything contained herein to the contrary, the
provisions of Sections 3.02, 3.03 and 3.05 shall survive the expiration or
termination of this Agreement and the other Loan Documents and the payment in
full of the Loans.
ARTICLE IV
Conditions
     SECTION 4.01. Effective Date. The obligations of each Lender to make Loans
and the LC Issuer to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 10.01):
          (a) Credit Agreement and Loan Documents. The Administrative Agent (or
its counsel) shall have received (i) from each party hereto either (A) a
counterpart of this Agreement signed on behalf of such party or (B) written
evidence satisfactory to the Administrative Agent that such party has signed a
counterpart of this Agreement and (ii) duly executed copies of the Loan
Documents, including, without limitation, the Notes, and such other
certificates, documents, instruments and agreements as the Administrative Agent
shall reasonably request in connection with the transactions contemplated by
this Agreement and the other Loan Documents, including a written opinion of the

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Borrowers’ counsel, addressed to the Administrative Agent in form and substance
satisfactory to the Administrative Agent and its counsel.
          (b) Financial Projections. The Administrative Agent shall have
received satisfactory projections of consolidated financial statements of
Holdings for the 2011-2013 fiscal years and such financial statements shall not,
in the reasonable judgment of the Administrative Agent, reflect any material
adverse change in the consolidated financial condition of Holdings.
          (c) Closing Certificates; Certified Certificate of Incorporation; Good
Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Borrower, dated the Effective Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
Board of Directors, members or other body authorizing the execution, delivery
and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the Financial Officers and any other
officers of such Borrower authorized to sign the Loan Documents to which it is a
party, and (C) contain appropriate attachments, including the certificate or
articles of incorporation or organization of each Borrower certified by the
relevant authority of the jurisdiction of organization of such Borrower and a
true and correct copy of its by-laws or operating, management or partnership
agreement, and (ii) a long form good standing certificate for each Borrower from
its jurisdiction of organization.
          (d) No Default Certificate. The Administrative Agent shall have
received a Compliance Certificate, signed by the Financial Officer, on the
Effective Date (i) stating that no Default has occurred and is continuing,
(ii) stating that the representations and warranties contained in Article V are
true and correct as of such date, (iii) demonstrating compliance with the
financial covenants set forth in Section 7.12, and (iv) certifying any other
factual matters as may be reasonably requested by the Lender.
          (e) Fees. The Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Effective Date.
          (f) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets of the
Borrowers are located, and such search shall reveal no liens on any of the
assets of the Borrowers except for liens permitted by Section 7.02 or discharged
on or prior to the Effective Date pursuant to a pay-off letter or other
documentation satisfactory to the Lender.
          (g) Personal Property Requirements. The Administrative Agent shall
have received:

  (i)   satisfactory evidence that all certificates or instruments representing
or evidencing the Securities Collateral (as defined in the Security Agreement)
(other than Equity Interests in the German Subsidiary) accompanied by
instruments of transfer and stock powers undated and endorsed in blank have been
delivered to the Administrative Agent;     (ii)   satisfactory evidence that all
other certificates, agreements, including control agreements, or instruments
necessary to perfect the Administrative Agent’s security interest in all Chattel
Paper, all Instruments, all Deposit Accounts, all Securities Accounts, all
Commodity Accounts, and all Investment Property of each Borrower (as each such
term is defined in the Security Agreement and to the extent

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      required by the Security Agreement) have been delivered to the
Administrative Agent;     (iii)   UCC financing statements in appropriate form
for filing under the UCC, and such other documents under applicable law in each
jurisdiction as may be necessary or appropriate or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created, or purported to be
created, by the Collateral Documents (to the extent required by the Security
Agreement);     (iv)   copies of UCC, tax and judgment lien searches, bankruptcy
and pending lawsuit searches or equivalent reports or searches, each of a recent
date in each of the jurisdictions set forth in Schedule 6(a) and Schedule 6(b)
attached to the Perfection Certificate; and     (v)   evidence reasonably
acceptable to the Administrative Agent of payment or arrangements for payment by
the Borrowers of all applicable recording taxes, fees, charges, costs and
expenses required for the recording of the Collateral Documents.

  (h)   Real Property Requirements. The Administrative Agent shall have
received:

  (i)   Amendments to each Mortgage, duly executed and acknowledged by each
Borrower that is the owner of or holder of any interest in such Mortgaged
Premises, and otherwise in form for recording in the recording office of each
applicable political subdivision where each such Mortgaged Premises is situated,
together with such certificates, affidavits, questionnaires or returns as shall
be required in connection with the recording or filing thereof to create a lien
under applicable Requirements of Law, and such financing statements and any
other instruments necessary to grant a mortgage Lien under the laws of any
applicable jurisdiction, all of which shall be in form and substance reasonably
satisfactory to Administrative Agent;     (ii)   with respect to each Mortgaged
Premises, such consents, approvals, amendments, supplements, estoppels, tenant
subordination agreements or other instruments as necessary to consummate the
Transactions or as shall reasonably be deemed necessary by the Administrative
Agent in order for the owner or holder of the fee or leasehold interest
constituting such Mortgaged Premises to grant the Lien contemplated by the
Mortgage with respect to such Mortgaged Premise;     (iii)   with respect to
each Mortgaged Premises that is owned in fee, a Title Policy;     (iv)   with
respect to each Mortgaged Premises that is owned in fee, such affidavits,
certificates, information (including financial data) and instruments of
indemnification (including a so-called “gap” indemnification) as shall be
required to induce the Title Company to issue the Title Policy/ies and
endorsements contemplated above;

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  (v)   evidence reasonably acceptable to the Administrative Agent of payment by
Borrowers of all Title Policy premiums, search and examination charges, escrow
charges and related charges, mortgage recording taxes, fees, charges, costs and
expenses required for the recording of the Amendments to Mortgages and issuance
of the Title Policies referred to above;     (vi)   with respect to each
Mortgaged Premises, copies of all Leases in which any Borrower holds the
lessor’s interest or other agreements relating to possessory interests, if any.
Such agreement shall be subordinate to the Lien of the Mortgage to be recorded
against such Mortgaged Premises, either expressly by its terms or pursuant to a
subordination, non-disturbance and attornment agreement, and shall otherwise be
acceptable to the Administrative Agent;     (vii)   with respect to each
Mortgaged Premises, the Borrowers shall have made all notifications,
registrations and filings, to the extent required by, and in accordance with,
all Governmental Real Property Disclosure Requirements applicable to such
Mortgaged Premise;     (viii)   a completed Federal Emergency Management Agency
Standard Flood Hazard Determination with respect to each Mortgaged Premise;    
(ix)   With respect to each location set forth on Schedule 5.06 that is not
owned in fee simple by a Borrower (except for the Companies’ locations at 7377
E. Doubletree Ranch Road, Suite 200, Scottsdale, Arizona and Suite 1200, 1001
19th Street North, Arlington, Virginia 22209, Washington, D.C.), the Borrowers
shall have delivered to the Administrative Agent a fully-executed Collateral
Access Agreement.

          (i) Insurance. The Administrative Agent shall have received a copy of,
or a certificate as to coverage under, the insurance policies required by
Section 6.09 and the applicable provisions of the Collateral Documents, each of
which shall be endorsed or otherwise amended to include a “standard” or “New
York” lender’s loss payable or mortgagee endorsement (as applicable) and shall
name the Administrative Agent, on behalf of the Secured Parties, as additional
insured, in form and substance reasonably satisfactory to the Administrative
Agent.
          (j) Litigation. No litigation shall be pending with respect to the
Loans or the definitive documentation in respect of the Loans. There shall not
exist any judgment, order, injunction or other restraint prohibiting the
consummation of the Transactions.
          (k) Fees and Expenses. All accrued fees and expenses of the
Administrative Agent and the Lenders (including the reasonable out-of-pocket the
fees and expenses of Edwards Angell Palmer & Dodge LLP, counsel for the
Administrative Agent and of local counsel for the Lenders) shall have been paid.
          (l) PATRIOT Act. The Lenders shall have received all documentation and
other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including without
limitation the PATRIOT Act.

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          (m) Field Examination, Etc. The Administrative Agent shall have
completed its field audit examinations of the Borrowers’ assets, liabilities,
books and records and appraisals of the Borrowers’ property, plant & equipment,
and shall have reviewed environmental assessment reports and studies and other
related matters of the Borrowers, which results shall be reasonably satisfactory
to the Administrative Agent.
          (n) Notice to Convertible Notes Trustee. The Borrowers shall have
delivered to the Administrative Agent a copy of the notice to the Convertible
Notes Trustee pursuant to, and demonstrating, Holdings’ compliance with,
Section 10.12 of the Convertible Notes Indenture.
          (o) Other Documents. The Administrative Agent shall have received such
other documents as the Administrative Agent or its counsel may have reasonably
requested.
          (p) Escrowed Funds. The Administrative Agent shall have received
satisfactory evidence that the Borrowers have deposited $812,000 with the
Administrative Agent pursuant to the Environmental Reserve Account Agreement.
     SECTION 4.02. Each Revolving Loan. The obligation of the Lenders to make a
Loan on the occasion of any Borrowing (but excluding Revolving Loans the
proceeds of which are to reimburse the Swingline Bank for Swingline Loans), are
subject to the satisfaction of the following conditions:
          (a) Receipt by the Administrative Agent of a Borrowing Request.
          (b) The representations and warranties of the Borrowers set forth in
this Agreement shall be true and correct on and as of the date of such
Borrowing.
          (c) At the time of and immediately after giving effect to such
Borrowing, no Default or Event of Default shall have occurred and be continuing.
          (d) After giving effect to any requested Revolving Borrowing,
Revolving Availability is not less than zero.
          (e) A copy of the notice to the Convertible Notes Trustee pursuant to,
and demonstrating, after giving effect to any requested Revolving Borrowing,
compliance with, Section 10.12 of the Convertible Notes Indenture; provided,
however, a copy of such notice shall not be required to be delivered with the
Borrowing Request in the event that (x) after giving effect to any requested
Revolving Borrowing, the aggregate amount of the outstanding Revolving Exposure
and LC Exposure does not exceed $62,000,000, (y) the subject Borrowing Request
relates to a fiscal period as to which Holdings has previously delivered to the
Administrative Agent a copy of the appropriate notice to the Convertible Notes
Trustee or (z) the Convertible Notes Indenture has been terminated.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrowers on the date thereof as to the matters specified in paragraphs (a),
(b), (c), (d) and (e) of this Section.
     SECTION 4.03. Each Letter of Credit. The obligation of the LC Issuer to
issue, amend, renew or extend any Letter of Credit is subject to the
satisfaction of the following conditions:
          (a) Receipt by the LC Issuer and the Administrative Agent of a request
in the form required under Section 2.14(b).

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          (b) The representations and warranties of the Borrowers set forth in
this Agreement shall be true and correct on and as of the date of issuance,
amendment, renewal or extension of such Letter of Credit.
          (c) At the time of and immediately after giving effect to the
issuance, amendment, renewal or extension of such Letter of Credit, no Default
or Event of Default shall have occurred and be continuing.
          (d) After giving effect to the issuance of any requested Letter of
Credit, the LC Exposure shall not exceed the LC Commitment.
Each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrowers on the date
thereof as to the matters specified in paragraphs (a), (b), (c) and (d) of this
Section.
ARTICLE V
Representations and Warranties
     Each Borrower represents and warrants to the Administrative Agent, each
Lender and the LC Issuer that:
     SECTION 5.01. Existence, Qualification and Power; Compliance with Laws.
Each Borrower and each Subsidiary thereof (a) is duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has the organizational power and authority
and all requisite governmental licenses, authorizations, consents and approvals
to (i) own its assets and carry on its business and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party and
consummate the Transaction, (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws, except in each
case referred to in clause (b) (i), (c) or (d), to the extent that failure to do
so would not reasonably be expected to have a Material Adverse Effect.
     SECTION 5.02. Authorization; No Contravention. The execution, delivery and
performance by each Borrower of each Loan Document to which such Person is party
have been duly authorized by all necessary corporate or other organizational
action, and do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under (i) any Contractual
Obligation (including, without limitation, the Convertible Note Indenture) to
which such Person is a party or affecting such Person or the properties of such
Person or any of its Subsidiaries, except for matters that would not reasonably
be expected to have a Material Adverse Effect, or (ii) any order, injunction,
writ or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject, except for matters that would not reasonably
be expected to have a Material Adverse Effect, or (c) violate any Law. Each
Borrower and each Subsidiary thereof is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that failure to
do so would not reasonably be expected to have a Material Adverse Effect.
     SECTION 5.03. Governmental Authorization; Other Consents. No material
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with (a) the execution, delivery or performance by any
Borrower of this Agreement or any other Loan Document or for the consummation of
the

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Transactions, (b) the grant by any Borrower of the Liens granted by it pursuant
to the Collateral Documents, (c) the perfection or maintenance of the Liens
created under the Collateral Documents (including the priority thereof) or
(d) the exercise by any Administrative Agent or any Lender of its rights under
the Loan Documents or the remedies in respect of the Collateral, except for
(i) filings necessary to perfect the Liens on the Collateral granted by the
Borrowers in favor of the Secured Parties, (ii) the approvals, consents,
exemptions, authorizations, actions, notices and filings which have been duly
obtained, taken, given or made and are in full force, (iii) those approvals,
consents, exemptions, authorizations, actions, notices or filings described in
the Security Agreement and (iv) those approvals, consents, exemptions,
authorizations, actions, notices or filings, the failure of which to obtain or
make would not reasonably be expected to have a Material Adverse Effect. All
applicable waiting periods in connection with the Transactions have expired
without any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Transactions or
the rights of the Borrowers or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.
     SECTION 5.04. Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Borrower that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Borrower, enforceable against each Borrower that is
party thereto in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors’ rights generally, and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
     SECTION 5.05. Financial Condition; No Material Adverse Change. (a) Holdings
has heretofore furnished to the Administrative Agent its consolidated balance
sheet and statements of income, stockholders equity and cash flows (i) as of and
for the fiscal year ended April 30, 2010, reported on by the Accountants, and
(ii) as of and for the fiscal quarter ended July 31, 2010 certified by a
Financial Officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
Holdings and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
          (b) No event, change or condition has occurred that has had, or could
reasonably be expected to have, a Material Adverse Effect, since April 30, 2010.
     SECTION 5.06. Properties. (a) As of the date of this Agreement, Schedule
5.06 sets forth the address of each parcel of real property that is owned or
leased by each Borrower and each Subsidiary. Each of such leases and subleases
is valid and enforceable in accordance with its terms and is in full force and
effect, and no default by any party to any such lease or sublease exists. Each
Borrower and each Subsidiary has good and indefeasible title to, or valid
leasehold interests in, all its real and personal property, free of all Liens
other than those permitted by Section 7.02 and Liens that are being contested in
good faith by appropriate proceedings and for which such Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves.
          (b) Each Borrower and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted and the use thereof by the
Borrowers and the Subsidiaries does not infringe in any material respect upon
the rights of any other Person, and the Borrowers’ rights thereto are not
subject to any licensing agreement or similar arrangement.

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     SECTION 5.07. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of any Borrower, threatened
against or affecting the Borrowers or any of their Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) on any Borrower or any Subsidiary or (ii) that involve this Agreement
or the Transactions.
          (b) Except for the Disclosed Matters (i) no Borrower nor any of its
Subsidiaries has received notice of any claim with respect to any material
Environmental Liability or knows of any basis for any material Environmental
Liability and (ii) and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect on any Borrower or Subsidiary, no Borrower nor any of
its Subsidiaries (1) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law or (2) has become subject to any Environmental
Liability.
          (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
     SECTION 5.08. Compliance with Laws and Agreements. Each Borrower and its
Subsidiaries is in compliance with all Requirements of Law applicable to it or
its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect on any Borrower or Subsidiary. No Default has occurred and is continuing.
     SECTION 5.09. Investment Company Status. No Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.
     SECTION 5.10. Taxes. The Borrowers and their Subsidiaries have timely filed
or caused to be filed all Federal, state, provincial, foreign and other tax
returns and reports required to be filed, and have timely paid all Federal,
state, provincial, foreign and other Taxes levied or imposed upon them or their
properties, income or assets otherwise due and payable (whether or not shown on
any Tax return) including in their capacity as withholding agent, except those
which are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance with
GAAP and which would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. There is no proposed Tax
assessment against any Borrower or their Subsidiaries that, if made, would
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect. Except for gross-up provisions applicable to employee
payments in the ordinary course of business or contained in employment
agreements, the agreements to acquire any option, stock or other equity interest
in any Borrower and the Loan Documents, neither any Borrower nor any Subsidiary
thereof is party to any tax sharing agreement that is currently in effect. Each
Borrower and each Subsidiary has made adequate provision in accordance with GAAP
for all material taxes not yet due and payable. Neither any Borrower nor any
Subsidiary has ever been a party to any understanding or arrangement
constituting a “tax shelter” within the meaning of Section 6662(d)(2)(C)(iii) of
the Code or within the meaning of Section 6111(c) or Section 6111(d) of the Code
as in effect immediately prior to the enactment of the American Jobs Creation of
2004, or has ever “participated” in a “reportable transaction” within the
meaning of Treas. Reg. Section 1.6011-4, except as would not be reasonably
expected to, individually or in the aggregate, result in a Material Adverse
Effect. Except any liabilities for taxes of any consolidated, combined or
unitary tax group of which any Borrower is the common

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parent, neither any Borrower nor any Subsidiary thereof has any liabilities for
the taxes of any Person under Treas. Reg. Section 1.1502-6 or any similar
provision of state, local or foreign law, as a transferee or successor, by
contract or otherwise, except as would not result in a Material Adverse Effect.
No tax liens have been filed and no claims are being asserted with respect to
any such taxes.
     SECTION 5.11. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. Each of the Borrowers and its Subsidiaries
is in compliance in all material respects with the presently applicable
provisions of ERISA, the Code and any other applicable Law with respect to each
Plan. The present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $2,000,000.00 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $2,000,000.00 the fair market value
of the assets of all such underfunded Plans.
     SECTION 5.12. Margin Regulations. Neither any Borrower nor any of such
Borrower’s Subsidiaries is engaged or will engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulations T, U or X issued by the Board), or extending
credit for the purpose of purchasing or carrying margin stock.
     SECTION 5.13. Disclosure. The Borrowers have disclosed to the
Administrative Agent, the Lenders and the LC Issuer all material agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
on any Borrower or any Subsidiary. Neither the Perfection Certificate nor any of
the other reports, financial statements, certificates or other information
furnished by or on behalf of any Borrower to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other Loan
Document (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrowers represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time delivered and, if such projected financial information
was delivered prior to the Effective Date, as of the Effective Date.
     SECTION 5.14. Material Agreements. All material agreements and contracts to
which any Borrower is a party or is bound as of the date of this Agreement are
listed on Schedule 5.14. No Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (i) any material agreement to which it is a party or (ii) any
agreement or instrument evidencing or governing Indebtedness.
     SECTION 5.15. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Effective Date, (i) the fair value of the assets of
each Borrower, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable value of
the property of each Borrower will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Borrower will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv)

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each Borrower will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted after the Effective Date.
          (b) No Borrower intends to, or will permit any of its Subsidiaries to,
or believes that it or any of its Subsidiaries will, incur debts beyond its
ability to pay such debts as they mature, taking into account the timing of and
amounts of cash to be received by it or any such Subsidiary and the timing of
the amounts of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary. No Borrower will permit any of its
Subsidiaries to incur debts beyond its ability to pay such debts as they mature,
if, as a result of doing so, it could be reasonably expected to have a Material
Adverse Effect on any Borrower or Subsidiary.
     SECTION 5.16. Insurance. Schedule 5.16 sets forth a description of all
insurance maintained by or on behalf of the Borrowers and the Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid. The Borrowers believe that the insurance maintained by
or on behalf of the Borrowers and Subsidiaries is adequate. Each Borrower has
caused its Subsidiaries to maintain with financially sound and reputable
carriers having a financial strength rating of at least A- by A.M. Best Company
adequate insurance in such amounts and for such risks where the failure to do so
could be reasonably expected to have a Material Adverse Effect on any Borrower
or Subsidiary.
     SECTION 5.17. Capitalization and Subsidiaries. Schedule 5.17 sets forth
(a) a correct and complete list of the name and relationship to Holdings of each
and all of Holdings’ Subsidiaries, (b) a true and complete listing of each class
of each of Holdings’ and Holdings’ Subsidiaries’ authorized Equity Interests, of
which all of such issued shares are validly issued, outstanding, fully paid and
non-assessable, and owned beneficially and of record by the Persons identified
on Schedule 5.17, and (c) the type of entity of Holdings and each of its
Subsidiaries. All of the issued and outstanding Equity Interests owned by any
Borrower has been (to the extent such concepts are relevant with respect to such
ownership interests) duly authorized and issued and is fully paid and
non-assessable.
     SECTION 5.18. Security Interest in Collateral.
          (a) Security Agreement. The Security Agreement is effective to create
in favor of the Administrative Agent for the benefit of the Secured Parties,
legal and valid Liens on, and security interests in, the Collateral described
therein and (i) when financing statements and other filings in appropriate form
are filed in the offices specified on Schedule 6 to the Perfection Certificate,
(ii) upon the taking of possession or control by the Administrative Agent of the
Collateral described therein with respect to which a security interest may be
perfected only by possession or control (which possession or control shall be
given to the Administrative Agent to the extent possession or control by the
Administrative Agent is required by the Security Agreement), (iii) upon
recording by the Administrative Agent of its Lien on the certificates of title
of motor vehicles and (iv) upon compliance with the applicable perfection
requirements of the laws of jurisdictions other than the United States with
respect to Collateral as to which perfection of the Agent’s Lien thereon is not
subject to the laws of the United States, the Liens created by the Security
Agreement shall (to the extent provided therein) constitute perfected first
priority Liens on, and security interests in, all right, title and interest of
the grantors in the Collateral described therein (other than such Collateral in
which a security interest cannot be perfected under the UCC as in effect at the
relevant time in the relevant jurisdiction), in each case subject to no Liens
other than Permitted Encumbrances and Liens otherwise permitted by Section 7.02.
          (b) Mortgages. Each Mortgage is effective to create, in favor of the
Administrative Agent, for its benefit and the benefit of the Secured Parties,
legal and valid Liens on, and security interests in, all of the Borrowers’
right, title and interest in and to the Mortgaged Premises thereunder and

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the proceeds thereof, subject only to Permitted Encumbrances or other Liens
acceptable to the Administrative Agent, and when the Mortgages are duly filed in
the offices specified in the local counsel opinion delivered with respect
thereto in accordance with the provisions of Sections 4.01 or 6.13, the
Mortgages shall (to the extent provided therein) constitute perfected first
priority Liens on, and security interests in, all right, title and interest of
the Borrowers in the Mortgaged Premises and the proceeds thereof, in each case
prior in right to any other Person, other than Liens permitted by such Mortgage.
     SECTION 5.19. Employment Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against any Borrower or any Subsidiary pending
or, to the knowledge of the Borrowers, threatened. The hours worked by and
payments made to employees of the Borrowers and the Subsidiaries have not been
in violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters. All payments due from any
Borrower or any Subsidiary, or for which any claim may be made against any
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Borrower or such Subsidiary. There are no collective bargaining
agreements or Multiemployer Plans covering the employees of Holdings or any of
its Subsidiaries as of the Effective Date and neither Holdings nor any
Subsidiary has suffered any strikes, walkouts, work stoppages or other material
labor difficulty within the last five years.
     SECTION 5.20. Affiliate Transactions. Except as set forth on Schedule 5.20,
as of the Effective Date, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Borrower and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders, employees, or Affiliates (other than Subsidiaries) of any
Borrower or any members of their respective immediate families, and none of the
foregoing Persons are directly or indirectly indebted to or have any direct or
indirect ownership, partnership, or voting interest in any Affiliate of any
Borrower or any Person with which any Borrower has a business relationship or
which competes with any Borrower.
     SECTION 5.21. OFAC; PATRIOT Act.
          (a) No Borrower or Subsidiary (i) is or will become a Person whose
Property or interests in property are blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 24, 2001 Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages or will engage in any
dealings or transactions prohibited by Section 2 of such Executive Order, or be
otherwise associated with any such Person in any manner violative of Section 2,
or (iii) will otherwise become a Person on the list of Specifically Designated
Nationals and Blocked Persons or subject to the limitations or prohibitions
under any other OFAC regulation or executive order.
          (b) The Borrowers and their Subsidiaries are in compliance in all
material respects with the Patriot Act. No part of the proceeds of the Loans
hereunder will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.
     SECTION 5.22. Intellectual Property Matters. Each Borrower owns, or is
licensed to use, all patents, patent applications, trademarks, trade names,
service marks, copyrights, technology, trade secrets, proprietary information,
domain names, know-how and processes necessary for the conduct of its business
as currently conducted (the “Intellectual Property”), except for those the
failure to own or license which, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse

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Effect. To the knowledge of each Borrower, no claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor to the knowledge of each Borrower does the use of such
Intellectual Property by each Borrower infringe the rights of any Person, except
for such claims and infringements that, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Effect.
     SECTION 5.23. Use of Proceeds. The Borrowers will use the proceeds of the
Loans to effect the Transactions and pay related fees and expenses and as
otherwise permitted by Section 6.08.
ARTICLE VI
Affirmative Covenants
     Until the Revolving Commitments and the LC Commitment have expired or been
terminated and the principal of and interest on each Loan and all fees payable
hereunder shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements and LC Borrowings shall have been
reimbursed, each Borrower executing this Agreement covenants and agrees, jointly
and severally with all of the Borrowers, with the Administrative Agent, the
Lenders and the LC Issuer that:
     SECTION 6.01. Financial Statements and Other Information. The Borrower
Representative will furnish to the Administrative Agent (and the Administrative
Agent will furnish to each Lender promptly after the receipt thereof):
          (a) within one hundred twenty (120) days after the end of each fiscal
year of Holdings, its audited consolidated balance sheet and related statements
of operations, stockholders’ equity and cash flows and consolidating balance
sheet and income statement as of the end of and for such year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on by the Accountants (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated and consolidating financial
statements present fairly in all material respects the financial condition and
results of operations of Holdings and its consolidated Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently
applied, accompanied by any management letter prepared by said Accountants;
          (b) within forty-five (45) days after the end of each of the first
three fiscal quarters of Holdings, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows and consolidating
balance sheet and income statement as of the end of and for such fiscal quarter
and the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of Holdings and its
consolidated Subsidiaries on a consolidated and consolidating basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
          (c) concurrently with any delivery of financial statements under
clause (a) or (b) above, (i) a Compliance Certificate (A) certifying, in the
case of the financial statements delivered under clause (a) or (b), as
presenting fairly in all material respects the financial condition and results
of operations of Holdings and its Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, (B) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details

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thereof and any action taken or proposed to be taken with respect thereto,
(C) setting forth reasonably detailed calculations demonstrating compliance with
Section 7.12, and (D) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 5.05 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate and
(ii) so long as (x) the aggregate amount of the outstanding Revolving Exposure
and LC Exposure exceeds $62,000,000 as of the end of such fiscal year or fiscal
quarter, as applicable, and (y) the Convertible Notes Indenture has not been
terminated, a copy of a notice to the Convertible Notes Trustee pursuant to, and
demonstrating compliance, with Section 10.12 of the Convertible Notes Indenture;
          (d) as soon as available, but in any event not later than ninety-two
(92) days after the beginning of each fiscal year of Holdings, a copy of the
plan and forecast (including a projected consolidated balance sheet, income
statement and cash flow statement and a consolidating balance sheet and income
statement) of Holdings for each such fiscal year in form reasonably satisfactory
to the Administrative Agent;
          (e) promptly following the formation of any Subsidiary, information
regarding such Subsidiary so that such Subsidiary may become a Borrower;
          (f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may be;
          (g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrowers or any Subsidiary, or compliance with the terms of this Agreement, as
the Administrative Agent may reasonably request; and
          (h) in lieu of providing hard copies of the documents Holdings is
required to deliver pursuant to paragraph (f) above, Holdings shall be deemed to
have delivered the reports, proxy statements and other material to the
Administrative Agent at such time such reports, proxy statements and other
material are posted to the internet or filed with the Securities and Exchange
Commission; provided, however, access to such documents must be (i) available
free of charge; (ii) exist in a format downloadable by the Administrative Agent
(as determined by the Administrative Agent); and (iii) downloadable by the
Administrative Agent or if such statements are not in a format downloadable by
the Administrative Agent then upon notice by the Administrative Agent, Holdings
will provide copies of such postings or filings.
     SECTION 6.02. Notices of Material Events. The Borrower Representative will
furnish to the Administrative Agent (and the Administrative Agent will furnish
to each Lender promptly after the receipt thereof) prompt written notice of the
following:
          (a) the occurrence of any Default or Event of Default;
          (b) receipt of any notice of any governmental investigation or any
litigation commenced or threatened against any Borrower or Subsidiary that
(i) seeks damages in excess of $4,000,000.00, (ii) seeks injunctive relief,
(iii) is asserted or instituted against any Plan, its fiduciaries or its assets,
(iv) alleges criminal misconduct by any Borrower or Subsidiary, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Laws, (vi) contests any tax, fee, assessment, or other
governmental charge in excess of $2,000,000.00, or (vii) involves any product
recall;

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          (c) any Lien (other than Permitted Encumbrances) or claim made or
asserted against any of the Collateral;
          (d) any loss, damage, or destruction to the Collateral in the amount
of $4,000,000.00 or more, whether or not covered by insurance;
          (e) any and all default notices received under or with respect to any
leased location or public warehouse where Collateral is located (which shall be
delivered within two (2) Business Days after receipt thereof);
          (f) all material amendments to any Material Agreement together with a
copy of each such amendment;
          (g) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of Holdings and its Subsidiaries in an aggregate amount exceeding
$2,000,000.00; and
          (h) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower Representative
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
     SECTION 6.03. Existence; Conduct of Business. Each Borrower will, and will
cause each Subsidiary to, (a) do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, qualifications, licenses, permits, franchises, governmental
authorizations, intellectual property rights, licenses and permits material to
the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is presently conducted;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 7.03 and (b) carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted.
     SECTION 6.04. Payment of Obligations. Each Borrower will, and will cause
each Subsidiary to, pay or discharge all Material Indebtedness and all other
material liabilities and obligations, including Taxes, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) such Borrower
or such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) such liabilities would not result in
aggregate liabilities in excess of $2,000,000.00 and none of the Collateral
becomes subject to forfeiture or loss as a result of the contest.
     SECTION 6.05. Maintenance of Properties. Each Borrower will, and will cause
each Subsidiary to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.
     SECTION 6.06. Books and Records; Inspection Rights. Each Borrower will, and
will cause each Subsidiary to, (i) keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities and (ii) permit any representatives
designated by the Administrative Agent (including employees of the
Administrative Agent, or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent), upon reasonable prior notice and during
regular business hours, to visit and inspect its properties, to examine and make

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extracts from its books and records, including environmental assessment reports
and Phase I or Phase II studies, and to discuss its affairs, finances and
condition with its officers and independent accountants, all at such reasonable
times and as often as reasonably requested. The Borrowers acknowledge that the
Administrative Agent, after exercising its rights of inspection, may prepare
certain Reports pertaining to the Borrowers’ assets for internal use by the
Administrative Agent. Each Borrower will permit the Administrative Agent to
conduct field audit examinations of the Borrowers’ assets, liabilities, books
and records at a frequency not less than once every 365 days; provided further
that the Borrowers will permit the Administrative Agent to conduct such
examinations at any reasonable time and with any reasonable frequency after a
Default. In connection with such field audits, the Borrowers will permit the
Administrative Agent to make test verifications of the Accounts with the
Borrowers’ customers.
     SECTION 6.07. Compliance with Laws. Each Borrower will, and will cause each
Subsidiary to, comply with all Requirements of Law applicable to it or its
property.
     SECTION 6.08. Use of Proceeds and Letters of Credit. The proceeds of the
Revolving Loans will be used only for (i) general working capital purposes,
(ii) the payment of fees and expenses incurred in connection with the closing of
the Loans and (iii) to purchase Convertible Notes in the open market or in
privately negotiated transactions. In addition, the proceeds of the Revolving
Loans may be used to pay the purchase price and related expenses of a tender
offer for the Convertible Notes pursuant to any registered tender offer with
respect thereto so long as the Administrative Agent has approved any and all
references to this Agreement, the Lenders and the Administrative Agent in any
materials relating thereto, which approval shall not be unreasonably withheld.
No part of the proceeds of any Loan and no Letter of Credit will be used,
whether directly or indirectly, (i) for any purpose that entails a violation of
any of the Regulations of the Board, including Regulations T, U and X or (ii) to
make any Acquisition other than Permitted Acquisitions.
     SECTION 6.09. Insurance. (a) Generally. Each Borrower will, and will cause
each Subsidiary to, maintain with financially sound and reputable carriers
having a financial strength rating of at least A- by A.M. Best Company
(i) insurance in such amounts (with no greater risk retention) and against such
risks (including (A) loss or damage by fire and loss in transit; (B) theft,
burglary, pilferage, larceny, embezzlement, and other criminal activities;
(C) business interruption; (D) general liability and (E) and such other
hazards), as is customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar
locations and (ii) all insurance required pursuant to the Collateral Documents.
The Borrowers will furnish to the Administrative Agent information in reasonable
detail as to the insurance so maintained.
          (b) Requirements of Insurance. All such insurance shall (i) provide
that no cancellation, reduction in amount or change in coverage thereof shall be
effective until at least 30 days (or 10 days for nonpayment of premiums) after
receipt by the Administrative Agent of written notice thereof, (ii) name the
Administrative Agent as additional insured on behalf of the Administrative Agent
and the Secured Parties (in the case of liability insurance) or loss payee (in
the case of property insurance), as applicable, and (iii) be reasonably
satisfactory in all other respects to the Administrative Agent.
          (c) Flood Insurance. The Borrowers will, and shall cause each
Subsidiary to, with respect to each Mortgaged Premises, obtain flood insurance
in such total amount as the Administrative Agent may from time to time
reasonably require, except that such total amount shall not exceed the principal
amount of the outstanding Indebtedness secured by such Mortgaged Premises, if at
any time the area in which any improvements are located on any Mortgaged
Premises is designated a “flood hazard area” in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency, and otherwise comply with
the National Flood Insurance Program as set forth in the Flood Disaster
Protection Act of 1973, as amended from time to time.

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     SECTION 6.10. Casualty and Condemnation. The Borrowers (a) will furnish to
the Administrative Agent prompt written notice of any casualty or other insured
damage to any material portion of the Collateral or the commencement of any
action or proceeding for the taking of any material portion of the Collateral or
interest therein under power of eminent domain or by condemnation or similar
proceeding and (b) will ensure that the net proceeds of any such event (whether
in the form of insurance proceeds, condemnation awards or otherwise) are
collected and applied in accordance with the applicable provisions of this
Agreement and the Collateral Documents.
     SECTION 6.11. Appraisals. At any time that the Administrative Agent
requests, the Borrowers will provide the Administrative Agent with appraisals or
updates thereof of the Inventory, equipment, intellectual property and real
property from an appraiser selected and engaged by the Administrative Agent, and
prepared on a basis satisfactory to the Administrative Agent, such appraisals
and updates to include, without limitation, information required by applicable
law and regulations; provided, however, that if no Event of Default has occurred
and is continuing, the Administrative Agent may require one appraisal of each
type per calendar year, each of which shall be at the sole expense of the
Borrowers.
     SECTION 6.12. Depository Banks. Each Borrower and each Domestic Subsidiary
will maintain TD Bank as a principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business. Schedule 6.12 sets
forth the details for all deposit and investments accounts maintained by each
Borrower and each Domestic Subsidiary.
     SECTION 6.13. Additional Collateral; Further Assurances. (a) Subject to
applicable law, each Borrower and each Domestic Subsidiary that is or becomes a
Borrower shall, unless the Administrative Agent otherwise consents, cause each
Domestic Subsidiary of Holdings formed or acquired after the date of this
Agreement in accordance with the terms of this Agreement to become a Borrower by
executing the Joinder Agreement set forth as Exhibit F hereto (the “Joinder
Agreement”). Upon execution and delivery thereof, each such Person (i) shall
become a Borrower and thereupon shall have all of the rights, benefits, duties,
and obligations in such capacity under the Loan Documents and (ii) will grant
Liens to the Administrative Agent, in any property of such Borrower which
constitutes Collateral, including any parcel of real property located in the
U.S. owned by any Borrower by executing and delivering Collateral Documents.
          (b) The Borrowers will cause (i) 100% of the issued and outstanding
Equity Interests of each of its Domestic Subsidiaries, (ii) 65% of the issued
and outstanding Equity Interests of each of its Foreign Subsidiaries (other than
the German Subsidiary) (or such greater percentage that, due to a change in
applicable law after the date hereof, (1) could not reasonably be expected to
cause the undistributed earnings of such Foreign Subsidiary as determined for
U.S. federal income tax purposes to be treated as a deemed dividend to such
Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to
cause any material adverse tax consequences) entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) and (iii) 100% of the issued and
outstanding Equity Interests not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary (other than the German
Subsidiary) directly owned by a Borrower to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent pursuant to the
terms and conditions of the Loan Documents or other Collateral Documents as the
Administrative Agent shall reasonably request. Notwithstanding the foregoing, at
any time after an Event of Default has occurred and is continuing, each Borrower
will, upon the request of the Administrative Agent, cause each Foreign
Subsidiary to become a Borrower and to grant Liens to the Administrative Agent
on its assets and have the balance of its stock pledged to the Administrative
Agent.

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          (c) Without limiting the foregoing, each Borrower will, and will cause
each Subsidiary to, execute and deliver, or cause to be executed and delivered,
to the Administrative Agent such documents, agreements and instruments, and will
take or cause to be taken such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by law or which the
Administrative Agent may, from time to time, reasonably request to carry out the
terms and conditions of this Agreement and the other Loan Documents and to
ensure perfection and priority of the Liens created or intended to be created by
the Collateral Documents, all at the expense of the Borrowers.
          (d) If any material assets (including any Equity Interests and any
real property or improvements thereto or any interest therein) are acquired by
any Borrower after the Effective Date (other than assets constituting Collateral
under any Collateral Document that become subject to the Lien in favor of the
Administrative Agent under any Collateral Document upon acquisition thereof),
the Borrower Representative will notify the Administrative Agent, and, if
requested by the Administrative Agent, the Borrowers will cause such assets to
be subjected to a Lien securing the Obligations and will take such actions as
shall be necessary or reasonably requested by the Administrative Agent to grant
and perfect such Liens, including actions described in paragraph (c) of this
Section, all at the expense of the Borrowers.
          (e) If, after the date of this Agreement, any Foreign Subsidiary
becomes a Material Foreign Subsidiary, in the reasonable discretion of the
Required Lenders, the Administrative Agent shall have the right to perfect, at
the Borrowers’ joint and several cost, payable upon request therefor (including,
without limitation, any foreign counsel, or foreign notary, filing, registration
or similar, fees, costs or expenses), its Lien in the Equity Interests of such
Material Foreign Subsidiary in the respective foreign jurisdiction; provided
that the Required Lenders, in their reasonable discretion and in consultation
with the Borrower Representative, may waive the requirements of this Subsection
(e) with respect to the perfection of the Administrative Agent’s Lien in any
Equity Interest in any foreign jurisdiction to the extent that they determine
that the costs of perfecting such Liens in such Equity Interests are excessive
in relation to the value of the security to be afforded thereby.
ARTICLE VII
Negative Covenants
     Until the Revolving Commitments and the LC Commitment have expired or
terminated and the principal of and interest on each Loan and all fees, expenses
and other amounts payable under any Loan Document have been paid in full and all
Letters of Credit have expired or terminated and all LC Disbursements shall have
been reimbursed, the Borrowers covenant and agree, jointly and severally, with
the Administrative Agent, the Lenders and the LC Issuer that:
     SECTION 7.01. Indebtedness. No Borrower will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
          (a) the Obligations;
          (b) Indebtedness existing on the date hereof and set forth in
Schedule 7.01(b) and extensions, renewals and replacements of any such
Indebtedness in accordance with clause (f) hereof;

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          (c) Indebtedness that is unsecured and subordinated to the Obligations
on terms satisfactory to the Administrative Agent in its Permitted Discretion
provided that after giving effect to the incurrence of such Indebtedness, the
Borrowers will remain in compliance with Section 7.12;
          (d) Indebtedness of any Borrower to any other Borrower; provided that
(i) such Indebtedness shall be subject to Section 6.04 and (ii) such
Indebtedness shall be subordinated to the Obligations on terms reasonably
satisfactory to the Administrative Agent;
          (e) Indebtedness of any Borrower or any Subsidiary incurred to finance
the acquisition of any capital assets (constituting purchase money
Indebtedness), including Capital Lease Obligations, and extensions, renewals and
replacements of any such Indebtedness in accordance with clause (f) hereof;
provided that after giving effect to the incurrence of such Indebtedness, the
Companies will remain in compliance with Section 7.12;
          (f) Indebtedness which represents an extension, refinancing, or
renewal of any of the Indebtedness described in clause (b) hereof; provided
that, (i) the principal amount or interest rate of such Indebtedness is not
increased, (ii) any Liens securing such Indebtedness are not extended to any
additional property of any Borrower, (iii) no Borrower that is not originally
obligated with respect to repayment of such Indebtedness is required to become
obligated with respect thereto, (iv) such extension, refinancing or renewal does
not result in a shortening of the average weighted maturity of the Indebtedness
so extended, refinanced or renewed, (v) the terms of any such extension,
refinancing, or renewal are not less favorable to the obligor thereunder than
the original terms of such Indebtedness and (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must include subordination terms and conditions that are
at least as favorable to the Administrative Agent as those that were applicable
to the refinanced, renewed, or extended Indebtedness;
          (g) Indebtedness owed to any Person providing workers’ compensation,
health, disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business;
          (h) Indebtedness of any Borrower or any Subsidiary in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations, in each case provided in the ordinary course of business;
          (i) Guarantees made by any Borrower on behalf of any Subsidiary (other
than a Foreign Subsidiary except to the extent permitted under the definition of
“Permitted Foreign Loan Investment”), provided that after giving effect thereto,
the Companies will remain in compliance with Section 7.12;
          (j) Indebtedness of any Borrower incurred as an account party in
respect of Letter(s) of Credit;
          (k) Indebtedness of any Borrower secured only by patents, patent
applications and registrations, trademarks, trademark applications and
registrations, copyrights and copyright applications and registrations of any
Borrower, and any rights related to the foregoing; provided, that after giving
effect thereto, the Companies will remain in compliance with Section 7.12; and
          (l) Indebtedness in respect of the Convertible Notes and any
Refinancing Indebtedness.

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     SECTION 7.02. Liens. No Borrower will, nor will it permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
          (a) Liens created pursuant to any Loan Document;
          (b) Permitted Encumbrances;
          (c) any Lien on any property or asset of any Borrower or any
Subsidiary existing on the date hereof and set forth in Schedule 7.02(c);
provided that (i) such Lien shall not apply to any other property or asset of
any Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
          (d) Liens on capital assets acquired by any Borrower or any
Subsidiary; provided that (i) such security interests secure Indebtedness
permitted by clause (e) of Section 7.01, and (ii) such security interests shall
not apply to any other property or assets of any Borrower or any Subsidiary;
          (e) in connection with any Acquisition, any Lien on personal property
of the acquisition target with respect to Capital Lease Obligations or purchase
money Indebtedness existing prior to acquisition by Holdings or any Subsidiary,
provided that (i) such Lien shall be limited to the assets financed by such
capital lease or purchase money Indebtedness, (ii) such Lien shall not apply to
the inventory, accounts and general intangibles of the acquisition target,
(iii) such Lien shall not apply or extend to any other assets or property of any
Borrower, (iv) such Lien shall secure only those obligations it secures on the
date of such acquisition, including any extensions, renewals and replacements
thereof, and no future obligations, and (v) such Lien was not granted in
contemplation of or in connection with such Acquisition;
          (f) Liens of a collecting bank arising in the ordinary course of
business under Section 4-208 of the Uniform Commercial Code in effect in the
relevant jurisdiction covering only the items being collected upon;
          (g) Liens arising out of sale and leaseback transactions permitted by
Section 7.06; and
          (h) Liens solely on patents, patent applications and registrations,
trademarks, trademark applications and registrations, copyrights and copyright
applications and registrations of any Borrower, and any rights related to the
foregoing; provided, that such Liens secure only Indebtedness permitted by
clause (k) of Section 7.01.
Notwithstanding the foregoing, none of the Liens permitted pursuant to this
Section 7.02 may at any time attach to any Borrower’s (1) Accounts, other than
those permitted under clause (a) of the definition of Permitted Encumbrance and
clause (a) above and (2) Inventory, other than those permitted under clauses
(a) and (b) of the definition of Permitted Encumbrance and clause (a) above.
     SECTION 7.03. Fundamental Changes. (a) No Borrower will, nor will it permit
any Subsidiary to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default or Event of Default shall have occurred and be continuing, (i) any
Subsidiary of any Borrower may merge into such Borrower in a transaction in
which such Borrower is the surviving

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corporation, (ii) any Subsidiary that is not a Borrower may liquidate or
dissolve if the Borrower Representative determines in good faith that such
liquidation or dissolution is in the best interests of the Borrowers and is not
materially disadvantageous to the Administrative Agent; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 7.04, and (iii) any Borrower or Subsidiary may merge with another Person
in connection with a Permitted Acquisition so long as such Borrower is the
surviving entity in any such merger involving a Borrower.
          (b) No Borrower will, nor will it permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by such Borrower or such Subsidiary on the date of execution of this
Agreement and businesses reasonably related thereto.
          (c) No Borrower will, nor will it permit any of its Subsidiaries to,
form any new Subsidiary which is a Foreign Subsidiary, except to the extent
permitted under the definition of “Permitted Foreign Subsidiary Loan and
Investment”.
          (d) Holdings will not engage in any business or activity other than
the ownership of all the outstanding shares of capital stock of S&W Corp., TCHC,
USR and the other Subsidiaries and activities incidental thereto. Holdings will
not own or acquire any assets (other than Equity Interests of S&W Corp., TCHC,
USR or other Subsidiaries as permitted hereunder and the cash proceeds of any
Restricted Payments permitted by Section 7.08) or incur any liabilities (other
than liabilities under the Loan Documents and liabilities reasonably incurred in
connection with its maintenance of its existence), except in accordance with
this Agreement.
     SECTION 7.04. Investments, Loans, Advances, Guarantees and Acquisitions. No
Borrower will, nor will it permit any Subsidiary to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Borrower and a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit (whether through purchase of assets, merger
or otherwise), except:
          (a) Permitted Investments, provided that, in the case of investments
described in clauses (a) through (e) of the definition of Permitted Investments,
such investments (other than investments in any Excluded Account (as defined in
the Security Agreement)) shall be subject to control agreements in favor of the
Administrative Agent or otherwise subject to a perfected security interest in
favor of the Administrative Agent;
          (b) (i) investments in existence on the date of this Agreement by a
Borrower in Equity Interests of its Subsidiaries and (ii) other investments in
existence on the date of this Agreement as described in Schedule 7.04(b);
provided, that, other than to the extent permitted by clause (c) below, the
amount in each case of (i) and (ii) is not increased after the date of this
Agreement;
          (c) investments after the date hereof by a Borrower in Equity
Interests in its Domestic Subsidiaries, provided that any such Equity Interests
shall be pledged to the Administrative Agent for the benefit of the Secured
Parties in accordance with Section 6.13(b);
          (d) loans or advances made by any Borrower to any Domestic Subsidiary
and made by any Subsidiary to any Borrower or any other Domestic Subsidiary;

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          (e) guarantees constituting Indebtedness permitted by Section 7.01(i)
or arising by endorsement of items for deposit or collection received in the
ordinary course of business;
          (f) investments by Holdings in any Subsidiary to the extent required
to make a Permitted Acquisition in accordance with the terms of this Agreement;
provided with respect to any Foreign Subsidiary, (i) such investment is a
Permitted Foreign Subsidiary Loan and Investment, (ii) the Equity Interests held
by a Borrower in such Foreign Subsidiary shall be pledged to the Administrative
Agent for the benefit of the Secured Parties in accordance with Section 6.13(b)
and (iii) such Foreign Subsidiary must have the capacity to obtain its own
financing without recourse to any Borrower;
          (g) subject to Section 8.02 hereof, notes payable, or stock or other
securities issued by Account Debtors to a Borrower pursuant to negotiated
agreements with respect to settlement of such Account Debtor’s Accounts in the
ordinary course of business, consistent with past practices;
          (h) investments in the form of Swap Agreements permitted by
Section 7.07;
          (i) investments of any Person existing at the time such Person becomes
a Subsidiary of Holdings or consolidates or merges with Holdings or any of the
Subsidiaries so long as such investments were not made in contemplation of such
Person becoming a Subsidiary or of such merger;
          (j) investments received in connection with the dispositions of assets
permitted by Section 7.05; and
          (k) investments constituting deposits described in clauses (c) and
(d) of the definition of the term “Permitted Encumbrances”;
     SECTION 7.05. Asset Sales. No Borrower will, nor will it permit any
Subsidiary to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will any Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to a Borrower or another Subsidiary in compliance with Section 7.04),
except:
          (a) sales, transfers and dispositions of (i) inventory in the ordinary
course of business and (ii) used, obsolete, worn out or surplus equipment or
property in the ordinary course of business;
          (b) sales, transfers and dispositions to a Borrower;
          (c) sales, transfers and dispositions of accounts receivable in
connection with the compromise, settlement or collection thereof;
          (d) sales, transfers and dispositions of investments permitted by
clauses (h) and (j) of Section 7.04;
          (e) sale and leaseback transactions permitted by Section 7.06;
          (f) dispositions resulting from any casualty or other insured damage
to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of any Borrower or any Subsidiary; and
          (g) sales, transfers and other dispositions of assets (other than
Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary
are sold) that are not permitted by any other paragraph of this Section,
provided that the aggregate fair market value of all assets sold, transferred or

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otherwise disposed of in reliance upon this paragraph (g) shall not exceed
$5,000,000 during any fiscal year of the Companies;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b) and (f) above) shall be
made for fair value and for at least 100% cash consideration.
     SECTION 7.06. Sale and Leaseback Transactions. No Borrower will, nor will
it permit any Subsidiary to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property sold or transferred, except as
permitted by Schedule 7.06 and except for any such sale of any fixed or capital
assets by any Borrower or any Subsidiary that is made for cash consideration in
an amount not less than the fair value of such fixed or capital asset and is
consummated within ninety (90) days after such Borrower or such Subsidiary
acquires or completes the construction of such fixed or capital asset.
     SECTION 7.07. Swap Agreements. No Borrower will, nor will it permit any
Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which a Borrower or any Subsidiary has actual
exposure (other than those in respect of Equity Interests of any Borrower or any
of its Subsidiaries), (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Borrower or any Subsidiary, and
(c) Foreign Exchange Obligations.
     SECTION 7.08. Restricted Payments; Certain Payments of Indebtedness. (a) No
Borrower will, nor will it permit any Subsidiary to, declare or make, or agree
to pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except (i) the Borrowers may
declare and pay dividends with respect to their common stock payable solely in
additional shares of its common stock and in cash to the extent after giving
effect thereto the Borrowers will remain in compliance with Section 7.12, and
(ii) Subsidiaries may declare and pay dividends ratably with respect to their
Equity Interests.
          (b) No Borrower will, nor will it permit any Subsidiary to, make or
agree to pay or make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:

  (i)   payment of Indebtedness created under the Loan Documents;

  (ii)   with the prior written consent of the Administrative Agent, payment of
Indebtedness permitted by Section 7.01 with the proceeds of the issuance of
Equity Interests;

  (iii)   payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness (subject to any subordination
agreements);

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  (iv)   prepayment of Indebtedness permitted by Section 7.01 provided that
(A) no Default or Event of Default has occurred and is continuing; (B) the
making of such prepayment will not result in the occurrence of a Default or
Event of Default after giving effect thereto; and (C) except as to prepayment of
the Indebtedness permitted by Section 7.01(l), the Administrative Agent has
given its prior written consent, which consent shall not be unreasonably
withheld;

  (v)   refinancings of Indebtedness to the extent permitted by Section 7.01;
and

  (vi)   payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness.

     SECTION 7.09. Transactions with Affiliates. No Borrower will, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates,
except (a) transactions that (i) are in the ordinary course of business and
(ii) are at prices and on terms and conditions not less favorable to a Borrower
or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) transactions between or among a Borrower and any
Subsidiary that is a Borrower not involving any other Affiliate, (c) any loan,
advance or investment permitted by Sections 7.04(c), 7.04(d) or 7.04(f), (d) any
Indebtedness permitted under Sections 7.01(d) and 7.01(i), (e) any Restricted
Payment permitted by Section 7.08, (f) loans or advances to employees permitted
under Section 7.04, (g) the payment of reasonable fees to directors of any
Borrower or any Subsidiary who are not employees of such Borrower or such
Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of any
Borrower or its Subsidiaries in the ordinary course of business and (h) any
issuances of securities or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment agreements, stock
options and stock ownership plans approved by any Borrower’s board of directors.
     SECTION 7.10. Restrictive Agreements. No Borrower will, nor will it permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of such Borrower or any of its Subsidiaries to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to any Borrower or any other Subsidiary or to Guarantee Indebtedness of any
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by any Loan Document,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 7.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
     SECTION 7.11. Amendment of Certain Documents. No Borrower will, nor will it
permit any Subsidiary to, amend, modify or waive (a) any of its rights under its
Organization Documents, (b) any

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term or condition of any Convertible Notes Document in any manner materially
adverse to the interests or rights of the Administrative Agent or any Lender
under the Loan Documents, provided that Holdings may agree with the holders of
the Convertible Notes to amend Section 10.12 of the Convertible Notes Indenture
to remove the restriction on Holdings’ ability to incur additional indebtedness
and liens and the requirement for Holdings to deliver notices as set forth
therein, or (c) any term or condition of any Refinancing Indebtedness Document
in any manner materially adverse to the interests and rights of the
Administrative Agent or any Lender under the Loan Documents.
     SECTION 7.12. Financial Covenants.
          (a) Consolidated Fixed Charge Coverage Ratio. The Companies will not
permit the Consolidated Fixed Charge Coverage Ratio, determined for any Test
Period ending on October 31, 2010 and the end of each fiscal quarter thereafter,
to be less than 1.50:1.00.
          (b) Consolidated Leverage Ratio. The Companies will not permit the
Consolidated Leverage Ratio, determined for any Test Period ending on
October 31, 2010 and the end of each fiscal quarter thereafter, to be greater
than 3.25:1.00.
ARTICLE VIII
Events of Default
     SECTION 8.01. Events of Default. If any of the following events (“Events of
Default”) shall occur:
          (a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any Letter of Credit when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise, and such failure shall continue unremedied
for a period of five (5) days;
          (b) any Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
(5) days;
          (c) any representation or warranty made or deemed made by or on behalf
of any Borrower or any Subsidiary in or in connection with this Agreement or any
Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
materially incorrect when made or deemed made;
          (d) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.02(a), 6.03 (with respect to a
Borrower’s existence) or 6.08 or in Article VII;
          (e) any Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those which
constitute a default under another Section of this Article), and such failure
shall continue unremedied for a period of (i) five (5) Business Days after the
earlier of knowledge of such breach or notice thereof from the Administrative
Agent if such breach relates to terms or provisions of Section 6.02 (other than
Section 6.02(a)), 6.03 through 6.07, 6.09, 6.10 or

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6.12 of this Agreement or (ii) thirty (30) days after the earlier of knowledge
of such breach or notice thereof from the Administrative Agent if such breach
relates to terms or provisions of any other Section of this Agreement;
          (f) any Borrower or any Subsidiary shall fail to make any payment
within 10 days (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable;
          (g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
          (h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of a Borrower or any Subsidiary, or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Borrower or any Subsidiary of any Borrower or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or ordering any
of the foregoing shall be entered;
          (i) any Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Borrower or Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
          (j) any Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
          (k) one or more judgments for the payment of money in an aggregate
amount of $4,000,000.00 or more (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) shall be
rendered against any Borrower or any Subsidiary or any combination thereof and
the same shall remain undischarged for a period of sixty (60) consecutive days
during which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of any
Borrower or any Subsidiary to enforce any such judgment or any Borrower or any
Subsidiary shall fail within sixty (60) days to discharge one or more
non-monetary judgments or orders which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;
          (l) an ERISA Event shall have occurred that, in the opinion of the
Administrative Agent, when taken together with all other ERISA Events that have
occurred, could reasonably be

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expected to result in liability of a Borrower or any Subsidiary in an aggregate
amount exceeding $2,000,000.00;
          (m) a Change in Control shall occur;
          (n) the occurrence of any “default”, as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided;
          (o) any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any Collateral purported
to be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document, or any Borrower shall fail to
comply with any of the terms or provisions of any Collateral Document;
          (p) any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any
Borrower shall challenge the enforceability of any Loan Document or shall assert
in writing, or engage in any action or inaction based on any such assertion,
that any provision of any of the Loan Documents has ceased to be or otherwise is
not valid, binding and enforceable in accordance with its terms);
          (q) any one or more material licenses, permits or authorizations now
or hereafter held by any Borrower permitting the manufacture and/or sale of
firearms shall be terminated, suspended or revoked or shall not be renewed,
which terminations, suspensions, revocations or failures to renew would,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect; or
          (r) any Borrower or any Subsidiary shall fail to make any payment
(regardless of amount) in respect of any Cash Management Obligation, Swap
Obligation or Foreign Exchange Obligation, and such failure shall continue
unremedied for a period of five (5) days.
     SECTION 8.02. Remedies Upon Event of Default. If any Event of Default
occurs and is continuing, the Administrative Agent may, and shall at the request
of the Required Lenders and the LC Issuer, as applicable, take any or all of the
following actions:
          (a) declare the commitment of each Lender to make Loans and any
obligation of the LC Issuer to issue Letters of Credit to be terminated,
whereupon such commitments and obligation shall be terminated;
          (b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers;
          (c) require that the Borrowers cash collateralize the LC Exposure as
provided in Section 2.09(h); and
          (d) exercise on behalf of itself, the Lenders and the LC Issuer all
rights and remedies available to it, the Lenders, the LC Issuer and the other
Secured Parties under the Loan Documents;

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provided that upon the occurrence of an actual or deemed entry of an order for
relief with respect to any Borrower under the Bankruptcy Code of the United
States, the obligation of each Lender to make Loans and any obligation of the LC
Issuer to issue Letters of Credit to be terminated shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable and
the obligations of the Borrowers to cash collateralize the LC Exposure as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
The Administrative Agent, for the benefit of the Lenders and the LC Issuer shall
also have the right of the appointment of a receiver for the assets and property
of each of the Borrowers, and each of the Borrowers consent to such rights and
such appointment and hereby waive any objection such Borrower may have thereto.
     SECTION 8.03. Application of Funds. After the exercise of remedies provided
for in Section 8.02 (or after the Loans have automatically become immediately
due and payable and the LC Exposure have automatically been required to be cash
collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations from proceeds of Collateral shall be
applied by the Administrative Agent in the following order:
     First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (other than principal and interest but
including fees, charges and disbursements of counsel to the Administrative Agent
and amounts payable under Article III) payable to the Administrative Agent in
its capacity as such;
     Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to any Lender and the LC Issuer (including fees, charges
and disbursements of counsel to the respective Lenders payable under
Section 10.04 and amounts payable under Article III), ratably among them in
proportion to the amounts respectively described in this clause Second payable
to them;
     Third, to payment of that portion of the Obligations constituting accrued
and unpaid Letter of Credit Fees, Unused Revolver Fees, interest on the Loans,
LC Disbursements, LC Borrowings and other Obligations, ratably among the Lenders
and the LC Issuer in proportion to the respective amounts described in this
clause Third payable to them;
     Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, LC Disbursements, LC Borrowings, amounts owing under
Cash Management Agreements, the Swap Termination Value of Swap Agreements,
including, without limitation, Foreign Exchange Obligations, ratably among the
Lenders, the LC Issuer and other Secured Parties in proportion to the respective
amounts described in this clause Fourth held by them;
     Fifth, to the Administrative Agent for the account of the LC Issuer, to
cash collateralize that portion of LC Exposure comprised of the aggregate
undrawn amount of Letters of Credit;
     Sixth, to payment of breakage, termination, prepayment, yield maintenance
or other amounts owing in respect of any between any Borrower and any Secured
Party, to the extent such Obligations are permitted hereunder, ratably among
such Secured Parties; and
     Last, the balance, if any, after all of the Obligations then due have been
paid in full, to the Borrowers or as otherwise required by Law.

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Subject to Section 2.09(h), amounts used to cash collateralize the LC Exposure
pursuant to clause Fifth above shall be applied to satisfy drawings under such
Letters of Credit as they occur. If any amount remains on deposit as cash
collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.
     Each Borrower acknowledges the relative rights, priorities and agreements
of the Secured Parties, as set forth in this Agreement, including as set forth
in this Section 8.02.
ARTICLE IX
Administrative Agent
     SECTION 9.01. Appointment and Authority.
          (a) Each of the Lenders and the LC Issuer hereby irrevocably appoints
TD Bank to act on its behalf as the Administrative Agent hereunder and under the
other Loan Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent, the Lenders and the LC
Issuer, and no Borrower shall have rights as a third party beneficiary of any of
such provisions.
          (b) The Administrative Agent shall also act as the “collateral agent”
under the Loan Documents, and each of the Lenders (in its capacities as a
Lender, potential counterparty to Swap Agreements, including with respect to
Foreign Exchange Obligations, and potential Cash Management Bank) and the LC
Issuer hereby irrevocably appoints and authorizes the Administrative Agent to
act as the agent of such Lender and the LC Issuer for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by any of the
Borrowers to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent, as “collateral agent” and any co-agents, sub-agents and
attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05
for purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article X
including Section 10.04(c), as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.
     SECTION 9.02. Rights as a Lender. The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “ Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its capacity as a Lender. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrowers or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
     SECTION 9.03. Exculpatory Provisions. Administrative Agent shall have no
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

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          (a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
          (b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Administrative
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for herein or in the other Loan Documents), provided that the Administrative
Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that
is contrary to any Loan Document or applicable law; and
          (c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as
Administrative Agent or by any of its Affiliates in any capacity.
     The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
not be deemed to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower
Representative or a Lender.
     The Administrative Agent shall not be responsible to the Lenders or any of
their respective Related Parties for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the Administrative Agent.
     SECTION 9.04. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the LC Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the LC Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the LC Issuer prior to the making of
such Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for any Borrower), independent
accountants and other experts selected by it, and shall not be liable to the
Lenders or any of their respective Related Parties for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

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     SECTION 9.05. Delegation of Duties. The Administrative Agent may perform
any and all of its duties and exercise its rights and powers hereunder or under
any other Loan Document by or through any one or more sub-agents appointed by
the Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Administrative Agent.
     SECTION 9.06. Resignation of Administrative Agent. (a) The Administrative
Agent may at any time give notice of its resignation to the Lenders, the LC
Issuer and the Borrower Representative. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrowers, to appoint a successor Administrative Agent, which shall be a
depository institution with an office in the United States, or an Affiliate of
any such depository institution with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders or such successor
shall not have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the LC Issuer appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify the Borrower
Representative and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (a) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
retiring Administrative Agent on behalf of the Lenders or the LC Issuer under
any of the Loan Documents, the retiring Administrative Agent shall continue to
hold such collateral security until such time as a successor Administrative
Agent is appointed) and (b) all payments, communications and determinations
provided to be made by, to or through the Administrative Agent shall instead be
made by or to each Lender and the LC Issuer directly, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section.
          (b) If the Administrative Agent is a Defaulting Lender, the Required
Lenders may remove the Administrative Agent from such capacity by giving written
notice to the Administrative Agent and the other Lenders, and shall have the
right, in consultation with the Borrower Representative, to appoint a successor
Administrative Agent, which shall be a depository institution with an office in
the United States, or an Affiliate of any such depository institution with an
office in the United States. If no such successor shall have been so appointed
by the Required Lenders or such successor shall not have accepted such
appointment by the date which is 15 days after the Required Lenders deliver such
notice of removal, the removal shall nevertheless thereupon become effective,
and (a) the removed Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the removed Administrative Agent on
behalf of the Lenders or the LC Issuer under any of the Loan Documents, the
removed Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed) and (b) all
payments, communications and determinations provided to be made by, to or
through the removed Administrative Agent shall instead be made by or to each
Lender and the LC Issuer directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this Section.
          (c) Upon the acceptance of a successor’s appointment as Administrative
Agent under subsections (a) or (b) of this Section, such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring, retired or removed Administrative Agent, as applicable, and the
retiring, retired or removed Administrative Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom

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as provided above in subsections (a) or (b) of this Section). The fees payable
by the Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor. After the Administrative Agent’s resignation or removal pursuant
to subsections (a) or (b) of this Section, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring, retired
or removed Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring, retired or removed Administrative Agent was acting as
Administrative Agent.
          (d) Any resignation by or removal of the Administrative Agent pursuant
to subsections (a) or (b) of this Section shall also constitute its resignation
or removal as the LC Issuer. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (i) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring,
retired or removed LC Issuer, (ii) the retiring, retired or removed LC Issuer
shall be discharged from all of its duties and obligations hereunder or under
the other Loan Documents, and (iii) the successor LC Issuer shall issue letters
of credit in substitution for the Letters of Credit, if any, outstanding at the
time of such succession or make other arrangements satisfactory to the retiring,
retired or removed LC Issuer to effectively assume the obligations of the
retiring, retired or removed LC Issuer with respect to such Letters of Credit.
     SECTION 9.07. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and the LC Issuer acknowledges that it has, independently and without
reliance upon any Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the LC Issuer also acknowledges that it will,
independently and without reliance upon any Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
     SECTION 9.08. No Other Duties, Etc. Anything herein to the contrary
notwithstanding, the Administrative Agent, shall not have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in its capacity, as applicable, as an Administrative Agent, a Lender or the LC
Issuer hereunder. None of the Lenders or other entities identified on the facing
page of this Agreement as a “Syndication Agent”, “Sole Lead Arranger” or “Sole
Bookrunner” shall have any right, power, obligation, liability, responsibility
or duty under this Agreement or any other Loan Document other than those
applicable to all Lenders as such if such entity is also a Lender. Without
limiting the foregoing, none of the Lenders or other entities so identified
shall have or be deemed to have any fiduciary relationship with any other
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other entities so identified in deciding to enter into
this Agreement or any other Loan Document or in taking or not taking action
hereunder or thereunder.
     SECTION 9.09. Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Borrower, any Administrative Agent (irrespective of
whether the principal of any Loan or LC Exposure shall then be due and payable
as herein expressed or by declaration or otherwise and irrespective of whether
such Administrative Agent shall have made any demand on any Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
          (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, LC Exposure and all other
Obligations that are owing and unpaid and

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to file such other documents as may be necessary or advisable in order to have
the claims of the Lenders, the LC Issuer and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the LC Issuer and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders and the Administrative
Agent under Sections 2.12 and 10.04) allowed in such judicial proceeding; and
          (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the LC Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the LC Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.18
and 10.04.
     Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
the LC Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or the LC Issuer or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
or the LC Issuer in any such proceeding.
     SECTION 9.10. Collateral Matters. The Lenders and the LC Issuer irrevocably
authorize the Administrative Agent to, and the Administrative Agent shall, at
the request of the Borrower Representative:
          (a) release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Revolving Commitments and LC Commitment and payment in full of all Obligations
(other than contingent indemnification obligations), (ii) that is sold or to be
sold or otherwise disposed of as part of or in connection with any sale or other
disposition permitted hereunder or under any other Loan Document, (iii) subject
to Section 10.01, if approved, authorized or ratified in writing by the Required
Lenders, or (iv) owned by a Borrower upon release of such Borrower from its
obligations under this Agreement pursuant to clause (c) below;
          (b) release or subordinate any Lien on any property granted to or held
by the Administrative Agent under any Loan Document to the holder of any Lien on
such property that is permitted by Section 7.02(d); and
          (c) release any Borrower (other than Holdings) from its obligations
under this Agreement if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder; provided that no such release shall occur if
such Borrower continues to be a guarantor in respect of any other Indebtedness
of a Borrower unless and until such Borrower is (or is being simultaneously)
released from its guaranty with respect to such other Indebtedness.
     Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent’s, as the case may be,
authority to release or subordinate its interest in particular types or items of
property, or to release any Borrower from its obligations under this Agreement
pursuant to this Section 9.10. In each case as specified in this Section 9.10,
the Administrative Agent will, at the Borrowers expense and provided that the
Borrowers shall have provided the Administrative Agent such certifications or
documents as the Administrative Agent shall reasonably

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request in order to demonstrate compliance with the provisions of this Agreement
described above, execute and deliver to the applicable Borrower such documents
as such Borrower may reasonably request to evidence the release of such item of
Collateral from the security interest granted under the Collateral Documents, or
to release such Borrower from its obligations under this Agreement, in each case
in accordance with the terms of the Loan Documents.
ARTICLE X
Miscellaneous
     SECTION 10.01. Amendments, Etc. Except as otherwise specified in this
Agreement, no amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent to any departure by any Borrower therefrom,
shall be effective unless in writing signed by the Required Lenders and the
Borrowers or the applicable Borrower, as the case may be, and acknowledged by
the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided that no such amendment, waiver or consent shall:
          (a) extend or increase any Revolving Commitment or LC Commitment of
any Lender (or reinstate any Revolving Commitment or LC Commitment terminated
pursuant to Section 8.02) without the written consent of such Lender (it being
understood that no amendment, modification, termination, waiver or consent with
respect to any condition precedent, covenant or Default shall constitute an
increase in the Revolving Commitment or LC Commitment of any Lender);
          (b) (A) change the scheduled final maturity of any Loan, (B) postpone
the date for payment of any principal, interest fees or any other amount payable
hereunder or under any Loan Documents, (C) reduce the amount of, waive or excuse
any such payment or (D) postpone the scheduled date of expiration of any
Revolving Commitment or LC Commitment, in any case, without the written consent
of each Lender directly affected thereby;
          (c) reduce or forgive the principal of, or the rate of interest
specified herein on, any Loan or LC Disbursement, or any fees or other amounts
payable hereunder or under any other Loan Document or change the form or
currency of payment without the written consent of each Lender directly affected
thereby (it being understood that any amendment or modification to the financial
definitions in this Agreement shall not constitute a reduction in the rate of
interest for purposes of this clause (c));
          (d) change Section 2.15 or Section 8.02 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
          (e) change any provision of this Section 10.01 or the definition of
“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;
          (f) change any provision of Section 10.06 in a manner which would
restrict the ability of any Lender to assign any of its rights or obligations
hereunder without the written consent of each Lender;
          (g) other than in a transaction permitted under Section 7.05, except
as otherwise provided in any other Loan Document, release all or substantially
all of the Collateral in any transaction or series of related transactions,
without the written consent of each Lender; or

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          (h) amend or waive any provision contained in Section 2.02(b) without
the consent of each Lender.
and provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the LC Issuer in addition to the Lenders required above,
affect the rights or duties of the LC Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Swingline Lender in addition to the Lenders required above,
affect the rights or duties of the Swingline Lender under this Agreement or any
other Loan Document; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Revolving Commitments and LC Commitments, if any, of such Lender
may not be increased or extended without the consent of such Lender.
     If, in connection with any proposed change, waiver, discharge or
termination of the provisions of this Agreement as contemplated by this
Section 10.01, the consent of the Required Lenders is obtained but the consent
of one or more of such other Lenders whose consent is required is not obtained,
then the Borrowers shall have the right to replace all non-consenting Lenders
required to obtain such consent with one or more Eligible Assignees in
accordance with Section 10.13, so long as at the time of such replacement each
such new Lender consents to the proposed change, waiver, discharge or
termination.
     Notwithstanding anything to the contrary, without the consent of any other
Person, the applicable Borrower or Borrowers and the Administrative Agent may
(in its or their respective sole discretion, or shall, to the extent required by
any Loan Document) enter into any amendment or waiver of any Loan Document, or
enter into any new agreement or instrument, to effect the granting, perfection,
protection, expansion or enhancement of any security interest in any Collateral
or additional property to become Collateral for the benefit of the Secured
Parties, or as required by local law to give effect to, or protect any security
interest for the benefit of the Secured Parties, in any property or so that the
security interests therein comply with applicable law.
     SECTION 10.02. Notices; Effectiveness; Electronic Communication.
          (a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by electronic
mail transmission as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

  (i)   if to the Administrative Agent, Swingline Lender or LC Issuer at:

TD Bank, N.A.
1441 Main Street
Springfield, MA 01103
Attention: Maria P. Goncalves,
Regional Vice President
E-mail: maria.goncalves@tdbanknorth.com

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And
TD Bank, N.A.
1441 Main Street
Springfield, MA 01103
Attention: Joanne Lavoie
Commercial Sales Assistant
E-mail: joanne.lavoie@tdbanknorth.com
with copy to:
Edwards Angell Palmer & Dodge LLP
111 Huntington Avenue
Boston, MA 02199
Attention: James I. Rubens, Esq.
E-mail: jrubens@eapdlaw.com

  (ii)   if to any Borrower, to the Borrower Representative at:

Smith & Wesson Holding Corporation
c/o Smith & Wesson Corp.
2100 Roosevelt Avenue
Springfield, MA 01102-2208
Attention: John Dineen
E-mail: jdineen@smith-wesson.com
with a copy to:
Smith & Wesson Holding Corporation
c/o Smith & Wesson Corp.
2100 Roosevelt Avenue
Springfield, MA 01102-2208
Attention: Deana McPherson
E-mail: dmcpherson@smith-wesson.com
and with a copy to:
Greenberg Traurig, LLP
2375 E. Camelback Road
Suite 700
Phoenix, AZ 85016
Attention: Karl A. Freeburg
E-mail: Freeburgk@gtlaw.com

  (iii)   if to any other Lender, to the address, electronic mail address or
telephone number set forth for such Lender on Schedule 10.02(a).

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received. Notices
delivered through electronic mail transmission to the extent provided in
subsection (b) below, shall be effective as provided in such subsection (b).

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          (b) Electronic Communications. (i) Notices and other communications to
the Lenders and the LC Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II if
such Lender or the LC Issuer, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication.
          (ii) notices and other communications sent to an e-mail address shall
be deemed received upon the sender’s receipt of an acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement); provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(iii) notices or communications posted to an Internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (ii) of notification that
such notice or communication is available and identifying the website address
therefor.
          (c) The Platform. THE INTRALINKS OR OTHER ELECTRONIC DOCUMENT POSTING
PLATFORM THAT MAY BE USED BY THE ADMINISTRATIVE AGENT IS PROVIDED “AS IS” AND
“AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY
OR COMPLETENESS OF ANY MATERIALS OR INFORMATION REGARDING THE BORROWERS (THE
“BORROWER MATERIALS”) OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any Borrower or any Lender, the LC Issuer
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any Borrower’s or
the Administrative Agent’s transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of any Agent Party; provided, however, that in no event shall any
Agent Party have any liability to any Borrower, any Lender, the LC Issuer or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
          (d) Change of Address, Etc. Each of any Borrower, the Administrative
Agent and the LC Issuer may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the Borrower
Representative, the Administrative Agent and the LC Issuer.
          (e) Reliance by Administrative Agent, the LC Issuer, the
Administrative Agent and Lenders. The Administrative Agent, the LC Issuer and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Borrowing Requests or Conversion/Continuation Notices) purportedly
given by or on behalf of the Borrower Representative even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the terms
thereof, as understood by the recipient, varied from any confirmation thereof.
The Borrowers shall indemnify the Administrative Agent the LC Issuer, each
Lender and the Related Parties

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of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower Representative. All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by Administrative
Agent, and each of the parties hereto hereby consents to such recording.
     SECTION 10.03. No Waiver; Cumulative Remedies. No failure by the
Administrative Agent, any Lender, the LC Issuer or any other Secured Party to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
     SECTION 10.04. Expenses; Indemnity; Damage Waiver.
          (a) Costs and Expenses. The Borrowers shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and one local counsel per jurisdiction on behalf of the Administrative
Agent) and the Lead Arranger, in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents, any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the LC
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
LC Issuer (including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent or the LC Issuer and one separate counsel
for all Lenders (other than the Administrative Agent)) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including without limitation (x) its rights under
this Section 10.04 and (y) during any workout or restructuring, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
          (b) Indemnification by the Borrowers. The Borrowers shall jointly and
severally indemnify the Lead Arranger, Administrative Agent (and any sub-agent
thereof), each Lender and the LC Issuer and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by any Borrower arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the LC Issuer
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release or
threatened release of Hazardous Material on, at, under or from any property
owned, leased, operated or used by any Borrower or any of the Subsidiaries, or
any environmental claim related in any way to any Borrower or any of the
Subsidiaries, or (iv) any actual or threatened claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by any other Borrower,
and regardless of whether any Indemnitee is a party

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thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or its Affiliates and the respective
officers, directors, employees, attorneys, agents and advisors of such
Indemnitee and its Affiliates or (y) result from a claim brought by any Borrower
against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if such Borrower has obtained a
final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction, and provided further that Article III (instead
of this Section 10.04) shall govern indemnity with respect to the matters
addressed in such Article.
          (c) Reimbursement by Lenders. To the extent that the Borrowers for any
reason fail to indefeasibly pay any amount required under subsection (a) or
(b) of this Section 10.04 to be paid by it to Administrative Agent (or any
sub-agent thereof), the Swingline Lender, or any Related Party of any of the
foregoing Persons, each Lender severally agrees to pay to the Administrative
Agent (or any such sub-agent), the Swingline Lender or such Related Party, as
the case may be, such Lender’s pro rata share of the Total Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against the Administrative Agent (or any such sub-agent)
or the Swingline Lender, in its capacity as such, or against such Related Party;
provided further that no Lender shall be liable for any loss, claim, damage,
liability or related expense required to be paid to the Administrative Agent (or
any such sub-agent) or the Swingline Lender in connection with such capacity, or
to such Related Party, as the case may be, under Section 10.04(b), if and to the
extent that such loss, claim, damage, liability or related expense is determined
by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of the Administrative
Agent (or any such sub-agent), the Swingline Lender or such Related Party, as
the case may be. The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.13(e).
          (d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrowers shall not assert, and hereby waive,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
          (e) Payments. All amounts due under this Section 10.04 shall be
payable not later than ten Business Days after demand therefor.
          (f) Survival. The agreements in this Section 10.04 shall survive the
resignation of the Administrative Agent, the LC Issuer, the replacement of any
Lender, the termination of the Revolving Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
     SECTION 10.05. Payments Set Aside. To the extent that any payment by or on
behalf of any Borrower is made to the Administrative Agent, the LC Issuer or any
Lender, or the Administrative Agent, the LC Issuer or any Lender exercises its
right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or

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required (including pursuant to any settlement entered into by the
Administrative Agent, the LC Issuer, or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any debtor relief law (including, without limitation, the US
Bankruptcy Code) or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender, the LC Issuer and each other
Secured Party severally agrees to pay to Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or repaid
by Administrative Agent, plus interest thereon from the date of such demand to
the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders, the LC Issuer
and the other Secured Parties under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.
     SECTION 10.06. Successors and Assigns. (a) Successors and Assigns
Generally. 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 no Borrower may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this
Section 10.06, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section 10.06, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this
Section 10.06 (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the
extent provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
          (b) Assignments by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment and the
Loans (including for purposes of this Section 10.06(b), participations in LC
Exposure) at the time owing to it); provided that

  (i)   except in the case of an assignment of the entire remaining amount of
the assigning Lender’s Revolving Commitment or Loans at the time owing to it or
in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the Revolving
Commitment or the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment, is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than the lesser of (x)
$5,000,000 and (y) the Revolving Commitment and Loans held by the assigning
Lender unless, in each case, the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrowers otherwise consent (each
such consent not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single

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      assignment for purposes of determining whether such minimum amount has
been met;

  (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 with respect to the Loans or the Revolving Commitment assigned;

  (iii)   Required Consents. No consent shall be required for any assignment by
a Lender except to the extent required by this subsection (b)(iii):

  (A)   the consent of the Borrowers (such consent not to be unreasonably
withheld or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund;     (B)   the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Revolving Commitment if such assignment is to a Person that is not a Lender with
a Revolving Commitment in respect of the applicable facility, an Affiliate of
such Lender or an Approved Fund with respect to such Lender; and     (C)   the
consent of the LC Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and

  (iv)   the parties of each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount of $3,500; provided, however, that the
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment. The Eligible Assignee, if it
is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement 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 3.02, 3.03, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrowers (at their expense) shall execute and
deliver the applicable Note to the assignee Lender. Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this subsection shall be treated for purposes of this Agreement as a

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sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section 10.06.
          (c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrowers, shall maintain 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 Revolving Commitments of, and principal
amounts 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
in the absence of manifest error, and the Borrowers, the Administrative Agent
and the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by only the Borrowers
and by any Lender (with respect to itself only) at any reasonable time and from
time to time upon reasonable prior notice.
          (d) Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrowers, the Administrative Agent or the Swingline
Lender, sell participations to any Person (other than a natural person or the
Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations
under this Agreement (including all or a portion of its Revolving Commitments
and/or the Loans; provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Administrative Agent, the Lenders and the LC Issuer
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement; provided that such
Lender may agree that it will not, without the consent of such Participant,
agree to any amendment, modification or waiver described Section 10.01(b) or
(c), to the extent affecting such Participant.
     Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in Section 10.01(b) or
(c) that affects such Participant. Subject to subsection (e) of this Section,
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 3.02, 3.03 and 3.05 (subject to the requirements of those sections) to
the same extent as if it were a Lender and had acquired its interest by
assignment Pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender; provided such Participant agrees to be subject to
Section 2.15 as though it were a Lender.
          (e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.02 or 3.03 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrowers’ prior written consent (not to be
unreasonably withheld or delayed); provided that, for purposes of this clause
(e), entering into this Agreement or other Loan Document shall not be construed
as providing such consent, or the right to a greater payment results from a
Change in Law after the Participant becomes a Participant with respect to such
participation. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, shall maintain a copy of each participation and each
Participant to which the Borrowers have so consented, from time to time (the
“Participant Register”). The entries in the Participant Register shall be
conclusive in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Participant Register pursuant to the terms hereof as a
Participant hereunder for all purposes of this Agreement. The Participant
Register shall be available for inspection by only the Borrowers and by any
Lender (with respect to its participations only) at any reasonable time and from
time to time upon reasonable prior notice.

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          (f) Certain Pledges. Any Lender may, without the consent of any
Borrower or the Administrative Agent, at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note(s), if any) to secure obligations of such Lender, including
(i) any pledge or assignment to secure obligations to a Federal Reserve Bank and
(ii) any pledge or assignment to any holders of obligations owed, or securities
issued, by such Lender as collateral security for such obligations or
securities, or to any trustee for, or any other representative of, such holders;
provided that no such pledge or assignment shall release such Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
          (g) Electronic Execution of Assignments. The words “execution,”
“signed,” “signature” and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
     SECTION 10.07. Treatment of Certain Information; Confidentiality. Each of
the Administrative Agent, the Lenders and the LC Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, trustees, employees, agents, advisors and
representatives, (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process; provided that the Administrative Agent or such Lender,
unless prohibited by any Law, shall use reasonable efforts to notify the
Borrowers in advance of any disclosure pursuant to this clause (c) but only to
the extent reasonably practicable under the circumstances and on the
understanding that neither the Administrative Agent nor any Lender shall incur
any liability for failure to give such notice, (d) to any other party hereto,
(e) in connection with the exercise of any remedies hereunder or under any other
Loan Document or any action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (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 Agreement with any Borrower or any Subsidiary, (g) with
the consent of the Borrowers or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender, the LC Issuer or
any of their respective Affiliates on a nonconfidential basis from a source
other than the Borrowers.
     For purposes of this Section, “Information” means all information received
from the Borrowers or any Subsidiary relating to any Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the LC Issuer on a
nonconfidential basis prior to disclosure by Holdings or any Subsidiary. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
     Each of the Administrative Agent, the Lenders and the LC Issuer
acknowledges that (a) the Information may include material non-public
information concerning a Borrower or a Subsidiary, as the case may be, (b) it
has developed compliance procedures regarding the use of material non-public

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information and (c) it will handle such material non-public information in
accordance with applicable Law, including Federal and state securities Laws.
     Each Borrower consents to the publication by the Administrative Agent or
any Lender of advertising material relating to the financing transactions
contemplated by this Agreement using such Borrower’s name, product photographs,
logo or trademark. The Administrative Agent or such Lender shall provide a draft
of any advertising material to the Borrower Representative for review and
comment prior to the publication thereof.
     SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender, the LC Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the LC Issuer or any such Affiliate to or for the
credit or the account of any Borrower against any and all of the obligations of
such Borrower now or hereafter existing under this Agreement or any other Loan
Document to such Lender or the LC Issuer, irrespective of whether or not such
Lender or the LC Issuer shall have made any demand under this Agreement or any
other Loan Document and although such obligations of such Borrower may be
contingent or unmatured or are owed to a branch or office of such Lender or the
LC Issuer different from the branch or office holding such deposit or obligated
on such indebtedness. The rights of each Lender, the LC Issuer and their
respective Affiliates under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Lender, the LC Issuer or
their respective Affiliates may have. Each Lender and the LC Issuer agrees to
notify the Borrowers and the Administrative Agent promptly after any such setoff
and application; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
     SECTION 10.09. Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the “Maximum Rate”). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrowers. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
     SECTION 10.10. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy or electronic mail
(including, without limitation, by PDF) shall be effective as delivery of a
manually executed counterpart of this Agreement.

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     SECTION 10.11. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Loan Document or
other document delivered pursuant hereto or thereto or in connection herewith or
therewith shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any credit extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
     SECTION 10.12. Severability. If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
     SECTION 10.13. Replacement of Lenders. If any Lender requests compensation
under Section 3.02, or if the Borrowers are required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.05, and such amounts or compensation do not affect Lenders
generally, or if any Lender is a Defaulting Lender or a non-consenting Lender as
provided in Section 10.01, then the Borrowers may, at their sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10.06), all
of its interests, rights and obligations under this Agreement and the related
Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that:
          (a) the Borrowers shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);
          (b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and, if such Lender is also the LC Issuer,
its LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (including
any amounts under Section 3.03) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts);
          (c) in the case of any such assignment resulting from a claim for
compensation under Section 3.02 or payments required to be made pursuant to
Section 3.05, such assignment will result in a reduction in such compensation or
payments thereafter; and
          (d) such assignment does not conflict with applicable Laws.
     A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.
     SECTION 10.14. Governing Law, Jurisdiction, Etc.

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          (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, BUT NOT LIMITED
TO, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
          (b) SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER PARTY
HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMIT, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN
NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT
OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
          (c) WAIVER OF VENUE. EACH BORROWER AND EACH OTHER PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
          (d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
     SECTION 10.15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE

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BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
     SECTION 10.16. USA PATRIOT Act Notice. Each Lender that is subject to the
Act (as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrowers that pursuant to the
requirements of the USA Patriot Improvement and Reauthorization Act,
Pub.L.109-177 (signed into Law March 9, 2006) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrowers, which
information includes the name and address of the Borrowers and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrowers in accordance with the Act.
     SECTION 10.17. Judgment Currency. If for the purpose of obtaining judgment
in any court it is necessary to convert an amount due hereunder in the currency
in which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Administrative Agent could purchase in the
New York foreign exchange market, the Original Currency with the Second Currency
on the date two (2) Business Days preceding that on which judgment is given.
Each Borrower agrees that its obligation in respect of any Original Currency due
from it hereunder or under any other Loan Document to which it is party shall,
notwithstanding any judgment or payment in such other currency, be discharged
only to the extent that, on the Business Day following the date the
Administrative Agent receives payment of any sum so adjudged to be due hereunder
in the Second Currency, the Administrative Agent may, in accordance with normal
banking procedures, purchase, in the New York foreign exchange market, the
Original Currency with the amount of the Second Currency so paid; and if the
amount of the Original Currency so purchased or that could have been so
purchased is less than the amount originally due in the Original Currency, each
Borrower agrees as a separate obligation and notwithstanding any such payment or
judgment to indemnify the Administrative Agent and the Lenders against such
loss. The term “rate of exchange” in this Section 10.17 means the spot rate at
which the Administrative Agent, in accordance with normal practices, is able on
the relevant date to purchase the Original Currency with the Second Currency,
and includes any premium and costs of exchange payable in connection with such
purchase.
     SECTION 10.18. No Advisory or Fiduciary Responsibility. In connection with
all aspects of each of the Transactions contemplated hereby, each Borrower
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that:
(i) the credit facility provided for hereunder and any related arranging or
other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between the Borrowers and its
Affiliates, on the one hand, and the Lead Arranger and the Administrative Agent,
on the other hand, and the Borrowers are capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, each of the Lead Arranger and the
Administrative Agent are and have been acting solely as a principal and is not
the financial advisor, agent or fiduciary, for any Borrower or any of its
Affiliates, stockholders, creditors or employees or any other Person;
(iii) neither the Lead Arranger nor the Administrative Agent has assumed and
will not assume an advisory, agency or fiduciary responsibility in favor of any
Borrower with respect to any of the transactions contemplated hereby or the
process leading thereto, including with respect to any amendment, waiver or
other modification hereof or of any other Loan Document (irrespective of whether
the Lead Arranger or the Administrative Agent has advised or is currently
advising any Borrower or any of its Affiliates on other matters) and the Lead
Arranger and the Administrative Agent have no obligation to any Borrower or any
of its Affiliates with respect to the transactions contemplated hereby except
those obligations expressly set forth herein and in the other Loan Documents;
(iv) the Lead Arranger and the

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Administrative Agent and their Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrowers and
theirs Affiliates, and neither the Lead Arranger nor the Administrative Agent
has any obligation to disclose any of such interests by virtue of any advisory,
agency or fiduciary relationship; and (v) neither the Lead Arranger nor the
Administrative Agent has provided and will not provide any legal, accounting,
regulatory or tax advice with respect to any of the transactions contemplated
hereby (including any amendment, waiver or other modification hereof or of any
other Loan Document) and each of the Borrowers has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate.
Each of the Borrowers hereby waives and releases, to the fullest extent
permitted by law, any claims that it may have against the Lead Arranger and the
Administrative Agent with respect to any breach or alleged breach of agency or
fiduciary duty.
     SECTION 10.19. All Obligations to Constitute Joint and Several Obligations.
          (a) All Obligations of the Borrowers shall be secured by the
Administrative Agent’s Lien upon all of the Collateral, and by all other Liens
heretofore, now or at any time hereafter granted by the Borrowers to the
Administrative Agent, for the benefit of the Secured Parties, to the extent
provided in the Loan Documents or Bank Product Documents under which such Lien
arises.
          (b) Each of the Borrowers expressly represents and acknowledges that
it is part of a common enterprise with the other Borrowers and that any
financial accommodations by the Administrative Agent and the other Lenders to
any other Borrower hereunder and under the other Loan Documents and the Bank
Product Documents are and will be of direct and indirect interest, benefit and
advantage to the Borrowers. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to the Administrative Agent and Lenders and their respective
successors and assigns, the full and prompt payment (whether at stated maturity,
by acceleration or otherwise) and performance of, all Obligations owed or
hereafter owing to the Administrative Agent and Lenders by each other Borrower.
Each Borrower agrees that its guaranty obligation hereunder is a continuing
guaranty of payment and performance and not of collection, that its obligations
under this Section 10.19 shall not be discharged until payment and performance,
in full, of the Obligations has occurred, and that its obligations under this
Section 10.19 shall be absolute, unconditional and irrevocable, irrespective of,
and unaffected by, (i) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement, any other Loan Document,
any Bank Product Document or any other agreement, document or instrument to
which any Borrower is or may become a party; (ii) the absence of any action to
enforce this Agreement (including this Section 10.19), any other Loan Document
or any Bank Product Document or the waiver or consent by the Administrative
Agent and Lenders with respect to any of the provisions thereof; (iii) the
insolvency of any Borrower or Subsidiary; and (iv) any other action or
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor. Each Borrower shall be regarded, and shall be
in the same position, as principal debtor with respect to the Obligations
guaranteed hereunder.
          (c) The Borrowers acknowledge that any Borrowing Request,
Conversion/Continuation Notice, request for issuance of a Letter of Credit or
other notice or request given by the Borrower Representative to the
Administrative Agent shall bind the Borrowers, and that any notice given by the
Administrative Agent or any other Lender to the Borrowers shall be effective
with respect to the Borrowers. Each of the Borrowers acknowledges and agrees
that the Borrowers shall be liable, on a joint and several basis, for all of the
Loans and other Obligations, regardless of which Borrower actually may have
received the proceeds of any of the Loans or other extensions of credit or have
had Letters of Credit issued hereunder or the amount of such Loans received,
Letters of Credit issued or the manner in which the Administrative Agent or any
other Lender accounts among the Borrowers for such Loans, Letters of Credit or
other extensions of credit on its books and records, and further acknowledges
and agrees that Loans and other extensions of credit to the Borrowers inure to
the mutual benefit of all of the

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Borrowers and that the Administrative Agent and the other Lenders are relying on
the joint and several liability of the Borrowers in extending the Loans and
other financial accommodations hereunder.
          (d) Each Borrower expressly waives all rights it may have now or in
the future under any statute, or at common law, or at law or in equity, or
otherwise, to compel the Administrative Agent or Lenders to marshal assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Borrower, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. Each Borrower consents and agrees that the
Administrative Agent or the Lenders may, at any time and from time to time,
without notice or demand, whether before or after any actual or purported
termination, repudiation or revocation of this Agreement by any Borrower, and
without affecting the enforceability or continuing effectiveness hereof as to
such Borrower: (i) with the consent of the other Borrowers, supplement, restate,
modify, amend, increase, decrease, extend, renew or otherwise change the time
for payment or the terms of this Agreement or any part thereof, including any
increase or decrease of the rate(s) of interest thereon; (ii) with the consent
of the other Borrowers, supplement, restate, modify, amend, increase, decrease,
or enter into or give any agreement with respect to, this Agreement or any part
thereof, or any of the Collateral Documents; (iii) waive, approve or consent to
any action, condition, covenant, default, remedy, right, representation or term
of this Agreement or any other Loan Document; (iv) accept partial payments;
(v) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer or enforce any security or guarantees, and apply
any security and direct the order or manner of sale thereof as the Agents or
Lenders in their sole and absolute discretion may determine; (vi) release any
person from any personal liability with respect to this Agreement or any part
thereof; (vii) settle, release on terms satisfactory to the Required Lenders or
by operation of applicable laws or otherwise liquidate or enforce any security
or guaranty in any manner, consent to the transfer of any security and bid and
purchase at any sale; or (viii) consent to the merger, change or any other
restructuring or termination of the corporate or partnership existence of any
Borrower or any other person, and correspondingly restructure the obligations
evidenced hereby, and any such merger, change, restructuring or termination
shall not affect the liability of any Borrower or the continuing effectiveness
hereof, or the enforceability hereof with respect to all or any part of the
obligations evidenced hereby. It is agreed among each Borrower, the
Administrative Agent and Lenders that the foregoing consents and waivers are of
the essence of the transaction contemplated by this Agreement and the other Loan
Documents and that, but for the provisions of this Section 10.19 and such
waivers, the Administrative Agent and Lenders would decline to enter into this
Agreement.
          (e) Notwithstanding anything to the contrary in this Agreement or in
any other Loan Document, and except as set forth in Section 10.19(f), each
Borrower hereby expressly and irrevocably waives any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor. Each Borrower acknowledges and agrees that this waiver
is intended to benefit the Administrative Agent and Lenders and shall not limit
or otherwise affect such Borrower’s liability hereunder or the enforceability of
this Section 10.19, and that the Administrative Agent, Lenders and their
respective successors and assigns are intended third party beneficiaries of the
waivers and agreements set forth in this Section 10.19.
          (f) In the event any Borrower (a “Funding Borrower”) shall make any
payment or payments under this Agreement or shall suffer any loss as a result of
any realization upon any collateral granted by it to secure its obligations
hereunder, such Funding Borrower shall have the right to seek contribution
payments from each other Borrower (each, a “Contributing Borrower”) to the
extent permitted by any Requirement of Law. Nothing in this Section 10.19 shall
affect any Borrower’s joint and several liability to the Lenders for the entire
amount of its Obligations. Each Borrower covenants and agrees that its right to
receive any contribution hereunder from a Contributing Borrower shall be

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subordinate and junior in right of payment to all Obligations of the Borrowers
to the Lenders Group . No Borrower will exercise any rights that it may acquire
by way of subrogation hereunder or under any other Loan Document or any Bank
Product Document or at law by any payment made hereunder or otherwise, nor shall
any Borrower seek or be entitled to seek any contribution or reimbursement from
any other Borrower in respect of payments made by such Borrower hereunder or
under any other Loan Document or under any Bank Product Document, until all
amounts owing to the Lenders on account of the Obligations are paid in full in
cash (or, with respect to Letters of Credit, are either cash collateralized or
supported by a letter of credit) and the Revolving Loan Commitment and the LC
Commitment are terminated. If any amounts shall be paid to any Borrower on
account of such subrogation or contribution rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Borrower in trust for the Lenders segregated from other funds of such Borrower,
and shall, forthwith upon receipt by such Borrower, be turned over to the
Administrative Agent in the exact form received by such Borrower (duly endorsed
by such Borrower to the Administrative Agent, if required), to be applied
against the Obligations, whether matured or unmatured, as provided for herein.
          (g) If the Administrative Agent or any Lender may, under applicable
law, proceed to realize its benefits under any of the Loan Documents, the
Administrative Agent or any Lender may, at its sole option, determine which of
its remedies or rights it may pursue without affecting any of its rights and
remedies under this Section 10.19. If, in the exercise of any of its rights and
remedies, the Administrative Agent or any Lender shall forfeit any of its rights
or remedies, including its right to enter a deficiency judgment against any
Borrower or any other Person, whether because of any applicable laws pertaining
to “election of remedies” or the like, each Borrower hereby consents to such
action by the Administrative Agent or such Lender and waives any claim based
upon such action, even if such action by the Administrative Agent or such Lender
shall result in a full or partial loss of any rights of subrogation that each
Borrower might otherwise have had but for such action by the Administrative
Agent or such Lender. Any election of remedies that results in the denial or
impairment of the right of the Administrative Agent or any Lender to seek a
deficiency judgment against any Borrower shall not impair any other Borrower’s
obligation to pay the full amount of the Obligations.
ARTICLE XI
Amendment and Restatement
     SECTION 11.01. Acknowledgements. The Borrowers acknowledge and agree that,
immediately prior to the Effective Date, (a) the aggregate outstanding principal
amount of the Revolving Loans is $0.00 and (b) the aggregate outstanding face
amount of the Existing Letters of Credit is $4,297,315.36.
     SECTION 11.02. Effect of this Agreement. Upon this Agreement becoming
effective pursuant to Article 4, from and after the Effective Date: (a) all
“Revolving Loans” and “Letters of Credit” outstanding under the Existing Credit
Agreement shall continue outstanding hereunder without offset, defense,
counterclaim, abatement, reduction, set off, deduction or charge of any kind,
nature or description whatsoever, and the modification effected by this
Agreement shall not be deemed to provide for or to effect a repayment and
re-advance of any of the Indebtedness to the Lenders now outstanding under the
Existing Credit Agreement, it being the intention of the Borrowers,
Administrative Agent and the Lenders that a portion of the Indebtedness owing
under this Agreement be and is the same Indebtedness as that owing under the
Existing Credit Agreement immediately prior to the Effective Date; (b) all terms
and conditions of the Existing Credit Agreement and any other Loan Document (as
defined in the Existing Credit Agreement), as amended and restated by this
Agreement and the other Loan Documents executed and delivered on the Effective
Date, shall be and remain in full force and effect, as so amended and restated,
and shall constitute the legal, valid, binding and enforceable obligations of
the Borrowers to the Administrative Agent and Lenders; (c) the terms and
conditions of the Existing Credit

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Agreement shall be amended as set forth herein and, as so amended, shall be
restated in their entirety; (d) this Agreement shall not in any way release or
impair the Liens created pursuant to the Existing Credit Agreement or any other
Loan Document (as defined in the Existing Credit Agreement) or the rights,
duties or Obligations relating thereto or affect the relative priorities
thereof, in each case to the extent in force and effect thereunder as of the
Effective Date, except as modified hereby or by documents, instruments and
agreements executed and delivered in connection herewith, and all of such
rights, duties, Obligations and Liens are assumed, ratified and affirmed by the
Borrowers; (e) all indemnification obligations of the Borrowers under the
Existing Credit Agreement and any other Loan Document (as defined in the
Existing Credit Agreement) shall survive the execution and delivery of this
Agreement and shall continue in full force and effect for the benefit of the
Administrative Agent, Lenders and any other Person indemnified under the
Existing Credit Agreement or any other Loan Document (as defined in the Existing
Credit Agreement) at any time prior to the Effective Date; (f) the Obligations
incurred under the Existing Credit Agreement shall, to the extent outstanding on
the Effective Date, continue outstanding under this Agreement and shall not be
deemed to be paid, released, discharged or otherwise satisfied by the execution
of this Agreement, and this Agreement shall not constitute a refinancing,
substitution or novation of such Obligations or any of the other rights, duties
and obligations of the parties hereunder; (g) any and all references in the Loan
Documents to the Existing Credit Agreement shall, without further action of the
parties, be deemed a reference to the Existing Credit Agreement, as amended and
restated by this Agreement, and as this Agreement shall be further amended,
amended and restated, supplemented or otherwise modified from time to time
hereafter; and (h) all security interests created under the Existing Credit
Agreement and the other Loan Document (as defined in the Existing Credit
Agreement) executed and delivered on the Effective Date continue to be in full
force and effect after giving effect to the consummation of this Agreement.
Furthermore, the parties hereto acknowledge and agree that this Agreement may,
as an administrative matter, delete, amend or otherwise modify certain terms of
the Existing Credit Agreement that are not applicable as of the Effective Date
or thereafter; provided, however, that nothing in this Agreement shall affect,
limit or otherwise modify the validity or enforceability of any such term for so
long as such term was effective or applicable in accordance with the Existing
Credit Agreement.
[Signature Page Follows]

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

                  Borrowers:    
 
                SMITH & WESSON HOLDING CORPORATION    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                SMITH & WESSON CORP.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                THOMPSON/CENTER ARMS COMPANY, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                UNIVERSAL SAFETY RESPONSE, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                FOX RIDGE OUTFITTERS, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    

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                  BEAR LAKE HOLDINGS, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                K.W. THOMPSON TOOL COMPANY, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                O.L. DEVELOPMENT, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                THOMPSON CENTER HOLDING COMPANY    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    
 
                SMITH & WESSON DISTRIBUTING, INC.    
 
           
 
  By:   /s/ John R. Dineen    
 
  Name:  
 
John R. Dineen    
 
  Title:   Interim Chief Financial Officer    

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                  Administrative Agent:
 
                TD BANK, NA.,     as Administrative Agent
 
           
 
  By:   /s/ Maria P. Goncalves    
 
  Name:  
 
Maria P. Goncalves    
 
  Title:   Regional Vice President    
 
                LC Issuer
 
                TD BANK, N.A.,     as LC Issuer
 
           
 
  By:   /s/ Maria P. Goncalves    
 
  Name:  
 
Maria P. Goncalves    
 
  Title:   Regional Vice President    
 
                Lenders
 
                TD BANK, N.A.
 
           
 
  By:   /s/ Maria P. Goncalves    
 
  Name:  
 
Maria P. Goncalves    
 
  Title:   Regional Vice President    

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                  SOVEREIGN BANK
 
           
 
  By:   /s/ Edward S. Borden    
 
  Name:  
 
Edward S. Borden    
 
  Title:   Senior Vice President    

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                  BERKSHIRE BANK
 
           
 
  By:   /s/ Michael T. Mancuso    
 
  Name:  
 
Michael T. Mancuso    
 
  Title:   Vice President    

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                  CHICOPEE SAVINGS BANK
 
           
 
  By:   /s/ Kathi L. Donahue    
 
  Name:  
 
Kathi L. Donahue    
 
  Title:   Senior Vice President    

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                  DEUTSCHE BANK TRUST COMPANY AMERICAS
 
           
 
  By:   /s/ Enrique Landaeta    
 
  Name:  
 
Enrique Landaeta    
 
  Title:   Vice President    
 
           
 
  By:   /s/ Marguerite Sutton    
 
  Name:  
 
Marguerite Sutton    
 
  Title:   Director    

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

     
1. Assignor:
  [_________________]
 
   
2. Assignee:
  [_________________]
 
  [and is an Affiliate/Approved Fund of [identify Lender]1]
 
   
3. Borrowers:
  Smith & Wesson Holding Corporation, Smith & Wesson Corp., Thompson/Center Arms
Company, Inc., Thompson Center Holding Corporation, Universal Safety Response,
Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool Company, Inc., O.L.
Development, Inc., Bear Lake Holdings, Inc. and Smith & Wesson Distributing,
Inc. (collectively, the “Borrowers”)
 
   
4. Administrative Agent:
  TD Bank, N.A.

 

1   Select as applicable.

 

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5. Credit Agreement:
  Amended and Restated Credit Agreement, dated as of December 7, 2010 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrowers, the Lenders from time to time
party thereto (the “Lenders”), and TD Bank, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”)
 
   
6. Assigned Interest:
   

                                  Aggregate Amount of Revolving         Amount
of Revolving     Percentage Assigned of         Commitment/Loans for all Lenders
        Commitment/Loans Assigned     Commitment/Loans2     CUSIP Number   $    
 
  $           %              
 
                  $      
 
  $           %              
 
                  $      
 
  $           %              
 
                 

     
[7. Trade Date:
  ]3

Effective Date: ______________, 20___ [TO BE INSERTED BY THE ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:

              ASSIGNOR
 
            [NAME OF ASSIGNOR]
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    
 
            ASSIGNEE
 
            [NAME OF ASSIGNEE]
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

 

2   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.   3   To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of the
Trade Date.

 

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          [Consented to and]4 Accepted:    
 
        TD BANK, N.A.,     as Administrative Agent    
 
       
By:
   
 
   
Name:
       
Title:
       
 
        [Consented to:]5    
 
        [BORROWERS]    
 
       
By:
   
 
   
Name:
       
Title:
       

 

4   To be added only if the consent of the Administrative Agent is required by
the terms of the Credit Agreement.   5   To be added only if the consent of the
Borrowers is required by the terms of the Credit Agreement.

 

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ANNEX 1
TO ASSIGNMENT AND
ASSUMPTION AGREEMENT
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
     1. Representations and Warranties.
          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
any of the Borrowers, any of their Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by any of the Borrowers, any of their Subsidiaries or Affiliates or
any other Person of any of their respective obligations under any Loan Document.
          1.2 Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an assignee under the Credit Agreement (subject to
receipt of such consents as may be required under the Credit Agreement),
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Lead
Arranger, Administrative Agent (and any sub-agent thereof) or any other Lender,
and (v) if it is not incorporated under the laws of the United States or a State
thereof, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Lead Arranger, Administrative Agent
(and any sub-agent thereof), the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
     2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to, on or after the Effective Date. The Assignor and
the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
     3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and

 

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Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment and Assumption by telecopy shall be effective as
delivery of a manually executed counterpart of this Assignment and Assumption.
This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York applicable to contracts made and
performed in said state.

 

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EXHIBIT B
FORM OF BORROWING REQUEST
[Date]
TD Bank, N.A.
1441 Main Street
Springfield, Massachusetts 01103
Attention: Maria P. Goncalves, Regional Vice President
Ladies and Gentlemen:
     The undersigned, as Borrower Representative, refers to that certain Amended
and Restated Credit Agreement dated as of December 7, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined), by
and among Smith & Wesson Holding Corporation, Smith & Wesson Corp.,
Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation,
Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool
Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc. and Smith &
Wesson Distributing, Inc., as borrowers, the Lenders from time to time party
thereto, and TD Bank, N.A., as Administrative Agent, and, pursuant to
Section 2.05 of the Credit Agreement, hereby gives irrevocable notice that the
undersigned, as Borrower Representative, hereby requests a Revolving Borrowing
under the Credit Agreement, and to that end sets forth below the information
relating to such Borrowing (the “Proposed Borrowing”) as required under
Section 2.05 of the Credit Agreement:

  (i)   The Business Day of the Proposed Borrowing is __________________1 (the
“Borrowing Date”).     (ii)   The aggregate principal amount of the Proposed
Borrowing is $__________________.     (iii)   The Loans comprising the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [LIBOR Loans].    
[(iv)   The initial Interest Period for each Loan made as part of the Proposed
Borrowing shall be [one/two/three or six months]]2     (v)   The Applicable
Margin for the Loans made in the Proposed Borrowing will be _____________.

     The undersigned hereby certifies that the following statements are true on
and as of the date hereof and will be true on and as of the Borrowing Date:
     (A) Each of the representations and warranties contained in Article V of
the Credit Agreement and in the other Loan Documents is and will be true and
correct in all material respects before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made on
each such date (except to the extent any such representation or warranty relates
solely to a prior date);
 

1   Shall be a Business Day at least (i) three (3) Business Days after the date
hereof for the borrowing of a LIBOR Loan, and (ii) one (1) Business Day after
the dated hereof for the borrowing of a Base Rate Loan.   2   To be included for
a Proposed Borrowing comprised of LIBOR Loans.

 

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     (B) No Default or Event of Default has occurred and is continuing or would
result from the Proposed Borrowing or from the application of the proceeds
therefrom; and
     (C) After giving effect to the Proposed Borrowing, Revolving Availability
will not be less than zero.

              Very truly yours,
 
            SMITH & WESSON HOLDING CORPORATION,     as Borrower Representative
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

 

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EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
     This Compliance Certificate is furnished pursuant to that certain Amended
and Restated Credit Agreement dated as of December 7, 2010, (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among Smith & Wesson Holding Corporation (“Holdings”), Smith &
Wesson Corp., Thompson/Center Arms Company, Inc., Thompson Center Holding
Corporation, Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W.
Thompson Tool Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc.
and Smith & Wesson Distributing, Inc. (collectively, the “Borrowers”), the
Lenders from time to time party thereto and TD Bank, N.A., as Administrative
Agent. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
     THE UNDERSIGNED HEREBY CERTIFIES, ON ITS BEHALF AND ON BEHALF OF THE
BORROWERS, THAT:
     1. I am the duly elected _______________of the Borrower Representative;
     2. [The representations and warranties contained in Article V of the Credit
Agreement and in the other Loan Documents are true and correct on and as of the
date hereof with the same effect as if made on the date hereof, except for
representations and warranties expressly stated to relate to a specific earlier
date, in which case such representations and warranties were true and correct in
all material respects as of such earlier date.]1
     3. [No Default or Event of Default has occurred and is continuing or could
result from giving effect to the transactions contemplated by the Credit
Agreement and the other Loan Documents.]2
     4. I have reviewed the terms of the Credit Agreement and I have made, or
have caused to be made under my supervision, a review of the transactions and
conditions of Holdings and its consolidated Subsidiaries during the accounting
period covered by the attached financial statements [for quarterly financial
statements add: and such financial statements present fairly in all material
respects the financial position and results of operations of Holdings and its
Subsidiaries on a consolidated and consolidating basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes];
     5. The examinations described in paragraph 2 did not disclose[, except as
set forth below],3 and I have no knowledge of (i) the existence of any condition
or event which constitutes a Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in
Section 6.01 of the Credit Agreement;
     6. Schedule I attached hereto sets forth reasonably detailed calculations
demonstrating the Borrowers’ compliance with the covenants in Section 7.12 of
the Credit Agreement; and
     [Describe the exceptions, if any, to paragraph 3 by listing, in detail, the
(i) nature of the condition or event, the period during which it has existed and
the action which the Borrowers have taken, are
 

1   To be included in the Compliance Certificate delivered at closing.   2   To
be included in the Compliance Certificate delivered at closing.   3   Include
only if including bracketed paragraph below.

 

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taking, or propose to take with respect to each such condition or event or
(ii) the change in GAAP or the application thereof and the effect of such change
on the attached financial statements:
[                                                             
                                                              
                                                              ]]

 

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     The Borrower Representative hereby certifies that the above information,
together with the computations set forth in Schedule I hereto, are true and
accurate. The Borrower Representative recognizes that the Administrative Agent
and the Lenders are relying on this certificate and making credit decisions
based upon the same which it might otherwise not do but for the accuracy of this
certificate.

              SMITH & WESSON HOLDING CORPORATION,     as Borrower Representative
 
       
 
  By:    
 
       
 
  Name:    
 
  Title:    

 

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SCHEDULE I
Compliance as of                     _____, 20____,
with the provisions of Section 7.12 of the Credit Agreement
Loans Outstanding

     
Revolving Loan(s) (including L/C Disbursements):
  $                    
Swingline Loan(s):
  $                    
Total Loans outstanding:
  $                    

I. Minimum Consolidated Fixed Charge Coverage Ratio:

     
The actual Fixed Charge Coverage Ratio for such period is:
  ___ to 1.00
The minimum Fixed Charge Coverage Ratio required for such period is:
  1.50 to 1.00
In Compliance:
  [Yes][No]

The Fixed Charge Coverage Ratio has been calculated as follows:

             
A.
  Consolidated Net Income   $                    
 
           
B.
  Plus:   Consolidated Interest Expense   $                    
 
           
C.
  Plus:   Income Tax Expense (with a deduction in case of income tax benefit)  
$                    
 
           
D.
  Plus:   Depreciation and Amortization Expense   $                    
 
           
E.
  Plus:   Extraordinary Charges   $                    
 
           
F.
  Plus:   Non-Cash Charges for such period related to Stock Options and
Restricted Stock Grants   $                    
 
           
G.
  Plus:   Other Nonrecurring Non-Cash Charges
(but excluding any non-cash charge included in Consolidated Net Income in a
prior period)  
$                    
 
           
H.
  Less:   Extraordinary Gains and Non-Cash Income   $(                    )
 
           
I.
  Consolidated EBITDA   $                    
 
           
J.
  Plus:   Consolidated Rental Expense   $                    
 
           
K.
  Less:   Unfinanced Capital Expenditures   $(                    )
 
           
L.
  Less:   Cash Taxes Paid   $(                    )
 
           
M.
  Less:   Dividends and Distributions Paid in Cash   $(                    )
 
           
N.
  Consolidated Net Cash Available for Debt Service   $                    
 
           
O.
  Cash Consolidated Interest Expense   $                    
 
           
P.
  Plus:   Consolidated Rental Expense Paid   $                    

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

 

             
Q.
  Plus:   Scheduled Principal Repayments on Indebtedness made  
$                    
 
           
R.
  Plus:   Capital Lease Obligation Payments Made   $                    
 
           
S.
  Consolidated Fixed Charges   $                    
 
           
U.
  Consolidated Fixed Charge Coverage Ratio (N divided by S)  
                    x
 
            II.   Maximum Consolidated Leverage Ratio:    

     
The actual Consolidated Leverage Ratio for such period is:
  ___ to 1.00
The Maximum Consolidated Leverage Ratio allowed for such period is:
  3.25 to 1.00
In Compliance:
  [Yes][No]

The Consolidated Leverage Ratio has been calculated as follows:

             
A.
  Total Loans outstanding (from above)   $                    
 
           
B.
  Plus:   Other Outstanding Indebtedness of the Companies:  
$                    
 
           
C.
  i.   Amount due on Guaranties                     
                    $                        
 
  ii.   Maximum Principal Amount of
Indebtedness Guaranteed                        
                    $                        
 
  iii.   Greater of (i) or (ii)   $                    
 
  iv.   Off-Balance Sheet Liabilities   $                    
 
  v.   Contingent Liabilities (Sum of iii and iv)   $                    
 
           
D.
  Total Funded Debt (A plus B plus C(v))   $                    
 
           
E.
  Consolidated EBITDA (from above)   $                    
 
           
F.
  Consolidated Leverage Ratio (D divided by E)                       x

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

 

EXHIBIT D
FORM OF CONVERSION/CONTINUATION NOTICE
[Date]
TD Bank, N.A.
1441 Main Street
Springfield, Massachusetts 01103
Attention: Maria P. Goncalves, Regional Vice President
Ladies and Gentlemen:
     The undersigned, as Borrower Representative, refers to that certain Amended
and Restated Credit Agreement dated as of December 7, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined), by
and among Smith & Wesson Holding Corporation, Smith & Wesson Corp.,
Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation,
Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool
Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc. and Smith &
Wesson Distributing, Inc., as borrowers, the Lenders party from time to time
party thereto, and TD Bank, N.A., as Administrative Agent, and, pursuant to
Section 2.07 of the Credit Agreement, hereby gives irrevocable notice that the
undersigned, as Borrower Representative, hereby requests a [conversion]
[continuation] of Loans under the Credit Agreement, and to that end sets forth
below the information relating to such [conversion] [continuation] (the
“Proposed [Conversion] [Continuation]”) as required under Section 2.07 of the
Credit Agreement:

  (i)   The Business Day of the Proposed [Conversion] [Continuation] is
______________.1     (ii)   The Proposed [Conversion] [Continuation] involves
$____________ in the aggregate principal amount of Revolving Loans [made
pursuant to a Borrowing on ___________________.]     (iii)   The Loans referred
to in clause (ii) above are presently maintained as [LIBOR] [Base Rate] Loans
and are proposed hereby to be [converted into LIBOR/Base Rate Loans] [continued
as LIBOR].     [(iv)   The initial Interest Period for each Loan being
[converted into] [continued as] a LIBOR Loan as part of the Proposed
[Conversion] [Continuation] shall be [one/two/three or six months]]2     [(v)]  
The Applicable Margin for the Loans resulting from the Proposed [Conversion]
[Continuation] will be ____________________.

 

1   Shall be a Business Day at least (i) three (3) Business Days after the date
hereof for the conversion to or continuation of LIBOR Loans, and (ii), three
(3) Business Days after the dated hereof for the conversion of LIBOR Loans to
Base Rate Loans, and additionally, in the case of any conversion of LIBOR Loans
into Base Rate Loans, or continuation of LIBOR Loans, shall be the last day of
the Interest Period applicable thereto.   2   To be included in the case of any
conversion of Base Rate Loans into, or continuation of, LIBOR Loans.

 

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

 

     The undersigned, as Borrower Representative, hereby certifies that the
following statement is true on and as of the date hereof and will be true on and
as of the effective date of the Proposed [Conversion] [Continuation]: No Default
of Event of Default has occurred and is continuing or would result from the
Proposed [Conversion] [Continuation].

                  Very truly yours,    
 
                SMITH & WESSON HOLDING CORPORATION,         as Borrower
Representative    
 
           
 
  By:        
 
     
 
   
 
  Name:        
 
  Title:        

 

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

 

EXHIBIT E-1
REVOLVING LINE OF CREDIT NOTE

      $_______________   ___________ ____, 20__

     FOR VALUE RECEIVED, the undersigned, SMITH & WESSON HOLDING CORPORATION, a
Nevada corporation, SMITH & WESSON CORP., a Delaware corporation,
THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON CENTER
HOLDING CORPORATION, a Delaware corporation, UNIVERSAL SAFETY RESPONSE, INC., a
Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire corporation,
K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L. DEVELOPMENT,
INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware
corporation and SMITH & WESSON DISTRIBUTING, INC., a Delaware corporation
(collectively, the “Borrowers”), promise to pay to the order of
_____________________________ (the “Lender”), at the place and times provided in
the Credit Agreement referred to below the principal sum of
___________________ DOLLARS AND ____ CENTS ($_____________)
or, if less, the principal amount of, and interest accrued on, all Revolving
Loans made by the Lender from time to time pursuant to that certain Amended and
Restated Credit Agreement dated December 7, 2010 (as amended, restated or
modified from time to time, the “Credit Agreement”) by and among the Borrowers,
TD Bank, N.A., in its capacity as Administrative Agent (in said capacity,
together with its successors and assigns, the “Administrative Agent”) and the
Lenders party thereto from time to time (including, without limitation, the
Lender). Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Credit Agreement.
     The unpaid principal amount of this Revolving Line of Credit Note from time
to time outstanding is subject to mandatory prepayment from time to time as
provided in the Credit Agreement and shall bear interest as provided in the
Credit Agreement. All payments of principal and interest on this Revolving Line
of Credit Note shall be payable in lawful currency of the United States of
America in immediately available funds to the Administrative Agent.
     This Revolving Line of Credit Note is entitled to the benefits of, and
evidences obligations incurred under, the Credit Agreement, to which reference
is made for a description of the Collateral for this Revolving Line of Credit
Note and for a statement of the terms and conditions on which the Borrowers are
permitted and required to make prepayments and repayments of principal of the
obligations evidenced hereby and on which such obligations may be declared to be
immediately due and payable.
     THIS REVOLVING LINE OF CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
     Each and every party liable hereunder or for the indebtedness evidenced
hereby whether as maker, endorser, guarantor, surety or otherwise hereby:
(a) except as may be expressly provided in the Credit Agreement or the other
Loan Documents, waives notice (including, without limitation, notice of
intention to accelerate maturity, notice of acceleration of maturity, and notice
of non-payment), presentment, demand, protest, suretyship defenses and defenses
in the nature thereof such as bringing of suit, and diligence in taking any
action to collect amounts owing hereunder or in any proceeding against any of
the rights and properties securing payment hereof; (b) waives any defenses based
upon and specifically assents to any and all extensions and postponements of the
time for payment, changes in

 

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

 

terms and conditions and all other indulgences and forbearances which may be
granted by the holder to any party now or hereafter liable hereunder or for the
indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any Collateral now or hereafter held
hereunder or in connection with the Credit Agreement or any of the other Loan
Documents, and to the addition or release of any other party or person primarily
or secondarily liable; (d) agrees that if any Collateral given to secure this
Revolving Line of Credit Note or the indebtedness evidenced hereby or to secure
any of the obligations set forth or referred to in the Credit Agreement or any
of the other Loan Documents shall be found to be unenforceable in full or to any
extent, or if the Administrative Agent, the Lender, any other Secured Party or
any other party shall fail to duly perfect or protect such Collateral, the same
shall not relieve or release any party liable hereon or thereon nor vitiate any
other security or collateral given for any obligations evidenced hereby or
thereby; (e) agrees to pay all reasonable costs and expenses incurred by the
Administrative Agent, the Lender or any other Secured Party in connection with
the indebtedness evidenced hereby, including, without limitation, all reasonable
attorneys’ fees and costs, for the making and collection of the indebtedness
evidenced hereby and the enforcement of rights and remedies hereunder and under
the Credit Agreement and the other Loan Documents, whether or not suit is
instituted; and (f) consents to all of the terms and conditions contained in
this Revolving Line of Credit Note, the Credit Agreement and the other Loan
Documents.
     The liability of the Borrowers under this Revolving Line of Credit Note
shall be joint and several.
(Remainder of page intentionally left blank)

 

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

 

     IN WITNESS WHEREOF, the Borrowers have executed this Revolving Line of
Credit Note under seal as of the day and year first above written.

                  SMITH & WESSON HOLDING CORPORATION    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                SMITH & WESSON CORP.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                THOMPSON/CENTER ARMS COMPANY, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                UNIVERSAL SAFETY RESPONSE, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                FOX RIDGE OUTFITTERS, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                BEAR LAKE HOLDINGS, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

 

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

 

                  K.W. THOMPSON TOOL COMPANY, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                O.L. DEVELOPMENT, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                THOMPSON CENTER HOLDING COMPANY    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                SMITH & WESSON DISTRIBUTING, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

 

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

 

EXHIBIT E-2
SWINGLINE NOTE

      $5,000,000   December 7, 2010

     FOR VALUE RECEIVED, the undersigned, SMITH & WESSON HOLDING CORPORATION, a
Nevada corporation, SMITH & WESSON CORP., a Delaware corporation,
THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON CENTER
HOLDING CORPORATION, a Delaware corporation, UNIVERSAL SAFETY RESPONSE, INC., a
Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire corporation,
K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L. DEVELOPMENT,
INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a Delaware
corporation and SMITH & WESSON DISTRIBUTING, INC., a Delaware corporation
(collectively, the “Borrowers”), promise to pay to the order of TD BANK, N.A.
(the “Swingline Lender”), at the place and times provided in the Credit
Agreement referred to below the principal sum of
FIVE MILLION DOLLARS AND 00 CENTS ($5,000,000)
or, if less, the principal amount of, and interest accrued on, all Swingline
Loans made by the Swingline Lender from time to time pursuant to that certain
Amended and Restated Credit Agreement dated December 7, 2010 (as amended,
restated or modified from time to time, the “Credit Agreement”) by and among the
Borrowers, TD Bank, N.A., in its capacity as Administrative Agent (in said
capacity, together with its successors and assigns, the “Administrative Agent”)
and the Lenders party thereto from time to time (including, without limitation,
the Swingline Lender). Capitalized terms used herein and not defined herein
shall have the meanings ascribed to them in the Credit Agreement.
     The unpaid principal amount of this Swingline Note from time to time
outstanding is subject to mandatory prepayment from time to time as provided in
the Credit Agreement and shall bear interest as provided in the Credit
Agreement. All payments of principal and interest on this Swingline Note shall
be payable in lawful currency of the United States of America in immediately
available funds to the Administrative Agent.
     This Swingline Note is entitled to the benefits of, and evidences
obligations incurred under, the Credit Agreement, to which reference is made for
a description of the Collateral for this Swingline Note and for a statement of
the terms and conditions on which the Borrowers are permitted and required to
make prepayments and repayments of principal of the obligations evidenced hereby
and on which such obligations may be declared to be immediately due and payable.
     THIS SWINGLINE NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
     Each and every party liable hereunder or for the indebtedness evidenced
hereby whether as maker, endorser, guarantor, surety or otherwise hereby:
(a) except as may be expressly provided in the Credit Agreement or the other
Loan Documents, waives notice (including, without limitation, notice of
intention to accelerate maturity, notice of acceleration of maturity, and notice
of non-payment), presentment, demand, protest, suretyship defenses and defenses
in the nature thereof such as bringing of suit, and diligence in taking any
action to collect amounts owing hereunder or in any proceeding against any of
the rights and properties securing payment hereof; (b) waives any defenses based
upon and specifically assents to any and all extensions and postponements of the
time for payment, changes in

 

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

 

terms and conditions and all other indulgences and forbearances which may be
granted by the holder to any party now or hereafter liable hereunder or for the
indebtedness evidenced hereby; (c) agrees to any substitution, exchange,
release, surrender or other delivery of any Collateral now or hereafter held
hereunder or in connection with the Credit Agreement or any of the other Loan
Documents, and to the addition or release of any other party or person primarily
or secondarily liable; (d) agrees that if any Collateral given to secure this
Swingline Note or the indebtedness evidenced hereby or to secure any of the
obligations set forth or referred to in the Credit Agreement or any of the other
Loan Documents shall be found to be unenforceable in full or to any extent, or
if the Administrative Agent, the Swingline Lender, any other Secured Party or
any other party shall fail to duly perfect or protect such Collateral, the same
shall not relieve or release any party liable hereon or thereon nor vitiate any
other security or collateral given for any obligations evidenced hereby or
thereby; (e) agrees to pay all reasonable costs and expenses incurred by the
Administrative Agent, the Swingline Lender or any other Secured Party in
connection with the indebtedness evidenced hereby, including, without
limitation, all reasonable attorneys’ fees and costs, for the making and
collection of the indebtedness evidenced hereby and the enforcement of rights
and remedies hereunder and under the Credit Agreement and the other Loan
Documents, whether or not suit is instituted; and (f) consents to all of the
terms and conditions contained in this Swingline Note, the Credit Agreement and
the other Loan Documents.
     The liability of the Borrowers under this Swingline Note shall be joint and
several.
(Remainder of page intentionally left blank)

 

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

 

     IN WITNESS WHEREOF, the Borrowers have executed this Swingline Note under
seal as of the day and year first above written.

                  SMITH & WESSON HOLDING CORPORATION    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                SMITH & WESSON CORP.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                THOMPSON/CENTER ARMS COMPANY, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                UNIVERSAL SAFETY RESPONSE, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                FOX RIDGE OUTFITTERS, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                BEAR LAKE HOLDINGS, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

 

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

 

                  K.W. THOMPSON TOOL COMPANY, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                O.L. DEVELOPMENT, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                THOMPSON CENTER HOLDING COMPANY    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        
 
                SMITH & WESSON DISTRIBUTING, INC.    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

 

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

 

EXHIBIT F
JOINDER AGREEMENT
     THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, ____,
20__, is entered into between __________________, a _________________ (the “New
Subsidiary”) and TD Bank, N.A. (the “Administrative Agent”) under that certain
Amended and Restated Credit Agreement, dated as of December 7, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Smith & Wesson Holding Corporation, Smith & Wesson
Corp., Thompson/Center Arms Company, Inc., Thompson Center Holding Corporation,
Universal Safety Response, Inc., Fox Ridge Outfitters, Inc., K.W. Thompson Tool
Company, Inc., O.L. Development, Inc., Bear Lake Holdings, Inc, and Smith &
Wesson Distributing, Inc., as borrowers, the Lenders from time to time party
thereto and the Administrative Agent. All capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Credit Agreement.
     The New Subsidiary and the Administrative Agent, hereby agree as follows:
     1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the New Subsidiary will be deemed to be a Borrower
under the Credit Agreement for all purposes of the Credit Agreement and shall
have all of the obligations of a Borrower thereunder as if it had executed the
Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Credit Agreement, including without limitation (a) all of the
representations and warranties of the Loan Parties set forth in Article V of the
Credit Agreement, and (b) all of the covenants set forth in Articles VI and VII
of the Credit Agreement and strictly in accordance with the terms thereof. The
New Subsidiary has delivered to the Administrative Agent an executed Joinder
Agreement to the Pledge and Security Agreement.
     2. If required by the Administrative Agent, the New Subsidiary is,
simultaneously with the execution of this Agreement, executing and delivering
such Collateral Documents (and such other documents and instruments) as
requested by the Administrative Agent in accordance with the Credit Agreement.
     3. The address of the New Subsidiary for purposes of Section 10.02 of the
Credit Agreement is as follows:
                                                                 
                                                                 
                                                                 
     4. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.
     6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

 

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

 

     IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, has caused the
same to be accepted by its authorized officer, as of the day and year first
above written.

                  [NEW SUBSIDIARY]    
 
           
 
  By:        
 
  Name:  
 
   
 
  Title:        

Acknowledged and accepted:
TD BANK, N.A.,
as Administrative Agent

         
By:
       
Name:
 
 
   
Title: