EXHIBIT 10.1

 

 

 

$55,000,000 CREDIT FACILITY

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of September 23, 2005

 

by and among

 

WII COMPONENTS, INC.,

 

a Delaware corporation,

 

as Borrower,

 

 

ANTARES CAPITAL CORPORATION,

 

for itself, as a Lender, and as Agent for all Lenders,

 

 

and

 

 

THE FINANCIAL INSTITUTIONS PARTY HERETO,

 

as Lenders

 

 

 

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

 

TABLE OF CONTENTS

 

ARTICLE I -

THE CREDITS

 

1.1

Amounts and Terms of Commitments

 

1.2

Notes

 

1.3

Interest

 

1.4

Loan Accounts

 

1.5

Procedure for Revolving Credit and CapEx Loan Borrowing

 

1.6

Conversion and Continuation Elections

 

1.7

Optional Prepayments

 

1.8

Mandatory Prepayments of Loans and Commitment Reductions

 

1.9

Fees

 

1.10

Payments by the Borrower

 

1.11

Payments by the Lenders to the Agent; Settlement

 

 

 

 

ARTICLE II -

CONDITIONS PRECEDENT

 

2.1

Conditions to Effectiveness

 

2.2

Conditions to All Borrowings

 

2.3

Conditions to Certain Loans and Acquisitions

 

2.4

Conditions to CapEx Loan Borrowings

 

 

 

 

ARTICLE III -

REPRESENTATIONS AND WARRANTIES

 

3.1

Corporate Existence and Power

 

3.2

Corporate Authorization; No Contravention

 

3.3

Governmental Authorization

 

3.4

Binding Effect

 

3.5

Litigation

 

3.6

No Default

 

3.7

ERISA Compliance

 

3.8

Use of Proceeds; Margin Regulations

 

3.9

Title to Property

 

3.10

Taxes

 

3.11

Financial Condition

 

3.12

Environmental Matters

 

3.13

Loan Documents

 

3.14

Regulated Entities

 

3.15

Solvency

 

3.16

Labor Relations

 

3.17

Copyrights, Patents, Trademarks and Licenses, etc.

 

3.18

Subsidiaries

 

3.19

Brokers’ Fees; Transaction Fees

 

3.20

Insurance

 

3.21

Full Disclosure

 

3.22

Representations and Warranties Incorporated from Related Agreements

 

 

i

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

 

3.23

Activities of Borrower

 

3.24

High Yield Unsecured Documents

 

3.25

Foreign Assets Control Regulations and Anti-Money Laundering

 

 

 

 

ARTICLE IV -

AFFIRMATIVE COVENANTS

 

4.1

Financial Statements

 

4.2

Certificates; Borrowing Base Certificates; Other Information

 

4.3 [a05-18185_1ex10d1.htm#a4_3Notices_TheBorrowerShallNotif_192228]

Notices [a05-18185_1ex10d1.htm#a4_3Notices_TheBorrowerShallNotif_192228]

 

4.4 [a05-18185_1ex10d1.htm#a4_4PreservationOfCorporateExiste_192453]

Preservation of Corporate Existence, Etc.
[a05-18185_1ex10d1.htm#a4_4PreservationOfCorporateExiste_192453]

 

4.5 [a05-18185_1ex10d1.htm#a4_5MaintenanceOfProperty_TheBorr_192509]

Maintenance of Property
[a05-18185_1ex10d1.htm#a4_5MaintenanceOfProperty_TheBorr_192509]

 

4.6 [a05-18185_1ex10d1.htm#a4_6Insurance_TheBorrowerShallMai_192510]

Insurance [a05-18185_1ex10d1.htm#a4_6Insurance_TheBorrowerShallMai_192510]

 

4.7 [a05-18185_1ex10d1.htm#a4_7PaymentOfObligations_TheBorro_192528]

Payment of Obligations
[a05-18185_1ex10d1.htm#a4_7PaymentOfObligations_TheBorro_192528]

 

4.8 [a05-18185_1ex10d1.htm#a4_8ComplianceWithLaws_TheBorrowe_192532]

Compliance with Laws
[a05-18185_1ex10d1.htm#a4_8ComplianceWithLaws_TheBorrowe_192532]

 

4.9 [a05-18185_1ex10d1.htm#a4_9InspectionOfPropertyAndBooksA_192538]

Inspection of Property and Books and Records
[a05-18185_1ex10d1.htm#a4_9InspectionOfPropertyAndBooksA_192538]

 

4.10 [a05-18185_1ex10d1.htm#a4_10UseOfProceeds_TheBorrowerSha_192553]

Use of Proceeds [a05-18185_1ex10d1.htm#a4_10UseOfProceeds_TheBorrowerSha_192553]

 

4.11 [a05-18185_1ex10d1.htm#a4_11Solvency_BorrowerAndEachOfIt_192555]

Solvency [a05-18185_1ex10d1.htm#a4_11Solvency_BorrowerAndEachOfIt_192555]

 

4.12 [a05-18185_1ex10d1.htm#a4_12FurtherAssurances__192557]

Further Assurances [a05-18185_1ex10d1.htm#a4_12FurtherAssurances__192557]

 

4.13 [a05-18185_1ex10d1.htm#a4_13Appraisals_InAdditionToAnyAp_192613]

Appraisals [a05-18185_1ex10d1.htm#a4_13Appraisals_InAdditionToAnyAp_192613]

 

 

 

 

ARTICLE V - [a05-18185_1ex10d1.htm#ArticlevNegativeCovenants_192625]

NEGATIVE COVENANTS [a05-18185_1ex10d1.htm#ArticlevNegativeCovenants_192625]

 

5.1 [a05-18185_1ex10d1.htm#a5_1LimitationOnLiens_TheBorrower_192630]

Limitation on Liens
[a05-18185_1ex10d1.htm#a5_1LimitationOnLiens_TheBorrower_192630]

 

5.2 [a05-18185_1ex10d1.htm#a5_2DispositionOfAssets_TheBorrow_192641]

Disposition of Assets
[a05-18185_1ex10d1.htm#a5_2DispositionOfAssets_TheBorrow_192641]

 

5.3 [a05-18185_1ex10d1.htm#a5_3ConsolidationsAndMergers_TheB_192653]

Consolidations and Mergers
[a05-18185_1ex10d1.htm#a5_3ConsolidationsAndMergers_TheB_192653]

 

5.4 [a05-18185_1ex10d1.htm#a5_4LoansAndInvestments_TheBorrow_192654]

Loans and Investments
[a05-18185_1ex10d1.htm#a5_4LoansAndInvestments_TheBorrow_192654]

 

5.5 [a05-18185_1ex10d1.htm#a5_5LimitationOnIndebtedness_TheB_192713]

Limitation on Indebtedness
[a05-18185_1ex10d1.htm#a5_5LimitationOnIndebtedness_TheB_192713]

 

5.6 [a05-18185_1ex10d1.htm#a5_6TransactionsWithAffiliates_Th_192733]

Transactions with Affiliates
[a05-18185_1ex10d1.htm#a5_6TransactionsWithAffiliates_Th_192733]

 

5.7 [a05-18185_1ex10d1.htm#a5_7ManagementFeesAndCompensation_192735]

Management Fees and Compensation
[a05-18185_1ex10d1.htm#a5_7ManagementFeesAndCompensation_192735]

 

5.8 [a05-18185_1ex10d1.htm#a5_8UseOfProceeds_TheBorrowerShal_192757]

Use of Proceeds [a05-18185_1ex10d1.htm#a5_8UseOfProceeds_TheBorrowerShal_192757]

 

5.9 [a05-18185_1ex10d1.htm#a5_9ContingentObligations_TheBorr_192759]

Contingent Obligations
[a05-18185_1ex10d1.htm#a5_9ContingentObligations_TheBorr_192759]

 

5.10 [a05-18185_1ex10d1.htm#a5_10ComplianceWithErisa_TheBorro_192805]

Compliance with ERISA
[a05-18185_1ex10d1.htm#a5_10ComplianceWithErisa_TheBorro_192805]

 

5.11 [a05-18185_1ex10d1.htm#a5_11RestrictedPayments_TheBorrow_192814]

Restricted Payments
[a05-18185_1ex10d1.htm#a5_11RestrictedPayments_TheBorrow_192814]

 

5.12 [a05-18185_1ex10d1.htm#a5_12ChangeInBusiness_TheBorrower_192919]

Change in Business
[a05-18185_1ex10d1.htm#a5_12ChangeInBusiness_TheBorrower_192919]

 

5.13 [a05-18185_1ex10d1.htm#a5_13ChangeInStructure_ExceptAsEx_192936]

Change in Structure
[a05-18185_1ex10d1.htm#a5_13ChangeInStructure_ExceptAsEx_192936]

 

5.14 [a05-18185_1ex10d1.htm#a5_14AccountingChanges_TheBorrowe_192937]

Accounting Changes
[a05-18185_1ex10d1.htm#a5_14AccountingChanges_TheBorrowe_192937]

 

5.15 [a05-18185_1ex10d1.htm#a5_15AmendmentsToRelatedAgreement_192938]

Amendments to Related Agreements
[a05-18185_1ex10d1.htm#a5_15AmendmentsToRelatedAgreement_192938]

 

5.16 [a05-18185_1ex10d1.htm#a5_16NoNegativePledges__193001]

No Negative Pledges [a05-18185_1ex10d1.htm#a5_16NoNegativePledges__193001]

 

5.17 [a05-18185_1ex10d1.htm#a5_17ForeignAssetsControlRegulati_193003]

Foreign Assets Control Regulations
[a05-18185_1ex10d1.htm#a5_17ForeignAssetsControlRegulati_193003]

 

5.18 [a05-18185_1ex10d1.htm#a5_18Integration_NotwithstandingA_193005]

Integration [a05-18185_1ex10d1.htm#a5_18Integration_NotwithstandingA_193005]

 

5.19 [a05-18185_1ex10d1.htm#a5_19CertainLeasedLocations_TheBo_193016]

Certain Leased Locations
[a05-18185_1ex10d1.htm#a5_19CertainLeasedLocations_TheBo_193016]

 

 

 

 

ARTICLE VI - [a05-18185_1ex10d1.htm#ArticleviFinancialCovenants_193018]

FINANCIAL COVENANTS [a05-18185_1ex10d1.htm#ArticleviFinancialCovenants_193018]

 

6.1 [a05-18185_1ex10d1.htm#a6_1Reserved__193020]

Reserved [a05-18185_1ex10d1.htm#a6_1Reserved__193020]

 

6.2 [a05-18185_1ex10d1.htm#a6_2LeverageRatio_TheBorrowerShal_193021]

Leverage Ratio [a05-18185_1ex10d1.htm#a6_2LeverageRatio_TheBorrowerShal_193021]

 

6.3 [a05-18185_1ex10d1.htm#a6_3FixedChargeCoverageRatio_TheB_193026]

Fixed Charge Coverage Ratio
[a05-18185_1ex10d1.htm#a6_3FixedChargeCoverageRatio_TheB_193026]

 

6.4 [a05-18185_1ex10d1.htm#a6_4Reserved__193221]

Reserved [a05-18185_1ex10d1.htm#a6_4Reserved__193221]

 

 

ii

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

 

6.5 [a05-18185_1ex10d1.htm#a6_5Ebitda_TheBorrowerShallNotPer_193222]

EBITDA [a05-18185_1ex10d1.htm#a6_5Ebitda_TheBorrowerShallNotPer_193222]

 

6.6 [a05-18185_1ex10d1.htm#a6_6EquityContribution_AnythingCo_193223]

Equity Contribution
[a05-18185_1ex10d1.htm#a6_6EquityContribution_AnythingCo_193223]

 

 

 

 

ARTICLE VII - [a05-18185_1ex10d1.htm#ArticleviiEventsOfDefault_193238]

EVENTS OF DEFAULT [a05-18185_1ex10d1.htm#ArticleviiEventsOfDefault_193238]

 

7.1 [a05-18185_1ex10d1.htm#a7_1EventOfDefault_AnyOfTheFollow_193240]

Event of Default
[a05-18185_1ex10d1.htm#a7_1EventOfDefault_AnyOfTheFollow_193240]

 

7.2 [a05-18185_1ex10d1.htm#a7_2Remedies_UponTheOccurrenceAnd_193329]

Remedies [a05-18185_1ex10d1.htm#a7_2Remedies_UponTheOccurrenceAnd_193329]

 

7.3 [a05-18185_1ex10d1.htm#a7_3RightsNotExclusive_TheRightsP_193338]

Rights Not Exclusive
[a05-18185_1ex10d1.htm#a7_3RightsNotExclusive_TheRightsP_193338]

 

7.4 [a05-18185_1ex10d1.htm#a7_4CashCollateralForLettersOfCre_193340]

Cash Collateral for Letters of Credit
[a05-18185_1ex10d1.htm#a7_4CashCollateralForLettersOfCre_193340]

 

 

 

 

ARTICLE VIII - [a05-18185_1ex10d1.htm#ArticleviiiTheAgent_193341]

THE AGENT [a05-18185_1ex10d1.htm#ArticleviiiTheAgent_193341]

 

8.1 [a05-18185_1ex10d1.htm#a8_1AppointmentAndAuthorization_E_193343]

Appointment and Authorization
[a05-18185_1ex10d1.htm#a8_1AppointmentAndAuthorization_E_193343]

 

8.2 [a05-18185_1ex10d1.htm#a8_2DelegationOfDuties_TheAgentMa_193346]

Delegation of Duties
[a05-18185_1ex10d1.htm#a8_2DelegationOfDuties_TheAgentMa_193346]

 

8.3 [a05-18185_1ex10d1.htm#a8_3LiabilityOfAgent_NoneOfTheAge_193347]

Liability of Agent
[a05-18185_1ex10d1.htm#a8_3LiabilityOfAgent_NoneOfTheAge_193347]

 

8.4 [a05-18185_1ex10d1.htm#a8_4RelianceByAgent_TheAgentShall_193348]

Reliance by Agent
[a05-18185_1ex10d1.htm#a8_4RelianceByAgent_TheAgentShall_193348]

 

8.5 [a05-18185_1ex10d1.htm#a8_5NoticeOfDefault_TheAgentShall_193350]

Notice of Default
[a05-18185_1ex10d1.htm#a8_5NoticeOfDefault_TheAgentShall_193350]

 

8.6 [a05-18185_1ex10d1.htm#a8_6CreditDecision_EachLenderExpr_193351]

Credit Decision [a05-18185_1ex10d1.htm#a8_6CreditDecision_EachLenderExpr_193351]

 

8.7 [a05-18185_1ex10d1.htm#a8_7Indemnification_WhetherOrNotT_193354]

Indemnification [a05-18185_1ex10d1.htm#a8_7Indemnification_WhetherOrNotT_193354]

 

8.8 [a05-18185_1ex10d1.htm#a8_8AgentInIndividualCapacity_Ant_193439]

Agent in Individual Capacity
[a05-18185_1ex10d1.htm#a8_8AgentInIndividualCapacity_Ant_193439]

 

8.9 [a05-18185_1ex10d1.htm#a8_9SuccessorAgent_ThePersonThenA_193440]

Successor Agent [a05-18185_1ex10d1.htm#a8_9SuccessorAgent_ThePersonThenA_193440]

 

8.10 [a05-18185_1ex10d1.htm#a8_10CollateralMatters__193444]

Collateral Matters [a05-18185_1ex10d1.htm#a8_10CollateralMatters__193444]

 

 

 

 

ARTICLE IX - [a05-18185_1ex10d1.htm#ArticleixMiscellaneous_193456]

MISCELLANEOUS [a05-18185_1ex10d1.htm#ArticleixMiscellaneous_193456]

 

9.1 [a05-18185_1ex10d1.htm#a9_1AmendmentsAndWaivers_NoAmendm_193458]

Amendments and Waivers
[a05-18185_1ex10d1.htm#a9_1AmendmentsAndWaivers_NoAmendm_193458]

 

9.2 [a05-18185_1ex10d1.htm#a9_2Notices__193513]

Notices [a05-18185_1ex10d1.htm#a9_2Notices__193513]

 

9.3 [a05-18185_1ex10d1.htm#a9_3NoWaiverCumulativeRemedies_No_193516]

No Waiver; Cumulative Remedies
[a05-18185_1ex10d1.htm#a9_3NoWaiverCumulativeRemedies_No_193516]

 

9.4 [a05-18185_1ex10d1.htm#a9_4CostsAndExpenses_WhetherOrNot_193517]

Costs and Expenses
[a05-18185_1ex10d1.htm#a9_4CostsAndExpenses_WhetherOrNot_193517]

 

9.5 [a05-18185_1ex10d1.htm#a9_5Indemnity_TheBorrowerShallInd_193527]

Indemnity [a05-18185_1ex10d1.htm#a9_5Indemnity_TheBorrowerShallInd_193527]

 

9.6 [a05-18185_1ex10d1.htm#a9_6MarshalingPaymentsSetAside_Ne_193535]

Marshaling; Payments Set Aside
[a05-18185_1ex10d1.htm#a9_6MarshalingPaymentsSetAside_Ne_193535]

 

9.7 [a05-18185_1ex10d1.htm#a9_7SuccessorsAndAssigns_TheProvi_193538]

Successors and Assigns
[a05-18185_1ex10d1.htm#a9_7SuccessorsAndAssigns_TheProvi_193538]

 

9.8 [a05-18185_1ex10d1.htm#a9_8AssignmentsParticipationsEtc__193548]

Assignments, Participations, etc.
[a05-18185_1ex10d1.htm#a9_8AssignmentsParticipationsEtc__193548]

 

9.9 [a05-18185_1ex10d1.htm#a9_9Confidentiality_EachOfTheAgen_193621]

Confidentiality [a05-18185_1ex10d1.htm#a9_9Confidentiality_EachOfTheAgen_193621]

 

9.10 [a05-18185_1ex10d1.htm#a9_10SetoffSharingOfPayments_InAd_193638]

Set-off; Sharing of Payments
[a05-18185_1ex10d1.htm#a9_10SetoffSharingOfPayments_InAd_193638]

 

9.11 [a05-18185_1ex10d1.htm#a9_11NotificationOfAddressesLendi_193643]

Notification of Addresses, Lending Offices, Etc.
[a05-18185_1ex10d1.htm#a9_11NotificationOfAddressesLendi_193643]

 

9.12 [a05-18185_1ex10d1.htm#a9_12Counterparts_ThisAgreementMa_193644]

Counterparts [a05-18185_1ex10d1.htm#a9_12Counterparts_ThisAgreementMa_193644]

 

9.13 [a05-18185_1ex10d1.htm#a9_13SeverabilityFacsimileSignatu_193650]

Severability; Facsimile Signature
[a05-18185_1ex10d1.htm#a9_13SeverabilityFacsimileSignatu_193650]

 

9.14 [a05-18185_1ex10d1.htm#a9_14Captions_TheCaptionsAndHeadi_193653]

Captions [a05-18185_1ex10d1.htm#a9_14Captions_TheCaptionsAndHeadi_193653]

 

9.15 [a05-18185_1ex10d1.htm#a9_15IndependenceOfProvisions_The_193654]

Independence of Provisions
[a05-18185_1ex10d1.htm#a9_15IndependenceOfProvisions_The_193654]

 

9.16 [a05-18185_1ex10d1.htm#a9_16Interpretation_ThisAgreement_193654]

Interpretation [a05-18185_1ex10d1.htm#a9_16Interpretation_ThisAgreement_193654]

 

9.17 [a05-18185_1ex10d1.htm#a9_17NoThirdPartiesBenefited_This_193656]

No Third Parties Benefited
[a05-18185_1ex10d1.htm#a9_17NoThirdPartiesBenefited_This_193656]

 

9.18 [a05-18185_1ex10d1.htm#a9_18GoverningLawAndJurisdiction__193657]

Governing Law and Jurisdiction
[a05-18185_1ex10d1.htm#a9_18GoverningLawAndJurisdiction__193657]

 

9.19 [a05-18185_1ex10d1.htm#a9_19WaiverOfJuryTrial_TheBorrowe_193723]

Waiver of Jury Trial
[a05-18185_1ex10d1.htm#a9_19WaiverOfJuryTrial_TheBorrowe_193723]

 

9.20 [a05-18185_1ex10d1.htm#a9_20EntireAgreementRelease_ThisA_193725]

Entire Agreement; Release
[a05-18185_1ex10d1.htm#a9_20EntireAgreementRelease_ThisA_193725]

 

9.21 [a05-18185_1ex10d1.htm#a9_21PatriotAct_EachLenderThatIsS_193737]

Patriot Act [a05-18185_1ex10d1.htm#a9_21PatriotAct_EachLenderThatIsS_193737]

 

9.22 [a05-18185_1ex10d1.htm#a9_22ReplacementOfLender_WithinFo_193738]

Replacement of Lender
[a05-18185_1ex10d1.htm#a9_22ReplacementOfLender_WithinFo_193738]

 

9.23 [a05-18185_1ex10d1.htm#a9_23ContinuedEffectivenessNoNova_193800]

Continued Effectiveness; No Novation
[a05-18185_1ex10d1.htm#a9_23ContinuedEffectivenessNoNova_193800]

 

 

iii

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

 

ARTICLE X - [a05-18185_1ex10d1.htm#ArticlexTaxesYieldProtectionAndIl_193802]

TAXES, YIELD PROTECTION AND ILLEGALITY
[a05-18185_1ex10d1.htm#ArticlexTaxesYieldProtectionAndIl_193802]

 

10.1 [a05-18185_1ex10d1.htm#a10_1Taxes__193803]

Taxes [a05-18185_1ex10d1.htm#a10_1Taxes__193803]

 

10.2 [a05-18185_1ex10d1.htm#a10_2Illegality_aIfAfterTheDateHe_194050]

Illegality [a05-18185_1ex10d1.htm#a10_2Illegality_aIfAfterTheDateHe_194050]

 

10.3 [a05-18185_1ex10d1.htm#a10_3IncreasedCostsAndReductionOf_194055]

Increased Costs and Reduction of Return
[a05-18185_1ex10d1.htm#a10_3IncreasedCostsAndReductionOf_194055]

 

10.4 [a05-18185_1ex10d1.htm#a10_4FundingLosses_TheBorrowerAgr_194113]

Funding Losses [a05-18185_1ex10d1.htm#a10_4FundingLosses_TheBorrowerAgr_194113]

 

10.5 [a05-18185_1ex10d1.htm#a10_5InabilityToDetermineRates_If_194134]

Inability to Determine Rates
[a05-18185_1ex10d1.htm#a10_5InabilityToDetermineRates_If_194134]

 

10.6 [a05-18185_1ex10d1.htm#a10_6ReservesOnLiborRateLoans_The_194138]

Reserves on LIBOR Rate Loans
[a05-18185_1ex10d1.htm#a10_6ReservesOnLiborRateLoans_The_194138]

 

10.7 [a05-18185_1ex10d1.htm#a10_7CertificatesOfLenders_AnyLen_194139]

Certificates of Lenders
[a05-18185_1ex10d1.htm#a10_7CertificatesOfLenders_AnyLen_194139]

 

10.8 [a05-18185_1ex10d1.htm#a10_8Survival_TheAgreementsAndObl_194143]

Survival [a05-18185_1ex10d1.htm#a10_8Survival_TheAgreementsAndObl_194143]

 

 

 

 

ARTICLE XI - [a05-18185_1ex10d1.htm#ArticlexiReserved_194145]

RESERVED [a05-18185_1ex10d1.htm#ArticlexiReserved_194145]

 

 

 

 

ARTICLE XII - [a05-18185_1ex10d1.htm#ArticlexiiDefinitions_194146]

DEFINITIONS [a05-18185_1ex10d1.htm#ArticlexiiDefinitions_194146]

 

12.1 [a05-18185_1ex10d1.htm#a12_1DefinedTerms_TheFollowingTer_194151]

Defined Terms [a05-18185_1ex10d1.htm#a12_1DefinedTerms_TheFollowingTer_194151]

 

12.2 [a05-18185_1ex10d1.htm#a12_2OtherInterpretiveProvisions__195230]

Other Interpretive Provisions
[a05-18185_1ex10d1.htm#a12_2OtherInterpretiveProvisions__195230]

 

12.3 [a05-18185_1ex10d1.htm#a12_3AccountingPrinciples__195244]

Accounting Principles [a05-18185_1ex10d1.htm#a12_3AccountingPrinciples__195244]

 

 

iv

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

 

SCHEDULES

 

 

 

 

 

Schedule 1.1(a) [a05-18185_1ex10d1.htm#Schedule1_1a_195748]

Term Loan Commitments and CapEx Loan Commitments
[a05-18185_1ex10d1.htm#Schedule1_1a_195748]

 

Schedule 1.1(b) [a05-18185_1ex10d1.htm#Schedule1_1b_195852]

Revolving Loan Commitments [a05-18185_1ex10d1.htm#Schedule1_1b_195852]

 

Schedule 3.2

Capitalization

 

Schedule 3.5

Litigation

 

Schedule 3.7

ERISA

 

Schedule 3.17

Intellectual Property

 

Schedule 4.2(e)

Expansion Capital Expenditures

 

Schedule 5.1

Liens

 

Schedule 5.5

Indebtedness

 

Schedule 5.9

Contingent Obligations

 

Schedule 12.2

Restricted Accounts

 

 

 

 

 

 

 

EXHIBITS

 

 

 

 

 

Exhibit 4.2(b)

Compliance Certificate

 

Exhibit 12.1(a)

Borrowing Base Certificate

 

Exhibit 12.1(b)

Notice of Borrowing

 

Exhibit 12.1(c)

Notice of Continuation/Conversion

 

Exhibit 12.1(d)

Revolving Note

 

Exhibit 12.1(e)-1

Term Note

 

Exhibit 12.1(e)-2

CapEx Note

 

 

v

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

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into as
of September 23, 2005, by and among WII Components, Inc., a Delaware corporation
(the “Borrower”), Antares Capital Corporation, a Delaware corporation, as
administrative agent for the several financial institutions from time to time
party to this Agreement (collectively, the “Lenders” and individually each a
“Lender”) and for itself as a Lender, and such Lenders.

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, the Agent and certain of the Lenders are parties to a
Credit Agreement dated as of February 18, 2004 (as heretofore amended, modified
and supplemented, including, without limitation, pursuant to that certain
Consent, Waiver and First Amendment to Credit Agreement (the “First Amendment”)
dated as of April 30, 2004 and that certain Consent, Waiver and Second Amendment
to Credit Agreement (the “Second Amendment”) dated as of July 28, 2005, the
“Original Credit Agreement”); and

 

WHEREAS, the Borrower, the Agent and the Lenders desire to amend and restate in
its entirety the Original Credit Agreement to, among other things, increase the
amount of the revolving credit facility made available to the Borrower
thereunder, and make available to the Borrower a term loan and a capital
expenditure loan facility, without constituting a novation, all on the terms and
subject to the conditions contained herein.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties hereto amend and restate the Original
Credit Agreement in its entirety as follows:

 

ARTICLE I - THE CREDITS

 

1.1                                 AMOUNTS AND TERMS OF COMMITMENTS.

 

(A)                                  THE TERM LOAN AND CAPEX LOANS.

 

(I)                                     EACH LENDER WITH A TERM LOAN COMMITMENT
SEVERALLY AND NOT JOINTLY AGREES, ON THE TERMS AND CONDITIONS HEREINAFTER SET
FORTH, TO LEND TO THE BORROWER ON THE RESTATEMENT EFFECTIVE DATE, THE AMOUNT SET
FORTH OPPOSITE SUCH LENDER’S NAME IN SCHEDULE 1.1(A) UNDER THE HEADING “TERM
LOAN COMMITMENT” (SUCH AMOUNT BEING REFERRED TO HEREIN AS SUCH LENDER’S “TERM
LOAN COMMITMENT”).  AMOUNTS BORROWED UNDER THIS SUBSECTION 1.1(A)(I) ARE
REFERRED TO AS THE “TERM LOAN.”

 

(II)                                  EACH LENDER WITH A CAPEX LOAN COMMITMENT
SEVERALLY AND NOT JOINTLY AGREES, ON THE TERMS AND CONDITIONS HEREINAFTER SET
FORTH, TO MAKE LOANS TO THE BORROWER (EACH SUCH LOAN, A “CAPEX LOAN”) FROM TIME
TO TIME ON ANY BUSINESS DAY DURING THE PERIOD FROM THE RESTATEMENT EFFECTIVE
DATE TO THE CAPEX LINE TERMINATION DATE, IN AN AGGREGATE AMOUNT NOT TO EXCEED AT
ANY TIME OUTSTANDING THE AMOUNT SET FORTH OPPOSITE

 

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

 

SUCH LENDER’S NAME IN SCHEDULE 1.1(A) UNDER THE HEADING “CAPEX LOAN COMMITMENT”
(SUCH AMOUNT AS THE SAME MAY BE REDUCED FROM TIME TO TIME AS A RESULT OF ONE OR
MORE ASSIGNMENTS PURSUANT TO SECTION 9.8, BEING REFERRED TO HEREIN AS SUCH
LENDER’S “CAPEX LOAN COMMITMENT”); PROVIDED, HOWEVER, THAT, AFTER GIVING EFFECT
TO ANY BORROWING OF CAPEX LOANS, THE AGGREGATE PRINCIPAL AMOUNT OF ALL
OUTSTANDING CAPEX LOANS SHALL NOT EXCEED THE AGGREGATE CAPEX LOAN COMMITMENT.

 

(III)                               AMOUNTS BORROWED AS A TERM LOAN OR A CAPEX
LOAN WHICH ARE REPAID OR PREPAID MAY NOT BE REBORROWED.

 

(B)                                 THE REVOLVING CREDIT.  EACH LENDER SEVERALLY
AND NOT JOINTLY AGREES, ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH, TO
MAKE LOANS TO THE BORROWER (EACH SUCH LOAN, A “REVOLVING LOAN”) FROM TIME TO
TIME ON ANY BUSINESS DAY DURING THE PERIOD FROM THE RESTATEMENT EFFECTIVE DATE
TO THE REVOLVING TERMINATION DATE, IN AN AGGREGATE AMOUNT NOT TO EXCEED AT ANY
TIME OUTSTANDING THE AMOUNT SET FORTH OPPOSITE SUCH LENDER’S NAME IN
SCHEDULE 1.1(B) UNDER THE HEADING “REVOLVING LOAN COMMITMENT” (SUCH AMOUNT AS
THE SAME MAY BE REDUCED FROM TIME TO TIME PURSUANT TO
SUBSECTION 1.8(H)(II) HEREOF OR AS A RESULT OF ONE OR MORE ASSIGNMENTS PURSUANT
TO SECTION 9.8, BEING REFERRED TO HEREIN AS SUCH LENDER’S “REVOLVING LOAN
COMMITMENT”); PROVIDED, HOWEVER, THAT, AFTER GIVING EFFECT TO ANY BORROWING OF
REVOLVING LOANS, THE AGGREGATE PRINCIPAL AMOUNT OF ALL OUTSTANDING REVOLVING
LOANS SHALL NOT EXCEED THE MAXIMUM REVOLVING LOAN BALANCE.  SUBJECT TO THE OTHER
TERMS AND CONDITIONS HEREOF, AMOUNTS BORROWED UNDER THIS SUBSECTION 1.1(B) MAY
BE REPAID AND REBORROWED FROM TIME TO TIME.  THE “MAXIMUM REVOLVING LOAN
BALANCE” FROM TIME TO TIME WILL BE THE LESSER OF:

 

(I)                                     THE “BORROWING BASE” (AS CALCULATED
PURSUANT TO THE BORROWING BASE CERTIFICATE THEN MOST RECENTLY DELIVERED TO THE
AGENT AND LENDERS IN ACCORDANCE WITH THE TERMS HEREOF) IN EFFECT FROM TIME TO
TIME, AND

 

(II)                                  THE AGGREGATE REVOLVING LOAN COMMITMENT
THEN IN EFFECT;

 

less, in either case, the amount of any Letter of Credit Participation
Liability.

 

If at any time the then outstanding principal balance of Revolving Loans exceeds
the Maximum Revolving Loan Balance, then Borrower shall, within three
(3) Business Days, prepay outstanding Revolving Loans in an amount sufficient to
eliminate such excess.  Immediately prior to the effectiveness of this
Agreement, the outstanding principal balance of Revolving Loans is $4,300,000,
such amount constituting the outstanding Revolving Loans under the Original
Credit Agreement.

 

(C)                                  LENDER LETTERS OF CREDIT AND LETTER OF
CREDIT PARTICIPATION AGREEMENTS.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT AND IN RELIANCE UPON THE REPRESENTATIONS AND WARRANTIES OF BORROWER
HEREIN SET FORTH, THE REVOLVING LOAN COMMITMENT MAY, IN ADDITION TO ADVANCES
UNDER THE REVOLVING LOAN, BE UTILIZED, UPON THE REQUEST OF THE BORROWER, FOR
(I) THE ISSUANCE OF LETTERS OF CREDIT BY AGENT (EACH SUCH LETTER OF CREDIT, A
“LENDER LETTER OF CREDIT”) OR (II) THE ISSUANCE OF LETTER OF CREDIT
PARTICIPATION AGREEMENTS BY AGENT (EACH SUCH LETTER OF CREDIT PARTICIPATION, A
“LETTER OF CREDIT PARTICIPATION AGREEMENT”) TO CONFIRM PAYMENT TO BANKS (WHETHER
OR NOT SUCH BANKS ARE LENDERS) WHICH ISSUE LETTERS OF CREDIT FOR THE ACCOUNT OF
BORROWER

 

2

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

 

OR ANY OF ITS SUBSIDIARIES ON BEHALF OF EACH LENDER HAVING A REVOLVING LOAN
COMMITMENT (SEVERALLY AND NOT JOINTLY) ACCORDING TO SUCH LENDER’S REVOLVING LOAN
COMMITMENT.  THE AGGREGATE AMOUNT OF LETTER OF CREDIT PARTICIPATION LIABILITY
WITH RESPECT TO ALL LENDER LETTERS OF CREDIT AND LETTER OF CREDIT PARTICIPATION
AGREEMENTS OUTSTANDING AT ANY TIME SHALL NOT EXCEED $2,000,000.

 

The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Agent for any amounts paid by the Agent under any Lender Letter of
Credit or Letter of Credit Participation Agreement.  The Borrower hereby
authorizes and directs the Lenders with Revolving Loan Commitments (or if the
Revolving Loan Commitments have terminated, who had a Revolving Loan Commitment
at the time of such termination), at the Agent’s option, to make a Revolving
Loan in the amount of any payment made by the Agent with respect to any Lender
Letter of Credit or Letter of Credit Participation Agreement.  All amounts paid
by the Agent with respect to any Lender Letter of Credit or Letter of Credit
Participation Agreement that are not immediately repaid by Borrower with the
proceeds of a Revolving Loan or otherwise shall bear interest at the interest
rate then applicable to Revolving Loans, calculated using the Base Rate and the
Applicable Margin.  Each Lender agrees to fund its Commitment Percentage of any
Revolving Loan made pursuant to this subsection 1.1(c) and, if no such Revolving
Loans are made, each Lender agrees to purchase, and shall be deemed to have
purchased, a participation in such Lender Letter of Credit or Letter of Credit
Participation Agreement in an amount equal to its ratable share of such Lender
Letter of Credit or Letter of Credit Participation Agreement based upon the
Revolving Loan Commitments then in effect and each Lender agrees to pay to the
Agent such share of any payments made by the Agent under such Lender Letter of
Credit or Letter of Credit Participation Agreement.  The obligations of each
Lender under the preceding two (2) sentences shall be absolute and unconditional
and such remittance shall be made notwithstanding the occurrence or continuation
of an Event of Default or Default or the failure to satisfy any condition set
forth in Section 2.2 hereof.

 

In addition to all other terms and conditions set forth in this Agreement, the
issuance by Agent of any Lender Letter of Credit or Letter of Credit
Participation Agreement shall be subject to the condition precedent that the
Lender Letter of Credit, Letter of Credit Participation Agreement or the letter
of credit or written contract for which the Borrower requests a Letter of Credit
Participation Agreement shall support a transaction entered into by one of its
Subsidiaries in the Ordinary Course of Business, or otherwise reasonably
acceptable to Agent, and shall be in such form, be for such amount, and contain
such terms as are reasonably satisfactory to Agent.

 

The expiration date of each Lender Letter of Credit shall be on a date which is
the earlier of (a) one year from its date of issuance, or (b) the thirtieth
(30th) day before the Revolving Termination Date.  Each Letter of Credit
Participation Agreement shall provide that the Letter of Credit Participation
Agreement terminates and all demands or claims for payment must be presented by
a date certain, which date will be the earlier of (a) one year from its date of
issuance, or (b) the thirtieth (30th) day before the Revolving Termination Date.

 

The Borrower shall give Agent at least ten (10) Business Days’ prior written
notice specifying the date a Lender Letter of Credit or Letter of Credit
Participation Agreement is to be issued, identifying the beneficiary and
describing the nature of the transactions proposed to be

 

3

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

 

supported thereby.  The notice shall be accompanied by the drawing terms for the
Lender Letter of Credit or form of each letter of credit or other written
contract which will be supported by the Letter of Credit Participation
Agreement.

 

1.2                                 NOTES.

 

(A)                                  THE TERM LOAN MADE BY EACH LENDER WITH A
TERM LOAN COMMITMENT SHALL BE EVIDENCED BY A TERM NOTE PAYABLE TO THE ORDER OF
SUCH LENDER IN AN AMOUNT EQUAL TO SUCH LENDER’S TERM LOAN COMMITMENT.

 

(B)                                 THE CAPEX LOANS MADE BY EACH LENDER WITH A
CAPEX LOAN COMMITMENT SHALL BE EVIDENCED BY A CAPEX NOTE PAYABLE TO THE ORDER OF
SUCH LENDER IN AN AMOUNT EQUAL TO SUCH LENDER’S CAPEX LOAN COMMITMENT.

 

(C)                                  THE REVOLVING LOANS MADE, OR DEEMED MADE,
BY EACH LENDER SHALL BE EVIDENCED BY A REVOLVING NOTE PAYABLE TO THE ORDER OF
SUCH LENDER IN AN AMOUNT EQUAL TO SUCH LENDER’S REVOLVING LOAN COMMITMENT.

 

1.3                                 INTEREST.

 

(A)                                  SUBJECT TO SUBSECTIONS 1.3(C) AND 1.3(D),
EACH LOAN SHALL BEAR INTEREST ON THE OUTSTANDING PRINCIPAL AMOUNT THEREOF FROM
THE DATE WHEN MADE AT A RATE PER ANNUM EQUAL TO THE LIBOR OR THE BASE RATE, AS
THE CASE MAY BE, PLUS THE APPLICABLE MARGIN.  EACH DETERMINATION OF AN INTEREST
RATE BY THE AGENT SHALL BE CONCLUSIVE AND BINDING ON THE BORROWER AND THE
LENDERS IN THE ABSENCE OF DEMONSTRABLE ERROR.  ALL COMPUTATIONS OF FEES AND
INTEREST PAYABLE UNDER THIS AGREEMENT SHALL BE MADE ON THE BASIS OF A 360-DAY
YEAR AND ACTUAL DAYS ELAPSED.  INTEREST AND FEES SHALL ACCRUE DURING EACH PERIOD
DURING WHICH INTEREST OR SUCH FEES ARE COMPUTED FROM THE FIRST DAY THEREOF TO
THE LAST DAY THEREOF.  THE BORROWER HEREBY AGREES THAT ACCRUED AND UNPAID
INTEREST IN AN AGGREGATE AMOUNT EQUAL TO $9,665.97 DUE AND OWING TO THE PERSONS
WHO ARE LENDERS HEREUNDER AND “LENDERS” UNDER AND AS DEFINED IN THE ORIGINAL
CREDIT AGREEMENT (EACH AN “EXISTING LENDER”) AS OF THE RESTATEMENT EFFECTIVE
DATE SHALL BE DEEMED ACCRUED AND CONTINUED HEREUNDER AND SHALL BE PAID IN CASH
BY THE BORROWER TO THE AGENT, FOR THE BENEFIT OF THE EXISTING LENDERS, (I) WITH
RESPECT TO ACCRUED AND UNPAID INTEREST ON BASE RATE LOANS UNDER THE ORIGINAL
CREDIT AGREEMENT, ON THE FIRST INTEREST PAYMENT DATE WITH RESPECT TO BASE RATE
LOANS OCCURRING AFTER THE RESTATEMENT EFFECTIVE DATE, AND (II) WITH RESPECT TO
ACCRUED AND UNPAID INTEREST ON ANY LIBOR RATE LOANS UNDER THE ORIGINAL CREDIT
AGREEMENT, ON THE RESPECTIVE INTEREST PAYMENT DATE APPLICABLE TO SUCH LIBOR RATE
LOAN UNDER THE ORIGINAL CREDIT AGREEMENT.

 

(B)                                 INTEREST ON EACH LOAN SHALL BE PAID IN CASH,
IN ARREARS ON EACH INTEREST PAYMENT DATE AND ON THE DATE OF ANY PAYMENT OR
PREPAYMENT OF LOANS IN FULL.

 

(C)                                  AT THE ELECTION OF THE AGENT OR THE
REQUIRED LENDERS WHILE ANY EVENT OF DEFAULT EXISTS, THE BORROWER SHALL PAY, IN
CASH, INTEREST (AFTER AS WELL AS BEFORE ENTRY OF JUDGMENT THEREON TO THE EXTENT
PERMITTED BY LAW) ON THE OBLIGATIONS FROM AND AFTER THE DATE OF OCCURRENCE OF
SUCH EVENT OF DEFAULT, AT A RATE PER ANNUM WHICH IS DETERMINED BY ADDING TWO
PERCENT (2.0%) PER ANNUM TO THE APPLICABLE MARGIN FOR SUCH LOANS (PLUS, THE
LIBOR OR BASE RATE, AS THE CASE MAY BE) AND, IN THE CASE OF OBLIGATIONS NOT
SUBJECT TO THE APPLICABLE MARGIN (OTHER THAN THE FEES

 

4

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

 

DESCRIBED IN SECTION 1.9), AT A RATE PER ANNUM EQUAL TO THE RATE PER ANNUM
APPLICABLE TO REVOLVING LOANS WHICH ARE (OR IF ANY WERE) BASE RATE LOANS
(INCLUDING THE APPLICABLE MARGIN WITH RESPECT THERETO) PLUS TWO PERCENT (2.0%);
PROVIDED, HOWEVER, THAT, ON AND AFTER THE EXPIRATION OF ANY INTEREST PERIOD
APPLICABLE TO ANY LIBOR RATE LOAN OUTSTANDING DURING THE CONTINUATION OF SUCH
EVENT OF DEFAULT, THE PRINCIPAL AMOUNT OF SUCH LOAN SHALL, DURING THE
CONTINUATION OF SUCH EVENT OF DEFAULT, BEAR INTEREST AT A RATE PER ANNUM EQUAL
TO THE BASE RATE PLUS THE APPLICABLE MARGIN PLUS TWO PERCENT (2.0%).  ALL SUCH
INTEREST SHALL BE PAYABLE ON DEMAND OF THE AGENT OR THE REQUIRED LENDERS.

 

(D)                                 ANYTHING HEREIN TO THE CONTRARY
NOTWITHSTANDING, THE OBLIGATIONS OF THE BORROWER HEREUNDER AND UNDER THE OTHER
LOAN DOCUMENTS SHALL BE SUBJECT TO THE LIMITATION THAT PAYMENTS OF INTEREST
SHALL NOT BE REQUIRED, FOR ANY PERIOD FOR WHICH INTEREST IS COMPUTED HEREUNDER
OR THEREUNDER, TO THE EXTENT (BUT ONLY TO THE EXTENT) THAT CONTRACTING FOR OR
RECEIVING SUCH PAYMENT BY THE RESPECTIVE LENDER WOULD BE CONTRARY TO THE
PROVISIONS OF ANY LAW APPLICABLE TO SUCH LENDER LIMITING THE HIGHEST RATE OF
INTEREST WHICH MAY BE LAWFULLY CONTRACTED FOR, CHARGED OR RECEIVED BY SUCH
LENDER, AND IN SUCH EVENT THE BORROWER SHALL PAY SUCH LENDER INTEREST AT THE
HIGHEST RATE PERMITTED BY APPLICABLE LAW.

 

1.4                                 LOAN ACCOUNTS.  THE AGENT, ON BEHALF OF THE
LENDERS, SHALL RECORD ON ITS BOOKS AND RECORDS THE AMOUNT OF EACH LOAN MADE, THE
INTEREST RATE APPLICABLE, ALL PAYMENTS OF PRINCIPAL AND INTEREST THEREON AND THE
PRINCIPAL BALANCE THEREOF FROM TIME TO TIME OUTSTANDING.  THE AGENT SHALL
DELIVER TO THE BORROWER ON A MONTHLY BASIS A LOAN STATEMENT SETTING FORTH SUCH
RECORD FOR THE IMMEDIATELY PRECEDING MONTH.  SUCH RECORD SHALL, ABSENT
DEMONSTRABLE ERROR, BE CONCLUSIVE EVIDENCE OF THE AMOUNT OF THE LOANS MADE BY
THE LENDERS TO THE BORROWER AND THE INTEREST AND PAYMENTS THEREON.  ANY FAILURE
TO SO RECORD OR ANY ERROR IN DOING SO, OR ANY FAILURE TO DELIVER SUCH LOAN
STATEMENT SHALL NOT, HOWEVER, LIMIT OR OTHERWISE AFFECT THE OBLIGATION OF THE
BORROWER HEREUNDER (AND UNDER ANY NOTE) TO PAY ANY AMOUNT OWING WITH RESPECT TO
THE LOANS OR PROVIDE THE BASIS FOR ANY CLAIM AGAINST THE AGENT OR ANY LENDER.

 

1.5                                 PROCEDURE FOR REVOLVING CREDIT AND CAPEX
LOAN BORROWING.

 

(A)                                  EACH BORROWING OF A REVOLVING LOAN AND/OR A
CAPEX LOAN SHALL BE MADE UPON THE BORROWER’S IRREVOCABLE (SUBJECT TO
SECTION 10.5 HEREOF) WRITTEN NOTICE DELIVERED TO THE AGENT IN THE FORM OF A
NOTICE OF BORROWING, WHICH NOTICE MUST BE RECEIVED BY THE AGENT PRIOR TO
12:30 P.M. (CHICAGO TIME) (I) ON THE REQUESTED BORROWING DATE IN THE CASE OF
EACH BASE RATE LOAN EQUAL TO OR LESS THAN $1,000,000 AND IN THE CASE OF THE
LOANS TO BE MADE ON THE RESTATEMENT EFFECTIVE DATE, (II) ON THE DATE WHICH IS
ONE (1) BUSINESS DAY PRIOR TO THE REQUESTED BORROWING DATE OF EACH BASE RATE
LOAN IN EXCESS OF $1,000,000 BUT EQUAL TO OR LESS THAN $3,000,000 AND (III) ON
THE DAY WHICH IS THREE (3) BUSINESS DAYS PRIOR TO THE REQUESTED BORROWING DATE
IN THE CASE OF EACH LIBOR RATE LOAN AND EACH BASE RATE LOAN IN EXCESS OF
$3,000,000; PROVIDED, THAT WITH RESPECT TO LOANS SUBSEQUENT TO THE LOANS MADE ON
THE RESTATEMENT EFFECTIVE DATE, THE BORROWER MAY GIVE NOTICE OF THE REQUESTED
BORROWING TO THE AGENT BY TELEPHONE CALL, WITH SUCH NOTICE CONFIRMED NOT LATER
THAN THE FOLLOWING BUSINESS DAY BY DELIVERY TO THE AGENT OF A SIGNED NOTICE OF
BORROWING.  SUCH NOTICE OF BORROWING SHALL SPECIFY:

 

(I)                                     THE AMOUNT OF THE BORROWING (WHICH SHALL
BE IN AN AGGREGATE MINIMUM PRINCIPAL AMOUNT OF $100,000 AND MULTIPLES OF $50,000
IN EXCESS THEREOF);

 

5

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

 

(II)                                  THE REQUESTED BORROWING DATE, WHICH SHALL
BE A BUSINESS DAY;

 

(III)                               WHETHER THE BORROWING IS TO COMPRISE
REVOLVING LOANS OR CAPEX LOANS;

 

(IV)                              WHETHER THE BORROWING IS TO COMPRISE LIBOR
RATE LOANS AND/OR BASE RATE LOANS; AND

 

(V)                                 IF THE BORROWING IS TO COMPRISE LIBOR RATE
LOANS, THE INTEREST PERIOD APPLICABLE TO SUCH LOANS.

 

provided, however, that with respect to the Borrowing to be made on the
Restatement Effective Date, such Borrowing will consist of Base Rate Loans only
and shall remain so for not less than three (3) Business Days.  Thereafter, the
Borrower may request that Revolving Loans and/or CapEx Loans be made as LIBOR
Rate Loans and that Loans be converted to or continued as LIBOR Rate Loans,
provided only LIBOR Rate Loans having an Interest Period of one (1) month shall
be permitted during the first sixty (60) days after the Restatement Effective
Date.

 

(B)                                 UPON RECEIPT OF THE NOTICE OF BORROWING, THE
AGENT WILL PROMPTLY NOTIFY EACH LENDER WITH A COMMITMENT AFFECTED THEREBY OF
SUCH NOTICE AND OF THE AMOUNT OF SUCH LENDER’S COMMITMENT PERCENTAGE OF THE
BORROWING.

 

(C)                                  UNLESS AGENT IS OTHERWISE DIRECTED IN
WRITING BY THE BORROWER, THE PROCEEDS OF EACH REQUESTED BORROWING AFTER THE
RESTATEMENT EFFECTIVE DATE WILL BE MADE AVAILABLE TO THE BORROWER BY THE AGENT
BY WIRE TRANSFER (OR ACH TRANSFER) OF SUCH AMOUNT TO THE BORROWER PURSUANT TO
THE WIRE TRANSFER INSTRUCTIONS SPECIFIED ON THE SIGNATURE PAGE HERETO.

 

1.6                                 CONVERSION AND CONTINUATION ELECTIONS.

 

(A)                                  THE BORROWER MAY UPON IRREVOCABLE (SUBJECT
TO SUBSECTION 10.2(C) AND SECTION 10.5) WRITTEN NOTICE TO THE AGENT IN
ACCORDANCE WITH SUBSECTION 1.6(B) ELECT TO CONVERT ON ANY BUSINESS DAY, ANY BASE
RATE LOANS INTO LIBOR RATE LOANS OR ELECT TO CONTINUE ON THE LAST DAY OF THE
APPLICABLE INTEREST PERIOD ANY LIBOR RATE LOANS HAVING INTEREST PERIODS MATURING
ON SUCH DAY, IN EACH INSTANCE, IN WHOLE OR IN PART IN AN AMOUNT NOT LESS THAN
$100,000, OR THAT IS IN AN INTEGRAL MULTIPLE OF $50,000 IN EXCESS THEREOF.

 

(B)                                 THE BORROWER SHALL DELIVER A NOTICE OF
CONTINUATION/CONVERSION TO BE RECEIVED BY THE AGENT NOT LATER THAN 12:30 P.M.
(CHICAGO TIME) AT LEAST THREE (3) BUSINESS DAYS IN ADVANCE OF THE REQUESTED
CONVERSION DATE OR CONTINUATION DATE, SPECIFYING:

 

(I)                                     THE PROPOSED CONVERSION DATE OR
CONTINUATION DATE;

 

(II)                                  THE AGGREGATE AMOUNT OF LOANS TO BE
CONVERTED OR CONTINUED; AND

 

(III)                               THE DURATION OF THE REQUESTED INTEREST
PERIOD WITH RESPECT TO THE LOANS TO BE CONVERTED OR CONTINUED AS LIBOR RATE
LOANS.

 

(C)                                  IF UPON THE EXPIRATION OF ANY INTEREST
PERIOD APPLICABLE TO LIBOR RATE LOANS, THE BORROWER HAS FAILED TO SELECT TIMELY
A NEW INTEREST PERIOD TO BE APPLICABLE TO SUCH LIBOR RATE

 

6

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

 

LOANS OR IF ANY EVENT OF DEFAULT SHALL THEN EXIST, THE BORROWER SHALL BE DEEMED
TO HAVE ELECTED TO CONVERT SUCH LIBOR RATE LOANS INTO BASE RATE LOANS EFFECTIVE
AS OF THE EXPIRATION DATE OF SUCH CURRENT INTEREST PERIOD.

 

(D)                                 UPON RECEIPT OF A NOTICE OF
CONTINUATION/CONVERSION, THE AGENT WILL PROMPTLY NOTIFY EACH LENDER THEREOF.  IN
ADDITION, THE AGENT WILL, WITH REASONABLE PROMPTNESS, NOTIFY THE BORROWER AND
THE LENDERS OF EACH DETERMINATION OF LIBOR; PROVIDED, THAT ANY FAILURE TO DO SO
SHALL NOT RELIEVE THE BORROWER OF ANY LIABILITY HEREUNDER OR PROVIDE THE BASIS
FOR ANY CLAIM AGAINST THE AGENT.  ALL CONVERSIONS AND CONTINUATIONS SHALL BE
MADE PRO RATA ACCORDING TO THE RESPECTIVE OUTSTANDING PRINCIPAL AMOUNTS OF THE
LOANS WITH RESPECT TO WHICH THE NOTICE WAS GIVEN HELD BY EACH LENDER.

 

(E)                                  UNLESS THE REQUIRED LENDERS SHALL OTHERWISE
AGREE, DURING THE EXISTENCE OF AN EVENT OF DEFAULT, THE BORROWER MAY NOT ELECT
TO HAVE A LOAN CONVERTED INTO OR CONTINUED AS A LIBOR RATE LOAN.

 

(F)                                    NOTWITHSTANDING ANY OTHER PROVISION
CONTAINED IN THIS AGREEMENT, AFTER GIVING EFFECT TO ANY BORROWING, OR TO ANY
CONTINUATION OR CONVERSION OF ANY LOANS, THERE SHALL NOT BE MORE THAN SEVEN
(7) DIFFERENT INTEREST PERIODS IN EFFECT.

 

(G)                                 LIBOR RATE LOANS THAT SHALL HAVE BEEN
EVIDENCED BY THE ORIGINAL CREDIT AGREEMENT AND REMAIN OUTSTANDING AS OF THE
RESTATEMENT EFFECTIVE DATE SHALL CONTINUE AS LIBOR RATE LOANS HEREUNDER AND THE
INTEREST PERIODS RELATING THERETO SHALL CONTINUE AS INTEREST PERIODS HEREUNDER.

 

1.7                                 OPTIONAL PREPAYMENTS.

 

(A)                                  THE BORROWER MAY AT ANY TIME UPON AT LEAST
ONE (1) BUSINESS DAY’S PRIOR WRITTEN NOTICE TO THE AGENT (WHICH NOTICE MAY, AT
THE BORROWER’S DISCRETION, ALSO SPECIFY THE MANNER IN WHICH PREPAYMENTS BEING
MADE PURSUANT TO THIS SECTION 1.7 SHALL BE APPLIED TO THE OBLIGATIONS), PREPAY
THE LOANS IN WHOLE OR IN PART IN AN AMOUNT GREATER THAN OR EQUAL TO $100,000, IN
EACH INSTANCE, WITHOUT PENALTY OR PREMIUM EXCEPT AS PROVIDED IN SECTION 10.4. 
OPTIONAL PARTIAL PREPAYMENTS OF THE TERM LOAN AND CAPEX LOANS SHALL BE APPLIED
IN THE MANNER SET FORTH IN SUBSECTION 1.8(H)(I).  OPTIONAL PARTIAL PREPAYMENTS
IN AMOUNTS LESS THAN $100,000 SHALL NOT BE PERMITTED.

 

(B)                                 THE NOTICE OF ANY PREPAYMENT SHALL NOT
THEREAFTER BE REVOCABLE BY THE BORROWER AND THE AGENT WILL PROMPTLY NOTIFY EACH
LENDER THEREOF AND OF SUCH LENDER’S COMMITMENT PERCENTAGE OF SUCH PREPAYMENT. 
THE PAYMENT AMOUNT SPECIFIED IN SUCH NOTICE SHALL BE DUE AND PAYABLE ON THE DATE
SPECIFIED THEREIN.  TOGETHER WITH EACH PREPAYMENT UNDER THIS SECTION 1.7, THE
BORROWER SHALL PAY ANY AMOUNTS REQUIRED PURSUANT TO SECTION 10.4.

 

1.8                                 MANDATORY PREPAYMENTS OF LOANS AND
COMMITMENT REDUCTIONS.

 

(A)                                  (I)                                    
TERM LOAN.  THE OUTSTANDING PRINCIPAL AMOUNT OF THE TERM LOAN SHALL BE PAID IN
FULL ON SEPTEMBER 23, 2010.

 

7

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

 

(II)                                  CAP-EX LOANS.  COMMENCING AT THE CLOSE OF
BUSINESS ON THE CAPEX LINE TERMINATION DATE AND AT ALL TIMES THEREAFTER, THE
LENDERS SHALL NOT BE REQUIRED OR OBLIGATED TO MAKE ADDITIONAL CAPEX LOANS AND
THE AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF ALL CAPEX LOANS ON SUCH DATE
SHALL CONVERT INTO A SENIOR SECURED TERM LOAN AND SHALL BE PAID IN FULL ON
SEPTEMBER 23, 2010.

 

(B)                                 REVOLVING LOAN.  THE BORROWER SHALL REPAY TO
THE LENDERS IN FULL ON THE DATE SPECIFIED IN CLAUSE (A) OF THE DEFINITION OF
“REVOLVING TERMINATION DATE” THE AGGREGATE PRINCIPAL AMOUNT OF THE REVOLVING
LOANS OUTSTANDING ON THE REVOLVING TERMINATION DATE.

 

(C)                                  ASSET DISPOSITIONS.  IF THE BORROWER OR ANY
OF ITS SUBSIDIARIES SHALL AT ANY TIME OR FROM TIME TO TIME:

 

(I)                                     MAKE OR AGREE TO MAKE A DISPOSITION; OR

 

(II)                                  SUFFER AN EVENT OF LOSS;

 

and the aggregate amount of the Net Proceeds received by the Borrower and its
Subsidiaries in connection with such Disposition or Event of Loss and all other
Dispositions and Events of Loss occurring during the fiscal year exceeds
$1,000,000, then (A) the Borrower shall promptly notify the Agent of such
proposed Disposition or Event of Loss (including the amount of the estimated Net
Proceeds to be received by the Borrower and/or any of its Subsidiaries in
respect thereof) and (B) promptly upon receipt by the Borrower and/or any of its
Subsidiaries of the Net Proceeds of such Disposition or Event of Loss, the
Borrower shall deliver such Net Proceeds to the Agent for distribution to the
Lenders as a prepayment of the Loans, which prepayment shall be applied in
accordance with subsection 1.8(h)(ii) hereof.  Notwithstanding the foregoing and
provided (x) no Default or Event of Default has occurred and is continuing and
(y) the Borrower otherwise shall have complied with Section 5.2 in respect
thereof, such prepayment shall not be required to the extent a Subsidiary of the
Borrower reinvests the Net Proceeds of such Disposition or Event of Loss, or a
portion thereof, in productive assets of a kind then used or usable in the
business of such Subsidiary, within one hundred eighty (180) days after the date
of such Disposition or Event of Loss, or enters into a binding commitment in
respect thereof within said one hundred eighty (180) day period and subsequently
makes such reinvestment.  Pending such reinvestment, such Net Proceeds shall be
either (i) delivered to the Agent, for distribution to the Lenders, as a
prepayment of the Revolving Loans (to the extent of Revolving Loans then
outstanding), but not as a permanent reduction of the Revolving Loan Commitment
(which application shall not be required if, under the terms of the Indenture,
such application is required to result in a permanent reduction of the Revolving
Loan Commitment) or (ii) held by the Borrower in an account of the Borrower
subject to a deposit account control agreement to which the Agent is a party,
and which is in form and substance acceptable to the Agent; provided, such Net
Proceeds deposited into such deposit account shall be used by a Subsidiary of
the Borrower solely for reinvestment as and to the extent permitted herein or
otherwise delivered promptly to the Agent, for distribution to the Lenders, as a
prepayment of the Loans, to be applied in accordance with
subsection 1.8(h)(ii).  The foregoing notwithstanding, if at any time pending
such reinvestment the aggregate outstanding principal balance of the Revolving
Loans exceeds the Maximum Revolving Loan Balance, then Agent hereby is directed
to apply such Net Proceeds deposited

 

8

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

 

into such deposit account to the Revolving Loans in an amount sufficient to
eliminate such excess.

 

(D)                                 ISSUANCE OF DEBT SECURITIES.  IMMEDIATELY
UPON THE RECEIPT BY BORROWER OR ANY OF ITS SUBSIDIARIES OF THE NET ISSUANCE
PROCEEDS OF THE ISSUANCE OF DEBT SECURITIES BY BORROWER OR ANY OF ITS
SUBSIDIARIES (OTHER THAN NET ISSUANCE PROCEEDS FROM PERMITTED ISSUANCES),
BORROWER SHALL DELIVER TO AGENT AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF
SUCH PROCEEDS FOR APPLICATION TO THE LOANS IN ACCORDANCE WITH
SUBSECTION 1.8(H)(I).

 

(E)                                  RESERVED.

 

(F)                                    PROCEEDS UNDER ACQUISITION DOCUMENTS. 
IMMEDIATELY UPON RECEIPT OF ANY INDEMNIFICATION, PURCHASE PRICE ADJUSTMENT,
EARNOUT, ESCROW OR SIMILAR PAYMENT (OTHER THAN A WORKING CAPITAL ADJUSTMENT)
UNDER ANY ACQUISITION DOCUMENTS BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, THE
BORROWER SHALL DELIVER TO THE AGENT AN AMOUNT EQUAL TO FIFTY PERCENT (50%) OF
EACH SUCH PAYMENTS FOR APPLICATION TO THE LOANS IN ACCORDANCE WITH
SUBSECTION 1.8(H)(I); PROVIDED, THAT THE REMAINING FIFTY PERCENT (50%) OF ANY
SUCH PAYMENTS IS USED BY A SUBSIDIARY OF THE BORROWER SOLELY FOR PURPOSES
OTHERWISE PERMITTED HEREUNDER, INCLUDING GENERAL WORKING CAPITAL PURPOSES.

 

(G)                                 EQUITY CONTRIBUTION.  IMMEDIATELY UPON
RECEIPT BY THE BORROWER OR ANY OF ITS SUBSIDIARIES OF ANY EQUITY CONTRIBUTION
FROM SPONSOR IN ACCORDANCE WITH SECTION 6.6, BORROWER SHALL DELIVER TO AGENT AN
AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF SUCH PROCEEDS (OR OTHERWISE REPAY
THE LOANS IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF SUCH PROCEEDS) FOR
APPLICATION TO THE LOANS IN ACCORDANCE WITH SUBSECTION 1.8(H)(III).

 

(H)                                 APPLICATION OF PREPAYMENTS.

 

(I)                                     ANY PREPAYMENTS PURSUANT TO SECTION 1.7
OR SUBSECTION 1.8(D) OR 1.8(F) SHALL BE APPLIED AS FOLLOWS: (A) THE FIRST FIFTY
PERCENT (50%) OF SUCH PREPAYMENT SHALL BE APPLIED TO PREPAY THE TERM LOAN AND
THE CAPEX LOANS PRO RATA BASED ON THE THEN OUTSTANDING PRINCIPAL BALANCES
THEREOF AND (B) THE REMAINING FIFTY PERCENT (50%) OF SUCH PREPAYMENT SHALL BE
APPLIED TO PREPAY THE OUTSTANDING REVOLVING LOANS (WITHOUT A CORRESPONDING
REDUCTION OF THE REVOLVING LOAN COMMITMENT OF ANY LENDER) AND, AFTER THE
OUTSTANDING REVOLVING LOANS SHALL HAVE BEEN PAID IN FULL, ANY REMAINING PORTION
OF SUCH PREPAYMENT SHALL BE APPLIED TO PREPAY THE TERM LOAN AND THE CAPEX LOANS
PRO RATA BASED ON THE THEN OUTSTANDING PRINCIPAL BALANCES THEREOF; PROVIDED,
HOWEVER, THAT SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING, PREPAYMENTS MADE PURSUANT TO SECTION 1.7 MAY BE APPLIED TO THE
OBLIGATIONS AT THE DIRECTION OF THE BORROWER, AS SPECIFIED IN THE APPLICABLE
NOTICE OF PREPAYMENT DELIVERED BY THE BORROWER PURSUANT TO SUBSECTION 1.7(A);
PROVIDED, FURTHER, HOWEVER, THAT IN THE ABSENCE OF SUCH DIRECTION BY THE
BORROWER, SUCH PREPAYMENTS SHALL BE APPLIED TO PREPAY THE OUTSTANDING REVOLVING
LOANS (WITHOUT A CORRESPONDING REDUCTION OF THE REVOLVING LOAN COMMITMENT OF ANY
LENDER) AND, AFTER THE OUTSTANDING REVOLVING LOANS SHALL HAVE BEEN PAID IN FULL,
ANY REMAINING PORTION OF SUCH PREPAYMENT SHALL BE APPLIED TO PREPAY THE TERM
LOAN AND THE CAPEX LOANS PRO RATA BASED ON THE THEN OUTSTANDING PRINCIPAL
BALANCES THEREOF.

 

9

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

 

(II)                                  ANY PREPAYMENTS PURSUANT TO
SUBSECTION 1.8(C) (OTHER THAN PREPAYMENTS OF REVOLVING LOANS PENDING
REINVESTMENT AS SET FORTH THEREIN) SHALL BE APPLIED AS FOLLOWS: (A) THE FIRST
FIFTY PERCENT (50%) OF SUCH PREPAYMENT SHALL BE APPLIED TO PREPAY THE TERM LOAN
AND THE CAPEX LOANS PRO RATA BASED ON THE THEN OUTSTANDING PRINCIPAL BALANCES
THEREOF AND (B) THE REMAINING FIFTY PERCENT (50%) OF SUCH PREPAYMENT SHALL BE
APPLIED IN PERMANENT REDUCTION OF THE REVOLVING LOAN, WHEREUPON THE REVOLVING
LOAN COMMITMENT OF EACH LENDER SHALL AUTOMATICALLY AND PERMANENTLY BE REDUCED BY
AN AMOUNT EQUAL TO SUCH LENDER’S RATABLE SHARE OF THE AGGREGATE OF PRINCIPAL
REPAID, EFFECTIVE AS OF THE EARLIER OF THE DATE THAT SUCH PREPAYMENT IS MADE OR
THE DATE BY WHICH SUCH PREPAYMENT IS DUE AND PAYABLE HEREUNDER AND, AFTER THE
OUTSTANDING REVOLVING LOANS SHALL HAVE BEEN PAID IN FULL, ANY REMAINING PORTION
OF SUCH PREPAYMENT SHALL BE APPLIED TO PREPAY THE TERM LOAN AND THE CAPEX LOANS
PRO RATA BASED ON THE THEN OUTSTANDING PRINCIPAL BALANCES THEREOF; PROVIDED,
HOWEVER, THAT PREPAYMENTS PURSUANT TO SUBSECTION 1.8(C) SHALL NOT RESULT IN A
PERMANENT REDUCTION OF THE REVOLVING LOAN COMMITMENT IF (1) THE BORROWER HAS
COMPLIED WITH SECTION 5.2 IN RESPECT THEREOF, INCLUDING, WITHOUT LIMITATION, BY
DELIVERING TO THE AGENT A REPLACEMENT BORROWING BASE CERTIFICATE SETTING FORTH
THE CALCULATION OF THE “BORROWING BASE” AFTER GIVING EFFECT TO EACH UNDERLYING
DISPOSITION AND EVENT OF LOSS, (2) AT THE REQUEST OF THE AGENT, AN APPRAISAL OF
THE REMAINING EQUIPMENT, MACHINERY AND/OR REAL PROPERTY TO BE INCLUDED IN SUCH
“BORROWING BASE” HAS BEEN UNDERTAKEN WITHIN SIXTY (60) DAYS OF THE DATE OF ANY
SUCH DISPOSITION AND EVENT OF LOSS, WHICH REQUEST SHALL BE MADE, IF EVER, BY THE
AGENT WITHIN A REASONABLE PERIOD AFTER THE DATE UPON WHICH THE BORROWER SHALL
HAVE NOTIFIED THE AGENT IN WRITING OF SUCH DISPOSITION OR EVENT OF LOSS, AND
(3) THE INDENTURE DOES NOT OTHERWISE REQUIRE SUCH APPLICATION TO RESULT IN A
PERMANENT REDUCTION OF THE REVOLVING LOAN COMMITMENT.

 

(III)                               ANY PREPAYMENTS PURSUANT TO
SUBSECTION 1.8(G) SHALL BE APPLIED TO THE REVOLVING LOAN (WITHOUT A
CORRESPONDING REDUCTION OF THE REVOLVING LOAN COMMITMENT OF ANY LENDER).

 

(IV)                              TO THE EXTENT PERMITTED BY THE FOREGOING
CLAUSES (I), (II) AND (III), AMOUNTS PREPAID SHALL BE APPLIED FIRST TO ANY BASE
RATE LOANS THEN OUTSTANDING AND THEN TO OUTSTANDING LIBOR RATE LOANS WITH THE
SHORTEST INTEREST PERIODS REMAINING.  TOGETHER WITH EACH PREPAYMENT UNDER THIS
SECTION 1.8, THE BORROWER SHALL PAY ANY AMOUNTS REQUIRED PURSUANT TO
SECTION 10.4 HEREOF.

 

1.9                                 FEES.

 

(A)                                  CLOSING AND AGENT’S FEES.  THE BORROWER
SHALL PAY TO THE AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS, A CLOSING FEE,
AND FOR THE AGENT’S OWN ACCOUNT, AN AGENT’S FEE, IN THE AMOUNTS AND AT THE TIMES
SET FORTH IN AN AMENDED AND RESTATED LETTER AGREEMENT BETWEEN THE BORROWER AND
THE AGENT DATED OF EVEN DATE HEREWITH (THE “FEE LETTER”).

 

10

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

 

(B)                                 COMMITMENT FEE.  THE BORROWER SHALL PAY TO
AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS, A FEE (THE “COMMITMENT FEE”) IN
AN AMOUNT EQUAL TO:

 

(I)                                     THE AGGREGATE REVOLVING LOAN COMMITMENT,
LESS

 

(II)                                  THE SUM OF (X) THE AVERAGE DAILY BALANCE
OF ALL REVOLVING LOANS OUTSTANDING PLUS (Y) THE AVERAGE DAILY AMOUNT OF THE
LETTER OF CREDIT PARTICIPATION LIABILITY, IN EACH CASE, DURING THE PRECEDING
QUARTER,

 

multiplied by three-eighths of one percent (0.375%) per annum, such fee to be
payable quarterly in arrears on the first day of the quarter following the date
hereof and the first day of each quarter thereafter.  The Commitment Fee
provided in this subsection 1.9(b) shall accrue at all times from and after
mutual execution and delivery of this Agreement.  The Borrower hereby agrees
that accrued and unpaid Commitment Fees in an amount equal to $18,628.12 due and
owing to the Existing Lenders under the Original Credit Agreement as of the
Restatement Effective Date shall be deemed accrued and continued hereunder and
shall be paid in full in cash by the Borrower to the Agent, for the benefit of
the Existing Lenders, on the first day of the month following the date hereof.

 

(C)                                  LETTER OF CREDIT PARTICIPATION FEE.  THE
BORROWER SHALL PAY TO AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS, FEES FOR
EACH LENDER LETTER OF CREDIT AND EACH LETTER OF CREDIT PARTICIPATION AGREEMENT
(THE “LETTER OF CREDIT PARTICIPATION FEE”) FOR THE PERIOD FROM AND INCLUDING THE
DATE OF ISSUANCE OF SAME TO AND EXCLUDING THE DATE OF EXPIRATION OR TERMINATION,
EQUAL TO THE AVERAGE DAILY AMOUNT OF LETTER OF CREDIT PARTICIPATION LIABILITY
MULTIPLIED BY A RATE PER ANNUM EQUAL TO THREE PERCENT (3.00%); PROVIDED,
HOWEVER, AT THE AGENT’S OR REQUIRED LENDERS’ OPTION, WHILE AN EVENT OF DEFAULT
EXISTS SUCH PERCENT SHALL BE INCREASED BY TWO PERCENT (2.00%) PER ANNUM OVER THE
OTHERWISE APPLICABLE RATE, SUCH FEES TO BE PAYABLE MONTHLY IN ARREARS ON THE
FIRST DAY OF THE MONTH FOLLOWING THE DATE HEREOF AND THE FIRST DAY OF EACH MONTH
THEREAFTER.  THE BORROWER SHALL ALSO REIMBURSE THE AGENT FOR ANY AND ALL FEES
AND EXPENSES, IF ANY, PAID BY THE AGENT TO THE ISSUER OF ANY LETTER OF CREDIT
SUBJECT TO A LETTER OF CREDIT PARTICIPATION AGREEMENT.

 

(D)                                 CAPEX COMMITMENT FEE.  THE BORROWER SHALL
PAY TO THE AGENT, FOR THE RATABLE BENEFIT OF THE LENDERS HAVING CAPEX LOAN
COMMITMENTS, A FEE (THE “CAPEX COMMITMENT FEE”) IN AN AMOUNT EQUAL TO

 

(I)                                     THE AGGREGATE CAPEX LOAN COMMITMENT,
LESS

 

(II)                                  THE AVERAGE DAILY BALANCE OF ALL CAPEX
LOANS OUTSTANDING DURING THE PRECEDING CALENDAR QUARTER,

 

MULTIPLIED BY THREE-EIGHTHS OF ONE PERCENT (0.375%) PER ANNUM, SUCH FEE TO BE
PAYABLE QUARTERLY IN ARREARS ON THE FIRST DAY OF THE CALENDAR QUARTER FOLLOWING
THE DATE HEREOF AND THE FIRST DAY OF EACH CALENDAR QUARTER THEREAFTER.  THE
CAPEX COMMITMENT FEE PROVIDED IN THIS SUBSECTION 1.9(D) SHALL ACCRUE AT ALL
TIMES FROM AND AFTER MUTUAL EXECUTION AND DELIVERY OF THIS AGREEMENT UNTIL THE
CAPEX LINE TERMINATION DATE (WITH ALL ACCRUED FEES DUE AND PAYABLE IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT).

 

11

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

 

1.10                           PAYMENTS BY THE BORROWER.

 

(A)                                  ALL PAYMENTS (INCLUDING PREPAYMENTS) TO BE
MADE BY THE BORROWER ON ACCOUNT OF PRINCIPAL, INTEREST, FEES AND OTHER AMOUNTS
REQUIRED HEREUNDER SHALL BE MADE WITHOUT SET-OFF, RECOUPMENT, COUNTERCLAIM OR
DEDUCTION OF ANY KIND, SHALL, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, BE
MADE TO THE AGENT FOR THE RATABLE ACCOUNT OF THE LENDERS AT THE ADDRESS FOR
PAYMENT SPECIFIED IN THE SIGNATURE PAGE HEREOF IN RELATION TO THE AGENT (OR SUCH
OTHER ADDRESS AS THE AGENT MAY FROM TIME TO TIME SPECIFY IN ACCORDANCE WITH
SECTION 9.2), AND SHALL BE MADE IN DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS,
NO LATER THAN 12:30 P.M. (CHICAGO TIME) ON THE DATE DUE.  ANY PAYMENT WHICH IS
RECEIVED BY THE AGENT LATER THAN 12:30 P.M. (CHICAGO TIME) SHALL BE DEEMED TO
HAVE BEEN RECEIVED ON THE IMMEDIATELY SUCCEEDING BUSINESS DAY AND ANY APPLICABLE
INTEREST OR FEE SHALL CONTINUE TO ACCRUE.  THE BORROWER HEREBY AUTHORIZES THE
AGENT AND EACH LENDER TO (BUT NEITHER THE AGENT NOR ANY LENDER SHALL HAVE ANY
OBLIGATION TO) MAKE A REVOLVING LOAN (WHICH SHALL BE A BASE RATE LOAN) TO PAY
(I) INTEREST, AGENT FEES, COMMITMENT FEES, CAPEX COMMITMENT FEES AND LETTER OF
CREDIT PARTICIPATION FEES, IN EACH INSTANCE, ON THE DATE DUE, OR (II) AFTER FIVE
(5) BUSINESS DAYS PRIOR NOTICE TO THE BORROWER, OTHER FEES, COSTS OR EXPENSES
PAYABLE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES HEREUNDER OR UNDER THE OTHER
LOAN DOCUMENTS.

 

(B)                                 SUBJECT TO THE PROVISIONS SET FORTH IN THE
DEFINITION OF “INTEREST PERIOD” HEREIN, IF ANY PAYMENT HEREUNDER SHALL BE STATED
TO BE DUE ON A DAY OTHER THAN A BUSINESS DAY, SUCH PAYMENT SHALL BE MADE ON THE
NEXT SUCCEEDING BUSINESS DAY, AND SUCH EXTENSION OF TIME SHALL IN SUCH CASE BE
INCLUDED IN THE COMPUTATION OF INTEREST OR FEES, AS THE CASE MAY BE.

 

(C)                                  ALL AMOUNTS COLLECTED OR RECEIVED BY THE
AGENT AFTER THE OBLIGATIONS HAVE BEEN ACCELERATED (SO LONG AS SUCH ACCELERATION
HAS NOT BEEN RESCINDED) AND ALL PROCEEDS RECEIVED BY THE AGENT AS A RESULT OF
THE EXERCISE OF ITS REMEDIES UNDER THE COLLATERAL DOCUMENTS AFTER THE OCCURRENCE
AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT SHALL BE APPLIED AS FOLLOWS:

 

first, to payment of fees, costs and expenses, including Attorney Costs, of the
Agent payable or reimbursable by the Borrower and/or its Subsidiaries under the
Loan Documents;

 

second, to payment of Attorney Costs of Lenders payable or reimbursable by the
Borrower and/or its Subsidiaries under this Agreement;

 

third, to payment of all accrued unpaid interest on the Obligations pro rata;

 

fourth, to payment of principal of the Obligations (including, if an Event of
Default has occurred and is continuing, cash collateralization of Letter of
Credit Participation Liability);

 

fifth, to payment of any other amounts owing constituting Obligations; and

 

sixth, any remainder shall be for the account of and paid to whomever may be
lawfully entitled thereto.

 

12

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

 

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to the application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share of amounts available to be applied pursuant to clauses
second, third, fourth and fifth above.

 

1.11                           PAYMENTS BY THE LENDERS TO THE AGENT; SETTLEMENT.

 

(A)                                  AS SET FORTH IN SUBSECTION 1.5(B), UPON
RECEIPT OF A NOTICE OF BORROWING, THE AGENT WILL PROMPTLY NOTIFY EACH LENDER OF
SUCH LENDER’S COMMITMENT PERCENTAGE OF THE BORROWING REQUESTED THEREBY.  EACH
LENDER WILL FUND ITS COMMITMENT PERCENTAGE OF BORROWINGS OF REVOLVING LOANS TO
THE AGENT AT THE AGENT’S ACCOUNT SPECIFIED ON ITS SIGNATURE PAGE HERETO, OR TO
SUCH OTHER ACCOUNT AS THE AGENT MAY DESIGNATE IN WRITING, NO LATER THAN
2:00 P.M. (CHICAGO TIME) ON THE SCHEDULED BORROWING DATE.  EACH LENDER WITH A
CAPEX LOAN COMMITMENT WILL FUND ITS COMMITMENT PERCENTAGE OF BORROWINGS OF CAPEX
LOANS TO THE AGENT AT THE AGENT’S ACCOUNT SPECIFIED ON ITS SIGNATURE
PAGE HERETO, OR TO SUCH OTHER ACCOUNT AS THE AGENT MAY DESIGNATE IN WRITING, NO
LATER THAN 2:00 P.M. (CHICAGO TIME) ON THE SCHEDULED BORROWING DATE.

 

(B)                                 UNLESS THE AGENT SHALL HAVE RECEIVED NOTICE
FROM A LENDER ON THE RESTATEMENT EFFECTIVE DATE OR, WITH RESPECT TO EACH
BORROWING AFTER THE RESTATEMENT EFFECTIVE DATE, BY 1:00 P.M. (CHICAGO TIME) ON
THE DATE OF ANY PROPOSED BORROWING, THAT SUCH LENDER WILL NOT MAKE AVAILABLE TO
THE AGENT AS AND WHEN REQUIRED HEREUNDER FOR THE ACCOUNT OF THE BORROWER THE
AMOUNT OF SUCH LENDER’S COMMITMENT PERCENTAGE OF THE PROPOSED BORROWING, THE
AGENT MAY ASSUME THAT EACH LENDER HAS MADE SUCH AMOUNT AVAILABLE TO THE AGENT IN
IMMEDIATELY AVAILABLE FUNDS ON THE APPLICABLE BORROWING DATE AND THE AGENT MAY
(BUT SHALL NOT BE SO REQUIRED), IN RELIANCE UPON SUCH ASSUMPTION, MAKE AVAILABLE
TO THE BORROWER ON SUCH DATE A CORRESPONDING AMOUNT.  IF AND TO THE EXTENT ANY
LENDER SHALL NOT HAVE MADE ITS FULL AMOUNT AVAILABLE TO THE AGENT IN IMMEDIATELY
AVAILABLE FUNDS AND THE AGENT IN SUCH CIRCUMSTANCES HAS MADE AVAILABLE TO THE
BORROWER SUCH AMOUNT, THAT LENDER SHALL ON THE NEXT BUSINESS DAY FOLLOWING THE
DATE OF SUCH BORROWING MAKE SUCH AMOUNT AVAILABLE TO THE AGENT, TOGETHER WITH
INTEREST AT THE FEDERAL FUNDS RATE FOR AND DETERMINED AS OF EACH DAY DURING SUCH
PERIOD.  A NOTICE OF THE AGENT SUBMITTED TO ANY LENDER WITH RESPECT TO AMOUNTS
OWING UNDER THIS SUBSECTION 1.11(B) SHALL BE CONCLUSIVE, ABSENT MANIFEST ERROR. 
IF SUCH AMOUNT IS SO MADE AVAILABLE, SUCH PAYMENT TO THE AGENT SHALL CONSTITUTE
SUCH LENDER’S LOAN ON THE DATE OF BORROWING FOR ALL PURPOSES OF THIS AGREEMENT. 
IF SUCH AMOUNT IS NOT MADE AVAILABLE TO THE AGENT ON THE NEXT BUSINESS DAY
FOLLOWING THE DATE OF SUCH BORROWING, THE AGENT SHALL NOTIFY THE BORROWER OF
SUCH FAILURE TO FUND AND, UPON DEMAND BY THE AGENT, THE BORROWER SHALL PAY SUCH
AMOUNT TO THE AGENT FOR THE AGENT’S ACCOUNT, TOGETHER WITH INTEREST THEREON FOR
EACH DAY ELAPSED SINCE THE DATE OF SUCH BORROWING, AT A RATE PER ANNUM EQUAL TO
THE INTEREST RATE APPLICABLE AT THE TIME TO THE LOANS COMPRISING SUCH BORROWING.

 

(C)                                  THE FAILURE OF ANY LENDER TO MAKE ANY LOAN
ON ANY DATE OF BORROWING SHALL NOT RELIEVE ANY OTHER LENDER OF ANY OBLIGATION
HEREUNDER TO MAKE A LOAN ON THE DATE OF SUCH BORROWING, BUT NO LENDER SHALL BE
RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO MAKE THE LOAN TO BE MADE BY
SUCH OTHER LENDER ON THE DATE OF ANY BORROWING.  WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, EACH LENDER SHALL BE OBLIGATED TO FUND ITS COMMITMENT
PERCENTAGE OF ANY REVOLVING LOAN MADE AFTER ANY ACCELERATION OF THE OBLIGATIONS
WITH RESPECT TO ANY DRAW ON ANY LENDER LETTER OF CREDIT OR ANY PAYMENT MADE
UNDER ANY LETTER OF CREDIT PARTICIPATION AGREEMENT.

 

13

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

 

(D)                                 PROVIDED THAT SUCH LENDER HAS MADE ALL
PAYMENTS REQUIRED TO BE MADE BY IT UNDER THIS AGREEMENT, THE AGENT WILL PAY TO
SUCH LENDER, BY WIRE TRANSFER TO SUCH LENDER’S ACCOUNT (AS SPECIFIED BY SUCH
LENDER ON SUCH LENDER’S RESPECTIVE SIGNATURE PAGE TO THIS AGREEMENT OR THE
APPLICABLE ASSIGNMENT AND ACCEPTANCE) SUCH LENDER’S COMMITMENT PERCENTAGE OF
PRINCIPAL, INTEREST, COMMITMENT FEES, CAPEX COMMITMENT FEES AND LETTER OF CREDIT
PARTICIPATION FEES, IN EACH INSTANCE, RECEIVED BY THE AGENT, PROMPTLY AFTER THE
AGENT’S RECEIPT THEREOF.

 

(E)                                  UNLESS THE AGENT SHALL HAVE RECEIVED NOTICE
FROM THE BORROWER PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE LENDERS
HEREUNDER THAT THE BORROWER WILL NOT MAKE SUCH PAYMENT IN FULL AS AND WHEN
REQUIRED HEREUNDER, THE AGENT MAY ASSUME THAT THE BORROWER HAS MADE SUCH PAYMENT
IN FULL TO THE AGENT ON SUCH DATE IN IMMEDIATELY AVAILABLE FUNDS AND THE AGENT
MAY (BUT SHALL NOT BE SO REQUIRED), IN RELIANCE UPON SUCH ASSUMPTION, CAUSE TO
BE DISTRIBUTED TO EACH LENDER ON SUCH DUE DATE AN AMOUNT EQUAL TO THE AMOUNT
THEN DUE SUCH LENDER.  IF THE AGENT PAYS AN AMOUNT TO A LENDER UNDER THIS
AGREEMENT IN THE BELIEF OR EXPECTATION THAT A RELATED PAYMENT HAS BEEN OR WILL
BE RECEIVED BY THE AGENT FROM THE BORROWER AND SUCH RELATED PAYMENT IS NOT
RECEIVED BY THE AGENT, THE AGENT SHALL BE ENTITLED TO RECOVER SUCH AMOUNT FROM
SUCH LENDER, AND EACH LENDER SHALL REPAY TO THE AGENT ON DEMAND SUCH AMOUNT,
TOGETHER WITH INTEREST THEREON FOR EACH DAY FROM THE DATE SUCH AMOUNT IS
DISTRIBUTED TO SUCH LENDER UNTIL THE DATE SUCH LENDER REPAYS SUCH AMOUNT TO THE
AGENT, AT THE FEDERAL FUNDS RATE, WITHOUT SETOFF, RECOUPMENT, COUNTERCLAIM OR
DEDUCTION OF ANY KIND.  IF THE AGENT DETERMINES AT ANY TIME THAT ANY AMOUNT
RECEIVED BY THE AGENT UNDER THIS AGREEMENT MUST BE RETURNED TO THE BORROWER OR
PAID TO ANY OTHER PERSON PURSUANT TO ANY SOLVENCY, FRAUDULENT CONVEYANCE OR
SIMILAR LAW OR OTHERWISE, THEN, NOTWITHSTANDING ANY OTHER TERM OR CONDITION OF
THIS AGREEMENT, THE AGENT WILL NOT BE REQUIRED TO DISTRIBUTE ANY PORTION OF SUCH
PAYMENT TO ANY LENDER.  IN ADDITION, EACH LENDER WILL REPAY TO THE AGENT ON
DEMAND ANY PORTION OF SUCH AMOUNT THAT THE AGENT HAS DISTRIBUTED TO SUCH LENDER,
TOGETHER WITH INTEREST THEREON AT SUCH RATE, IF ANY, AS THE AGENT IS REQUIRED TO
PAY TO THE BORROWER OR SUCH OTHER PERSON, WITHOUT SETOFF, RECOUPMENT,
COUNTERCLAIM OR DEDUCTION OF ANY KIND.

 

ARTICLE II - CONDITIONS PRECEDENT

 

2.1                                 CONDITIONS TO EFFECTIVENESS.  THE
EFFECTIVENESS OF THIS AGREEMENT AND THE OBLIGATION OF EACH LENDER TO MAKE LOANS
AND OF THE AGENT TO ISSUE LENDER LETTERS OF CREDIT OR LETTER OF CREDIT
PARTICIPATION AGREEMENTS HEREUNDER ARE SUBJECT TO THE CONDITION THAT THE AGENT
SHALL HAVE RECEIVED ON OR BEFORE THE RESTATEMENT EFFECTIVE DATE ALL OF THE
FOLLOWING, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT AND EACH
LENDER AND (EXCEPT FOR THE NOTES AND ANY INSTRUMENTS OR DOCUMENTS WHICH ARE
PLEDGED COLLATERAL) IN SUFFICIENT COUNTERPARTS FOR EACH LENDER, DULY EXECUTED BY
ALL PARTIES THERETO:

 

(A)                                  CREDIT AGREEMENT AND NOTES.  THIS AGREEMENT
EXECUTED BY THE BORROWER, THE AGENT AND EACH OF THE LENDERS, AND THE NOTES
EXECUTED BY THE BORROWER;

 

14

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

 

(B)                                 SECRETARY’S CERTIFICATES; RESOLUTIONS;
INCUMBENCY.  A CERTIFICATE OF THE SECRETARY OR ASSISTANT SECRETARY OF THE
BORROWER AND EACH SUBSIDIARY OF THE BORROWER WHICH IS A PARTY TO ANY LOAN
DOCUMENT, CERTIFYING:

 

(I)                                     THE NAMES AND TRUE SIGNATURES OF THE
OFFICERS OF THE BORROWER AND EACH SUCH SUBSIDIARY AUTHORIZED TO EXECUTE, DELIVER
AND PERFORM, AS APPLICABLE, THIS AGREEMENT, AND ALL OTHER LOAN DOCUMENTS TO BE
DELIVERED HEREUNDER; AND

 

(II)                                  COPIES OF THE RESOLUTIONS OF THE BOARD OF
DIRECTORS OR OTHER GOVERNING BODY OF THE BORROWER AND EACH SUCH SUBSIDIARY
APPROVING AND AUTHORIZING THE EXECUTION, DELIVERY AND PERFORMANCE, AS
APPLICABLE, BY THE BORROWER OR SUCH SUBSIDIARY OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO BE EXECUTED OR DELIVERED BY IT HEREUNDER;

 

(C)                                  ORGANIZATION DOCUMENTS AND GOOD STANDING. 
EACH OF THE FOLLOWING DOCUMENTS:

 

(I)                                     THE ORGANIZATION DOCUMENTS OF THE
BORROWER AND EACH OF ITS SUBSIDIARIES, AS SUCH ORGANIZATION DOCUMENTS ARE IN
EFFECT ON THE RESTATEMENT EFFECTIVE DATE, CERTIFIED BY THE SECRETARY OF STATE
(OR SIMILAR, APPLICABLE GOVERNMENTAL AUTHORITY) OF THE STATE OF INCORPORATION OR
FORMATION OF THE BORROWER OR SUCH SUBSIDIARY AS OF A RECENT DATE, IF AND AS
APPLICABLE, ALL CERTIFIED BY THE SECRETARY OR ASSISTANT SECRETARY OF THE
BORROWER OR SUCH SUBSIDIARY AS OF THE RESTATEMENT EFFECTIVE DATE; AND

 

(II)                                  A GOOD STANDING CERTIFICATE FOR THE
BORROWER AND EACH OF ITS SUBSIDIARIES FROM THE SECRETARY OF STATE (OR SIMILAR,
APPLICABLE GOVERNMENTAL AUTHORITY) OF ITS STATE OF INCORPORATION OR FORMATION,
AS APPLICABLE, AND EACH STATE WHERE THE BORROWER OR SUCH SUBSIDIARY IS QUALIFIED
TO DO BUSINESS AS A FOREIGN ENTITY AS OF A RECENT DATE;

 

(D)                                 COLLATERAL DOCUMENTS.  THE COLLATERAL
DOCUMENTS, EXECUTED BY THE BORROWER AND EACH OF ITS SUBSIDIARIES WHO ARE A PARTY
THERETO IN APPROPRIATE FORM FOR RECORDING, WHERE NECESSARY, TOGETHER WITH THE
FOLLOWING, TO THE EXTENT NOT PREVIOUSLY DELIVERED TO THE AGENT UNDER THE
ORIGINAL CREDIT AGREEMENT:

 

(I)                                     ACKNOWLEDGMENT COPIES OF ALL UNIFORM
COMMERCIAL CODE FINANCING STATEMENTS FILED, REGISTERED OR RECORDED TO PERFECT
THE SECURITY INTERESTS OF THE AGENT, FOR THE BENEFIT OF THE AGENT AND THE
LENDERS, GRANTED PURSUANT TO THE COLLATERAL DOCUMENTS, OR OTHER EVIDENCE
REASONABLY SATISFACTORY TO THE AGENT THAT THERE HAS BEEN FILED, REGISTERED OR
RECORDED ALL FINANCING STATEMENTS AND OTHER FILINGS, REGISTRATIONS AND
RECORDINGS REASONABLY NECESSARY AND ADVISABLE TO PERFECT THE LIENS OF THE AGENT,
FOR THE BENEFIT OF THE AGENT AND THE LENDERS, GRANTED PURSUANT TO THE COLLATERAL
DOCUMENTS, IN ACCORDANCE WITH APPLICABLE LAW;

 

(II)                                  UNIFORM COMMERCIAL CODE FINANCING
STATEMENT, FEDERAL AND STATE TAX LIEN, PENDING LITIGATION AND JUDGMENT SEARCHES
AS THE AGENT SHALL HAVE REASONABLY REQUESTED OF THE BORROWER, EACH OF ITS
SUBSIDIARIES AND SUCH OTHER PERSONS AS THE AGENT MAY REQUEST, AND SUCH
TERMINATION STATEMENTS, RELEASES OR OTHER DOCUMENTS AS MAY BE REASONABLY
NECESSARY TO CONFIRM THAT THE COLLATERAL IS SUBJECT TO NO OTHER LIENS IN FAVOR
OF ANY PERSONS (OTHER THAN PERMITTED LIENS);

 

15

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

 

(III)                               ALL CERTIFICATES AND INSTRUMENTS
REPRESENTING THE PLEDGED COLLATERAL, IRREVOCABLE PROXIES AND STOCK TRANSFER
POWERS EXECUTED IN BLANK OR OTHER EXECUTED ENDORSEMENTS REASONABLY SATISFACTORY
TO THE AGENT, WITH SIGNATURES GUARANTEED AS THE AGENT MAY REQUIRE;

 

(IV)                              EVIDENCE THAT ALL OTHER ACTIONS REASONABLY
NECESSARY OR, IN THE REASONABLE OPINION OF THE AGENT, DESIRABLE TO PERFECT AND
PROTECT THE LIENS CREATED BY THE COLLATERAL DOCUMENTS HAVE BEEN TAKEN;

 

(V)                                 FUNDS SUFFICIENT TO PAY ANY FILING OR
RECORDING TAX OR FEE IN CONNECTION WITH ANY AND ALL UNIFORM COMMERCIAL CODE
FINANCING STATEMENTS AND, IF APPLICABLE, THE MORTGAGES OR AMENDMENTS THERETO,
ALL TITLE INSURANCE PREMIUMS, DOCUMENTARY STAMP OR INTANGIBLE TAXES, RECORDING
FEES AND MORTGAGE TAXES PAYABLE IN CONNECTION WITH THE RECORDING OF ANY MORTGAGE
OR FILING OF ANY UNIFORM COMMERCIAL CODE FINANCING STATEMENTS OR THE ISSUANCE OF
THE TITLE INSURANCE POLICIES (WHETHER DUE ON THE RESTATEMENT EFFECTIVE DATE OR
IN THE FUTURE) INCLUDING SUMS DUE IN CONNECTION WITH ANY FUTURE ADVANCES;

 

(VI)                              WITH RESPECT TO EACH PARCEL OF REAL PROPERTY
IN RESPECT OF WHICH THERE IS DELIVERED BY THE BORROWER OR ANY OF ITS
SUBSIDIARIES A MORTGAGE, AN A.L.T.A. MORTGAGEE POLICY OF TITLE INSURANCE (OR,
WITH RESPECT TO MORTGAGEE POLICIES OF TITLE INSURANCE DELIVERED IN CONNECTION
WITH THE ORIGINAL CREDIT AGREEMENT, DATE DOWN ENDORSEMENTS), OR A BINDER ISSUED
BY A TITLE INSURANCE COMPANY REASONABLY SATISFACTORY TO THE AGENT INSURING (OR
UNDERTAKING TO INSURE, IN THE CASE OF A BINDER) THAT THE MORTGAGE CREATES AND
CONSTITUTES A VALID FIRST LIEN AGAINST SUCH REAL PROPERTY IN FAVOR OF THE AGENT,
FOR THE BENEFIT OF AGENT AND THE LENDERS, IN AN AMOUNT AND SUBJECT ONLY TO
EXCEPTIONS REASONABLY ACCEPTABLE TO THE AGENT, WITH SUCH ENDORSEMENTS AND
AFFIRMATIVE INSURANCE AS THE AGENT MAY REASONABLY REQUEST;

 

(VII)                           IF REQUIRED BY THE AGENT, FLOOD INSURANCE AND
EARTHQUAKE INSURANCE ON TERMS SATISFACTORY TO THE AGENT;

 

(VIII)                        IF REQUIRED BY THE AGENT, THE MOST RECENT A.L.T.A.
SURVEYS AND SURVEYOR’S CERTIFICATIONS CERTIFIED TO THE AGENT AS TO ALL REAL
PROPERTY IN RESPECT OF WHICH THERE IS DELIVERED A MORTGAGE BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES, EACH IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE AGENT; AND

 

(IX)                                SUCH CONSENTS, ESTOPPELS, SUBORDINATION
AGREEMENTS AND OTHER DOCUMENTS AND INSTRUMENTS EXECUTED BY LANDLORDS, TENANTS
AND OTHER PERSONS PARTY TO MATERIAL CONTRACTS RELATING TO ANY COLLATERAL AS TO
WHICH THE AGENT SHALL BE GRANTED A LIEN FOR THE BENEFIT OF AGENT AND THE
LENDERS, AS REASONABLY REQUESTED BY THE AGENT;

 

(E)                                  LEGAL OPINIONS.  SUCH OPINIONS OF COUNSEL
TO THE BORROWER AND ITS SUBSIDIARIES, IN EACH INSTANCE ADDRESSED TO THE AGENT
AND THE LENDERS, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT;

 

16

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

 

(F)                                    PAYMENT OF FEES.  EVIDENCE REASONABLY
ACCEPTABLE TO IT THAT THE BORROWER SHALL HAVE PAID ALL ACCRUED AND UNPAID FEES,
COSTS AND EXPENSES TO THE EXTENT THEN DUE AND PAYABLE ON THE RESTATEMENT
EFFECTIVE DATE, TOGETHER WITH ATTORNEY COSTS OF THE AGENT;

 

(G)                                 CERTIFICATE.  A CERTIFICATE SIGNED ON BEHALF
OF THE BORROWER BY A RESPONSIBLE OFFICER, DATED AS OF THE RESTATEMENT EFFECTIVE
DATE, STATING THAT:

 

(I)                                     THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE III HEREOF ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON
AND AS OF SUCH DATE, AS THOUGH MADE ON AND AS OF SUCH DATE;

 

(II)                                  NO DEFAULT OR EVENT OF DEFAULT EXISTS OR
WOULD RESULT FROM THE BORROWING OR ISSUANCE OF THE LENDER LETTERS OF CREDIT OR
LETTER OF CREDIT PARTICIPATION AGREEMENTS TO BE MADE ON THE RESTATEMENT
EFFECTIVE DATE OR FROM THE CONSUMMATION OF ANY OF THE OTHER TRANSACTIONS
CONTEMPLATED HEREBY; AND

 

(III)                               THERE HAS OCCURRED SINCE DECEMBER 31, 2004
NO EVENT OR CIRCUMSTANCE THAT HAS RESULTED OR WOULD REASONABLY BE EXPECTED TO
RESULT IN (A) A MATERIAL ADVERSE EFFECT OR (B) A MATERIAL ADVERSE CHANGE IN, OR
A MATERIAL ADVERSE EFFECT UPON, THE PROSPECTS OF THE BORROWER OR THE BORROWER
AND ITS SUBSIDIARIES TAKEN AS A WHOLE;

 

(H)                                 FINANCIAL STATEMENTS.  COPIES OF ALL OF THE
FINANCIAL STATEMENTS OF THE BORROWER AND ITS SUBSIDIARIES REFERRED TO IN
SECTION 3.11, CERTIFIED ON BEHALF OF THE BORROWER BY A RESPONSIBLE OFFICER;

 

(I)                                     INSURANCE POLICIES.  STANDARD LENDERS’
LOSS PAYABLE AND OTHER ENDORSEMENTS IN FAVOR OF THE AGENT WITH RESPECT TO THE
INSURANCE POLICIES OR OTHER INSTRUMENTS OR DOCUMENTS EVIDENCING INSURANCE
COVERAGE ON THE PROPERTY OF THE BORROWER IN ACCORDANCE WITH SECTION 4.6;

 

(J)                                     BORROWING BASE CERTIFICATE.  A DULY
COMPLETED BORROWING BASE CERTIFICATE SETTING FORTH THE “BORROWING BASE” AS OF
JULY 31, 2005.  NOT MORE THAN $10,000,000 IN REVOLVING LOANS SHALL BE
OUTSTANDING ON THE RESTATEMENT EFFECTIVE DATE, AND AFTER GIVING EFFECT TO THE
FUNDING OF THE LOANS TO BE MADE ON THE RESTATEMENT EFFECTIVE DATE, THE MAXIMUM
REVOLVING LOAN BALANCE SHALL EXCEED THE OUTSTANDING PRINCIPAL BALANCE OF
REVOLVING LOANS BY NOT LESS THAN $30,000,000;

 

(K)                                  HIGH YIELD UNSECURED INDEBTEDNESS. 
EVIDENCE REASONABLY SATISFACTORY TO IT THAT NO MORE THAN $120,000,000 IN STATED
PRINCIPAL AMOUNT OF HIGH YIELD UNSECURED INDEBTEDNESS IS OUTSTANDING;

 

(L)                                     EBITDA. EVIDENCE REASONABLY SATISFACTORY
TO IT DEMONSTRATING THAT EBITDA (WITH SUCH ADJUSTMENTS AS THE AGENT MAY
REASONABLY APPROVE) OF THE BORROWER AND ITS SUBSIDIARIES FOR THE TWELVE (12)
MONTH PERIOD ENDED JULY 31, 2005 WAS AT LEAST $33,500,000;

 

(M)                               PROJECTIONS.  PROJECTIONS IN FORM AND
SUBSTANCE SATISFACTORY TO THE AGENT FOR THE BORROWER AND ITS SUBSIDIARIES FOR
THE PERIOD FROM 2005 THROUGH 2008, INCLUDING PROJECTIONS ON A QUARTER BY QUARTER
BASIS FOR THE TWELVE CALENDAR MONTHS IMMEDIATELY FOLLOWING THE RESTATEMENT

 

17

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

 

EFFECTIVE DATE AND DELIVERY OF ACTUAL RESULTS FOR THE MOST RECENT TWELVE
CALENDAR MONTH PERIOD PRIOR TO THE RESTATEMENT EFFECTIVE DATE FOR WHICH
FINANCIAL STATEMENTS ARE AVAILABLE; AND

 

(N)                                 OTHER DOCUMENTS.  SUCH OTHER APPROVALS,
OPINIONS, DOCUMENTS OR MATERIALS AS THE AGENT MAY REASONABLY REQUEST.

 

2.2                                 CONDITIONS TO ALL BORROWINGS.  THE
OBLIGATION OF EACH LENDER TO MAKE ANY LOAN AND OF THE AGENT TO ISSUE ANY LENDER
LETTER OF CREDIT OR LETTER OF CREDIT PARTICIPATION AGREEMENT, OR TO CONTINUE A
LOAN AS, OR CONVERT ANY LOAN TO, A LIBOR RATE LOAN, IS SUBJECT TO THE
SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT ON THE RELEVANT BORROWING
DATE, CONTINUATION DATE OR CONVERSION DATE:

 

(A)                                  NOTICE OF BORROWING OR
CONTINUATION/CONVERSION.  THE AGENT SHALL HAVE RECEIVED (WITH, IN THE CASE OF
THE LOANS TO BE MADE ON THE RESTATEMENT EFFECTIVE DATE ONLY, A COPY FOR EACH
LENDER) A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION, AS
APPLICABLE, IN ACCORDANCE WITH SECTION 1.5 OR SECTION 1.6;

 

(B)                                 REPRESENTATIONS AND WARRANTIES.  THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT THAT ARE MADE BY THE
BORROWER AND THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THE OTHER LOAN
DOCUMENTS AND IN THE RELATED AGREEMENTS THAT ARE MADE BY THE BORROWER AND EACH
OF ITS SUBSIDIARIES PARTY THERETO SHALL BE TRUE AND CORRECT IN ALL MATERIAL
RESPECTS ON AND AS OF SUCH BORROWING DATE, CONTINUATION DATE OR CONVERSION DATE
WITH THE SAME EFFECT AS IF MADE ON AND AS OF SUCH BORROWING DATE, CONTINUATION
DATE OR CONVERSION DATE (EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND
WARRANTIES (I) EXPRESSLY REFER TO AN EARLIER DATE, IN WHICH CASE THEY SHALL BE
TRUE AND CORRECT AS OF SUCH EARLIER DATE, (II) ARE NOT TRUE AND CORRECT DUE TO
EVENTS OR CONDITIONS, THE OCCURRENCE OR EXISTENCE OF WHICH ARE NOT PROHIBITED BY
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS AND WHICH DO NOT, IN AND OF
THEMSELVES, CONSTITUTE A DEFAULT OR AN EVENT OF DEFAULT, OR (III) ARE NOT TRUE
AND CORRECT AS A RESULT OF DISCLOSURES MADE IN WRITING TO, AND APPROVED BY, THE
AGENT AND LENDERS IN CONNECTION WITH PERMITTED ACQUISITIONS);

 

(C)                                  NO EXISTING DEFAULT.  NO DEFAULT OR EVENT
OF DEFAULT SHALL EXIST OR SHALL RESULT FROM SUCH BORROWING OR CONTINUATION OR
CONVERSION; AND

 

(D)                                 PERMITTED ACQUISITIONS.  TO THE EXTENT THE
PROCEEDS OF ANY LOAN ARE USED TO FINANCE A PERMITTED ACQUISITION, BORROWER SHALL
HAVE COMPLIED WITH THE CONDITIONS INCLUDED IN SECTION 2.3 AND THE DEFINITION OF
“PERMITTED ACQUISITION” CONTAINED IN SECTION 11.1 HEREOF ON OR PRIOR TO THE
DISBURSEMENT OF SUCH LOAN.

 

Each Notice of Borrowing and Notice of Continuation/Conversion submitted by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the date of each such notice or application and as of
the date of each Borrowing or continuation or conversion, as applicable, that
the conditions in Section 2.2 are satisfied.

 

2.3                                 CONDITIONS TO CERTAIN LOANS AND
ACQUISITIONS.  THE CONSUMMATION OF ANY PERMITTED ACQUISITION BY ANY SUBSIDIARIES
OF THE BORROWER AND, IN THE EVENT THE PROCEEDS OF THE REVOLVING LOAN ARE TO BE
USED TO FINANCE ALL OR A PORTION OF THE PURCHASE PRICE OF A PERMITTED
ACQUISITION, THE OBLIGATIONS OF EACH LENDER TO MAKE SUCH LOAN, IN EACH CASE
SHALL BE SUBJECT TO THE SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT ON
THE RELEVANT BORROWING DATE:

 

18

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

 

(A)                                  EVIDENCE OF PERFECTED FIRST PRIORITY
SECURITY INTEREST.  WITH RESPECT TO THE TARGET ACQUIRED, AND PRIOR TO OR
SIMULTANEOUSLY WITH THE CONSUMMATION OF SUCH ACQUISITION AND THE FUNDING OF SUCH
LOAN, THE AGENT SHALL HAVE BEEN GRANTED, FOR THE BENEFIT OF AGENT AND THE
LENDERS, A FIRST PRIORITY LIEN ON AND SECURITY INTEREST IN SUCH TARGET THEREOF,
SUBJECT ONLY TO PERMITTED LIENS, AND SHALL HAVE RECEIVED, WITHOUT LIMITATION,
(I) THE ITEMS DESCRIBED IN SUBSECTION 2.1(D)(II) AND SECTION 4.12, AND (II) DULY
EXECUTED UNIFORM COMMERCIAL CODE FINANCING STATEMENTS OR AMENDMENTS TO EXISTING
FINANCING STATEMENTS WITH RESPECT TO SUCH TARGET, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE AGENT AND WHICH, UPON FILING, SHALL PERFECT THE
SECURITY INTEREST OF THE AGENT, FOR THE BENEFIT OF AGENT AND THE LENDERS, IN
SUCH PROPERTY TO THE EXTENT SUCH SECURITY INTEREST CAN BE PERFECTED BY FILING
SUCH FINANCING STATEMENTS.  IN THE EVENT REAL PROPERTY IS BEING ACQUIRED IN
CONNECTION WITH SUCH ACQUISITION, PRIOR TO OR SIMULTANEOUSLY WITH THE FUNDING OF
SUCH LOAN, THE AGENT SHALL HAVE RECEIVED (X) TO THE EXTENT NOT ENCUMBERED WITH A
LIEN PERMITTED UNDER SUBSECTION 5.1(H), A FULLY EXECUTED MORTGAGE, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT TOGETHER WITH AN A.L.T.A.
LENDER’S TITLE INSURANCE POLICY ISSUED BY A TITLE INSURER REASONABLY
SATISFACTORY TO THE AGENT, IN FORM AND SUBSTANCE AND IN AN AMOUNT REASONABLY
SATISFACTORY TO THE AGENT INSURING THAT THE MORTGAGE IS A VALID AND ENFORCEABLE
FIRST PRIORITY LIEN ON THE RESPECTIVE PROPERTY, FREE AND CLEAR OF ALL DEFECTS,
ENCUMBRANCES AND LIENS OTHER THAN PERMITTED LIENS, (Y) TO THE EXTENT NOT
ENCUMBERED WITH A LIEN PERMITTED UNDER SUBSECTION 5.1(H), THEN CURRENT A.L.T.A.
SURVEYS, CERTIFIED TO THE AGENT BY A LICENSED SURVEYOR SUFFICIENT TO ALLOW THE
ISSUER OF THE LENDER’S TITLE INSURANCE POLICY TO ISSUE SUCH POLICY WITHOUT A
SURVEY EXCEPTION AND (Z) AN ENVIRONMENTAL SITE ASSESSMENT PREPARED BY A
QUALIFIED FIRM REASONABLY ACCEPTABLE TO THE AGENT AND THE REQUIRED LENDERS, IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE AGENT AND THE REQUIRED
LENDERS.

 

(B)                                 APPROVAL.  SUCH ACQUISITION IS A PERMITTED
ACQUISITION.

 

2.4                                 CONDITIONS TO CAPEX LOAN BORROWINGS.  THE
OBLIGATION OF EACH LENDER TO MAKE A CAPEX LOAN IS SUBJECT TO THE SATISFACTION OF
EACH OF THE FOLLOWING CONDITIONS PRECEDENT:

 

(A)                                  GENERAL.  THE CAPITAL EXPENDITURE FOR WHICH
THE PROCEEDS OF SUCH CAPEX LOAN WILL BE USED SHALL BE MADE TO EXPAND THE CURRENT
OPERATIONS OF THE BORROWER AND ITS SUBSIDIARIES IN COMPLIANCE WITH THE
PROVISIONS OF SECTION 5.12; PROVIDED, THAT PROCEEDS OF CAPEX LOANS SHALL NOT BE
USED TO PURCHASE ACCOUNTS OR INVENTORY.  THE BORROWER MAY REQUEST AND, SUBJECT
TO COMPLIANCE WITH THE PROVISIONS OF THIS SECTION 2.4 AND OF SECTION 2.2, THE
LENDERS SHALL MAKE, CAPEX LOANS IN ADVANCE OF THE BORROWER MAKING THE APPLICABLE
CAPITAL EXPENDITURE FOR WHICH THE PROCEEDS OF SUCH CAPEX LOAN SHALL BE USED.

 

(B)                                 EVIDENCE OF PERFECTED FIRST PRIORITY
SECURITY INTEREST.  PRIOR TO OR SIMULTANEOUSLY WITH THE MAKING OF ANY CAPITAL
EXPENDITURE AND THE FUNDING OF SUCH CAPEX LOAN, THE AGENT SHALL HAVE BEEN
GRANTED, FOR THE BENEFIT OF AGENT AND THE LENDERS, A FIRST PRIORITY LIEN ON AND
SECURITY INTEREST IN ANY PROPERTY ACQUIRED IN CONNECTION THEREWITH, SUBJECT ONLY
TO PERMITTED LIENS, AND SHALL HAVE RECEIVED, WITHOUT LIMITATION, (I) THE ITEMS
DESCRIBED IN SUBSECTION 2.1(D)(II) AND SECTION 4.12, AND (II) DULY EXECUTED
UNIFORM COMMERCIAL CODE FINANCING STATEMENTS OR AMENDMENTS TO EXISTING FINANCING
STATEMENTS WITH RESPECT TO ANY SUCH PROPERTY, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE AGENT AND WHICH, UPON FILING, SHALL PERFECT THE SECURITY
INTEREST OF THE AGENT, FOR THE BENEFIT OF AGENT AND THE LENDERS, IN SUCH
PROPERTY TO THE EXTENT SUCH SECURITY INTEREST CAN BE PERFECTED BY FILING SUCH
FINANCING STATEMENTS.  IN THE EVENT REAL

 

19

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

 

PROPERTY IS BEING ACQUIRED IN CONNECTION WITH THE MAKING OF SUCH CAPITAL
EXPENDITURE, PRIOR TO OR SIMULTANEOUSLY WITH THE FUNDING OF SUCH LOAN, THE AGENT
SHALL HAVE RECEIVED (X) TO THE EXTENT NOT ENCUMBERED WITH A LIEN PERMITTED UNDER
SUBSECTION 5.1(H), A FULLY EXECUTED MORTGAGE, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE AGENT TOGETHER WITH AN A.L.T.A. LENDER’S TITLE INSURANCE
POLICY ISSUED BY A TITLE INSURER REASONABLY SATISFACTORY TO THE AGENT, IN FORM
AND SUBSTANCE AND IN AN AMOUNT REASONABLY SATISFACTORY TO THE AGENT INSURING
THAT THE MORTGAGE IS A VALID AND ENFORCEABLE FIRST PRIORITY LIEN ON THE
RESPECTIVE PROPERTY, FREE AND CLEAR OF ALL DEFECTS, ENCUMBRANCES AND LIENS OTHER
THAN PERMITTED LIENS, (Y) TO THE EXTENT NOT ENCUMBERED WITH A LIEN PERMITTED
UNDER SUBSECTION 5.1(H), THEN CURRENT A.L.T.A. SURVEYS, CERTIFIED TO THE AGENT
BY A LICENSED SURVEYOR SUFFICIENT TO ALLOW THE ISSUER OF THE LENDER’S TITLE
INSURANCE POLICY TO ISSUE SUCH POLICY WITHOUT A SURVEY EXCEPTION AND (Z) AN
ENVIRONMENTAL SITE ASSESSMENT PREPARED BY A QUALIFIED FIRM REASONABLY ACCEPTABLE
TO THE AGENT AND THE REQUIRED LENDERS, IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE AGENT AND THE REQUIRED LENDERS; PROVIDED, HOWEVER, THAT WITH
RESPECT TO ANY SUCH ACQUISITION OF REAL PROPERTY LOCATED IN MERCER COUNTY,
PENNSYLVANIA OCCURRING ON OR PRIOR TO OCTOBER 7, 2005, THE FOREGOING DELIVERIES
SHALL BE MADE NO LATER THAN TEN (10) BUSINESS DAYS FOLLOWING THE DATE(S) OF
ACQUISITION OF SUCH REAL PROPERTY.

 

ARTICLE III - REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Agent and each Lender that the
following are, and after giving effect to the Related Transactions will be,
true, correct and complete:

 

3.1                                 CORPORATE EXISTENCE AND POWER.  THE BORROWER
AND EACH OF ITS SUBSIDIARIES:

 

(A)                                  IS A CORPORATION, LIMITED LIABILITY COMPANY
OR LIMITED PARTNERSHIP, AS APPLICABLE, DULY ORGANIZED, VALIDLY EXISTING AND IN
GOOD STANDING UNDER THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR
FORMATION, AS APPLICABLE;

 

(B)                                 HAS THE POWER AND AUTHORITY AND ALL
GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO OWN ITS ASSETS,
CARRY ON ITS BUSINESS AND EXECUTE, DELIVER, AND PERFORM ITS OBLIGATIONS UNDER,
THE LOAN DOCUMENTS AND THE RELATED AGREEMENTS TO WHICH IT IS A PARTY;

 

(C)                                  IS DULY QUALIFIED AS A FOREIGN CORPORATION,
LIMITED LIABILITY COMPANY OR LIMITED PARTNERSHIP, AS APPLICABLE, AND LICENSED
AND IN GOOD STANDING, UNDER THE LAWS OF EACH JURISDICTION WHERE ITS OWNERSHIP,
LEASE OR OPERATION OF PROPERTY OR THE CONDUCT OF ITS BUSINESS REQUIRES SUCH
QUALIFICATION OR LICENSE; AND

 

(D)                                 IS IN COMPLIANCE WITH ALL REQUIREMENTS OF
LAW;

 

except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so would not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

 

20

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

 

3.2                                 CORPORATE AUTHORIZATION; NO CONTRAVENTION.

 

(A)                                  THE EXECUTION, DELIVERY AND PERFORMANCE BY
THE BORROWER OF THIS AGREEMENT, AND THE BORROWER AND ITS SUBSIDIARIES OF ANY
OTHER LOAN DOCUMENT AND RELATED AGREEMENT TO WHICH ANY OF SUCH PERSONS IS PARTY,
HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY ACTION, AND DO NOT AND WILL NOT:

 

(I)                                     CONTRAVENE THE TERMS OF ANY OF SUCH
PERSON’S ORGANIZATION DOCUMENTS;

 

(II)                                  CONFLICT WITH OR RESULT IN ANY MATERIAL
BREACH OR CONTRAVENTION OF, OR RESULT IN THE CREATION OF ANY LIEN UNDER, ANY
DOCUMENT EVIDENCING ANY MATERIAL CONTRACTUAL OBLIGATION TO WHICH SUCH PERSON IS
A PARTY OR ANY ORDER, INJUNCTION, WRIT OR DECREE OF ANY GOVERNMENTAL AUTHORITY
TO WHICH SUCH PERSON OR ITS PROPERTY IS SUBJECT; OR

 

(III)                               VIOLATE ANY MATERIAL REQUIREMENT OF LAW IN
ANY MATERIAL RESPECT.

 

(B)                                 SCHEDULE 3.2 SETS FORTH THE AUTHORIZED
EQUITY SECURITIES OF THE BORROWER AND EACH OF ITS SUBSIDIARIES.  ALL ISSUED AND
OUTSTANDING EQUITY SECURITIES OF THE BORROWER AND EACH OF ITS SUBSIDIARIES ARE
DULY AUTHORIZED AND VALIDLY ISSUED, FULLY PAID, NON-ASSESSABLE, AND FREE AND
CLEAR OF ALL LIENS OTHER THAN, WITH RESPECT TO THE EQUITY SECURITIES OF THE
BORROWER’S SUBSIDIARIES, THOSE IN FAVOR OF THE AGENT, FOR THE BENEFIT OF THE
AGENT AND LENDERS, AND SUCH SECURITIES WERE ISSUED IN COMPLIANCE WITH ALL
APPLICABLE STATE AND FEDERAL LAWS CONCERNING THE ISSUANCE OF SECURITIES.  ALL OF
THE ISSUED AND OUTSTANDING EQUITY SECURITIES OF WOODCRAFT ARE OWNED BY THE
BORROWER.  ALL OF THE ISSUED AND OUTSTANDING EQUITY SECURITIES OF PRIMEWOOD,
BRENTWOOD AND GRAND VALLEY ACQUISITION SUB ARE OWNED BY WOODCRAFT.  ALL OF THE
ISSUED AND OUTSTANDING EQUITY SECURITIES OF BORROWER ARE OWNED BY THE PERSONS
AND IN THE AMOUNTS SET FORTH ON SCHEDULE 3.2.  EXCEPT AS SET FORTH ON
SCHEDULE 3.2, THERE ARE NO PRE-EMPTIVE OR OTHER OUTSTANDING RIGHTS, OPTIONS,
WARRANTS, CONVERSION RIGHTS OR OTHER SIMILAR AGREEMENTS OR UNDERSTANDINGS FOR
THE PURCHASE OR ACQUISITION OF ANY SHARES OF CAPITAL STOCK OR OTHER SECURITIES
OF ANY SUCH ENTITY.

 

3.3                                 GOVERNMENTAL AUTHORIZATION.  NO APPROVAL,
CONSENT, EXEMPTION, AUTHORIZATION, OR OTHER ACTION BY, OR NOTICE TO, OR FILING
WITH, ANY GOVERNMENTAL AUTHORITY IS NECESSARY OR REQUIRED IN CONNECTION WITH THE
EXECUTION, DELIVERY OR PERFORMANCE BY, OR ENFORCEMENT AGAINST, THE BORROWER OR
ANY OF ITS SUBSIDIARIES OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
RELATED AGREEMENT EXCEPT (A) FOR RECORDINGS AND FILINGS IN CONNECTION WITH THE
LIENS GRANTED TO THE AGENT UNDER THE COLLATERAL DOCUMENTS, (B) THOSE OBTAINED OR
MADE ON OR PRIOR TO THE RESTATEMENT EFFECTIVE DATE AND (C) IN THE CASE OF ANY
RELATED AGREEMENT, THOSE WHICH, IF NOT OBTAINED OR MADE, WOULD NOT REASONABLY BE
EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE
EFFECT.

 

3.4                                 BINDING EFFECT.  THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT AND RELATED AGREEMENT TO WHICH THE BORROWER OR ANY OF ITS
SUBSIDIARIES IS A PARTY CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATIONS OF
THE BORROWER AND EACH SUCH SUBSIDIARY, ENFORCEABLE AGAINST SUCH PERSON IN
ACCORDANCE WITH THEIR RESPECTIVE TERMS, EXCEPT AS ENFORCEABILITY MAY BE LIMITED
BY APPLICABLE BANKRUPTCY, INSOLVENCY, OR SIMILAR LAWS AFFECTING THE ENFORCEMENT
OF CREDITORS’ RIGHTS GENERALLY OR BY EQUITABLE PRINCIPLES RELATING TO
ENFORCEABILITY.

 

21

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

 

3.5                                 LITIGATION.  EXCEPT AS SPECIFICALLY
DISCLOSED IN SCHEDULE 3.5, THERE ARE NO ACTIONS, SUITS, PROCEEDINGS, CLAIMS OR
DISPUTES PENDING, OR TO THE BEST KNOWLEDGE OF THE BORROWER, THREATENED OR
CONTEMPLATED, AT LAW, IN EQUITY, IN ARBITRATION OR BEFORE ANY GOVERNMENTAL
AUTHORITY, AGAINST THE BORROWER, ANY OF ITS SUBSIDIARIES OR ANY OF THEIR
RESPECTIVE PROPERTY WHICH:

 

(A)                                  PURPORT TO AFFECT OR PERTAIN TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY RELATED AGREEMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY; OR

 

(B)                                 IF DETERMINED ADVERSELY TO THE BORROWER OR
ANY OF ITS SUBSIDIARIES, COULD REASONABLY BE EXPECTED TO RESULT IN EQUITABLE
RELIEF OR MONETARY JUDGMENT(S), INDIVIDUALLY OR IN THE AGGREGATE, IN EXCESS OF
$1,500,000.

 

No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

 

3.6                                 NO DEFAULT.  NO DEFAULT OR EVENT OF DEFAULT
EXISTS OR WOULD RESULT FROM THE INCURRING OF ANY OBLIGATIONS BY THE BORROWER OR
THE GRANT OR PERFECTION OF THE AGENT’S LIENS ON THE COLLATERAL OR THE
CONSUMMATION OF THE RELATED TRANSACTIONS.  NEITHER THE BORROWER NOR ANY OF ITS
SUBSIDIARIES IS IN DEFAULT UNDER OR WITH RESPECT TO ANY CONTRACTUAL OBLIGATION
IN ANY RESPECT WHICH, INDIVIDUALLY OR TOGETHER WITH ALL SUCH DEFAULTS, WOULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR THAT WOULD, IF SUCH
DEFAULT HAD OCCURRED AFTER THE RESTATEMENT EFFECTIVE DATE, CREATE AN EVENT OF
DEFAULT UNDER SUBSECTION 7.1(E).

 

3.7                                 ERISA COMPLIANCE.

 

(A)                                  SCHEDULE 3.7 LISTS ALL QUALIFIED PLANS AND
MULTIEMPLOYER PLANS.  THE BORROWER AND EACH OF ITS SUBSIDIARIES IS IN COMPLIANCE
IN ALL MATERIAL RESPECTS WITH ALL REQUIREMENTS OF EACH PLAN, AND EACH PLAN
COMPLIES IN ALL MATERIAL RESPECTS, AND IS OPERATED IN COMPLIANCE IN ALL MATERIAL
RESPECTS, WITH ALL APPLICABLE PROVISIONS OF LAW.  THE BORROWER IS NOT AWARE,
AFTER DUE INQUIRY, OF ANY ITEM OF NON-COMPLIANCE WHICH COULD REASONABLY BE
EXPECTED TO RESULT IN THE LOSS OF PLAN QUALIFICATION OR TAX-EXEMPT STATUS, OR
GIVE RISE TO A MATERIAL EXCISE TAX OR OTHER PENALTY IMPOSED BY A GOVERNMENTAL
AUTHORITY.  NO MATERIAL PROCEEDING, CLAIM, LAWSUIT AND/OR INVESTIGATION IS
PENDING CONCERNING ANY PLAN.  ALL REQUIRED CONTRIBUTIONS HAVE BEEN AND WILL BE
MADE IN ACCORDANCE WITH THE PROVISIONS OF EACH QUALIFIED PLAN AND MULTIEMPLOYER
PLAN, AND WITH RESPECT TO THE BORROWER OR ANY ERISA AFFILIATE, THERE ARE, HAVE
BEEN AND WILL BE NO MATERIAL UNFUNDED PENSION LIABILITIES OR WITHDRAWAL
LIABILITIES.

 

(B)                                 NO ERISA EVENT HAS OCCURRED OR IS EXPECTED
TO OCCUR WITH RESPECT TO ANY QUALIFIED PLAN, MULTIEMPLOYER PLAN OR PLAN.

 

(C)                                  MEMBERS OF THE CONTROLLED GROUP CURRENTLY
COMPLY AND HAVE COMPLIED IN ALL MATERIAL RESPECTS WITH THE NOTICE AND
CONTINUATION COVERAGE REQUIREMENTS OF SECTION 4980B OF THE CODE.

 

22

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

 

3.8                                 USE OF PROCEEDS; MARGIN REGULATIONS.  THE
PROCEEDS OF THE LOANS ARE INTENDED TO BE AND SHALL BE USED SOLELY FOR THE
PURPOSES SET FORTH IN AND PERMITTED BY SECTION 4.10, AND ARE INTENDED TO BE AND
SHALL BE USED IN COMPLIANCE WITH SECTION 5.8.  NEITHER THE BORROWER NOR ANY OF
ITS SUBSIDIARIES IS GENERALLY ENGAGED IN THE BUSINESS OF PURCHASING OR SELLING
MARGIN STOCK OR EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR CARRYING
MARGIN STOCK.  PROCEEDS OF THE LOANS SHALL NOT BE USED FOR THE PURPOSE OF
PURCHASING OR CARRYING MARGIN STOCK.

 

3.9                                 TITLE TO PROPERTY.  THE BORROWER AND EACH OF
ITS SUBSIDIARIES HAVE GOOD RECORD AND MARKETABLE TITLE IN FEE SIMPLE TO, OR
VALID LEASEHOLD INTERESTS IN, ALL REAL PROPERTY NECESSARY OR USED IN THE
ORDINARY CONDUCT OF THEIR RESPECTIVE BUSINESSES, EXCEPT FOR PERMITTED LIENS. 
NONE OF THE PROPERTY OF THE BORROWER OR ANY OF ITS SUBSIDIARIES IS SUBJECT TO
ANY LIENS, OTHER THAN PERMITTED LIENS.

 

3.10                           TAXES.  THE BORROWER AND ITS SUBSIDIARIES HAVE
FILED ALL FEDERAL AND OTHER MATERIAL TAX RETURNS AND REPORTS REQUIRED TO BE
FILED, AND HAVE PAID ALL FEDERAL AND OTHER MATERIAL TAXES, ASSESSMENTS, FEES AND
OTHER GOVERNMENTAL CHARGES LEVIED OR IMPOSED UPON THEM OR THEIR PROPERTY, INCOME
OR ASSETS OTHERWISE DUE AND PAYABLE, EXCEPT THOSE WHICH ARE BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY PROSECUTED AND FOR WHICH
ADEQUATE RESERVES HAVE BEEN PROVIDED IN ACCORDANCE WITH GAAP AND NO NOTICE OF
LIEN HAS BEEN FILED OR RECORDED. THERE IS NO PROPOSED TAX ASSESSMENT AGAINST THE
BORROWER OR ANY OF ITS SUBSIDIARIES WHICH WOULD, IF THE ASSESSMENT WERE MADE,
EITHER INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL ADVERSE EFFECT.

 

3.11                           FINANCIAL CONDITION.

 

(A)                                  EACH OF (I) THE AUDITED CONSOLIDATED
BALANCE SHEET OF THE BORROWER AND ITS SUBSIDIARIES FOR ITS 2004 FISCAL YEAR, AND
THE RELATED AUDITED CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS,
SHAREHOLDERS’ EQUITY AND CASH FLOWS FOR THE FISCAL YEAR ENDED ON THAT DATE AND
(II) THE UNAUDITED INTERIM CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS
SUBSIDIARIES DATED JUNE 30, 2005 AND THE RELATED UNAUDITED CONSOLIDATED
STATEMENTS OF INCOME, SHAREHOLDERS’ EQUITY AND CASH FLOWS FOR THE SIX (6) MONTHS
THEN ENDED:

 

(x)                                   were prepared in accordance with GAAP
consistently applied throughout the respective periods covered thereby, except
as otherwise expressly noted therein, subject to, in the case of the unaudited
interim financial statements, normal year-end adjustments and the lack of
footnote disclosures; and

 

(y)                                 present fairly in all material respects the
consolidated financial condition of Borrower and its Subsidiaries as of the
dates thereof and results of operations for the periods covered thereby.

 

(B)                                 SINCE DECEMBER 31, 2004, THERE HAS BEEN NO
MATERIAL ADVERSE EFFECT.

 

(C)                                  BORROWER AND ITS SUBSIDIARIES HAVE NO
INDEBTEDNESS OTHER THAN INDEBTEDNESS PERMITTED PURSUANT TO SECTION 5.5 AND HAVE
NO CONTINGENT OBLIGATIONS OTHER THAN CONTINGENT OBLIGATIONS PERMITTED PURSUANT
TO SECTION 5.9.

 

23

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

 

3.12                           ENVIRONMENTAL MATTERS.

 

(A)                                  THE ONGOING OPERATIONS OF THE BORROWER AND
EACH OF ITS SUBSIDIARIES COMPLY IN ALL RESPECTS WITH ALL ENVIRONMENTAL LAWS,
EXCEPT THOSE FOR WHICH NON-COMPLIANCE WHICH WOULD NOT (IF ENFORCED IN ACCORDANCE
WITH APPLICABLE LAW) REASONABLY BE EXPECTED TO RESULT IN, EITHER INDIVIDUALLY OR
IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

(B)                                 THE BORROWER AND EACH OF ITS SUBSIDIARIES
HAVE OBTAINED ALL LICENSES, PERMITS, AUTHORIZATIONS AND REGISTRATIONS REQUIRED
UNDER ANY ENVIRONMENTAL LAW (“ENVIRONMENTAL PERMITS”) AND NECESSARY FOR THEIR
RESPECTIVE ORDINARY COURSE OF BUSINESS, ALL SUCH ENVIRONMENTAL PERMITS ARE IN
GOOD STANDING, AND THE BORROWER AND EACH OF ITS SUBSIDIARIES ARE IN COMPLIANCE
WITH ALL MATERIAL TERMS AND CONDITIONS OF SUCH ENVIRONMENTAL PERMITS, EXCEPT
WHERE THE FAILURE TO OBTAIN, TO MAINTAIN IN GOOD STANDING, OR TO BE IN
COMPLIANCE WITH SUCH ENVIRONMENTAL PERMITS WOULD NOT REASONABLY BE EXPECTED TO
RESULT IN MATERIAL LIABILITY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES AND
COULD NOT REASONABLY BE EXPECTED TO RESULT IN, EITHER INDIVIDUALLY OR IN THE
AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

(C)                                  NONE OF THE BORROWER, ANY OF ITS
SUBSIDIARIES OR ANY OF THEIR RESPECTIVE PRESENT PROPERTY OR OPERATIONS, IS
SUBJECT TO ANY OUTSTANDING WRITTEN ORDER FROM OR AGREEMENT WITH ANY GOVERNMENTAL
AUTHORITY, NOR SUBJECT TO ANY JUDICIAL OR DOCKETED ADMINISTRATIVE PROCEEDING,
RESPECTING ANY ENVIRONMENTAL LAW, ENVIRONMENTAL CLAIM OR HAZARDOUS MATERIAL.

 

(D)                                 THERE ARE NO HAZARDOUS MATERIALS OR OTHER
CONDITIONS OR CIRCUMSTANCES EXISTING WITH RESPECT TO ANY PROPERTY, OR ARISING
FROM OPERATIONS PRIOR TO THE RESTATEMENT EFFECTIVE DATE, OF THE BORROWER OR ANY
OF ITS SUBSIDIARIES THAT WOULD REASONABLY BE EXPECTED TO RESULT, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, IN A MATERIAL ADVERSE EFFECT.  IN ADDITION,
NEITHER THE BORROWER NOR ANY OF ITS SUBSIDIARIES HAS ANY UNDERGROUND STORAGE
TANKS (I) THAT ARE NOT PROPERLY REGISTERED OR PERMITTED UNDER APPLICABLE
ENVIRONMENTAL LAWS, OR (II) THAT ARE LEAKING OR DISPOSING OF HAZARDOUS
MATERIALS.

 

3.13                           LOAN DOCUMENTS.  ALL REPRESENTATIONS AND
WARRANTIES OF THE BORROWER, ITS SUBSIDIARIES AND ANY OTHER PARTY TO ANY LOAN
DOCUMENT (OTHER THAN THE AGENT AND/OR ANY LENDER) CONTAINED IN THE LOAN
DOCUMENTS ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS.

 

3.14                           REGULATED ENTITIES.  NONE OF THE BORROWER, ANY
PERSON CONTROLLING THE BORROWER, OR ANY SUBSIDIARY OF THE BORROWER, IS (A) AN
“INVESTMENT COMPANY” WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT OF 1940;
OR (B) SUBJECT TO REGULATION UNDER THE PUBLIC UTILITY HOLDING COMPANY ACT OF
1935, THE FEDERAL POWER ACT, THE INTERSTATE COMMERCE ACT, ANY STATE PUBLIC
UTILITIES CODE, OR ANY OTHER FEDERAL OR STATE STATUTE OR REGULATION LIMITING ITS
ABILITY TO INCUR INDEBTEDNESS.

 

3.15                           SOLVENCY.  THE BORROWER AND EACH OF ITS
SUBSIDIARIES, INDIVIDUALLY, IS, AND THE BORROWER AND EACH OF ITS SUBSIDIARIES,
ON A CONSOLIDATED BASIS, ARE, SOLVENT.

 

3.16                           LABOR RELATIONS.  THERE ARE NO STRIKES, LOCKOUTS
OR OTHER LABOR DISPUTES AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR, TO
THE BEST OF THE BORROWER’S KNOWLEDGE, THREATENED AGAINST OR AFFECTING THE
BORROWER OR ANY OF ITS SUBSIDIARIES, IN ANY CASE WHICH WOULD REASONABLY BE
EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE
EFFECT AND NO

 

24

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

 

SIGNIFICANT UNFAIR LABOR PRACTICE COMPLAINT IS PENDING AGAINST THE BORROWER OR
ANY OF ITS SUBSIDIARIES OR, TO THE BEST KNOWLEDGE OF THE BORROWER, THREATENED
AGAINST ANY OF THEM BEFORE ANY GOVERNMENTAL AUTHORITY IN ANY CASE WHICH WOULD
REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT.

 

3.17                           COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES,
ETC.  SCHEDULE 3.17 IDENTIFIES ALL UNITED STATES AND FOREIGN PATENTS,
TRADEMARKS, MATERIAL SERVICE MARKS, MATERIAL TRADE NAMES AND REGISTERED
COPYRIGHTS, AND ALL REGISTRATIONS AND APPLICATIONS FOR REGISTRATION THEREOF AND
ALL LICENSES THEREOF, OWNED OR HELD BY THE BORROWER AND ITS SUBSIDIARIES ON THE
RESTATEMENT EFFECTIVE DATE AFTER GIVING EFFECT TO THE RELATED TRANSACTIONS, AND
IDENTIFIES THE JURISDICTIONS IN WHICH SUCH REGISTRATIONS AND APPLICATIONS HAVE
BEEN FILED.  EXCEPT AS OTHERWISE DISCLOSED IN SCHEDULE 3.17, AS OF THE
RESTATEMENT EFFECTIVE DATE, THE BORROWER AND ITS SUBSIDIARIES ARE THE SOLE
BENEFICIAL OWNERS OF, OR HAVE THE RIGHT TO USE, FREE FROM ANY RESTRICTIONS,
CLAIMS, RIGHTS ENCUMBRANCES OR BURDENS, ALL INTELLECTUAL PROPERTY, INCLUDING THE
INTELLECTUAL PROPERTY IDENTIFIED ON SCHEDULE 3.17, AND ALL OTHER PROCESSES,
DESIGNS, FORMULAS, COMPUTER PROGRAMS, COMPUTER SOFTWARE PACKAGES, TRADE SECRETS,
INVENTIONS, PRODUCT MANUFACTURING INSTRUCTIONS, TECHNOLOGY, RESEARCH AND
DEVELOPMENT, KNOW-HOW AND ALL OTHER INTELLECTUAL PROPERTY THAT ARE NECESSARY FOR
THE OPERATION OF THE BORROWER’S AND ITS SUBSIDIARIES’ BUSINESSES AS BEING
OPERATED ON THE RESTATEMENT EFFECTIVE DATE AFTER GIVING EFFECT TO THE RELATED
TRANSACTIONS.  EACH PATENT, TRADEMARK, SERVICE MARK, TRADE NAME, COPYRIGHT AND
LICENSE LISTED ON SCHEDULE 3.17 IS IN FULL FORCE AND EFFECT EXCEPT TO THE EXTENT
THE FAILURE TO BE IN EFFECT WILL NOT AND WOULD NOT REASONABLY BE EXPECTED TO
HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT. 
EXCEPT AS SET FORTH IN SCHEDULE 3.17, TO THE BEST KNOWLEDGE OF THE BORROWER, AS
OF THE RESTATEMENT EFFECTIVE DATE (A) NONE OF THE PRESENT OR CONTEMPLATED
PRODUCTS OR OPERATIONS OF THE BORROWER OR ITS SUBSIDIARIES INFRINGES ANY PATENT,
TRADEMARK, SERVICE MARK, TRADE NAME, COPYRIGHT, LICENSE OF INTELLECTUAL PROPERTY
OR OTHER RIGHT OWNED BY ANY OTHER PERSON, AND (B) THERE IS NO PENDING OR
THREATENED CLAIM OR LITIGATION AGAINST OR AFFECTING THE BORROWER OR ANY OF ITS
SUBSIDIARIES CONTESTING THE RIGHT OF ANY OF THEM TO MANUFACTURE, PROCESS, SELL
OR USE ANY SUCH PRODUCT OR TO ENGAGE IN ANY SUCH OPERATION EXCEPT FOR CLAIMS
AND/OR LITIGATION WHICH WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.  NONE OF THE TRADEMARK REGISTRATIONS SET FORTH ON SCHEDULE 3.17
IS AN “INTENT-TO-USE” REGISTRATION.

 

3.18                           SUBSIDIARIES.  THE BORROWER HAS NO SUBSIDIARIES
OR EQUITY INVESTMENTS IN ANY OTHER CORPORATION OR ENTITY OTHER THAN THOSE
SPECIFICALLY DISCLOSED IN SCHEDULE 3.2.

 

3.19                           BROKERS’ FEES; TRANSACTION FEES.  NEITHER THE
BORROWER NOR ANY OF ITS SUBSIDIARIES HAS ANY OBLIGATION TO ANY PERSON IN RESPECT
OF ANY FINDER’S, BROKER’S OR INVESTMENT BANKER’S FEE IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

3.20                           INSURANCE.  THE BORROWER AND EACH OF ITS
SUBSIDIARIES AND ITS PROPERTY ARE INSURED WITH FINANCIALLY SOUND AND REPUTABLE
INSURANCE COMPANIES WHICH ARE NOT AFFILIATES OF THE BORROWER, IN SUCH AMOUNTS,
WITH SUCH DEDUCTIBLES AND COVERING SUCH RISKS AS ARE CUSTOMARILY CARRIED BY
COMPANIES ENGAGED IN SIMILAR BUSINESSES AND OWNING SIMILAR PROPERTY IN
LOCALITIES WHERE THE BORROWER OR ITS SUBSIDIARIES OPERATE.  A TRUE AND COMPLETE
LISTING OF SUCH INSURANCE, INCLUDING ISSUERS, COVERAGES AND DEDUCTIBLES, HAS
BEEN PROVIDED TO THE AGENT.

 

25

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

 

3.21                           FULL DISCLOSURE.  NONE OF THE REPRESENTATIONS OR
WARRANTIES MADE BY THE BORROWER OR ANY OF ITS SUBSIDIARIES IN THE LOAN DOCUMENTS
AS OF THE DATE SUCH REPRESENTATIONS AND WARRANTIES ARE MADE OR DEEMED MADE, AND
NONE OF THE STATEMENTS CONTAINED IN EACH EXHIBIT, REPORT, STATEMENT OR
CERTIFICATE FURNISHED BY OR ON BEHALF OF THE BORROWER OR ANY OF ITS SUBSIDIARIES
IN CONNECTION WITH THE LOAN DOCUMENTS (INCLUDING THE OFFERING AND DISCLOSURE
MATERIALS, IF ANY, DELIVERED BY OR ON BEHALF OF THE BORROWER TO THE LENDERS
PRIOR TO THE RESTATEMENT EFFECTIVE DATE), CONTAINS ANY UNTRUE STATEMENT OF A
MATERIAL FACT OR OMITS ANY MATERIAL FACT REQUIRED TO BE STATED THEREIN OR
NECESSARY TO MAKE THE STATEMENTS MADE THEREIN, IN LIGHT OF THE CIRCUMSTANCES
UNDER WHICH THEY ARE MADE, NOT MISLEADING AS OF THE TIME WHEN MADE OR DELIVERED.

 

3.22                           REPRESENTATIONS AND WARRANTIES INCORPORATED FROM
RELATED AGREEMENTS.  EACH OF THE REPRESENTATIONS AND WARRANTIES MADE IN EACH OF
THE RELATED AGREEMENTS BY THE BORROWER AND ITS SUBSIDIARIES AND, TO THE
KNOWLEDGE OF THE BORROWER, BY EACH OF THE OTHER PARTIES THERETO WAS TRUE AND
CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE SUCH REPRESENTATIONS AND
WARRANTIES WERE MADE, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS OR
WARRANTIES RELATE TO A SPECIFIC DATE, IN WHICH CASE SUCH REPRESENTATIONS AND
WARRANTIES WERE TRUE AS OF SUCH EARLIER DATE, AND SUCH REPRESENTATIONS AND
WARRANTIES ARE HEREBY INCORPORATED HEREIN BY REFERENCE WITH THE SAME EFFECT AS
THOUGH SET FORTH IN THEIR ENTIRETY HEREIN, AS QUALIFIED THEREIN.

 

3.23                           ACTIVITIES OF BORROWER.  THE BORROWER WAS FORMED
FOR THE SOLE PURPOSE OF ACQUIRING AND HOLDING ALL OF THE OUTSTANDING EQUITY
SECURITIES OF WOODCRAFT AND, EXCEPT FOR THE FOREGOING, THE BORROWER HAS
CONDUCTED NO BUSINESS ACTIVITIES, ENTERED INTO NO TRANSACTIONS, INCURRED NO
LIABILITY AND TAKEN NO ACTIONS, DIRECTLY OR INDIRECTLY, THAT WOULD HAVE VIOLATED
SECTION 5.12 OF THIS AGREEMENT.

 

3.24                           HIGH YIELD UNSECURED DOCUMENTS.  THE OBLIGATIONS
ARE PERMITTED AND CONSTITUTE “SENIOR INDEBTEDNESS” UNDER THE TERMS OF THE HIGH
YIELD UNSECURED DOCUMENTS.  THE EXECUTION, DELIVERY AND PERFORMANCE BY THE
BORROWER OF THIS AGREEMENT, AND BY THE BORROWER AND ITS SUBSIDIARIES OF ANY
OTHER LOAN DOCUMENT AND RELATED AGREEMENT TO WHICH SUCH PERSON IS PARTY, DO NOT
AND WILL NOT CONFLICT WITH OR RESULT IN ANY MATERIAL BREACH OR CONTRAVENTION OF,
OR RESULT IN THE CREATION OF ANY LIEN OR DEFAULT OR EVENT OF DEFAULT UNDER, ANY
OF THE HIGH YIELD UNSECURED DOCUMENTS.  NONE OF THE HIGH YIELD UNSECURED
DOCUMENTS PROHIBITS OR OTHERWISE RESTRICTS IN ANY MANNER THE MAKING OF ANY
PAYMENTS HEREUNDER BY THE BORROWER OR ANY OF ITS SUBSIDIARIES.  THE HIGH YIELD
UNSECURED OFFERING WAS MADE IN COMPLIANCE WITH ALL REQUIREMENTS OF LAW,
INCLUDING, WITHOUT LIMITATION, THE TRUST INDENTURE ACT OF 1939 (15 U.S.C.
§§ 77AAA-77BBBB), AS AMENDED.

 

3.25                           FOREIGN ASSETS CONTROL REGULATIONS AND ANTI-MONEY
LAUNDERING.

 

(A)                                  OFAC.  NEITHER BORROWER NOR ANY SUBSIDIARY
OF BORROWER (I) IS A PERSON WHOSE PROPERTY OR INTEREST IN PROPERTY IS BLOCKED OR
SUBJECT TO BLOCKING PURSUANT TO SECTION 1 OF EXECUTIVE ORDER 13224 OF
SEPTEMBER 23, 2001 BLOCKING PROPERTY AND PROHIBITING TRANSACTIONS WITH PERSONS
WHO COMMIT, THREATEN TO COMMIT, OR SUPPORT TERRORISM (66 FED. REG. 49079
(2001)), (II) ENGAGES IN ANY DEALINGS OR TRANSACTIONS PROHIBITED BY SECTION 2 OF
SUCH EXECUTIVE ORDER, OR IS OTHERWISE ASSOCIATED WITH ANY SUCH PERSON IN ANY
MANNER VIOLATIVE OF SECTION 2, OR (III) IS A PERSON ON THE LIST OF SPECIALLY
DESIGNATED NATIONALS AND BLOCKED PERSONS OR SUBJECT TO

 

26

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

 

THE LIMITATIONS OR PROHIBITIONS UNDER ANY OTHER U.S. DEPARTMENT OF TREASURY’S
OFFICE OF FOREIGN ASSETS CONTROL REGULATION OR EXECUTIVE ORDER.

 

(B)                                 PATRIOT ACT.  BORROWER AND EACH OF ITS
SUBSIDIARIES ARE IN COMPLIANCE, IN ALL MATERIAL RESPECTS, WITH THE PATRIOT ACT. 
NO PART OF THE PROCEEDS OF THE LOANS WILL BE USED, DIRECTLY OR INDIRECTLY, FOR
ANY PAYMENTS TO ANY GOVERNMENTAL OFFICIAL OR EMPLOYEE, POLITICAL PARTY, OFFICIAL
OF A POLITICAL PARTY, CANDIDATE FOR POLITICAL OFFICE, OR ANYONE ELSE ACTING IN
AN OFFICIAL CAPACITY, IN ORDER TO OBTAIN, RETAIN OR DIRECT BUSINESS OR OBTAIN
ANY IMPROPER ADVANTAGE, IN VIOLATION OF THE UNITED STATES FOREIGN CORRUPT
PRACTICES ACT OF 1977, AS AMENDED.

 

ARTICLE IV - AFFIRMATIVE COVENANTS

 

The Borrower covenants and agrees that, so long as any Lender shall have any
Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:

 

4.1                                 FINANCIAL STATEMENTS.  THE BORROWER SHALL
MAINTAIN, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN, A SYSTEM OF
ACCOUNTING ESTABLISHED AND ADMINISTERED IN ACCORDANCE WITH SOUND BUSINESS
PRACTICES TO PERMIT THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH
GAAP (PROVIDED THAT QUARTERLY FINANCIAL STATEMENTS SHALL NOT BE REQUIRED TO HAVE
FOOTNOTE DISCLOSURE AND SHALL BE SUBJECT TO NORMAL YEAR-END ADJUSTMENTS).  THE
BORROWER SHALL DELIVER TO THE AGENT AND EACH LENDER IN FORM AND DETAIL
REASONABLY SATISFACTORY TO THE AGENT AND THE REQUIRED LENDERS:

 

(A)                                  AS SOON AS AVAILABLE, BUT NOT LATER THAN
NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR, A COPY OF THE AUDITED
CONSOLIDATED BALANCE SHEET OF BORROWER AND ITS SUBSIDIARIES AS AT THE END OF
SUCH YEAR AND THE RELATED CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS,
SHAREHOLDERS’ EQUITY AND CASH FLOWS FOR SUCH FISCAL YEAR, SETTING FORTH IN EACH
CASE IN COMPARATIVE FORM THE FIGURES FOR THE PREVIOUS FISCAL YEAR, AND
ACCOMPANIED BY THE UNQUALIFIED OPINION OF ANY “BIG FOUR” OR OTHER
NATIONALLY-RECOGNIZED INDEPENDENT PUBLIC ACCOUNTING FIRM REASONABLY ACCEPTABLE
TO THE AGENT WHICH REPORT SHALL STATE THAT SUCH CONSOLIDATED FINANCIAL
STATEMENTS PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE FINANCIAL POSITION FOR
THE PERIODS INDICATED IN CONFORMITY WITH GAAP APPLIED ON A BASIS CONSISTENT WITH
PRIOR YEARS;

 

(B)                                 AS SOON AS AVAILABLE, BUT NOT LATER THAN
FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER OF EACH YEAR, A COPY
OF THE UNAUDITED CONSOLIDATED AND CONSOLIDATING BALANCE SHEETS OF BORROWER AND
ITS SUBSIDIARIES, AND THE RELATED CONSOLIDATED AND CONSOLIDATING STATEMENTS OF
INCOME, SHAREHOLDERS’ EQUITY AND CASH FLOWS AS OF THE END OF SUCH QUARTER AND
FOR THE PORTION OF THE FISCAL YEAR THEN ENDED, ALL CERTIFIED ON BEHALF OF THE
BORROWER BY AN APPROPRIATE RESPONSIBLE OFFICER OF THE BORROWER AS BEING COMPLETE
AND CORRECT AND FAIRLY PRESENTING IN ALL MATERIAL RESPECTS, IN ACCORDANCE WITH
GAAP, THE FINANCIAL POSITION AND THE RESULTS OF OPERATIONS OF THE BORROWER AND
ITS SUBSIDIARIES, SUBJECT TO NORMAL YEAR-END ADJUSTMENTS AND ABSENCE OF FOOTNOTE
DISCLOSURE.

 

27

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

 

4.2                                 CERTIFICATES; BORROWING BASE CERTIFICATES;
OTHER INFORMATION.  THE BORROWER SHALL FURNISH TO THE AGENT AND EACH LENDER:

 

(A)                                  CONCURRENTLY WITH THE DELIVERY OF THE
ANNUAL FINANCIAL STATEMENTS REFERRED TO IN SUBSECTION 4.1(A) ABOVE, A
CERTIFICATE OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS REPORTING ON SUCH
FINANCIAL STATEMENTS STATING THAT IN MAKING THE EXAMINATION NECESSARY THEREFOR
NO KNOWLEDGE WAS OBTAINED OF ANY DEFAULT OR EVENT OF DEFAULT, EXCEPT AS
SPECIFIED IN SUCH CERTIFICATE;

 

(B)                                 CONCURRENTLY WITH THE DELIVERY OF THE
FINANCIAL STATEMENTS REFERRED TO IN SUBSECTIONS 4.1(A) AND 4.1(B) ABOVE, A FULLY
AND PROPERLY COMPLETED COMPLIANCE CERTIFICATE IN THE FORM OF EXHIBIT 4.2(B),
CERTIFIED ON BEHALF OF THE BORROWER BY A RESPONSIBLE OFFICER OF THE BORROWER;

 

(C)                                  PROMPTLY AFTER THE SAME ARE SENT, COPIES OF
ALL FINANCIAL STATEMENTS AND MATERIAL REPORTS WHICH THE BORROWER SENDS TO ITS
SHAREHOLDERS OR OTHER EQUITY HOLDERS, AS APPLICABLE, GENERALLY; AND PROMPTLY
AFTER THE SAME ARE FILED, COPIES OF ALL FINANCIAL STATEMENTS AND REGULAR,
PERIODIC OR SPECIAL REPORTS WHICH THE BORROWER MAY MAKE TO, OR FILE WITH, THE
SECURITIES AND EXCHANGE COMMISSION OR ANY SUCCESSOR OR SIMILAR GOVERNMENTAL
AUTHORITY;

 

(D)                                 AS SOON AS AVAILABLE AND IN ANY EVENT WITHIN
TEN (10) BUSINESS DAYS AFTER THE END OF EACH CALENDAR MONTH, AS OTHERWISE
REQUIRED UNDER SECTION 5.2 AND AT SUCH OTHER TIMES AS THE AGENT MAY REASONABLY
REQUIRE, A BORROWING BASE CERTIFICATE, CERTIFIED ON BEHALF OF THE BORROWER BY A
RESPONSIBLE OFFICER OF THE BORROWER, SETTING FORTH THE “BORROWING BASE” OF THE
BORROWER AS AT THE END OF THE MOST-RECENTLY ENDED FISCAL MONTH OR AS AT SUCH
OTHER DATE AS THE AGENT MAY REASONABLY REQUIRE;

 

(E)                                  (I) TOGETHER WITH EACH DELIVERY OF
FINANCIAL STATEMENTS PURSUANT TO SUBSECTION 4.1(A) AND SUBSECTION 4.1(B), (A) A
MANAGEMENT REPORT, IN REASONABLE DETAIL, SIGNED BY THE CHIEF FINANCIAL OFFICER
OF THE BORROWER, DESCRIBING THE OPERATIONS AND FINANCIAL CONDITION OF THE
BORROWER AND ITS SUBSIDIARIES FOR THE QUARTER AND THE PORTION OF THE FISCAL YEAR
THEN ENDED (OR FOR THE FISCAL YEAR THEN ENDED IN THE CASE OF ANNUAL FINANCIAL
STATEMENTS), IT BEING UNDERSTOOD THAT SUCH REPORT MAY BE IN THE FORM OF A
“MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION”, AS REQUIRED TO BE DELIVERED PURSUANT TO THE HIGH YIELD UNSECURED
INDENTURE, AND (B) UNTIL THE LATER OF (1) THE DATE UPON WHICH EACH OF THE
EXPANSION PROJECTS DESCRIBED ON SCHEDULE 4.2(E) SHALL HAVE BEEN COMPLETED AND
(2) JUNE 30, 2007, AN EXPANSION CAPITAL EXPENDITURE REPORT, WHICH REPORT SHALL
BE IN A FORM SUBSTANTIALLY SIMILAR TO THAT ATTACHED HERETO AS SCHEDULE 4.2(E),
AND MANAGEMENT DISCUSSION OF THE CAPITAL EXPENDITURES DESCRIBED IN SUCH REPORT,
IN EACH CASE, IN REASONABLE DETAIL AND SIGNED BY THE CHIEF FINANCIAL OFFICER OF
THE BORROWER, DESCRIBING THE EXPANSION CAPITAL EXPENDITURES MADE BY THE BORROWER
AND ITS SUBSIDIARIES FOR THE QUARTER AND THE PORTION OF THE FISCAL YEAR THEN
ENDED (OR FOR THE FISCAL YEAR THEN ENDED IN THE CASE OF ANNUAL FINANCIAL
STATEMENTS), AND (II) TOGETHER WITH EACH DELIVERY OF FINANCIAL STATEMENTS
PURSUANT TO SUBSECTION 4.1(B), A REPORT SETTING FORTH IN COMPARATIVE FORM THE
CORRESPONDING FIGURES FOR THE CORRESPONDING PERIODS OF THE PREVIOUS FISCAL YEAR
AND THE CORRESPONDING FIGURES FROM THE MOST RECENT PROJECTIONS FOR THE CURRENT
FISCAL YEAR DELIVERED PURSUANT TO SUBSECTION 4.2(G) AND DISCUSSING THE REASONS
FOR ANY SIGNIFICANT VARIATIONS;

 

28

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

 

(F)                                    UPON THE REQUEST OF THE AGENT, AT ANY
TIME IF AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING BUT OTHERWISE
NOT MORE OFTEN THAN ONCE A YEAR, THE BORROWER WILL, AT THE BORROWER’S EXPENSE,
OBTAIN AND DELIVER TO THE AGENT A REPORT OF AN INDEPENDENT COLLATERAL AUDITOR
SATISFACTORY TO THE AGENT WITH RESPECT TO THE ACCOUNTS AND INVENTORY, WHICH
REPORT SHALL INDICATE WHETHER OR NOT THE INFORMATION SET FORTH IN THE BORROWING
BASE CERTIFICATE MOST RECENTLY DELIVERED IS ACCURATE AND COMPLETE IN ALL
MATERIAL RESPECTS;

 

(G)                                 CONCURRENTLY WITH DELIVERY THEREOF TO THE
TRUSTEE, COPIES OF ANY AND ALL NOTICES, CERTIFICATES, STATEMENTS, REPORTS AND
OTHER DELIVERIES REQUIRED TO BE MADE PURSUANT TO SECTION 4.02 OF THE HIGH YIELD
UNSECURED INDENTURE, INCLUDING, WITHOUT LIMITATION, ALL REPORTS REQUIRED TO BE
FILED PURSUANT TO SECTIONS 13 AND 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934,
AS AMENDED, AND SECTION 4.14 OF THE HIGH YIELD UNSECURED INDENTURE, INCLUDING,
WITHOUT LIMITATION, ALL COMPLIANCE CERTIFICATES REQUIRED TO BE DELIVERED
PURSUANT THERETO;

 

(H)                                 AS SOON AS AVAILABLE AND IN ANY EVENT NO
LATER THAN THIRTY (30) DAYS AFTER THE LAST DAY OF EACH FISCAL YEAR OF THE
BORROWER, (I) PROJECTIONS OF THE BORROWER’S AND ITS SUBSIDIARIES’ CONSOLIDATED
AND CONSOLIDATING FINANCIAL PERFORMANCE FOR THE FORTHCOMING FISCAL YEAR ON A
QUARTERLY BASIS, WHICH PROJECTIONS SHALL INCLUDE BALANCE SHEETS AND STATEMENTS
OF INCOME, SHAREHOLDERS’ EQUITY AND CASH FLOWS, AND (II) PROJECTIONS OF THE
COSTS AND EXPENSES TO BE INCURRED BY THE BORROWER AND ITS SUBSIDIARIES IN
CONNECTION WITH CAPITAL EXPENDITURES IN THE FORTHCOMING FISCAL YEAR ON A
QUARTERLY BASIS;

 

(I)                                     INTENTIONALLY OMITTED;

 

(J)                                     PROMPTLY UPON RECEIPT THEREOF, COPIES OF
ANY MATERIAL REPORTS SUBMITTED BY THE BORROWER’S CERTIFIED PUBLIC ACCOUNTANTS IN
CONNECTION WITH EACH ANNUAL, INTERIM OR SPECIAL AUDIT OR REVIEW OF ANY TYPE OF
THE FINANCIAL STATEMENTS OR INTERNAL CONTROL SYSTEMS OF THE BORROWER MADE BY
SUCH ACCOUNTANTS, INCLUDING ANY COMMENT LETTERS SUBMITTED BY SUCH ACCOUNTANTS TO
MANAGEMENT OF THE BORROWER IN CONNECTION WITH THEIR SERVICES;

 

(K)                                  (I) ONCE DURING THE TERM OF THIS AGREEMENT
AT THE DISCRETION OF AGENT AT ANY TIME NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, (II) FROM TIME TO TIME, IF THE AGENT REASONABLY
DETERMINES THAT OBTAINING APPRAISALS IS NECESSARY IN ORDER FOR THE AGENT OR ANY
LENDER TO COMPLY WITH APPLICABLE LAWS OR REGULATIONS, AND (III) FROM TIME TO
TIME, AND AT ANY TIME IF A DEFAULT OR AN EVENT OF DEFAULT SHALL HAVE OCCURRED
AND BE CONTINUING, THE AGENT MAY, OR MAY REQUIRE THE BORROWER TO, IN EITHER CASE
AT THE BORROWER’S EXPENSE, OBTAIN APPRAISALS IN FORM AND SUBSTANCE AND FROM
APPRAISERS REASONABLY SATISFACTORY TO THE AGENT STATING THE THEN CURRENT FAIR
MARKET VALUE OF ALL OR ANY PORTION OF THE REAL OR PERSONAL PROPERTY OF THE
BORROWER AND ANY OF ITS SUBSIDIARIES; AND

 

(L)                                     PROMPTLY, SUCH ADDITIONAL BUSINESS,
FINANCIAL, CORPORATE AFFAIRS, PERFECTION CERTIFICATES AND OTHER INFORMATION AS
THE AGENT MAY FROM TIME TO TIME REASONABLY REQUEST.

 

29

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

 

4.3                                 NOTICES.  THE BORROWER SHALL NOTIFY PROMPTLY
THE AGENT AND EACH LENDER OF EACH OF THE FOLLOWING (AND IN NO EVENT LATER THAN
THREE (3) BUSINESS DAYS AFTER A RESPONSIBLE OFFICER BECOMING AWARE THEREOF):

 

(A)                                  THE OCCURRENCE OR EXISTENCE OF ANY DEFAULT
OR EVENT OF DEFAULT, OR ANY EVENT OR CIRCUMSTANCE THAT WOULD REASONABLY BE
EXPECTED TO RESULT IN A DEFAULT OR EVENT OF DEFAULT;

 

(B)                                 ANY BREACH OR NON-PERFORMANCE OF, OR ANY
DEFAULT UNDER, ANY CONTRACTUAL OBLIGATION OF THE BORROWER OR ANY OF ITS
SUBSIDIARIES, OR ANY VIOLATION OF, OR NON-COMPLIANCE WITH, ANY REQUIREMENT OF
LAW, WHICH WOULD REASONABLY BE EXPECTED TO RESULT, EITHER INDIVIDUALLY OR IN THE
AGGREGATE, IN A MATERIAL ADVERSE EFFECT, INCLUDING A DESCRIPTION OF SUCH BREACH,
NON-PERFORMANCE, DEFAULT, VIOLATION OR NON-COMPLIANCE AND THE STEPS, IF ANY, THE
BORROWER OR ANY SUCH SUBSIDIARY HAS TAKEN, IS TAKING OR PROPOSES TO TAKE IN
RESPECT THEREOF;

 

(C)                                  ANY DISPUTE, LITIGATION, INVESTIGATION,
PROCEEDING OR SUSPENSION WHICH MAY EXIST AT ANY TIME BETWEEN THE BORROWER OR ANY
OF ITS SUBSIDIARIES AND ANY GOVERNMENTAL AUTHORITY WHICH WOULD REASONABLY BE
EXPECTED TO RESULT, EITHER INDIVIDUALLY OR IN THE AGGREGATE, IN A MATERIAL
ADVERSE EFFECT;

 

(D)                                 THE COMMENCEMENT OF, OR ANY MATERIAL
DEVELOPMENT IN, ANY LITIGATION OR PROCEEDING AFFECTING THE BORROWER OR ANY OF
ITS SUBSIDIARIES IN WHICH: (I) THE AMOUNT OF DAMAGES CLAIMED IS $1,500,000 (OR
ITS EQUIVALENT IN ANY OTHER CURRENCY OR CURRENCIES) OR MORE, (II) INJUNCTIVE OR
SIMILAR RELIEF IS SOUGHT AND WHICH, IF ADVERSELY DETERMINED, WOULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, OR (III) THE RELIEF SOUGHT IS AN
INJUNCTION OR OTHER STAY OF THE PERFORMANCE OF THIS AGREEMENT, ANY LOAN DOCUMENT
OR ANY RELATED AGREEMENT;

 

(E)                                  ANY OF THE FOLLOWING IF THE SAME WOULD
REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT: (I) ANY ENFORCEMENT, CLEANUP, REMOVAL OR OTHER
GOVERNMENTAL OR REGULATORY ACTIONS INSTITUTED, COMPLETED OR THREATENED AGAINST
THE BORROWER, ANY OF ITS SUBSIDIARIES OR ANY OF ITS PROPERTY PURSUANT TO ANY
APPLICABLE ENVIRONMENTAL LAWS, (II) ANY OTHER ENVIRONMENTAL CLAIMS, AND
(III) ANY ENVIRONMENTAL OR SIMILAR CONDITION ON ANY REAL PROPERTY ADJOINING THE
PROPERTY OF THE BORROWER OR ANY OF ITS SUBSIDIARIES THAT COULD REASONABLY BE
ANTICIPATED TO CAUSE THE BORROWER’S OR ANY SUCH SUBSIDIARY’S PROPERTY OR ANY
PART THEREOF TO BE SUBJECT TO ANY MATERIAL RESTRICTIONS ON THE OWNERSHIP,
OCCUPANCY, TRANSFERABILITY OR USE OF SUCH PROPERTY UNDER ANY ENVIRONMENTAL LAWS;

 

(F)                                    ANY OF THE FOLLOWING IF THE SAME WOULD
REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT, TOGETHER WITH A COPY OF ANY NOTICE WITH RESPECT TO SUCH
EVENT THAT MAY BE REQUIRED TO BE FILED WITH A GOVERNMENTAL AUTHORITY AND ANY
NOTICE DELIVERED BY A GOVERNMENTAL AUTHORITY TO THE BORROWER OR ANY MEMBER OF
ITS CONTROLLED GROUP WITH RESPECT TO SUCH EVENT:

 

(I)                                     AN ERISA EVENT;

 

(II)                                  THE ADOPTION OF ANY NEW QUALIFIED PLAN
THAT IS SUBJECT TO TITLE IV OF ERISA OR SECTION 412 OF THE CODE BY ANY MEMBER OF
THE CONTROLLED GROUP;

 

30

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

 

(III)                               THE ADOPTION OF ANY AMENDMENT TO A QUALIFIED
PLAN THAT IS SUBJECT TO TITLE IV OF ERISA OR SECTION 412 OF THE CODE, IF SUCH
AMENDMENT RESULTS IN A MATERIAL INCREASE IN BENEFITS OR UNFUNDED LIABILITIES; OR

 

(IV)                              THE COMMENCEMENT OF CONTRIBUTIONS BY ANY
MEMBER OF THE CONTROLLED GROUP TO ANY MULTIEMPLOYER PLAN OR ANY QUALIFIED PLAN
THAT IS SUBJECT TO TITLE IV OF ERISA OR SECTION 412 OF THE CODE;

 

(G)                                 ANY MATERIAL ADVERSE EFFECT SUBSEQUENT TO
THE DATE OF THE MOST RECENT AUDITED FINANCIAL STATEMENTS OF THE BORROWER AND ITS
SUBSIDIARIES DELIVERED TO THE AGENT AND LENDERS PURSUANT TO THIS AGREEMENT;

 

(H)                                 ANY MATERIAL CHANGE IN ACCOUNTING POLICIES
OR FINANCIAL REPORTING PRACTICES BY THE BORROWER OR ANY OF ITS SUBSIDIARIES;

 

(I)                                     ANY LABOR CONTROVERSY RESULTING IN OR
THREATENING TO RESULT IN ANY STRIKE, WORK STOPPAGE, BOYCOTT, SHUTDOWN OR OTHER
LABOR DISRUPTION AGAINST OR INVOLVING THE BORROWER OR ANY OF ITS SUBSIDIARIES IF
THE SAME WOULD REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE
AGGREGATE, A MATERIAL ADVERSE EFFECT;

 

(J)                                     THE CREATION, ESTABLISHMENT OR
ACQUISITION OF ANY SUBSIDIARY OR THE ISSUANCE BY THE BORROWER OF ANY CAPITAL
STOCK, WARRANT OR SIMILAR AGREEMENT IN RESPECT THEREOF;

 

(K)                                  THE OCCURRENCE OF A DEFAULT, AN EVENT OF
DEFAULT OR A “CHANGE OF CONTROL” UNDER ANY OF THE HIGH YIELD UNSECURED
DOCUMENTS; AND

 

(L)                                     PROMPTLY FROM TIME TO TIME, COPIES OF
ANY NOTICES OR OTHER DELIVERIES FROM TIME TO TIME MADE OR RECEIVED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES UNDER OR PURSUANT TO THE RELATED AGREEMENTS,
INCLUDING, WITHOUT LIMITATION, ANY WORKING CAPITAL OR OTHER PURCHASE PRICE
ADJUSTMENTS, AND ANY INDEMNIFICATION CLAIMS AND DISBURSEMENTS OF ESCROWED FUNDS
UNDER ANY RELATED AGREEMENT;

 

Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer of the Borrower, setting forth reasonable details of
the occurrence referred to therein, and stating what action the Borrower
proposes to take with respect thereto and at what time.  Each notice under
subsection 4.3(a) shall describe with reasonable particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
breached or violated.

 

4.4                                 PRESERVATION OF CORPORATE EXISTENCE, ETC. 
THE BORROWER SHALL, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO:

 

(A)                                  PRESERVE AND MAINTAIN IN FULL FORCE AND
EFFECT ITS ORGANIZATIONAL EXISTENCE AND GOOD STANDING UNDER THE LAWS OF ITS
STATE OR JURISDICTION OF INCORPORATION, ORGANIZATION OR FORMATION, AS
APPLICABLE, EXCEPT IN CONNECTION WITH ANY TRANSACTION PERMITTED BY SECTION 5.3;

 

(B)                                 PRESERVE AND MAINTAIN IN FULL FORCE AND
EFFECT ALL RIGHTS, PRIVILEGES, QUALIFICATIONS, PERMITS, LICENSES AND FRANCHISES
NECESSARY IN THE NORMAL CONDUCT OF ITS BUSINESS EXCEPT IN

 

31

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

 

CONNECTION WITH TRANSACTIONS PERMITTED BY SECTION 5.3 AND SALES OF ASSETS
PERMITTED BY SECTION 5.2 AND EXCEPT AS WOULD NOT REASONABLY BE EXPECTED TO HAVE,
EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT;

 

(C)                                  USE ITS REASONABLE EFFORTS, IN THE ORDINARY
COURSE OF BUSINESS, TO PRESERVE ITS BUSINESS ORGANIZATION AND PRESERVE THE
GOODWILL AND BUSINESS OF THE CUSTOMERS, SUPPLIERS AND OTHERS HAVING MATERIAL
BUSINESS RELATIONS WITH IT, EXCEPT WHERE FAILURE TO DO SO WOULD NOT REASONABLY
BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE
EFFECT; AND

 

(D)                                 PRESERVE OR RENEW ALL OF ITS REGISTERED
TRADEMARKS, TRADE NAMES AND SERVICE MARKS, THE NON-PRESERVATION OF WHICH WOULD
REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT.

 

4.5                                 MAINTENANCE OF PROPERTY.  THE BORROWER SHALL
MAINTAIN, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN, AND PRESERVE ALL
OF THEIR RESPECTIVE PROPERTY WHICH ARE USED OR USEFUL IN THEIR RESPECTIVE
BUSINESSES IN GOOD WORKING ORDER AND CONDITION, ORDINARY WEAR AND TEAR AND
CASUALTY EXCEPTED AND SHALL MAKE ALL NECESSARY REPAIRS THERETO AND RENEWALS AND
REPLACEMENTS THEREOF EXCEPT WHERE THE FAILURE TO DO SO WOULD NOT REASONABLY BE
EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE
EFFECT.

 

4.6                                 INSURANCE.  THE BORROWER SHALL MAINTAIN, AND
SHALL CAUSE EACH OF ITS SUBSIDIARIES TO MAINTAIN, WITH FINANCIALLY SOUND AND
REPUTABLE INDEPENDENT INSURERS, INSURANCE WITH RESPECT TO THEIR RESPECTIVE
PROPERTY AND BUSINESSES AGAINST LOSS OR DAMAGE OF THE KINDS CUSTOMARILY INSURED
AGAINST BY PERSONS ENGAGED IN THE SAME OR SIMILAR BUSINESSES, OF SUCH TYPES AND
IN SUCH AMOUNTS AS ARE CUSTOMARILY CARRIED UNDER SIMILAR CIRCUMSTANCES BY SUCH
OTHER PERSONS, INCLUDING WORKERS’ COMPENSATION INSURANCE, PUBLIC LIABILITY AND
PROPERTY AND CASUALTY INSURANCE, WHICH AMOUNTS SHALL NOT BE REDUCED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES IN THE ABSENCE OF THIRTY (30) DAYS’ PRIOR
NOTICE TO THE AGENT AND BUSINESS INTERRUPTION INSURANCE IN AN AMOUNT NOT LESS
THAN PROJECTED EBITDA (EBITDA IS COMPUTED IN THE MANNER SET FORTH IN
EXHIBIT 4.2(B)) FOR A PERIOD OF NOT LESS THAN SIX (6) MONTHS AND, IN ANY EVENT,
IN AN AMOUNT NOT LESS THAN $16,500,000.  ALL PROPERTY DAMAGE AND CASUALTY
INSURANCE SHALL NAME THE AGENT AS LOSS PAYEE/MORTGAGEE, ALL LIABILITY INSURANCE
SHALL NAME THE AGENT AND THE LENDERS AS ADDITIONAL INSUREDS AND ALL BUSINESS
INTERRUPTION INSURANCE SHALL NAME THE AGENT AS ASSIGNEE.  UPON REQUEST OF THE
AGENT OR ANY LENDER, THE BORROWER SHALL FURNISH THE AGENT, WITH SUFFICIENT
COPIES FOR EACH LENDER, AT REASONABLE INTERVALS (BUT NOT MORE THAN ONCE PER
CALENDAR YEAR), A CERTIFICATE OF A RESPONSIBLE OFFICER OF THE BORROWER (AND, IF
REQUESTED BY THE AGENT, ANY INSURANCE BROKER OF THE BORROWER) SETTING FORTH THE
NATURE AND EXTENT OF ALL INSURANCE MAINTAINED BY THE BORROWER AND ITS
SUBSIDIARIES IN ACCORDANCE WITH THIS SECTION 4.6.  UNLESS THE BORROWER PROVIDES
THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT,
THE AGENT MAY PURCHASE INSURANCE AT THE BORROWER’S EXPENSE TO PROTECT THE
AGENT’S AND LENDERS’ INTERESTS IN THE BORROWER’S AND ITS SUBSIDIARIES’ PROPERTY;
PROVIDED, THAT THE AGENT SHALL PROVIDE NOTICE TO THE BORROWER OF ITS INTENTIONS
TO PURCHASE SUCH INSURANCE SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT
BORROWER’S AND ITS SUBSIDIARIES’ INTERESTS.  THE COVERAGE THAT THE AGENT
PURCHASES MAY NOT PAY ANY CLAIM THAT THE BORROWER OR ANY OF ITS SUBSIDIARIES
MAKES OR ANY CLAIM THAT IS MADE AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES
IN CONNECTION WITH SAID PROPERTY.  THE BORROWER MAY LATER CANCEL ANY

 

32

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

 

INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH
EVIDENCE THAT THE BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS
AGREEMENT.  IF THE AGENT PURCHASES INSURANCE, THE BORROWER WILL BE RESPONSIBLE
FOR THE COSTS THEREOF, INCLUDING INTEREST AND ANY OTHER CHARGES THE AGENT MAY
IMPOSE IN CONNECTION WITH THE PLACEMENT OF INSURANCE, UNTIL THE EFFECTIVE DATE
OF THE CANCELLATION OR EXPIRATION OF SUCH INSURANCE. THE COSTS OF SUCH INSURANCE
MAY BE ADDED TO THE OBLIGATIONS.  THE COSTS OF THE INSURANCE MAY BE MORE THAN
THE COST OF INSURANCE THE BORROWER MAY BE ABLE TO OBTAIN ON ITS OWN. 
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IF THE AGENT SHALL DIRECTLY
RECEIVE ANY PROCEEDS OF ANY BUSINESS INTERRUPTION INSURANCE POLICY BY REASON OF
THIS AGREEMENT, THEN, SO LONG AS NO DEFAULT OR EVENT OF DEFAULT HAS OCCURRED AND
IS CONTINUING ON THE DATE SUCH PROCEEDS ARE RECEIVED BY THE AGENT, OR WOULD
RESULT THEREFROM, THE AGENT SHALL DISBURSE SUCH PROCEEDS PROMPTLY TO THE
BORROWER; PROVIDED, THAT ANY SUCH DISBURSEMENT OF SUCH PROCEEDS TO THE BORROWER
SHALL NOT BE DEEMED, OR OPERATE AS, A WAIVER OR ALTERATION OF OR MODIFICATION TO
ANY OF THE OBLIGATIONS OR COVENANTS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND SUCH PROCEEDS RECEIVED BY
THE BORROWER SHALL BE USED ONLY FOR PURPOSES OTHERWISE PERMITTED HEREUNDER.

 

4.7                                 PAYMENT OF OBLIGATIONS.  THE BORROWER SHALL,
AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO, PAY, DISCHARGE AND PERFORM AS THE
SAME SHALL BECOME DUE AND PAYABLE OR REQUIRED TO BE PERFORMED, ALL OF THEIR
RESPECTIVE OBLIGATIONS AND LIABILITIES, INCLUDING, WITHOUT LIMITATION:

 

(A)                                  ALL TAX LIABILITIES, ASSESSMENTS AND
GOVERNMENTAL CHARGES OR LEVIES UPON THEM OR THEIR PROPERTY OR ASSETS, UNLESS THE
SAME ARE BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY
PROSECUTED WHICH STAY THE ENFORCEMENT OF ANY LIEN AND FOR WHICH ADEQUATE
RESERVES IN ACCORDANCE WITH GAAP ARE BEING MAINTAINED BY THE BORROWER OR SUCH
SUBSIDIARIES;

 

(B)                                 ALL LAWFUL CLAIMS WHICH, IF UNPAID, WOULD BY
LAW BECOME A LIEN UPON THEIR PROPERTY UNLESS THE SAME ARE BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY PROSECUTED WHICH STAY THE
IMPOSITION OR ENFORCEMENT OF THE LIEN AND FOR WHICH ADEQUATE RESERVES IN
ACCORDANCE WITH GAAP ARE BEING MAINTAINED BY THE BORROWER;

 

(C)                                  ALL INDEBTEDNESS, AS AND WHEN DUE AND
PAYABLE, BUT SUBJECT TO ANY SUBORDINATION PROVISIONS CONTAINED HEREIN OR IN ANY
INSTRUMENT OR AGREEMENT EVIDENCING SUCH INDEBTEDNESS; AND

 

(D)                                 THE PERFORMANCE OF ALL OBLIGATIONS UNDER ANY
CONTRACTUAL OBLIGATION TO WHICH THE BORROWER OR ANY OF ITS SUBSIDIARIES IS
BOUND, OR TO WHICH IT OR ANY OF ITS PROPERTY IS SUBJECT, INCLUDING THE RELATED
AGREEMENTS, EXCEPT WHERE THE FAILURE TO PERFORM WOULD NOT REASONABLY BE EXPECTED
TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT.

 

4.8                                 COMPLIANCE WITH LAWS.  THE BORROWER SHALL
COMPLY, AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO COMPLY, IN ALL MATERIAL
RESPECTS, WITH ALL REQUIREMENTS OF LAW OF ANY GOVERNMENTAL AUTHORITY HAVING
JURISDICTION OVER IT OR ITS BUSINESS (INCLUDING, WITHOUT LIMITATION, ALL
ENVIRONMENTAL LAWS), EXCEPT (A)(I) SUCH AS MAY BE CONTESTED IN GOOD FAITH BY
APPROPRIATE PROCEEDINGS DILIGENTLY PROSECUTED WITHOUT RISK OF LOSS OF ANY
COLLATERAL, (II) AS TO WHICH A BONA FIDE DISPUTE EXISTS, AND (III) FOR WHICH
APPROPRIATE RESERVES HAVE BEEN ESTABLISHED ON THE

 

33

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

 

BORROWER’S FINANCIAL STATEMENTS, OR (B) WHERE THE FAILURE TO COMPLY WOULD NOT
REASONABLY BE EXPECTED TO HAVE, EITHER INDIVIDUALLY OR IN THE AGGREGATE, A
MATERIAL ADVERSE EFFECT.

 

4.9                                 INSPECTION OF PROPERTY AND BOOKS AND
RECORDS.  THE BORROWER SHALL MAINTAIN AND SHALL CAUSE EACH OF ITS SUBSIDIARIES
TO MAINTAIN PROPER BOOKS OF RECORD AND ACCOUNT, IN WHICH FULL, TRUE AND CORRECT
ENTRIES IN CONFORMITY WITH GAAP CONSISTENTLY APPLIED SHALL BE MADE OF ALL
FINANCIAL TRANSACTIONS AND MATTERS INVOLVING THE ASSETS AND BUSINESS OF THE
BORROWER AND ITS SUBSIDIARIES.  THE BORROWER SHALL PERMIT, AND SHALL CAUSE EACH
OF ITS SUBSIDIARIES TO PERMIT: (I) REPRESENTATIVES AND INDEPENDENT CONTRACTORS
OF THE AGENT TO VISIT AND INSPECT ANY OF THEIR RESPECTIVE PROPERTY, TO EXAMINE
THEIR RESPECTIVE CORPORATE, FINANCIAL AND OPERATING RECORDS, AND MAKE COPIES
THEREOF OR ABSTRACTS THEREFROM, AND TO DISCUSS THEIR RESPECTIVE AFFAIRS,
FINANCES AND ACCOUNTS WITH THEIR RESPECTIVE DIRECTORS, OFFICERS, AND INDEPENDENT
PUBLIC ACCOUNTANTS; PROVIDED, THAT (A) IF NO EVENT OF DEFAULT EXISTS, ANY SUCH
VISITS AND INSPECTIONS MAY ONLY OCCUR DURING NORMAL BUSINESS HOURS AND UPON
REASONABLE ADVANCE NOTICE AND THE NUMBER OF SUCH VISITS AND INSPECTIONS COMBINED
SHALL NOT EXCEED MORE THAN ONE (1) TIME PER YEAR, AND (B) IF ANY EVENT OF
DEFAULT EXISTS, ANY SUCH VISITS AND INSPECTIONS MAY OCCUR AT ANY TIME DURING
NORMAL BUSINESS HOURS AND WITHOUT ADVANCE NOTICE; AND (II) REPRESENTATIVES AND
INDEPENDENT CONTRACTORS OF ANY LENDER TO DO ANY OF THE FOREGOING DURING THE
EXISTENCE OF ANY EVENT OF DEFAULT AND, IN ANY SUCH CASE DESCRIBED IN THIS CLAUSE
(II), ANY SUCH VISITS AND INSPECTIONS MAY OCCUR AT ANY TIME DURING NORMAL
BUSINESS HOURS AND WITHOUT ADVANCE NOTICE.  ALL ACTIONS PERMITTED TO BE TAKEN BY
THE AGENT AND ANY LENDER UNDER THIS SECTION 4.9 SHALL BE AT THE SOLE COST AND
EXPENSE OF THE BORROWER.

 

4.10                           USE OF PROCEEDS.  THE BORROWER SHALL USE THE
PROCEEDS OF THE LOANS SOLELY AS FOLLOWS: (A) TO PAY COSTS AND EXPENSES REQUIRED
TO BE PAID PURSUANT TO SECTION 2.1, (B) TO FINANCE THE PAYMENT OF THE CASH
PURCHASE PRICE OF PERMITTED ACQUISITIONS, (C) FOR WORKING CAPITAL AND OTHER
GENERAL CORPORATE PURPOSES OF ITS SUBSIDIARIES NOT IN CONTRAVENTION OF ANY
REQUIREMENT OF LAW AND NOT IN VIOLATION OF THIS AGREEMENT AND (D) WITH RESPECT
TO CAPEX LOANS, ONLY FOR THE PAYMENT OF EXPANSION CAPITAL EXPENDITURES.  FOR
CLARIFICATION, ALL PROCEEDS OF THE LOANS SHALL BE UTILIZED BY THE SUBSIDIARIES
OF BORROWER FOR THE PURPOSES DESCRIBED ABOVE AND, EXCEPT WITH RESPECT TO (A) AND
(B) ABOVE, NOT BY BORROWER ITSELF.

 

4.11                           SOLVENCY.  BORROWER AND EACH OF ITS SUBSIDIARIES,
INDIVIDUALLY, AND BORROWER AND EACH OF ITS SUBSIDIARIES, ON A CONSOLIDATED
BASIS, SHALL AT ALL TIMES BE SOLVENT.

 

4.12                           FURTHER ASSURANCES.

 

(A)                                  THE BORROWER SHALL ENSURE THAT ALL WRITTEN
INFORMATION, EXHIBITS AND REPORTS FURNISHED TO THE AGENT OR THE LENDERS DO NOT
AND WILL NOT CONTAIN ANY UNTRUE STATEMENT OF A MATERIAL FACT AND DO NOT AND WILL
NOT OMIT TO STATE ANY MATERIAL FACT OR ANY FACT NECESSARY TO MAKE THE STATEMENTS
CONTAINED THEREIN NOT MISLEADING IN LIGHT OF THE CIRCUMSTANCES IN WHICH MADE,
AND WILL PROMPTLY DISCLOSE TO THE AGENT AND THE LENDERS AND CORRECT ANY DEFECT
OR ERROR THAT MAY BE DISCOVERED THEREIN OR IN ANY LOAN DOCUMENT OR IN THE
EXECUTION, ACKNOWLEDGEMENT OR RECORDATION THEREOF.

 

(B)                                 PROMPTLY UPON REQUEST BY THE AGENT, THE
BORROWER SHALL (AND SHALL CAUSE EACH OF ITS SUBSIDIARIES TO) TAKE SUCH
ADDITIONAL ACTIONS AS THE AGENT MAY REASONABLY REQUIRE FROM TIME TO

 

34

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

 

TIME IN ORDER (I) TO SUBJECT TO THE LIENS CREATED BY ANY OF THE COLLATERAL
DOCUMENTS ANY OF THE PROPERTY, RIGHTS OR INTERESTS COVERED BY ANY OF THE
COLLATERAL DOCUMENTS, (II) TO PERFECT AND MAINTAIN THE VALIDITY, EFFECTIVENESS
AND PRIORITY OF ANY OF THE COLLATERAL DOCUMENTS AND THE LIENS INTENDED TO BE
CREATED THEREBY, AND (III) TO BETTER ASSURE, CONVEY, GRANT, ASSIGN, TRANSFER,
PRESERVE, PROTECT AND CONFIRM TO THE AGENT AND LENDERS THE RIGHTS GRANTED OR NOW
OR HEREAFTER INTENDED TO BE GRANTED TO THE AGENT AND THE LENDERS UNDER ANY LOAN
DOCUMENT OR UNDER ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH.  WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING AND EXCEPT AS OTHERWISE APPROVED IN
WRITING BY REQUIRED LENDERS, THE BORROWER SHALL CAUSE EACH OF ITS SUBSIDIARIES
TO GUARANTY THE OBLIGATIONS AND TO CAUSE EACH SUCH SUBSIDIARY TO GRANT TO THE
AGENT, FOR THE BENEFIT OF THE AGENT AND LENDERS, A SECURITY INTEREST IN ALL OF
SUCH SUBSIDIARY’S PROPERTY TO SECURE SUCH GUARANTY.  FURTHERMORE AND EXCEPT AS
OTHERWISE APPROVED IN WRITING BY REQUIRED LENDERS, THE BORROWER SHALL, AND SHALL
CAUSE EACH OF ITS SUBSIDIARIES TO, PLEDGE ALL OF THE STOCK OR OTHER EQUITY
INTERESTS OF EACH OF THEIR RESPECTIVE SUBSIDIARIES TO THE AGENT, FOR THE BENEFIT
OF THE AGENT AND LENDERS, TO SECURE THE OBLIGATIONS.  IN CONNECTION WITH EACH
PLEDGE OF STOCK OR OTHER EQUITY INTERESTS, THE BORROWER SHALL DELIVER, OR CAUSE
TO BE DELIVERED, TO THE AGENT, THE ITEMS DESCRIBED IN SUBSECTION 2.1(D)(III), IF
APPLICABLE.  IN THE EVENT THE BORROWER OR ANY OF ITS SUBSIDIARIES ACQUIRES ANY
REAL PROPERTY, SIMULTANEOUSLY WITH SUCH ACQUISITION, THE BORROWER OR SUCH
SUBSIDIARY SHALL EXECUTE AND/OR DELIVER, OR CAUSE TO BE EXECUTED AND/OR
DELIVERED, TO THE AGENT, (X) A FULLY EXECUTED MORTGAGE, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE AGENT TOGETHER WITH AN A.L.T.A. LENDER’S TITLE
INSURANCE POLICY ISSUED BY A TITLE INSURER REASONABLY SATISFACTORY TO THE AGENT,
IN FORM AND SUBSTANCE AND IN AN AMOUNT REASONABLY SATISFACTORY TO THE AGENT
INSURING THAT THE MORTGAGE IS A VALID AND ENFORCEABLE FIRST PRIORITY LIEN ON THE
RESPECTIVE PROPERTY, FREE AND CLEAR OF ALL DEFECTS, ENCUMBRANCES AND LIENS OTHER
THAN PERMITTED LIENS, (Y) WITH RESPECT TO REAL PROPERTY OWNED IN FEE ONLY, THEN
CURRENT A.L.T.A. SURVEYS, CERTIFIED TO THE AGENT AND THE LENDERS BY A LICENSED
SURVEYOR SUFFICIENT TO ALLOW THE ISSUER OF THE LENDER’S TITLE INSURANCE POLICY
TO ISSUE SUCH POLICY WITHOUT A SURVEY EXCEPTION AND (Z) AN ENVIRONMENTAL SITE
ASSESSMENT PREPARED BY A QUALIFIED FIRM REASONABLY ACCEPTABLE TO THE AGENT, IN
FORM AND SUBSTANCE SATISFACTORY TO THE AGENT.

 

(C)                                  THE BORROWER SHALL, AND SHALL CAUSE EACH OF
ITS SUBSIDIARIES TO, IN ACCORDANCE WITH THE TERMS OF THE APPLICABLE COLLATERAL
DOCUMENTS, CAUSE EACH FINANCIAL INSTITUTION (OTHER THAN U.S. BANK IN RESPECT OF
THE RESTRICTED ACCOUNTS) AT WHICH THE BORROWER OR ANY SUCH SUBSIDIARY MAINTAINS
ANY LOCKBOX, DEPOSIT ACCOUNT, SECURITIES ACCOUNT OR OTHER SIMILAR ACCOUNT TO
DELIVER TO THE AGENT A CONTROL AGREEMENT, IN FORM AND SUBSTANCE SATISFACTORY TO
THE AGENT.  THE FOREGOING AND ANYTHING CONTAINED IN ANY COLLATERAL DOCUMENT TO
THE CONTRARY NOTWITHSTANDING, THE BORROWER SHALL NOT BE REQUIRED TO DELIVER ANY
SUCH CONTROL AGREEMENT IN RESPECT OF ANY RESTRICTED ACCOUNT (TO THE EXTENT THE
BORROWER OTHERWISE IS IN COMPLIANCE WITH THE OTHER TERMS OF THIS PARAGRAPH);
PROVIDED, THAT, THE BORROWER SHALL NOT, AND SHALL NOT CAUSE OR PERMIT ANY OF ITS
SUBSIDIARIES TO, DEPOSIT OR MAINTAIN FUNDS IN EXCESS OF (I) $70,000 IN THE
RESTRICTED CREDIT CARD ACCOUNT AT ANY TIME OR (II) $150,000 IN THE AGGREGATE IN
ALL RESTRICTED ACCOUNTS (OTHER THAN THE RESTRICTED CREDIT CARD ACCOUNT AND THE
RESTRICTED PAYROLL ACCOUNT) AT ANY TIME; PROVIDED, FURTHER, THAT, THE BORROWER
SHALL NOT, AND SHALL NOT CAUSE OR PERMIT ANY OF ITS SUBSIDIARIES TO, DEPOSIT OR
MAINTAIN FUNDS IN THE RESTRICTED PAYROLL ACCOUNT OTHER THAN FUNDS DEPOSITED
THEREIN IN THE ORDINARY COURSE OF BUSINESS FOR PURPOSES OF FUNDING CURRENT
PAYROLL LIABILITIES.

 

4.13                           APPRAISALS.  IN ADDITION TO ANY APPRAISALS
UNDERTAKEN BY OR AT THE REQUEST OF AGENT PURSUANT TO SECTION 4.2(K) OR
SECTION 5.2, FOR PURPOSES OF CALCULATING THE “BORROWING BASE”

 

35

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

 

PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF THE BORROWING BASE CERTIFICATE,
AND FOR BORROWER AND ITS SUBSIDIARIES TO BE PERMITTED TO INCLUDE MACHINERY,
EQUIPMENT AND OWNED REAL PROPERTY IN THE BORROWING BASE CERTIFICATE AT ANY TIME
AFTER THE RESTATEMENT EFFECTIVE DATE, IF REQUESTED BY THE AGENT AT ANY TIME
WITHIN THIRTY (30) DAYS AFTER THE RESTATEMENT EFFECTIVE DATE, THE AGENT SHALL BE
ENTITLED TO RECEIVE, AT THE BORROWER’S EXPENSE, APPRAISALS IN FORM AND SUBSTANCE
AND FROM APPRAISERS REASONABLY SATISFACTORY TO THE AGENT SETTING FORTH THE
ORDERLY LIQUIDATION VALUE OF THE MACHINERY AND EQUIPMENT OF BORROWER OR ANY OF
ITS SUBSIDIARIES AND THE FAIR MARKET VALUE OF ALL OR ANY PORTION OF SUCH REAL
PROPERTY OF BORROWER OR ANY OF ITS SUBSIDIARIES, IN EACH CASE APPRAISED AT THE
TIME OF SUCH APPRAISALS.  AFTER RECEIPT OF SUCH APPRAISALS, APPRAISALS IN
RESPECT OF SUCH PROPERTY MAY BE UNDERTAKEN OR REQUIRED BY AGENT PURSUANT TO
SECTION 4.2(K) AND/OR SECTION 5.2, THE RESULTS OF WHICH SHALL RESULT IN CHANGES
IN THE “BORROWING BASE” BASED UPON CHANGES IN THE COMPONENTS THEREOF RELATING TO
SUCH PROPERTY AS NECESSARY AND REQUIRED.  FURTHER, IF A SUBSIDIARY OF THE
BORROWER EXERCISES REINVESTMENT RIGHTS UNDER SECTION 1.8(C) AND THE PROPERTY IN
WHICH SUCH SUBSIDIARY REINVESTS CONSTITUTES EQUIPMENT, MACHINERY AND/OR REAL
PROPERTY THAT THE BORROWER DESIRES TO INCLUDE IN THE “BORROWING BASE” UNDER THE
BORROWING BASE CERTIFICATE, THEN AGENT MAY REQUIRE, AS A CONDITION THERETO,
APPRAISALS OF SUCH PROPERTY THAT OTHERWISE COMPLY WITH THE REQUIREMENTS OF
SECTION 4.2(K).  THE “BORROWING BASE” SHALL BE CALCULATED IN ACCORDANCE WITH THE
TERMS OF THE BORROWING BASE CERTIFICATE.

 

ARTICLE V - NEGATIVE COVENANTS

 

The Borrower covenants and agrees that, so long as any Lender shall have any
Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:

 

5.1                                 LIMITATION ON LIENS.  THE BORROWER SHALL
NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR
INDIRECTLY, MAKE, CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY LIEN UPON OR WITH
RESPECT TO ANY PART OF ITS PROPERTY, WHETHER NOW OWNED OR HEREAFTER ACQUIRED,
OTHER THAN, WITH RESPECT TO ITS SUBSIDIARIES, THE FOLLOWING, PROVIDED THE SAME
IS PERMITTED AND SOLELY TO THE EXTENT PERMITTED, UNDER THE HIGH YIELD UNSECURED
DOCUMENTS (“PERMITTED LIENS”):

 

(A)                                  ANY LIEN EXISTING ON THE PROPERTY OF THE
BORROWER’S SUBSIDIARIES ON THE RESTATEMENT EFFECTIVE DATE AND SET FORTH IN
SCHEDULE 5.1 SECURING INDEBTEDNESS OUTSTANDING ON SUCH DATE AND PERMITTED BY
SUBSECTION 5.5(C), INCLUDING REPLACEMENT LIENS ON THE PROPERTY CURRENTLY SUBJECT
TO SUCH LIENS SECURING INDEBTEDNESS PERMITTED BY SUBSECTION 5.5(C);

 

(B)                                 ANY LIEN CREATED UNDER ANY LOAN DOCUMENT;

 

(C)                                  LIENS FOR TAXES, FEES, ASSESSMENTS OR OTHER
GOVERNMENTAL CHARGES (I) WHICH ARE NOT DELINQUENT OR REMAIN PAYABLE WITHOUT
PENALTY OR (II) THE NON-PAYMENT OF WHICH IS PERMITTED BY SECTION 4.7; PROVIDED,
THAT IN RESPECT OF THIS CLAUSE (II), ALL SUCH LIENS SECURE CLAIMS IN THE
AGGREGATE AT ANY TIME OUTSTANDING FOR THE BORROWER’S SUBSIDIARIES NOT EXCEEDING
$500,000;

 

36

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

 

(D)                                 CARRIERS’, WAREHOUSEMEN’S, MECHANICS’,
LANDLORDS’, MATERIALMEN’S, REPAIRMEN’S OR OTHER SIMILAR LIENS ARISING IN THE
ORDINARY COURSE OF BUSINESS WHICH ARE NOT DELINQUENT FOR MORE THAN NINETY (90)
DAYS OR REMAIN PAYABLE WITHOUT PENALTY OR WHICH ARE BEING CONTESTED IN GOOD
FAITH AND BY APPROPRIATE PROCEEDINGS DILIGENTLY PROSECUTED, WHICH PROCEEDINGS
HAVE THE EFFECT OF PREVENTING THE FORFEITURE OR SALE OF THE PROPERTY SUBJECT
THERETO AND FOR WHICH ADEQUATE RESERVES IN ACCORDANCE WITH GAAP ARE BEING
MAINTAINED;

 

(E)                                  LIENS (OTHER THAN ANY LIEN IMPOSED BY
ERISA) CONSISTING OF PLEDGES OR DEPOSITS REQUIRED IN THE ORDINARY COURSE OF
BUSINESS IN CONNECTION WITH WORKERS’ COMPENSATION, UNEMPLOYMENT INSURANCE AND
OTHER SOCIAL SECURITY LEGISLATION OR TO SECURE THE PERFORMANCE OF TENDERS,
STATUTORY OBLIGATIONS, SURETY, STAY, CUSTOMS AND APPEALS BONDS, BIDS, LEASES,
GOVERNMENTAL CONTRACT, TRADE CONTRACTS, PERFORMANCE AND RETURN OF MONEY BONDS
AND OTHER SIMILAR OBLIGATIONS (EXCLUSIVE OF OBLIGATIONS FOR THE PAYMENT OF
BORROWED MONEY) OR TO SECURE LIABILITY TO INSURANCE CARRIERS;

 

(F)                                    LIENS CONSISTING OF JUDGMENT OR JUDICIAL
ATTACHMENT LIENS, PROVIDED, THAT THE ENFORCEMENT OF SUCH LIENS IS EFFECTIVELY
STAYED AND ALL SUCH LIENS SECURE CLAIMS IN THE AGGREGATE AT ANY TIME OUTSTANDING
FOR THE BORROWER’S SUBSIDIARIES NOT EXCEEDING $500,000;

 

(G)                                 EASEMENTS, RIGHTS-OF-WAY, ZONING AND OTHER
RESTRICTIONS, MINOR DEFECTS OR OTHER IRREGULARITIES IN TITLE, AND OTHER SIMILAR
ENCUMBRANCES EXISTING ON THE RESTATEMENT EFFECTIVE DATE OR INCURRED IN THE
ORDINARY COURSE OF BUSINESS WHICH, IN EACH CASE, EITHER INDIVIDUALLY OR, IN THE
AGGREGATE, ARE NOT SUBSTANTIAL IN AMOUNT, AND WHICH DO NOT IN ANY CASE
MATERIALLY DETRACT FROM THE VALUE OF THE PROPERTY SUBJECT THERETO OR INTERFERE
IN ANY MATERIAL RESPECT WITH THE ORDINARY CONDUCT OF THE BUSINESSES OF THE
BORROWER AND ITS SUBSIDIARIES;

 

(H)                                 LIENS ON ANY PROPERTY ACQUIRED OR HELD BY
THE BORROWER’S SUBSIDIARIES SECURING INDEBTEDNESS INCURRED OR ASSUMED FOR THE
PURPOSE OF FINANCING (OR REFINANCING) ALL OR ANY PART OF THE COST OF ACQUIRING
SUCH PROPERTY AND PERMITTED UNDER SUBSECTION 5.5(D); PROVIDED, THAT (I) ANY SUCH
LIEN ATTACHES TO SUCH PROPERTY CONCURRENTLY WITH OR WITHIN TWENTY (20) DAYS
AFTER THE ACQUISITION THEREOF, (II) SUCH LIEN ATTACHES SOLELY TO THE PROPERTY SO
ACQUIRED IN SUCH TRANSACTION, AND (III) THE PRINCIPAL AMOUNT OF THE DEBT SECURED
THEREBY DOES NOT EXCEED 100% OF THE COST OF SUCH PROPERTY;

 

(I)                                     LIENS SECURING CAPITAL LEASE OBLIGATIONS
PERMITTED UNDER SUBSECTION 5.5(D);

 

(J)                                     ANY INTEREST OR TITLE OF A LESSOR OR
SUBLESSOR, AS LESSOR OR SUBLESSOR, UNDER ANY LEASE PERMITTED BY THIS AGREEMENT;
AND

 

(K)                                  LIENS ARISING FROM PRECAUTIONARY UNIFORM
COMMERCIAL CODE FINANCING STATEMENTS FILED UNDER ANY LEASE PERMITTED BY THIS
AGREEMENT.

 

5.2                                 DISPOSITION OF ASSETS.  THE BORROWER SHALL
NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, DIRECTLY OR
INDIRECTLY, SELL, ASSIGN, LEASE, CONVEY, TRANSFER OR OTHERWISE DISPOSE OF
(WHETHER IN ONE OR A SERIES OF TRANSACTIONS) ANY PROPERTY (INCLUDING ACCOUNTS
AND NOTES RECEIVABLE, WITH OR WITHOUT RECOURSE) OR ENTER INTO ANY AGREEMENT TO
DO ANY OF THE FOREGOING, EXCEPT, WITH RESPECT TO THE BORROWER’S SUBSIDIARIES AND
IN EACH INSTANCE, PROVIDED THE SAME IS PERMITTED, AND SOLELY TO THE EXTENT
PERMITTED, UNDER THE HIGH YIELD UNSECURED DOCUMENTS:

 

37

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

 

(A)                                  DISPOSITIONS OF INVENTORY, OR USED,
WORN-OUT OR SURPLUS EQUIPMENT, ALL IN THE ORDINARY COURSE OF BUSINESS; AND

 

(B)                                 DISPOSITIONS NOT OTHERWISE PERMITTED
HEREUNDER WHICH ARE MADE FOR FAIR MARKET VALUE AND THE MANDATORY PREPAYMENT IN
THE AMOUNT OF THE NET PROCEEDS OF SUCH DISPOSITION IS MADE IF AND TO THE EXTENT
REQUIRED BY SECTION 1.8; PROVIDED, THAT (I) AT THE TIME OF ANY DISPOSITION, NO
EVENT OF DEFAULT SHALL EXIST OR SHALL RESULT FROM SUCH DISPOSITION, (II) THE
AGGREGATE SALES PRICE FROM SUCH DISPOSITION SHALL BE PAID IN CASH, (III) THE
AGGREGATE FAIR MARKET VALUE OF ALL ASSETS SO SOLD BY THE BORROWER’S
SUBSIDIARIES, TOGETHER, SHALL NOT EXCEED IN ANY FISCAL YEAR $2,000,000, (IV) IF
THE AGGREGATE NET PROCEEDS RECEIVED BY THE BORROWER AND ITS SUBSIDIARIES FOR ALL
DISPOSITIONS AND EVENTS OF LOSS OCCURRING DURING THE CURRENT FISCAL YEAR EXCEEDS
$1,000,000, AND SUCH DISPOSITIONS AND EVENTS OF LOSS INVOLVED MACHINERY,
EQUIPMENT AND/OR REAL PROPERTY THAT PREVIOUSLY WAS INCLUDED IN THE “BORROWING
BASE” UNDER THE BORROWING BASE CERTIFICATE THEN IN EFFECT, THE BORROWER SHALL
HAVE DELIVERED TO THE AGENT A REPLACEMENT BORROWING BASE CERTIFICATE SETTING
FORTH THE CALCULATION OF THE “BORROWING BASE” AFTER GIVING EFFECT TO SUCH
DISPOSITIONS AND/OR EVENTS OF LOSS AND, IF REQUESTED BY THE AGENT, APPRAISALS OF
THE REMAINING EQUIPMENT, MACHINERY AND/OR REAL PROPERTY TO BE INCLUDED IN SUCH
“BORROWING BASE”, AND (V) AFTER GIVING EFFECT TO SUCH DISPOSITION, THE BORROWER
SHALL BE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE COVENANTS SET FORTH IN
ARTICLE VI, RECOMPUTED FOR THE MOST RECENT QUARTER FOR WHICH FINANCIAL
STATEMENTS HAVE BEEN DELIVERED.

 

5.3                                 CONSOLIDATIONS AND MERGERS.  THE BORROWER
SHALL NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, MERGE,
CONSOLIDATE WITH OR INTO, OR CONVEY, TRANSFER, LEASE OR OTHERWISE DISPOSE OF
(WHETHER IN ONE TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR SUBSTANTIALLY
ALL OF ITS ASSETS (WHETHER NOW OWNED OR HEREAFTER ACQUIRED) TO OR IN FAVOR OF
ANY PERSON, EXCEPT UPON NOT LESS THAN FIVE (5) BUSINESS DAYS’ PRIOR WRITTEN
NOTICE TO THE AGENT, ANY SUBSIDIARY OF THE BORROWER MAY MERGE WITH, OR DISSOLVE
OR LIQUIDATE INTO A WHOLLY-OWNED SUBSIDIARY OF THE BORROWER; PROVIDED, THAT SUCH
WHOLLY-OWNED SUBSIDIARY SHALL BE THE CONTINUING OR SURVIVING ENTITY.

 

5.4                                 LOANS AND INVESTMENTS.  THE BORROWER SHALL
NOT AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO (I) PURCHASE OR
ACQUIRE, OR MAKE ANY COMMITMENT TO PURCHASE OR ACQUIRE ANY CAPITAL STOCK, EQUITY
INTEREST, OR ANY OBLIGATIONS OR OTHER SECURITIES OF, OR ANY INTEREST IN, ANY
PERSON, INCLUDING THE ESTABLISHMENT OR CREATION OF A SUBSIDIARY, OR (II) MAKE OR
COMMIT TO MAKE ANY ACQUISITIONS, OR ANY OTHER ACQUISITION OF ALL OR
SUBSTANTIALLY ALL OF THE ASSETS OF ANOTHER PERSON, OR OF ANY BUSINESS OR
DIVISION OF ANY PERSON, INCLUDING WITHOUT LIMITATION, BY WAY OF MERGER,
CONSOLIDATION OR OTHER COMBINATION OR (III) MAKE OR COMMIT TO MAKE ANY ADVANCE,
LOAN, EXTENSION OF CREDIT OR CAPITAL CONTRIBUTION TO OR ANY OTHER INVESTMENT IN,
ANY PERSON INCLUDING ANY AFFILIATE OF THE BORROWER OR ANY SUBSIDIARY OF THE
BORROWER (THE ITEMS DESCRIBED IN CLAUSES (I), (II) AND (III) ARE REFERRED TO AS
“INVESTMENTS”), EXCEPT FOR, IN EACH INSTANCE, PROVIDED THE SAME IS PERMITTED,
AND SOLELY TO THE EXTENT PERMITTED, UNDER THE HIGH YIELD UNSECURED DOCUMENTS:

 

(A)                                  INVESTMENTS IN CASH AND CASH EQUIVALENTS;

 

(B)                                 EXTENSIONS OF CREDIT BY THE BORROWER TO ANY
OF ITS WHOLLY-OWNED SUBSIDIARIES; PROVIDED, THAT THE OBLIGATIONS OF EACH OBLIGOR
SHALL BE EVIDENCED BY NOTES, WHICH NOTES SHALL BE

 

38

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

 

PLEDGED TO THE AGENT, FOR THE BENEFIT OF THE AGENT AND LENDERS, AND HAVE SUCH
OTHER TERMS AS THE AGENT MAY REASONABLY REQUIRE;

 

(C)                                  LOANS AND ADVANCES BY THE BORROWER’S
SUBSIDIARIES TO EMPLOYEES IN THE ORDINARY COURSE OF BUSINESS NOT TO EXCEED
$250,000 IN THE AGGREGATE AT ANY TIME OUTSTANDING; AND

 

(D)                                 PERMITTED ACQUISITIONS.

 

5.5                                 LIMITATION ON INDEBTEDNESS.  THE BORROWER
SHALL NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, CREATE,
INCUR, ASSUME, SUFFER TO EXIST, OR OTHERWISE BECOME OR REMAIN DIRECTLY OR
INDIRECTLY LIABLE WITH RESPECT TO, ANY INDEBTEDNESS, EXCEPT, IN EACH INSTANCE,
PROVIDED THE SAME IS PERMITTED, AND SOLELY TO THE EXTENT PERMITTED, UNDER THE
HIGH YIELD UNSECURED DOCUMENTS:

 

(A)                                  INDEBTEDNESS INCURRED PURSUANT TO THIS
AGREEMENT;

 

(B)                                 INDEBTEDNESS CONSISTING OF CONTINGENT
OBLIGATIONS DESCRIBED IN CLAUSE (I) OF THE DEFINITION THEREOF AND PERMITTED
PURSUANT TO SECTION 5.9;

 

(C)                                  INDEBTEDNESS OF THE BORROWER’S SUBSIDIARIES
EXISTING ON THE RESTATEMENT EFFECTIVE DATE AND SET FORTH IN SCHEDULE 5.5
INCLUDING EXTENSIONS AND REFINANCINGS THEREOF WHICH DO NOT INCREASE THE
PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS AS OF THE DATE OF SUCH EXTENSION OR
REFINANCING;

 

(D)                                 INDEBTEDNESS OF THE BORROWER’S SUBSIDIARIES
NOT TO EXCEED $10,000,000 IN THE AGGREGATE AT ANY TIME OUTSTANDING, CONSISTING
OF CAPITAL LEASE OBLIGATIONS OR SECURED BY LIENS PERMITTED BY SUBSECTION 5.1(H);

 

(E)                                  HIGH YIELD UNSECURED INDEBTEDNESS NOT TO
EXCEED $120,000,000 IN THE AGGREGATE PRINCIPAL AMOUNT AT ANY TIME OUTSTANDING
(REDUCED FROM TIME TO TIME BY PRINCIPAL PAYMENTS MADE THEREON, THE MAKING OF
WHICH REMAIN SUBJECT TO THE PROVISIONS OF THIS AGREEMENT) EVIDENCED BY THE HIGH
YIELD UNSECURED NOTES AND CONTINGENT OBLIGATIONS OF THE BORROWER’S SUBSIDIARIES
RESULTING FROM UNSECURED GUARANTEES THEREOF;

 

(F)                                    UNSECURED INTERCOMPANY INDEBTEDNESS
PERMITTED PURSUANT TO SUBSECTION 5.4(B);

 

(G)                                 OTHER UNSECURED INDEBTEDNESS OF THE
BORROWER’S SUBSIDIARIES NOT EXCEEDING IN THE AGGREGATE AT ANY TIME OUTSTANDING
$800,000, REDUCED BY THE AGGREGATE AMOUNT OF CONTINGENT OBLIGATIONS OUTSTANDING
THAT ARE PERMITTED PURSUANT TO SECTION 5.9(I);

 

(H)                                 UNSECURED CONTINGENT INDEBTEDNESS OF GRAND
VALLEY ACQUISITION SUB CONSTITUTING THE GRAND VALLEY EARN-OUT OBLIGATION
INCURRED IN CONNECTION WITH THE GRAND VALLEY ASSET ACQUISITION IN AN AGGREGATE
MAXIMUM POTENTIAL AMOUNT NOT TO EXCEED $1,000,000; AND

 

(i)                                     unsecured contingent Indebtedness of
Woodcraft constituting the Dimension Earn-Out Obligation incurred in connection
with the Dimension Acquisition in an aggregate maximum potential amount not to
exceed $7,000,000 plus accrued interest on the Dimension

 

39

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

 

Earn-Out Obligation at the rate specified in the Dimension Purchase Agreement as
in effect on the Second Amendment Closing Date.

 

5.6                                 TRANSACTIONS WITH AFFILIATES.  THE BORROWER
SHALL NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, ENTER INTO
ANY TRANSACTION WITH ANY AFFILIATE OF THE BORROWER OR OF ANY SUCH SUBSIDIARY,
EXCEPT:

 

(A)                                  AS EXPRESSLY PERMITTED BY THIS AGREEMENT;
OR

 

(B)                                 IN THE ORDINARY COURSE OF BUSINESS AND
PURSUANT TO THE REASONABLE REQUIREMENTS OF THE BUSINESS OF THE BORROWER OR SUCH
SUBSIDIARY; PROVIDED, THAT IN THE CASE OF THIS CLAUSE (B), UPON FAIR AND
REASONABLE TERMS NO LESS FAVORABLE TO THE BORROWER OR SUCH SUBSIDIARY THAN WOULD
BE OBTAINED IN A COMPARABLE ARM’S-LENGTH TRANSACTION WITH A PERSON NOT AN
AFFILIATE OF THE BORROWER OR SUCH SUBSIDIARY AND WHICH ARE DISCLOSED IN WRITING
TO THE AGENT.

 

5.7                                 MANAGEMENT FEES AND COMPENSATION.  THE
BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS SUBSIDIARIES TO, PAY ANY
MANAGEMENT, CONSULTING OR SIMILAR FEES TO ANY AFFILIATE OF THE BORROWER OR TO
ANY OFFICER, DIRECTOR OR EMPLOYEE OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR
AFFILIATES EXCEPT:

 

(A)                                  PAYMENT OF REASONABLE COMPENSATION TO
OFFICERS AND EMPLOYEES FOR ACTUAL SERVICES RENDERED TO THE BORROWER AND ITS
SUBSIDIARIES IN THE ORDINARY COURSE OF BUSINESS;

 

(B)                                 PAYMENT OF DIRECTORS’ FEES AND REIMBURSEMENT
OF ACTUAL OUT-OF-POCKET EXPENSES INCURRED IN CONNECTION WITH ATTENDING BOARD OF
DIRECTOR MEETINGS NOT TO EXCEED IN THE AGGREGATE, WITH RESPECT TO ALL SUCH
ITEMS, $100,000 IN ANY FISCAL YEAR OF THE BORROWER;

 

(C)                                  INTENTIONALLY OMITTED;

 

(D)                                 PAYMENT OF A ONE-TIME CLOSING FEE IN
JANUARY 2006 TO BEHRMAN BROTHERS MANAGEMENT CORP. IN CONNECTION WITH THE
DIMENSION ACQUISITION IN AN AMOUNT NOT TO EXCEED $100,000; AND

 

(E)                                  PAYMENT OF TRANSACTION OR SIMILAR FEES TO
BEHRMAN BROTHERS MANAGEMENT CORP. FROM TIME TO TIME IN CONNECTION WITH
(I) EQUITY OFFERINGS OR RAISES BY THE BORROWER, (II) THE SALE, MERGER OR OTHER
BUSINESS COMBINATION INVOLVING THE BUSINESS, SECURITIES OR ASSETS OF THE
BORROWER, (III) THE ACQUISITION BY THE BORROWER OF ANY PORTION OF THE BUSINESS,
SECURITIES OR ASSETS OF ANOTHER ENTITY CONSTITUTING A PERMITTED ACQUISITION AND
(IV) ANY EXTRAORDINARY DISTRIBUTION OF ASSETS OR DIVIDENDS IN CONNECTION WITH A
RECAPITALIZATION OF THE BORROWER (EACH SUCH TRANSACTION DESCRIBED IN THE
FOREGOING CLAUSES (I), (II), (III) AND (IV), A “TRANSACTION”), IN EACH CASE
PROVIDED THAT (X) SUCH FEE DOES NOT EXCEED TWO PERCENT (2%) OF AGGREGATE
TRANSACTION VALUE AND IS PAID FROM THE PROCEEDS OF SUCH TRANSACTION, (Y) NO
EVENT OF DEFAULT WOULD ARISE AS A RESULT OF THE CONSUMMATION OF THE APPLICABLE
TRANSACTION AND (Z) SUCH TRANSACTION WAS NOT CONSUMMATED FOR PURPOSES OF
SECTION 6.6 (IT BEING AGREED AND UNDERSTOOD THAT NOTHING CONTAINED IN THIS
PARAGRAPH (E) SHALL BE DEEMED TO CONSTITUTE (I) A WAIVER OF, OR OTHERWISE AFFECT
OR IMPAIR ANY OBLIGATION OF THE BORROWER OR ITS SUBSIDIARIES TO COMPLY WITH, ANY
PROVISION CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT PROHIBITING OR
OTHERWISE NOT PERMITTING THE CONSUMMATION OF ANY SUCH

 

40

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

 

TRANSACTION, OR (II) EXPRESS OR IMPLIED CONSENT OR APPROVAL BY THE AGENT OR ANY
LENDER TO THE CONSUMMATION OF ANY SUCH TRANSACTION);

 

provided, however, that no such fees or other payments described in the
foregoing clauses (c), (d) or (e) shall be paid during any period while any
Event of Default has occurred and is continuing or would arise as a result of
such payment.

 

5.8                                 USE OF PROCEEDS.  THE BORROWER SHALL NOT AND
SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO USE ANY PORTION OF THE
LOAN PROCEEDS, DIRECTLY OR INDIRECTLY, TO PURCHASE OR CARRY MARGIN STOCK OR
REPAY OR OTHERWISE REFINANCE INDEBTEDNESS OF THE BORROWER OR OTHERS INCURRED TO
PURCHASE OR CARRY MARGIN STOCK, OR OTHERWISE IN ANY MANNER WHICH IS IN
CONTRAVENTION OF ANY REQUIREMENT OF LAW OR IN VIOLATION OF THIS AGREEMENT.

 

5.9                                 CONTINGENT OBLIGATIONS.  THE BORROWER SHALL
NOT, AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, CREATE, INCUR,
ASSUME OR SUFFER TO EXIST ANY CONTINGENT OBLIGATIONS EXCEPT IN RESPECT OF THE
OBLIGATIONS AND EXCEPT:

 

(A)                                  ENDORSEMENTS OF THE BORROWER’S SUBSIDIARIES
FOR COLLECTION OR DEPOSIT IN THE ORDINARY COURSE OF BUSINESS;

 

(B)                                 RATE CONTRACTS ENTERED INTO IN THE ORDINARY
COURSE OF BUSINESS FOR BONA FIDE HEDGING PURPOSES AND NOT FOR SPECULATION WITH
THE AGENT’S PRIOR WRITTEN CONSENT;

 

(C)                                  UNSECURED CONTINGENT OBLIGATIONS OF THE
BORROWER AND ITS SUBSIDIARIES EXISTING AS OF THE RESTATEMENT EFFECTIVE DATE AND
LISTED IN SCHEDULE 5.9, INCLUDING EXTENSION AND RENEWALS THEREOF WHICH DO NOT
INCREASE THE AMOUNT OF SUCH CONTINGENT OBLIGATIONS AS OF THE DATE OF SUCH
EXTENSION OR RENEWAL;

 

(D)                                 CONTINGENT OBLIGATIONS INCURRED IN THE
ORDINARY COURSE OF BUSINESS OF THE BORROWER’S SUBSIDIARIES WITH RESPECT TO
SURETY AND APPEAL BONDS, PERFORMANCE BONDS AND OTHER SIMILAR OBLIGATIONS;

 

(E)                                  CONTINGENT OBLIGATIONS ARISING UNDER
INDEMNITY AGREEMENTS TO TITLE INSURERS TO CAUSE SUCH TITLE INSURERS TO ISSUE TO
THE AGENT TITLE INSURANCE POLICIES;

 

(F)                                    CONTINGENT OBLIGATIONS ARISING WITH
RESPECT TO CUSTOMARY INDEMNIFICATION OBLIGATIONS IN FAVOR OF (I) SELLERS IN
CONNECTION WITH PERMITTED ACQUISITIONS AND (II) PURCHASERS IN CONNECTION WITH
DISPOSITIONS PERMITTED UNDER SUBSECTION 5.2(B);

 

(G)                                 CONTINGENT OBLIGATIONS ARISING UNDER LENDER
LETTERS OF CREDIT AND OTHER LETTERS OF CREDIT WHICH ARE THE SUBJECT OF A LETTER
OF CREDIT PARTICIPATION AGREEMENT;

 

(H)                                 CONTINGENT OBLIGATIONS ARISING UNDER
PERMITTED GUARANTEES OF THE SUBORDINATED INDEBTEDNESS EVIDENCED BY THE HIGH
YIELD UNSECURED NOTES; AND

 

(I)                                     OTHER CONTINGENT OBLIGATIONS NOT
EXCEEDING $800,000 AT ANY TIME OUTSTANDING REDUCED BY THE AGGREGATE AMOUNT OF
INDEBTEDNESS OUTSTANDING THAT IS PERMITTED PURSUANT TO SECTION 5.5(G).

 

41

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

 

5.10                           COMPLIANCE WITH ERISA.  THE BORROWER SHALL NOT,
AND SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO:

 

(A)                                  TERMINATE ANY PLAN SUBJECT TO TITLE IV OF
ERISA SO AS TO RESULT IN ANY MATERIAL LIABILITY TO THE BORROWER;

 

(B)                                 PERMIT TO EXIST ANY ERISA EVENT OR ANY OTHER
EVENT OR CONDITION, WHICH WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT;

 

(C)                                  MAKE A COMPLETE OR PARTIAL WITHDRAWAL
(WITHIN THE MEANING OF ERISA SECTION 4201) FROM ANY MULTIEMPLOYER PLAN SO AS TO
RESULT IN ANY MATERIAL LIABILITY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES;

 

(D)                                 ENTER INTO ANY NEW PLAN OR MODIFY ANY
EXISTING PLAN SO AS TO INCREASE ITS OBLIGATIONS THEREUNDER WHICH WOULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; OR

 

(E)                                  PERMIT THE PRESENT VALUE OF ALL
NONFORFEITABLE ACCRUED BENEFITS UNDER ANY PLAN (USING THE ACTUARIAL ASSUMPTIONS
UTILIZED BY THE PBGC UPON TERMINATION OF A PLAN) MATERIALLY TO EXCEED THE FAIR
MARKET VALUE OF PLAN ASSETS ALLOCABLE TO SUCH BENEFITS, ALL DETERMINED AS OF THE
MOST RECENT VALUATION DATE FOR EACH SUCH PLAN.

 

5.11                           RESTRICTED PAYMENTS.  THE BORROWER SHALL NOT, AND
SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, (I) DECLARE OR MAKE ANY
DIVIDEND PAYMENT OR OTHER DISTRIBUTION OF ASSETS, PROPERTIES, CASH, RIGHTS,
OBLIGATIONS OR SECURITIES ON ACCOUNT OF ANY SHARES OF ANY CLASS OF ITS CAPITAL
STOCK, PARTNERSHIP INTERESTS, MEMBERSHIP INTERESTS OR OTHER EQUITY SECURITIES,
(II) PURCHASE, REDEEM OR OTHERWISE ACQUIRE FOR VALUE ANY SHARES OF ITS CAPITAL
STOCK, PARTNERSHIP INTERESTS, MEMBERSHIP INTERESTS OR OTHER EQUITY SECURITIES OR
ANY WARRANTS, RIGHTS OR OPTIONS TO ACQUIRE SUCH SHARES, INTERESTS OR SECURITIES
NOW OR HEREAFTER OUTSTANDING, (III) MAKE ANY PAYMENT OR PREPAYMENT OF PRINCIPAL
OF, PREMIUM, IF ANY, INTEREST, FEES, REDEMPTION, EXCHANGE, PURCHASE, RETIREMENT,
DEFEASANCE, PAYMENT IN TRUST, SINKING FUND OR SIMILAR PAYMENT WITH RESPECT TO,
SUBORDINATED INDEBTEDNESS, OR ANY PAYMENT ON ACCOUNT OF THE GRAND VALLEY
EARN-OUT OBLIGATION OR THE DIMENSION EARN-OUT OBLIGATION, (IV) MAKE ANY PAYMENT
OR PREPAYMENT OF PRINCIPAL OF, PREMIUM, IF ANY, INTEREST, FEES, REDEMPTION,
EXCHANGE, PURCHASE, RETIREMENT, DEFEASANCE, PAYMENT IN TRUST, SINKING FUND OR
SIMILAR PAYMENT WITH RESPECT TO, THE HIGH YIELD UNSECURED INDEBTEDNESS, OR
(V) MAKE ANY DIRECT OR INDIRECT PAYMENT IN RESPECT OF ANY CONSULTING,
MANAGEMENT, NON-COMPETITION OR SIMILAR AGREEMENT, ARRANGEMENT OR FEE (THE ITEMS
DESCRIBED IN CLAUSES (I), (II), (III), (IV) AND (V) ABOVE ARE REFERRED TO AS
“RESTRICTED PAYMENTS”); EXCEPT THAT ANY WHOLLY-OWNED SUBSIDIARY OF THE BORROWER
MAY DECLARE AND PAY DIVIDENDS TO ANY WHOLLY-OWNED SUBSIDIARY OF THE BORROWER AND
EXCEPT AS FOLLOWS, IN EACH INSTANCE PROVIDED THE SAME IS PERMITTED, AND SOLELY
TO THE EXTENT PERMITTED, UNDER THE HIGH YIELD UNSECURED DOCUMENTS:

 

(A)                                  THE BORROWER MAY DECLARE AND MAKE DIVIDEND
PAYMENTS OR OTHER DISTRIBUTIONS PAYABLE SOLELY IN ITS PERMITTED SECURITIES;

 

(B)                                 THE BORROWER’S SUBSIDIARIES MAY MAKE
DISTRIBUTIONS TO BORROWER IN AMOUNTS NECESSARY TO ENABLE BORROWER TO REDEEM FROM
MANAGEMENT STOCKHOLDERS SHARES OF THE BORROWER’S COMMON STOCK OR WARRANTS OR
OPTIONS TO ACQUIRE ANY SUCH SHARES, AND THE BORROWER

 

42

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

 

PROMPTLY SHALL SO REDEEM SUCH SHARES, WARRANTS OR OPTIONS WITH THE PROCEEDS
THEREOF; PROVIDED, THAT ANY SUCH REDEMPTIONS ARE MADE PROMPTLY BY THE BORROWER
AFTER ITS RECEIPT OF SUCH PROCEEDS; AND PROVIDED, FURTHER, THAT ALL OF THE
FOLLOWING CONDITIONS ARE SATISFIED:

 

(I)                                     NO DEFAULT OR EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING OR WOULD ARISE AS A RESULT OF SUCH RESTRICTED
PAYMENT;

 

(II)                                  AFTER GIVING EFFECT TO SUCH RESTRICTED
PAYMENT, THE BORROWER SHALL BE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE
COVENANTS SET FORTH IN ARTICLE VI, RECOMPUTED FOR THE MOST RECENT MONTH FOR
WHICH FINANCIAL STATEMENTS HAVE BEEN DELIVERED;

 

(III)                               THE AGGREGATE AMOUNT OF SUCH RESTRICTED
PAYMENTS PERMITTED (X) IN ANY FISCAL YEAR OF THE BORROWER SHALL NOT EXCEED
$350,000 AND (Y) DURING THE TERM OF THIS AGREEMENT SHALL NOT EXCEED $2,000,000;
AND

 

(IV)                              AFTER GIVING EFFECT TO SUCH RESTRICTED
PAYMENT, THE MAXIMUM REVOLVING LOAN BALANCE SHALL EXCEED THE AGGREGATE
OUTSTANDING PRINCIPAL BALANCE OF REVOLVING LOANS BY NOT LESS THAN $2,000,000;

 

(C)                                  INTENTIONALLY OMITTED;

 

(D)                                 INTENTIONALLY OMITTED;

 

(E)                                  IN THE EVENT THE BORROWER FILES A
CONSOLIDATED INCOME TAX RETURN WITH ITS SUBSIDIARIES, THE BORROWER’S
SUBSIDIARIES MAY MAKE DISTRIBUTIONS TO BORROWER TO PERMIT BORROWER TO PAY
FEDERAL AND STATE INCOME TAXES THEN DUE AND OWING, FRANCHISE TAXES AND OTHER
SIMILAR LICENSING EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS;
PROVIDED, THAT THE AMOUNT OF SUCH DISTRIBUTION SHALL NOT BE GREATER, NOR THE
RECEIPT BY THE BORROWER OF TAX BENEFITS LESS, THAN THEY WOULD HAVE BEEN HAD THE
BORROWER NOT FILED A CONSOLIDATED RETURN WITH ITS SUBSIDIARIES;

 

(F)                                    THE BORROWER’S SUBSIDIARIES MAY MAKE
DISTRIBUTIONS TO BORROWER IN AMOUNTS NECESSARY TO ENABLE BORROWER TO PAY, AS AND
WHEN DUE AND PAYABLE, AND THE BORROWER MAY PAY WITH THE PROCEEDS THEREOF,
PROVIDED, THAT ANY SUCH PAYMENTS ARE MADE PROMPTLY BY THE BORROWER AFTER ITS
RECEIPT OF SUCH PROCEEDS, (I) REGULARLY SCHEDULED SEMI-ANNUAL PAYMENTS OF
INTEREST ON THE HIGH YIELD UNSECURED INDEBTEDNESS AT A RATE NOT TO EXCEED TEN
PERCENT (10%) PER ANNUM IN ACCORDANCE WITH THE TERMS SET FORTH IN THE HIGH YIELD
UNSECURED DOCUMENTS, (II) REGULARLY SCHEDULED PAYMENTS OF INTEREST AND PRINCIPAL
ON ANY SUBORDINATED INDEBTEDNESS TO THE EXTENT PERMITTED UNDER THE SUBORDINATION
TERMS WITH RESPECT THERETO AND (III) ANY OTHER PAYMENTS THAT ARE REQUIRED UNDER
THIS AGREEMENT AND ANY OF THE OTHER LOAN DOCUMENTS;

 

(G)                                 THE BORROWER’S SUBSIDIARIES MAY MAKE
DISTRIBUTIONS TO BORROWER IN AMOUNTS NECESSARY TO ENABLE BORROWER TO MAKE CASH
DIVIDENDS OR DISTRIBUTIONS TO ITS HOLDERS OF CAPITAL STOCK SO LONG AS THE
AGGREGATE AMOUNT OF SUCH RESTRICTED PAYMENTS AND ALL OTHER RESTRICTED PAYMENTS
MADE UNDER THIS SECTION 5.11(G) SINCE THE ORIGINAL CLOSING DATE DOES NOT EXCEED
THE SUM OF (WITHOUT DUPLICATION):

 

43

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

 

(I)                                     FIFTY-PERCENT (50%) OF THE “CONSOLIDATED
NET INCOME” (AS DEFINED IN THE HIGH YIELD UNSECURED INDENTURE) ACCRUED DURING
THE PERIOD (TREATED AS ONE ACCOUNTING PERIOD) FROM THE BEGINNING OF THE FISCAL
QUARTER IMMEDIATELY FOLLOWING THE FISCAL QUARTER DURING WHICH THE ORIGINAL
CLOSING DATE OCCURRED TO THE END OF THE MOST RECENT FISCAL QUARTER ENDING PRIOR
TO THE DATE OF SUCH RESTRICTED PAYMENT FOR WHICH QUARTERLY FINANCIAL STATEMENTS
ARE AVAILABLE AND HAVE BEEN DELIVERED TO THE AGENT AND THE LENDERS IN ACCORDANCE
WITH THE TERMS HEREOF (OR, IN CASE SUCH CONSOLIDATED NET INCOME SHALL BE A
DEFICIT, MINUS 100% OF SUCH DEFICIT); PLUS

 

(II)                                  ONE HUNDRED PERCENT (100%) OF THE
AGGREGATE NET PROCEEDS RECEIVED BY THE BORROWER FROM THE ISSUANCE OR SALE OF ITS
PERMITTED SECURITIES SUBSEQUENT TO THE ORIGINAL CLOSING DATE (OTHER THAN AN
ISSUANCE OR SALE TO A SUBSIDIARY OF THE BORROWER AND OTHER THAN AN ISSUANCE OR
SALE TO AN EMPLOYEE STOCK OWNERSHIP PLAN OR TO A TRUST ESTABLISHED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES FOR THE BENEFIT OF THEIR EMPLOYEES) AND ONE
HUNDRED PERCENT (100%) OF ANY CASH CAPITAL CONTRIBUTION RECEIVED BY THE BORROWER
FROM ITS SHAREHOLDERS SUBSEQUENT TO THE ORIGINAL CLOSING DATE (OTHER THAN FOR
PURPOSES OF SECTION 6.6); PLUS

 

(III)                               THE AMOUNT BY WHICH INDEBTEDNESS OF THE
BORROWER IS REDUCED ON THE BORROWER’S BALANCE SHEET UPON THE CONVERSION OR
EXCHANGE SUBSEQUENT TO THE ORIGINAL CLOSING DATE OF ANY INDEBTEDNESS OF THE
BORROWER CONVERTIBLE OR EXCHANGEABLE FOR PERMITTED SECURITIES (LESS THE AMOUNT
OF ANY CASH, OR THE FAIR VALUE OF ANY OTHER PROPERTY, DISTRIBUTED BY THE
BORROWER UPON SUCH CONVERSION OR EXCHANGE) TO THE EXTENT THE SAME SHALL HAVE
BEEN PERMITTED UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE FOREGOING
AMOUNT SHALL NOT EXCEED THE NET CASH PROCEEDS RECEIVED BY THE BORROWER OR ANY OF
ITS SUBSIDIARIES FROM THE SALE OF SUCH INDEBTEDNESS (EXCLUDING NET PROCEEDS FROM
SALES TO A SUBSIDIARY OF THE BORROWER OR TO AN EMPLOYEE STOCK OWNERSHIP PLAN OR
TO A TRUST ESTABLISHED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES FOR THE
BENEFIT OF THEIR EMPLOYEES); PLUS

 

(IV)                              AN AMOUNT EQUAL TO THE NET REDUCTION IN THE
INVESTMENTS MADE BY THE BORROWER OR ANY SUBSIDIARY IN ANY PERSON (OTHER THAN THE
BORROWER OR ANY OF ITS SUBSIDIARIES) RESULTING FROM REPURCHASES, REPAYMENTS OR
REDEMPTIONS OF SUCH INVESTMENTS BY SUCH PERSON, PROCEEDS REALIZED ON THE SALE OF
SUCH INVESTMENTS AND PROCEEDS REPRESENTING THE RETURN OF CAPITAL (EXCLUDING
DIVIDENDS AND DISTRIBUTIONS), IN EACH CASE RECEIVED BY THE BORROWER OR ANY OF
ITS SUBSIDIARIES AND TO THE EXTENT THE SAME SHALL HAVE BEEN PERMITTED UNDER THIS
AGREEMENT; AND

 

PROVIDED, THAT ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED:

 

(I)                                     NO DEFAULT OR EVENT OF DEFAULT SHALL
HAVE OCCURRED AND BE CONTINUING OR WOULD ARISE AS A RESULT OF SUCH RESTRICTED
PAYMENT;

 

(II)                                  AFTER GIVING EFFECT TO SUCH RESTRICTED
PAYMENT, THE BORROWER SHALL BE IN COMPLIANCE ON A PRO FORMA BASIS WITH THE
COVENANTS SET FORTH IN ARTICLE VI, RECOMPUTED FOR THE MOST RECENT QUARTER FOR
WHICH FINANCIAL STATEMENTS HAVE BEEN DELIVERED;

 

44

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

 

(III)                               AFTER GIVING EFFECT TO SUCH RESTRICTED
PAYMENT, THE LEVERAGE RATIO, RECALCULATED FOR THE TWELVE (12) MONTH PERIOD
ENDING ON THE LAST DAY OF THE MOST RECENTLY ENDED QUARTER FOR WHICH THE AGENT
AND THE LENDERS SHALL HAVE RECEIVED FINANCIAL STATEMENTS IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT, SHALL BE LESS THAN 4.00 TO 1.00; AND

 

(IV)                              AFTER GIVING EFFECT TO SUCH RESTRICTED
PAYMENT, THE MAXIMUM REVOLVING LOAN BALANCE SHALL EXCEED THE AGGREGATE
OUTSTANDING PRINCIPAL BALANCE OF REVOLVING LOANS BY NOT LESS THAN $5,000,000;

 

(H)                                 GRAND VALLEY ACQUISITION SUB MAY PAY, AS AND
WHEN DUE AND PAYABLE, A ONE-TIME CASH PAYMENT IN AN AMOUNT REQUIRED TO BE PAID
PURSUANT TO THE TERMS OF THE GRAND VALLEY EARN-OUT OBLIGATION IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 1.4(B) OF THE GRAND VALLEY ASSET PURCHASE AGREEMENT AS
IN EFFECT ON THE FIRST AMENDMENT CLOSING DATE; PROVIDED, THAT ALL OF THE
FOLLOWING CONDITIONS ARE SATISFIED:

 

(i)                                     no Default or Event of Default shall
have occurred and be continuing or would arise as a result of such Restricted
Payment or any transactions which may occur to enable Grand Valley Acquisition
Sub to make such Restricted Payment;

 

(ii)                                  such Restricted Payment is required to be
made under the terms of the Grand Valley Asset Purchase Agreement;

 

(iii)                               after giving effect to such Restricted
Payment, the Borrower shall be in compliance on a pro forma basis with the
covenants set forth in Article VI, recomputed for the most recent quarter for
which financial statements have been delivered;

 

(iv)                              the aggregate amount of such Restricted
Payment shall not exceed $1,000,000 (or, if less, the amount determined in
accordance with the terms of the Grand Valley Asset Purchase Agreement as in
effect on the First Amendment Closing Date);

 

(v)                                 after giving effect to such Restricted
Payment, the Maximum Revolving Loan Balance shall exceed the aggregate
outstanding principal balance of Revolving Loans by not less than $5,000,000;

 

(vi)                              the “Available Liquidity” (as defined in the
High Yield Unsecured Indenture) of the Borrower shall be at least $7,500,000;
and

 

(vii)                           if required pursuant to the terms of the High
Yield Subordinated Indenture and/or in the event that the Leverage Ratio of the
Borrower and its Subsidiaries after giving effect to such Restricted Payment
shall be greater than 4.00:1.00, at least fifty percent (50%) of the amount of
such Restricted Payment shall have been financed with “Acceptable Capital
Contributions” (as defined in the High Yield Unsecured Indenture), and not more
than $500,000 of Revolving

 

45

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

 

Loans and cash on hand of the Borrower (to the extent not constituting proceeds
of such Acceptable Capital Contributions) (or, if less, an amount not to exceed
fifty percent (50%) of such Restricted Payment) in the aggregate shall be used
to make such Restricted Payment; and

 

(I)                                     WOODCRAFT MAY PAY, AS AND WHEN DUE AND
PAYABLE, CASH PAYMENTS IN AMOUNTS REQUIRED TO BE PAID PURSUANT TO THE TERMS OF
THE DIMENSION EARN-OUT OBLIGATION IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 1.6(C) OF THE DIMENSION PURCHASE AGREEMENT AS IN EFFECT ON THE SECOND
AMENDMENT CLOSING DATE; PROVIDED, THAT ALL OF THE FOLLOWING CONDITIONS ARE
SATISFIED:

 

(i)                                     no Default or Event of Default shall
have occurred and be continuing or would arise as a result of such Restricted
Payment or any transactions which may occur to enable Woodcraft to make such
Restricted Payment;

 

(ii)                                  such Restricted Payment is required to be
made under the terms of the Dimension Purchase Agreement;

 

(iii)                               after giving effect to such Restricted
Payment, the Borrower shall be in compliance on a pro forma basis with the
covenants set forth in Article VI, recomputed for the most recent quarter for
which financial statements have been delivered;

 

(iv)                              the amount of such Restricted Payment shall
not exceed the amount determined in accordance with the terms of the Dimension
Purchase Agreement as in effect on the Second Amendment Closing Date;

 

(v)                                 after giving effect to such Restricted
Payment, the Maximum Revolving Loan Balance shall exceed the aggregate
outstanding principal balance of Revolving Loans by not less than $5,000,000;

 

(vi)                              the “Available Liquidity” (as defined in the
High Yield Unsecured Indenture) of the Borrower shall be at least $7,500,000;
and

 

(vii)                           if required pursuant to the terms of the High
Yield Subordinated Indenture and/or in the event that the Leverage Ratio of the
Borrower and its Subsidiaries after giving effect to such Restricted Payment
shall be greater than 4.00:1.00, at least fifty percent (50%) of the amount of
such Restricted Payment shall have been financed with “Acceptable Capital
Contributions” (as defined in the High Yield Unsecured Indenture), and not more
than an amount of Revolving Loans and cash on hand of the Borrower (to the
extent not constituting proceeds of such Acceptable Capital Contributions) equal
to fifty percent (50%) of such Restricted Payment shall be used to make such
Restricted Payment.

 

5.12                           CHANGE IN BUSINESS.  THE BORROWER SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES TO ENGAGE IN ANY MATERIAL LINE OF BUSINESS
SUBSTANTIALLY DIFFERENT FROM THOSE RESPECTIVE LINES OF BUSINESS CARRIED ON BY
EACH OF THEM ON THE DATE HEREOF.  THE BORROWER SHALL NOT (I) ENGAGE IN ANY

 

46

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

 

BUSINESS ACTIVITY OTHER THAN (A) ITS OWNERSHIP OF THE EQUITY SECURITIES OF
WOODCRAFT, (B) ACTIVITIES INCIDENTAL TO MAINTENANCE OF ITS CORPORATE EXISTENCE
AND (C) PERFORMANCE OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS, THE HIGH YIELD
UNSECURED DOCUMENTS AND THE OTHER RELATED AGREEMENTS TO WHICH IT IS A PARTY,
(II) RECEIVE OR RETAIN ANY RESTRICTED PAYMENT EXCEPT TO THE EXTENT EXPRESSLY
PERMITTED HEREUNDER (PROVIDED BORROWER USES THE PROCEEDS THEREOF SOLELY FOR SUCH
SPECIFIED PURPOSES) OR (III) INCUR, GRANT OR SUFFER TO EXIST ANY LIENS,
INDEBTEDNESS OR CONTINGENT OBLIGATIONS OTHER THAN (X) LIENS GRANTED TO THE
AGENT, FOR THE BENEFIT OF THE AGENT AND THE LENDERS, OR (Y) INDEBTEDNESS AND
CONTINGENT OBLIGATIONS PURSUANT TO THE LOAN DOCUMENTS, THE HIGH YIELD UNSECURED
DOCUMENTS AND THE OTHER RELATED AGREEMENTS TO WHICH IT IS A PARTY.

 

5.13                           CHANGE IN STRUCTURE.  EXCEPT AS EXPRESSLY
PERMITTED UNDER SECTION 5.3, THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF
ITS SUBSIDIARIES TO, MAKE ANY MATERIAL CHANGES IN ITS EQUITY CAPITAL STRUCTURE
(INCLUDING IN THE TERMS OF ITS OUTSTANDING CAPITAL STOCK), OR AMEND ANY OF ITS
ORGANIZATION DOCUMENTS IN ANY MATERIAL RESPECT OR IN ANY RESPECT ADVERSE TO THE
AGENT OR LENDERS.

 

5.14                           ACCOUNTING CHANGES.  THE BORROWER SHALL NOT, AND
SHALL NOT SUFFER OR PERMIT ANY OF ITS SUBSIDIARIES TO, MAKE ANY SIGNIFICANT
CHANGE IN ACCOUNTING TREATMENT OR REPORTING PRACTICES, EXCEPT AS REQUIRED BY
GAAP, OR CHANGE THE FISCAL YEAR OF THE BORROWER OR OF ANY OF ITS SUBSIDIARIES.

 

5.15                           AMENDMENTS TO RELATED AGREEMENTS.

 

(A)                                  THE BORROWER SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES TO, (I) AMEND, SUPPLEMENT, WAIVE OR OTHERWISE
MODIFY ANY PROVISION OF, ANY RELATED AGREEMENT IN A MANNER ADVERSE TO THE AGENT
OR LENDERS OR WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT, OR (II) TAKE OR FAIL TO TAKE ANY ACTION UNDER ANY RELATED AGREEMENT THAT
WOULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

(B)                                 THE BORROWER SHALL NOT, AND SHALL NOT PERMIT
ANY OF ITS SUBSIDIARIES DIRECTLY OR INDIRECTLY TO, CHANGE OR AMEND THE TERMS OF
ANY SUBORDINATED INDEBTEDNESS, IF THE EFFECT OF SUCH AMENDMENT WOULD BE TO:
(I) INCREASE THE INTEREST RATE ON SUCH INDEBTEDNESS; (II) SHORTEN THE DATES UPON
WHICH PAYMENTS OF PRINCIPAL OR INTEREST ARE DUE ON SUCH INDEBTEDNESS; (III) ADD
OR CHANGE IN A MANNER ADVERSE TO THE BORROWER ANY EVENT OF DEFAULT OR ADD OR
MAKE MORE RESTRICTIVE ANY COVENANT WITH RESPECT TO SUCH INDEBTEDNESS;
(IV) CHANGE IN A MANNER ADVERSE TO THE BORROWER THE PREPAYMENT PROVISIONS OF
SUCH INDEBTEDNESS; (V) CHANGE THE SUBORDINATION PROVISIONS THEREOF (OR THE
SUBORDINATION TERMS OF ANY GUARANTY THEREOF); OR (VI) CHANGE OR AMEND ANY OTHER
TERM IF SUCH CHANGE OR AMENDMENT WOULD MATERIALLY INCREASE THE OBLIGATIONS OF
THE OBLIGOR OR CONFER ADDITIONAL MATERIAL RIGHTS ON THE HOLDER OF SUCH
INDEBTEDNESS IN A MANNER ADVERSE TO THE BORROWER, ANY OF ITS SUBSIDIARIES, THE
AGENT OR THE LENDERS.

 

(C)                                  THE BORROWER SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES DIRECTLY OR INDIRECTLY TO, CHANGE OR AMEND THE
TERMS OF THE HIGH YIELD UNSECURED INDEBTEDNESS OR ANY OF THE HIGH YIELD
UNSECURED DOCUMENTS, IF THE EFFECT OF SUCH CHANGE OR AMENDMENT WOULD BE TO:
(I) INCREASE THE INTEREST RATE ON OR PRINCIPAL AMOUNT OF SUCH INDEBTEDNESS;
(II) SHORTEN THE DATES UPON WHICH PAYMENTS OF PRINCIPAL OR INTEREST ARE DUE ON
SUCH INDEBTEDNESS; (III) ADD OR CHANGE IN A MANNER ADVERSE TO THE BORROWER ANY
EVENT OF DEFAULT OR ADD OR MAKE MORE RESTRICTIVE ANY

 

47

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

 

COVENANT WITH RESPECT TO SUCH INDEBTEDNESS; (IV) CHANGE IN A MANNER ADVERSE TO
THE BORROWER THE PREPAYMENT OR REDEMPTION PROVISIONS OF SUCH INDEBTEDNESS;
(V) CHANGE OR AMEND ANY OTHER TERM IF SUCH CHANGE OR AMENDMENT WOULD INCREASE
THE OBLIGATIONS OF THE OBLIGOR OR CONFER ADDITIONAL RIGHTS ON THE HOLDER OF SUCH
INDEBTEDNESS IN A MANNER ADVERSE TO THE BORROWER, ANY OF ITS SUBSIDIARIES, THE
AGENT OR THE LENDERS; (VI) PROVIDE THAT ANY SUCH INDEBTEDNESS WILL BECOME
SECURED, OR (VII) PROVIDE THAT SUCH INDEBTEDNESS WILL BECOME GUARANTEED, EXCEPT
BY ANY SUBSIDIARIES THAT ARE ALSO PROVIDING GUARANTEES OF THE OBLIGATIONS
HEREUNDER; AND PROVIDED THAT THE BORROWER AND ANY SUCH SUBSIDIARIES HAVE
COMPLIED WITH ALL OF THE CONDITIONS SET FORTH IN SECTION 4.12 HEREOF ON OR PRIOR
TO THE PROVISION OF SUCH GUARANTEE.

 

(D)                                 THE BORROWER SHALL NOT, AND SHALL NOT PERMIT
ANY OF ITS SUBSIDIARIES DIRECTLY OR INDIRECTLY TO, CHANGE, AMEND, SUPPLEMENT,
WAIVE OR OTHERWISE MODIFY ANY PROVISION OF ANY OF THE GRAND VALLEY PURCHASE
DOCUMENTS, ANY OTHER TERM OR PROVISION RELATING TO THE GRAND VALLEY EARN-OUT
OBLIGATION, ANY OF THE DIMENSION PURCHASE DOCUMENTS OR ANY OTHER TERM OR
PROVISION RELATING TO THE DIMENSION EARN-OUT OBLIGATION.

 

5.16                           NO NEGATIVE PLEDGES.

 

(A)                                  THE BORROWER SHALL NOT, AND SHALL NOT
PERMIT ANY OF ITS SUBSIDIARIES DIRECTLY OR INDIRECTLY TO, CREATE OR OTHERWISE
CAUSE OR SUFFER TO EXIST OR BECOME EFFECTIVE ANY CONSENSUAL RESTRICTION OR
ENCUMBRANCE OF ANY KIND ON THE ABILITY OF ANY SUCH SUBSIDIARY TO PAY DIVIDENDS
OR MAKE ANY OTHER DISTRIBUTION ON ANY OF SUCH SUBSIDIARY’S EQUITY SECURITIES OR
TO PAY FEES, INCLUDING MANAGEMENT FEES, OR MAKE OTHER PAYMENTS AND DISTRIBUTIONS
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OTHER THAN RESTRICTIONS CONTAINED
HEREIN OR IN THE HIGH YIELD UNSECURED DOCUMENTS WITH RESPECT TO DISTRIBUTIONS BY
A SUBSIDIARY OF THE BORROWER WHICH IS NOT A WHOLLY-OWNED SUBSIDIARY OF
BORROWER.  THE BORROWER SHALL NOT, AND SHALL NOT PERMIT ANY OF ITS SUBSIDIARIES
DIRECTLY OR INDIRECTLY TO, ENTER INTO, ASSUME OR BECOME SUBJECT TO ANY
CONTRACTUAL OBLIGATION PROHIBITING OR OTHERWISE RESTRICTING THE EXISTENCE OF ANY
LIEN UPON ANY OF ITS ASSETS IN FAVOR OF THE AGENT, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED EXCEPT IN CONNECTION WITH ANY DOCUMENT OR INSTRUMENT
GOVERNING LIENS PERMITTED PURSUANT TO SUBSECTIONS 5.1(H) AND (I); PROVIDED, THAT
ANY SUCH RESTRICTION CONTAINED THEREIN RELATES ONLY TO THE ASSET OR ASSETS
SUBJECT TO SUCH PERMITTED LIENS.

 

(B)                                 THE BORROWER SHALL NOT ISSUE ANY SHARES OF
THE BORROWER’S EQUITY SECURITIES, INCLUDING, WITHOUT LIMITATION, PERMITTED
SECURITIES, IF SUCH ISSUANCE WOULD RESULT IN AN EVENT OF DEFAULT UNDER
SUBSECTION 7.1(L).

 

5.17                           FOREIGN ASSETS CONTROL REGULATIONS.  BORROWER
WILL NOT, AND WILL NOT PERMIT ANY OF ITS SUBSIDIARIES TO, (I) USE ANY PROCEEDS
FROM THE LOANS TO KNOWINGLY ENGAGE IN ANY MATERIAL DEALINGS OR TRANSACTIONS WITH
ANY BLOCKED PERSONS DESCRIBED IN SECTION 1 OF EXECUTIVE ORDER 13224 OF THE
SEPTEMBER 23, 2001 BLOCKING PROPERTY AND PROHIBITING TRANSACTION WITH PERSONS
WHO COMMIT AND THREATEN TO COMMIT, OR SUPPORT TERRORISM (66 FED. REG. 49049
(2001)), OR (II) ENGAGE IN TRANSACTIONS WITH ANY PERSON OR COUNTRY TO THE EXTENT
RESTRICTED BY THE TRADING WITH THE ENEMY ACT, AS AMENDED, OR USE THE PROCEEDS
FROM THE LOANS TO SO ENGAGE.

 

5.18                           INTEGRATION.  NOTWITHSTANDING ANYTHING IN THIS
ARTICLE V TO THE CONTRARY, NO ACTION OTHERWISE PERMITTED UNDER THIS ARTICLE V
SHALL BE PERMITTED IF SUCH ACTION IS PROHIBITED OR IS

 

48

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

 

OTHERWISE NOT PERMITTED UNDER ANY OF THE HIGH YIELD UNSECURED DOCUMENTS AND THE
AGENT SHALL HAVE THE RIGHT, AT ANY TIME, TO REQUIRE THE BORROWER TO DELIVER A
CERTIFICATE EXECUTED BY A RESPONSIBLE OFFICER OF BORROWER AND OTHERWISE IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO AGENT WHICH CERTIFIES TO AGENT AND
LENDERS THAT ANY SUCH ACTION, AT THE TIME SUCH ACTION IS TO BE TAKEN, IS
PERMITTED UNDER THE HIGH YIELD UNSECURED DOCUMENTS.  FURTHERMORE, ALL COVENANTS
CONTAINED IN EACH OF THE HIGH YIELD UNSECURED DOCUMENTS HEREBY ARE INCORPORATED
HEREIN, MUTATIS MUTANDIS, AS IF SUCH COVENANTS WERE SET FORTH IN THIS AGREEMENT,
AND SHALL BE DEEMED IN ADDITION TO, AND NOT IN SUBSTITUTION OF, THE COVENANTS
CONTAINED IN THE LOAN DOCUMENTS.

 

5.19                           CERTAIN LEASED LOCATIONS.  THE BORROWER SHALL NOT
PERMIT INVENTORY, MACHINERY AND EQUIPMENT HAVING A VALUE IN EXCESS OF $750,000,
IN THE AGGREGATE, AT ANY TIME TO BE LOCATED AT THE BORROWER’S WAREHOUSING
FACILITIES MAINTAINED AT (A) 2815 CLEARWATER ROAD, ST. CLOUD, MINNESOTA 56301 OR
(B) 14500 PARALLEL, SUITE T, BASEHOR, KANSAS 66007, UNLESS THE BORROWER SHALL
HAVE DELIVERED A BAILEE WAIVER OR WAREHOUSING AGREEMENT, AS THE CASE MAY BE,
DULY EXECUTED BY THE BAILOR OR WAREHOUSER, AS THE CASE MAY BE, OF EACH SUCH
LOCATION, IN EACH CASE, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE
AGENT.

 

ARTICLE VI - FINANCIAL COVENANTS

 

The Borrower covenants and agrees that, so long as any Lender shall have any
Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied, unless the Required Lenders waive
compliance in writing:

 

6.1                                 RESERVED.

 

6.2                                 LEVERAGE RATIO.  THE BORROWER SHALL NOT
PERMIT ITS LEVERAGE RATIO FOR THE TWELVE (12) MONTH PERIOD ENDING ON THE LAST
DAY OF ANY FISCAL QUARTER OF THE BORROWER (COMMENCING WITH THE FISCAL QUARTER OF
THE BORROWER ENDING SEPTEMBER 30, 2005) TO BE GREATER THAN 7.00 TO 1.00.

 

“Leverage Ratio” shall be calculated in the manner set forth in Exhibit 4.2(b).

 

6.3                                 FIXED CHARGE COVERAGE RATIO.  THE BORROWER
SHALL NOT PERMIT ITS FIXED CHARGE COVERAGE RATIO FOR THE TWELVE (12) MONTH
PERIOD ENDING ON THE LAST DAY OF ANY FISCAL QUARTER OF THE BORROWER (COMMENCING
WITH THE FISCAL QUARTER OF THE BORROWER ENDING SEPTEMBER 30, 2005) TO BE LESS
THAN THE MINIMUM RATIO SET FORTH IN THE TABLE BELOW OPPOSITE SUCH DATE:

 

Date

 

Minimum Fixed Charge
Ratio

 

 

 

 

 

September 30, 2005

 

1.05 to 1.00

 

December 31, 2005

 

1.05 to 1.00

 

 

 

 

 

March 31, 2006

 

1.05 to 1.00

 

June 30, 2006

 

1.05 to 1.00

 

September 30, 2006

 

1.05 to 1.00

 

December 31, 2006

 

1.05 to 1.00

 

 

 

 

 

March 31, 2007 and the last day of each fiscal quarter thereafter

 

1.10 to 1.00

 

 

49

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

 

“Fixed Charge Coverage Ratio” shall be calculated in the manner set forth in
Exhibit 4.2(b).

 

6.4                                 RESERVED.

 

6.5                                 EBITDA.  THE BORROWER SHALL NOT PERMIT ITS
EBITDA FOR THE TWELVE (12) MONTH PERIOD ENDING ON THE LAST DAY OF ANY FISCAL
QUARTER OF THE BORROWER (COMMENCING WITH THE FISCAL QUARTER OF THE BORROWER
ENDING SEPTEMBER 30, 2005) TO BE LESS THAN $21,000,000.

 

“EBITDA” shall be calculated in the manner set forth in Exhibit 4.2(b).

 

6.6                                 EQUITY CONTRIBUTION.  ANYTHING CONTAINED IN
THIS ARTICLE VI TO THE CONTRARY NOTWITHSTANDING, IF THE BORROWER VIOLATES ANY
FINANCIAL COVENANT CONTAINED IN SECTIONS 6.2, 6.3 AND/OR 6.5 AS OF ANY DATE OF
MEASUREMENT, NO EVENT OF DEFAULT SHALL OCCUR IN RESPECT THEREOF TO THE EXTENT
EACH OF THE FOLLOWING CONDITIONS IS SATISFIED IN RESPECT THEREOF:

 

(A)                                  CONTEMPORANEOUSLY WITH THE DELIVERY OF THE
COMPLIANCE CERTIFICATE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT RELATING
TO SUCH DATE OF MEASUREMENT, SPONSOR DELIVERS TO AGENT A WRITING BY WHICH
SPONSOR UNCONDITIONALLY AND IRREVOCABLY COMMITS, FOR THE BENEFIT OF AGENT AND
THE LENDERS, TO CONTRIBUTE CASH COMMON EQUITY TO BORROWER IN AN AMOUNT AT LEAST
EQUAL TO THE RELEVANT EBITDA PLUG AMOUNT FOR PURPOSES OF THIS PARAGRAPH;

 

(B)                                 ON OR BEFORE THE FIFTH (5TH) DAY AFTER THE
DATE ON WHICH SUCH COMPLIANCE CERTIFICATE AND WRITING ARE DELIVERED TO THE
AGENT, SPONSOR MAKES A CASH COMMON EQUITY CONTRIBUTION IN A NET CASH AMOUNT AT
LEAST EQUAL TO THE RELEVANT EBITDA PLUG AMOUNT AND THE TERMS OF SUCH EQUITY
SHALL NOT PROVIDE FOR, INCLUDE OR GRANT ANY MANDATORY OR REQUIRED REDEMPTION OR
REPURCHASE RIGHTS OR ANY RIGHTS TO MANDATORY OR REQUIRED DIVIDENDS,
DISTRIBUTIONS OR OTHER PAYMENTS THEREON OR IN RESPECT THERETO (EACH SUCH
CONTRIBUTION, A “CASH CONTRIBUTION”);

 

(C)                                  UPON RECEIPT OF SUCH CASH CONTRIBUTION BY
THE BORROWER, THE BORROWER IMMEDIATELY MAKES A MANDATORY PREPAYMENT OF THE LOANS
AND OTHER OBLIGATIONS WITH THE PROCEEDS THEREOF IN ACCORDANCE WITH THE TERMS OF
SUBSECTION 1.8(G); AND

 

(D)                                 NO OTHER DEFAULT OR EVENT OF DEFAULT EXISTS
OR OTHERWISE WOULD BE CREATED BY THE MAKING OF ANY SUCH CONTRIBUTIONS;

 

it being understood that the amount of any such contributions shall be added to
EBITDA (or, in respect of the Fixed Charge Coverage ratio under Section 6.3,
Cash Flow) solely for the applicable test period and date of measurement and
shall not be included or considered (or credited) in the calculation of EBITDA
(or Cash Flow, as applicable) for any subsequent test period or date of
measurement.  The Borrower agrees and acknowledges that an Event of Default
shall occur immediately and automatically upon the failure of Sponsor or the
Borrower to timely comply with any of the foregoing.

 

50

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

 

ARTICLE VII - EVENTS OF DEFAULT

 

7.1                                 EVENT OF DEFAULT.  ANY OF THE FOLLOWING
SHALL CONSTITUTE AN “EVENT OF DEFAULT”:

 

(A)                                  NON-PAYMENT.  THE BORROWER FAILS TO PAY
(I) WHEN AND AS REQUIRED TO BE PAID HEREIN, ANY AMOUNT OF PRINCIPAL OF OR
INTEREST ON ANY LOAN, INCLUDING AFTER MATURITY OF THE LOANS, WHETHER BY
ACCELERATION OR OTHERWISE, OR (II) WITHIN TEN (10) DAYS AFTER THE SAME SHALL
BECOME DUE, ANY FEE OR ANY OTHER AMOUNT PAYABLE HEREUNDER OR PURSUANT TO ANY
OTHER LOAN DOCUMENT; OR

 

(B)                                 REPRESENTATION OR WARRANTY.  ANY
REPRESENTATION, WARRANTY OR CERTIFICATION BY OR ON BEHALF OF THE BORROWER OR ANY
OF ITS SUBSIDIARIES MADE OR DEEMED MADE HEREIN, IN ANY OTHER LOAN DOCUMENT, OR
WHICH IS CONTAINED IN ANY CERTIFICATE, DOCUMENT OR FINANCIAL OR OTHER STATEMENT
BY THE BORROWER, ANY OF ITS SUBSIDIARIES, OR ANY OF THEIR RESPECTIVE RESPONSIBLE
OFFICERS, FURNISHED AT ANY TIME UNDER THIS AGREEMENT, OR IN OR UNDER ANY OTHER
LOAN DOCUMENT, SHALL PROVE TO HAVE BEEN INCORRECT IN ANY MATERIAL RESPECT ON OR
AS OF THE DATE MADE OR DEEMED MADE; OR

 

(C)                                  SPECIFIC DEFAULTS.  THE BORROWER FAILS TO
PERFORM OR OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN ANY OF SECTIONS
4.1, 4.2(B), 4.2(D), 4.4 (OTHER THAN 4.4(C)), 4.6, 4.9, 4.13 OR ARTICLE V OR,
SUBJECT TO SECTION 6.6, ARTICLE VI HEREOF; OR

 

(D)                                 OTHER DEFAULTS.  THE BORROWER OR ANY OF ITS
SUBSIDIARIES FAILS TO PERFORM OR OBSERVE ANY OTHER TERM, COVENANT OR AGREEMENT
CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND SUCH DEFAULT SHALL
CONTINUE UNREMEDIED FOR A PERIOD OF THIRTY (30) DAYS AFTER THE EARLIER TO OCCUR
OF (I) THE DATE UPON WHICH A RESPONSIBLE OFFICER BECOMES AWARE OF SUCH DEFAULT
AND (II) THE DATE UPON WHICH WRITTEN NOTICE THEREOF IS GIVEN TO THE BORROWER BY
THE AGENT OR REQUIRED LENDERS; OR

 

(E)                                  CROSS-DEFAULT.  (I) THE BORROWER OR ANY OF
ITS SUBSIDIARIES (A) FAILS TO MAKE ANY PAYMENT IN RESPECT OF ANY INDEBTEDNESS
(OTHER THAN THE OBLIGATIONS) OR CONTINGENT OBLIGATION HAVING AN AGGREGATE
PRINCIPAL AMOUNT (INCLUDING UNDRAWN COMMITTED OR AVAILABLE AMOUNTS AND INCLUDING
AMOUNTS OWING TO ALL CREDITORS UNDER ANY COMBINED OR SYNDICATED CREDIT
ARRANGEMENT) OF MORE THAN $1,000,000 WHEN DUE (WHETHER BY SCHEDULED MATURITY,
REQUIRED PREPAYMENT, ACCELERATION, DEMAND, OR OTHERWISE) AND SUCH FAILURE
CONTINUES AFTER THE APPLICABLE GRACE OR NOTICE PERIOD, IF ANY, SPECIFIED IN THE
DOCUMENT RELATING THERETO ON THE DATE OF SUCH FAILURE; OR (B) FAILS TO PERFORM
OR OBSERVE ANY OTHER CONDITION OR COVENANT, OR ANY OTHER EVENT SHALL OCCUR OR
CONDITION EXIST, UNDER ANY AGREEMENT OR INSTRUMENT RELATING TO ANY SUCH
INDEBTEDNESS OR CONTINGENT OBLIGATION, IF THE EFFECT OF SUCH FAILURE, EVENT OR
CONDITION IS TO CAUSE, OR TO PERMIT THE HOLDER OR HOLDERS OF SUCH INDEBTEDNESS
OR BENEFICIARY OR BENEFICIARIES OF SUCH INDEBTEDNESS (OR A TRUSTEE OR AGENT ON
BEHALF OF SUCH HOLDER OR HOLDERS OR BENEFICIARY OR BENEFICIARIES) TO CAUSE SUCH
INDEBTEDNESS TO BE DECLARED TO BE DUE AND PAYABLE PRIOR TO ITS STATED MATURITY,
OR SUCH CONTINGENT OBLIGATION TO BECOME PAYABLE OR CASH COLLATERAL IN RESPECT
THEREOF TO BE DEMANDED; OR (II) ANY DEFAULT OR EVENT OF DEFAULT OCCURS UNDER OR
IN RESPECT OF THE HIGH YIELD UNSECURED INDEBTEDNESS OR ANY OF THE HIGH YIELD
UNSECURED DOCUMENTS; OR (III) ANY DEFAULT OR EVENT OF DEFAULT OCCURS UNDER OR IN
RESPECT OF ANY SUBORDINATED INDEBTEDNESS; OR

 

51

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

 

(F)                                    INSOLVENCY; VOLUNTARY PROCEEDINGS.  THE
BORROWER OR ANY OF ITS SUBSIDIARIES: (I) CEASES OR FAILS TO BE SOLVENT;
(II) GENERALLY FAILS TO PAY, OR ADMITS IN WRITING ITS INABILITY TO PAY, ITS
DEBTS AS THEY BECOME DUE, SUBJECT TO APPLICABLE GRACE PERIODS, IF ANY, WHETHER
AT STATED MATURITY OR OTHERWISE; (III) VOLUNTARILY CEASES TO CONDUCT ITS
BUSINESS IN THE ORDINARY COURSE; (IV) COMMENCES ANY INSOLVENCY PROCEEDING WITH
RESPECT TO ITSELF; OR (V) TAKES ANY ACTION TO EFFECTUATE OR AUTHORIZE ANY OF THE
FOREGOING; OR

 

(G)                                 INVOLUNTARY PROCEEDINGS.  (I) ANY
INVOLUNTARY INSOLVENCY PROCEEDING IS COMMENCED OR FILED AGAINST THE BORROWER OR
ANY OF ITS SUBSIDIARIES, OR ANY WRIT, JUDGMENT, WARRANT OF ATTACHMENT, EXECUTION
OR SIMILAR PROCESS, IS ISSUED OR LEVIED AGAINST A SUBSTANTIAL PART OF THE
BORROWER’S OR ANY OF ITS SUBSIDIARIES’ PROPERTY, AND ANY SUCH PROCEEDING OR
PETITION SHALL NOT BE DISMISSED, OR SUCH WRIT, JUDGMENT, WARRANT OF ATTACHMENT,
EXECUTION OR SIMILAR PROCESS SHALL NOT BE RELEASED, VACATED OR FULLY BONDED
WITHIN SIXTY (60) DAYS AFTER COMMENCEMENT, FILING OR LEVY; (II) THE BORROWER OR
ANY OF ITS SUBSIDIARIES ADMITS THE MATERIAL ALLEGATIONS OF A PETITION AGAINST IT
IN ANY INSOLVENCY PROCEEDING, OR AN ORDER FOR RELIEF (OR SIMILAR ORDER UNDER
NON-U.S. LAW) IS ORDERED IN ANY INSOLVENCY PROCEEDING; OR (III) THE BORROWER OR
ANY OF ITS SUBSIDIARIES ACQUIESCES IN THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, CONSERVATOR, LIQUIDATOR, MORTGAGEE IN POSSESSION (OR AGENT THEREFOR),
OR OTHER SIMILAR PERSON FOR ITSELF OR A SUBSTANTIAL PORTION OF ITS PROPERTY OR
BUSINESS; OR

 

(H)                                 ERISA.  (I) A MEMBER OF THE CONTROLLED GROUP
SHALL FAIL TO PAY WHEN DUE, AFTER THE EXPIRATION OF ANY APPLICABLE GRACE PERIOD,
ANY INSTALLMENT PAYMENT WITH RESPECT TO ITS WITHDRAWAL LIABILITY UNDER A
MULTIEMPLOYER PLAN; (II) A MEMBER OF THE CONTROLLED GROUP SHALL FAIL TO SATISFY
ITS CONTRIBUTION REQUIREMENTS UNDER SECTION 412(C)(11) OF THE CODE, WHETHER OR
NOT IT HAS SOUGHT A WAIVER UNDER SECTION 412(D) OF THE CODE; (III) THE
OCCURRENCE OF AN ERISA EVENT; (IV) A PLAN THAT IS INTENDED TO BE QUALIFIED UNDER
SECTION 401(A) OF THE CODE SHALL LOSE ITS QUALIFICATION; (V) ANY MEMBER OF THE
CONTROLLED GROUP ENGAGES IN OR OTHERWISE BECOMES LIABLE FOR A NON-EXEMPT
PROHIBITED TRANSACTION; (VI) A VIOLATION OF SECTION 404 OR 405 OF ERISA OR THE
EXCLUSIVE BENEFIT RULE UNDER SECTION 401(A) OF THE CODE; OR (VII) ANY MEMBER OF
THE CONTROLLED GROUP IS ASSESSED A TAX UNDER SECTION 4980B OF THE CODE OR INCURS
A LIABILITY UNDER SECTION 601 ET SEQ. OF ERISA; AND, THE OCCURRENCE OF ANY SUCH
EVENT LISTED IN CLAUSES (I) THROUGH (VII), OR THE OCCURRENCE OF ANY COMBINATION
OF EVENTS LISTED IN CLAUSES (I) THROUGH (VII) RESULTS IN, OR COULD REASONABLY BE
EXPECTED TO RESULT IN, A MATERIAL ADVERSE EFFECT OR RESULT IN EXPOSURE TO THE
BORROWER IN AN AMOUNT IN EXCESS OF $800,000; OR

 

(I)                                     MONETARY JUDGMENTS.  ONE OR MORE
JUDGMENTS, NON-INTERLOCUTORY ORDERS, DECREES OR ARBITRATION AWARDS SHALL BE
ENTERED AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES INVOLVING IN THE
AGGREGATE A LIABILITY (TO THE EXTENT NOT COVERED BY INDEPENDENT THIRD-PARTY
INSURANCE) AS TO ANY SINGLE OR RELATED SERIES OF TRANSACTIONS, INCIDENTS OR
CONDITIONS, OF $800,000 OR MORE, AND THE SAME SHALL REMAIN UNSATISFIED,
UNVACATED AND UNSTAYED PENDING APPEAL FOR A PERIOD OF THIRTY (30) DAYS AFTER THE
ENTRY THEREOF; OR

 

(J)                                     NON-MONETARY JUDGMENTS.  ONE OR MORE
NON-MONETARY JUDGMENTS, ORDERS OR DECREES SHALL BE RENDERED AGAINST THE BORROWER
OR ANY OF ITS SUBSIDIARIES WHICH DOES OR WOULD REASONABLY BE EXPECTED TO HAVE,
EITHER INDIVIDUALLY OR IN THE AGGREGATE, A MATERIAL ADVERSE EFFECT, AND THERE
SHALL BE ANY PERIOD OF TEN (10) CONSECUTIVE DAYS DURING WHICH A STAY OF

 

52

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

 

ENFORCEMENT OF SUCH JUDGMENT OR ORDER, BY REASON OF A PENDING APPEAL OR
OTHERWISE, SHALL NOT BE IN EFFECT; OR

 

(K)                                  COLLATERAL.  ANY MATERIAL PROVISION OF ANY
COLLATERAL DOCUMENT SHALL FOR ANY REASON CEASE TO BE VALID AND BINDING ON OR
ENFORCEABLE AGAINST THE BORROWER OR ANY SUBSIDIARY OF THE BORROWER PARTY THERETO
OR THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL SO STATE IN WRITING OR BRING AN
ACTION TO LIMIT ITS OBLIGATIONS OR LIABILITIES THEREUNDER; OR ANY COLLATERAL
DOCUMENT SHALL FOR ANY REASON (OTHER THAN PURSUANT TO THE TERMS THEREOF) CEASE
TO CREATE A VALID SECURITY INTEREST IN THE COLLATERAL PURPORTED TO BE COVERED
THEREBY OR SUCH SECURITY INTEREST SHALL FOR ANY REASON (OTHER THAN THE FAILURE
OF THE AGENT TO TAKE ANY ACTION WITHIN ITS CONTROL) CEASE TO BE A PERFECTED AND
FIRST PRIORITY SECURITY INTEREST SUBJECT ONLY TO PERMITTED LIENS; OR

 

(L)                                     OWNERSHIP.  (I) SPONSOR AT ANY TIME
SHALL CEASE TO OWN, BENEFICIALLY, AT LEAST EIGHTY PERCENT (80%) OF EACH CLASS OF
THE ISSUED AND OUTSTANDING CAPITAL STOCK OF BORROWER OWNED BY IT ON THE
RESTATEMENT EFFECTIVE DATE (AS THE SAME MAY BE ADJUSTED FOR ANY COMBINATION,
RECAPITALIZATION OR RECLASSIFICATION INTO A GREATER OR SMALLER NUMBER OF
SHARES); OR (II) SPONSOR AT ANY TIME SHALL FAIL TO OWN, BENEFICIALLY, DIRECTLY
OR INDIRECTLY, AT LEAST FIFTY-ONE PERCENT (51%) OF THE ISSUED AND OUTSTANDING
VOTING CAPITAL STOCK OF BORROWER OR, IN ANY EVENT, CAPITAL STOCK REPRESENTING
VOTING CONTROL OF BORROWER; OR (III) BORROWER SHALL CEASE TO OWN, BENEFICIALLY,
ONE HUNDRED PERCENT (100%) OF THE ISSUED AND OUTSTANDING EQUITY SECURITIES OF
WOODCRAFT; OR (IV) THE BORROWER OR ANY OF ITS SUBSIDIARIES SHALL CEASE TO OWN,
BENEFICIALLY, ONE HUNDRED PERCENT (100%) OF THE ISSUED AND OUTSTANDING EQUITY
SECURITIES OF ANY OF ITS SUBSIDIARIES (EXCEPT AS OTHERWISE PERMITTED PURSUANT TO
SECTION 5.3) IN EACH INSTANCE IN CLAUSES (I), (II), (III) AND (IV), FREE AND
CLEAR OF ALL LIENS, RIGHTS, OPTIONS, WARRANTS OR OTHER SIMILAR AGREEMENTS OR
UNDERSTANDINGS, OTHER THAN LIENS IN FAVOR OF AGENT, FOR THE BENEFIT OF AGENT; OR
(VI) A “CHANGE OF CONTROL” (AS DEFINED IN THE HIGH YIELD UNSECURED INDENTURE)
SHALL HAVE OCCURRED; OR

 

(M)                               INVALIDITY OF SUBORDINATION PROVISIONS.   THE
SUBORDINATION PROVISIONS OF ANY AGREEMENT OR INSTRUMENT GOVERNING ANY
SUBORDINATED INDEBTEDNESS SHALL FOR ANY REASON BE REVOKED OR INVALIDATED, OR
OTHERWISE CEASE TO BE IN FULL FORCE AND EFFECT, OR ANY PERSON SHALL CONTEST IN
ANY MANNER THE VALIDITY OR ENFORCEABILITY THEREOF OR DENY THAT IT HAS ANY
FURTHER LIABILITY OR OBLIGATION THEREUNDER, OR THE OBLIGATIONS, FOR ANY REASON
SHALL NOT HAVE THE PRIORITY CONTEMPLATED BY THIS AGREEMENT OR SUCH SUBORDINATION
PROVISIONS; OR

 

(N)                                 FAILURE TO PROCURE AND PAY ACCEPTABLE
CAPITAL CONTRIBUTIONS.

 

(i)                                     If required by Section 5.11(h)(vii) at
the time, if any, that (i) the Grand Valley Earn-Out Obligation becomes due and
payable in accordance with the provisions of Section 1.4(b) of the Grand Valley
Asset Purchase Agreement as in effect on the First Amendment Closing Date and
(ii) all of the conditions specified in clauses (i) through (vi) of
Section 5.11(h) shall have been satisfied, the Borrower shall fail to receive,
and thereafter contribute to Grand Valley Acquisition Sub, proceeds of
Acceptable Capital Contributions in an aggregate amount equal to at least fifty
percent (50%) of the Restricted Payment in respect of the Grand Valley Earn-Out
Obligation on or before the date such Restricted Payment is due and payable or
otherwise fails to use such proceeds for such purpose on a timely basis;

 

53

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

 

(ii)                                  If required by Section 5.11(i)(vii) at the
time, if any, that (i) any portion of the Dimension Earn-Out Obligation becomes
due and payable in accordance with the provisions of Section 1.6(c) of the
Dimension Purchase Agreement as in effect on the Second Amendment Closing Date
and (ii) all of the conditions specified in clauses (i) through (vi) of
Section 5.11(i) shall have been satisfied, the Borrower shall fail to receive
proceeds of Acceptable Capital Contributions in an aggregate amount equal to at
least fifty percent (50%) of the Restricted Payment in respect of such portion
of the Dimension Earn-Out Obligation on or before the date such Restricted
Payment is due and payable or otherwise fails to use such proceeds for such
purpose on a timely basis; or

 

(iii)                               If the Borrower shall fail to finance at
least fifty percent (50%) of any future expenditures with respect to transaction
costs related to the Dimension Acquisition with Acceptable Capital
Contributions; or

 

(O)                                 REVOCATION UNDER GUARANTY OR GRAND VALLEY
GUARANTY.  IF ANY OF THE BORROWER’S SUBSIDIARIES REVOKES, TERMINATES,
DISCONTINUES, OR OTHERWISE SEEKS TO VACATE, INVALIDATE, SET ASIDE, OVERTURN OR
ELIMINATE ITS OBLIGATIONS UNDER, ANY PORTION OF THE GUARANTY OR THE GRAND VALLEY
GUARANTY PURSUANT TO SECTION 8 THEREOF, OR NOTIFIES THE BORROWER OR THE AGENT OF
ITS INTENTION TO UNDERTAKE ANY OF THE FOREGOING.

 

7.2                                 REMEDIES.  UPON THE OCCURRENCE AND DURING
THE CONTINUATION OF ANY EVENT OF DEFAULT, THE AGENT MAY, AND SHALL AT THE
REQUEST OF THE REQUIRED LENDERS:

 

(A)                                  DECLARE ALL OR ANY PORTION OF THE
COMMITMENT OF EACH LENDER TO MAKE LOANS OR ISSUE LENDER LETTERS OF CREDIT OR
LETTER OF CREDIT PARTICIPATION AGREEMENTS TO BE TERMINATED, WHEREUPON SUCH
COMMITMENTS SHALL FORTHWITH BE TERMINATED;

 

(B)                                 DECLARE ALL OR ANY PORTION OF 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 BORROWER; AND

 

(C)                                  EXERCISE ON BEHALF OF ITSELF AND THE
LENDERS ALL RIGHTS AND REMEDIES AVAILABLE TO IT AND THE LENDERS UNDER THE LOAN
DOCUMENTS OR APPLICABLE LAW;

 

provided, however, that upon the occurrence of any event specified in
subsections 7.1(f) or 7.1(g) above (in the case of clause (i) of
subsection 7.1(g) upon the expiration of the sixty (60) day period mentioned
therein), the obligation of each Lender to make Loans and the obligation of
Agent to issue Lender Letters of Credit and Letter of Credit Participation
Agreements shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent or any
Lender.

 

54

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

 

7.3                                 RIGHTS NOT EXCLUSIVE.  THE RIGHTS PROVIDED
FOR IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE CUMULATIVE AND ARE NOT
EXCLUSIVE OF ANY OTHER RIGHTS, POWERS, PRIVILEGES OR REMEDIES PROVIDED BY LAW OR
IN EQUITY, OR UNDER ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT NOW EXISTING OR
HEREAFTER ARISING.

 

7.4                                 CASH COLLATERAL FOR LETTERS OF CREDIT.  IF
AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING OR THIS AGREEMENT (OR THE
REVOLVING LOAN COMMITMENT) SHALL BE TERMINATED FOR ANY REASON OR THE TERM LOANS
AND CAPEX LOANS HAVE BEEN PAID IN FULL, THEN THE AGENT MAY, AND UPON REQUEST OF
THE LENDERS HOLDING AT LEAST SIXTY-SIX AND TWO-THIRDS PERCENT (662/3%) OF THE
REVOLVING LOAN COMMITMENTS SHALL, DEMAND (WHICH DEMAND SHALL BE DEEMED TO HAVE
BEEN DELIVERED AUTOMATICALLY UPON ANY ACCELERATION OF THE LOANS AND OTHER
OBLIGATIONS HEREUNDER PURSUANT TO SECTION 7.2 HEREOF), AND THE BORROWER SHALL
THEREUPON DELIVER TO THE AGENT, TO BE HELD FOR THE BENEFIT OF THE AGENT AND THE
LENDERS ENTITLED THERETO, AN AMOUNT OF CASH EQUAL TO THE AMOUNT OF LETTER OF
CREDIT PARTICIPATION LIABILITY (DETERMINED IN ACCORDANCE WITH
SUBSECTION 1.1(C) HEREOF) AS ADDITIONAL COLLATERAL SECURITY FOR THE BORROWER’S
OBLIGATIONS IN RESPECT OF ANY OUTSTANDING LENDER LETTER OF CREDIT AND LETTER OF
CREDIT PARTICIPATION AGREEMENT.  THE AGENT MAY AT ANY TIME APPLY ANY OR ALL OF
SUCH CASH AND CASH COLLATERAL TO THE PAYMENT OF ANY OR ALL OF THE BORROWER’S
OBLIGATIONS IN RESPECT OF ANY LENDER LETTERS OF CREDIT OR LETTER OF CREDIT
PARTICIPATION AGREEMENTS.  PENDING SUCH APPLICATION, THE AGENT MAY (BUT SHALL
NOT BE OBLIGATED TO) INVEST THE SAME IN AN INTEREST BEARING ACCOUNT IN THE
AGENT’S NAME, FOR THE BENEFIT OF THE AGENT AND THE LENDERS ENTITLED THERETO,
UNDER WHICH DEPOSITS ARE AVAILABLE FOR IMMEDIATE WITHDRAWAL, AT SUCH BANK OR
FINANCIAL INSTITUTION AS THE AGENT MAY, IN ITS DISCRETION, SELECT.

 

ARTICLE VIII - THE AGENT

 

8.1                                 APPOINTMENT AND AUTHORIZATION.  EACH LENDER
HEREBY IRREVOCABLY APPOINTS, DESIGNATES AND AUTHORIZES THE AGENT TO TAKE SUCH
ACTION ON ITS BEHALF UNDER THE PROVISIONS OF THIS AGREEMENT AND EACH OTHER LOAN
DOCUMENT AND TO EXERCISE SUCH POWERS AND PERFORM SUCH DUTIES AS ARE EXPRESSLY
DELEGATED TO IT BY THE TERMS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
TOGETHER WITH SUCH POWERS AS ARE REASONABLY INCIDENTAL THERETO.  NOTWITHSTANDING
ANY PROVISION TO THE CONTRARY CONTAINED ELSEWHERE IN THIS AGREEMENT OR IN ANY
OTHER LOAN DOCUMENT, THE AGENT SHALL NOT HAVE ANY DUTIES OR RESPONSIBILITIES,
EXCEPT THOSE EXPRESSLY SET FORTH HEREIN, NOR SHALL THE AGENT HAVE OR BE DEEMED
TO HAVE ANY FIDUCIARY RELATIONSHIP WITH ANY LENDER, AND NO IMPLIED COVENANTS,
FUNCTIONS, RESPONSIBILITIES, DUTIES, OBLIGATIONS OR LIABILITIES SHALL BE READ
INTO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE EXIST AGAINST THE
AGENT.

 

8.2                                 DELEGATION OF DUTIES.  THE AGENT MAY EXECUTE
ANY OF ITS DUTIES UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY OR THROUGH
AGENTS, EMPLOYEES OR ATTORNEYS-IN-FACT AND SHALL BE ENTITLED TO ADVICE OF
COUNSEL CONCERNING ALL MATTERS PERTAINING TO SUCH DUTIES.  THE AGENT SHALL NOT
BE RESPONSIBLE FOR THE NEGLIGENCE OR MISCONDUCT OF ANY AGENT OR ATTORNEY-IN-FACT
THAT IT SELECTS WITH REASONABLE CARE.

 

8.3                                 LIABILITY OF AGENT.  NONE OF THE
AGENT-RELATED PERSONS SHALL (I) BE LIABLE FOR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT (EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION), OR (II) BE RESPONSIBLE IN ANY
MANNER TO ANY OF

 

55

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

 

THE LENDERS FOR ANY RECITAL, STATEMENT, REPRESENTATION OR WARRANTY MADE BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY OFFICER THEREOF, CONTAINED IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT, OR IN ANY CERTIFICATE, REPORT,
STATEMENT OR OTHER DOCUMENT REFERRED TO OR PROVIDED FOR IN, OR RECEIVED BY THE
AGENT UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
FOR THE VALUE OF ANY COLLATERAL OR THE VALIDITY, EFFECTIVENESS, GENUINENESS,
ENFORCEABILITY OR SUFFICIENCY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
FOR ANY FAILURE OF THE BORROWER OR ANY OTHER PARTY TO ANY LOAN DOCUMENT TO
PERFORM ITS OBLIGATIONS HEREUNDER OR THEREUNDER.  NO AGENT-RELATED PERSON SHALL
BE UNDER ANY OBLIGATION TO ANY LENDER TO ASCERTAIN OR TO INQUIRE AS TO THE
OBSERVANCE OR PERFORMANCE OF ANY OF THE AGREEMENTS CONTAINED IN, OR CONDITIONS
OF, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR TO INSPECT THE PROPERTY, BOOKS
OR RECORDS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR AFFILIATES.

 

8.4                                 RELIANCE BY AGENT.  THE AGENT SHALL BE
ENTITLED TO RELY, AND SHALL BE FULLY PROTECTED IN RELYING, UPON ANY WRITING,
RESOLUTION, NOTICE, CONSENT, CERTIFICATE, AFFIDAVIT, LETTER, TELEGRAM, FACSIMILE
OR TELEPHONE MESSAGE, STATEMENT OR OTHER DOCUMENT OR CONVERSATION BELIEVED BY IT
TO BE GENUINE AND TO HAVE BEEN SIGNED, SENT OR MADE BY THE PROPER PERSON OR
PERSONS, AND UPON ADVICE AND STATEMENTS OF LEGAL COUNSEL (INCLUDING COUNSEL TO
THE BORROWER), INDEPENDENT ACCOUNTANTS AND OTHER EXPERTS SELECTED BY THE AGENT.
 THE AGENT SHALL BE FULLY JUSTIFIED IN FAILING OR REFUSING TO TAKE ANY ACTION
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT UNLESS IT SHALL FIRST RECEIVE
SUCH ADVICE OR CONCURRENCE OF THE LENDERS (OR, WHERE AN ACTION OR WAIVER NEED
ONLY BE APPROVED BY THE REQUIRED LENDERS, BY THE REQUIRED LENDERS) AS IT DEEMS
APPROPRIATE AND, IF IT SO REQUESTS, IT SHALL FIRST BE INDEMNIFIED TO ITS
SATISFACTION BY THE LENDERS AGAINST ANY AND ALL LIABILITY AND EXPENSE WHICH MAY
BE INCURRED BY IT BY REASON OF TAKING OR CONTINUING TO TAKE ANY SUCH ACTION. 
THE AGENT SHALL IN ALL CASES BE FULLY PROTECTED IN ACTING, OR IN REFRAINING FROM
ACTING, UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ACCORDANCE WITH A
REQUEST OR CONSENT OF THE LENDERS (OR, WHERE AN ACTION OR WAIVER NEED ONLY BE
APPROVED BY THE REQUIRED LENDERS, BY THE REQUIRED LENDERS) AND SUCH REQUEST AND
ANY ACTION TAKEN OR FAILURE TO ACT PURSUANT THERETO SHALL BE BINDING UPON ALL OF
THE LENDERS.

 

8.5                                 NOTICE OF DEFAULT.  THE AGENT SHALL NOT BE
DEEMED TO HAVE KNOWLEDGE OR NOTICE OF THE OCCURRENCE OF ANY DEFAULT OR EVENT OF
DEFAULT, EXCEPT WITH RESPECT TO DEFAULTS IN THE PAYMENT OF PRINCIPAL, INTEREST
AND FEES REQUIRED TO BE PAID TO THE AGENT FOR THE ACCOUNT OF THE LENDERS, UNLESS
THE AGENT SHALL HAVE RECEIVED WRITTEN NOTICE FROM A LENDER OR THE BORROWER
REFERRING TO THIS AGREEMENT, DESCRIBING SUCH DEFAULT OR EVENT OF DEFAULT AND
STATING THAT SUCH NOTICE IS A “NOTICE OF DEFAULT.”  IN THE EVENT THAT THE AGENT
RECEIVES SUCH A NOTICE, THE AGENT SHALL GIVE NOTICE THEREOF TO THE LENDERS.  THE
AGENT SHALL TAKE SUCH ACTION WITH RESPECT TO SUCH DEFAULT OR EVENT OF DEFAULT AS
SHALL BE REQUESTED BY THE REQUIRED LENDERS IN ACCORDANCE WITH ARTICLE VII;
PROVIDED, HOWEVER, THAT UNLESS AND UNTIL THE AGENT SHALL HAVE RECEIVED ANY SUCH
REQUEST, THE AGENT MAY (BUT SHALL NOT BE OBLIGATED TO) TAKE SUCH ACTION, OR
REFRAIN FROM TAKING SUCH ACTION, WITH RESPECT TO SUCH DEFAULT OR EVENT OF
DEFAULT AS IT SHALL DEEM ADVISABLE OR IN THE BEST INTEREST OF THE LENDERS.

 

8.6                                 CREDIT DECISION.  EACH LENDER EXPRESSLY
ACKNOWLEDGES THAT NONE OF THE AGENT-RELATED PERSONS HAS MADE ANY REPRESENTATION
OR WARRANTY TO IT AND THAT NO ACT BY THE AGENT HEREINAFTER TAKEN, INCLUDING ANY
REVIEW OF THE AFFAIRS OF THE BORROWER AND ITS SUBSIDIARIES SHALL BE DEEMED TO
CONSTITUTE ANY REPRESENTATION OR WARRANTY BY THE AGENT TO ANY LENDER.  EACH
LENDER REPRESENTS TO THE AGENT THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE
UPON THE AGENT

 

56

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

 

AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT HAS DEEMED APPROPRIATE, MADE
ITS OWN APPRAISAL OF AND INVESTIGATION INTO THE BUSINESS, PROSPECTS, OPERATIONS,
PROPERTY, FINANCIAL AND OTHER CONDITION AND CREDITWORTHINESS OF THE BORROWER AND
ITS SUBSIDIARIES, AND ALL APPLICABLE BANK REGULATORY LAWS RELATING TO THE
TRANSACTIONS CONTEMPLATED THEREBY, AND MADE ITS OWN DECISION TO ENTER INTO THIS
AGREEMENT AND EXTEND CREDIT TO THE BORROWER HEREUNDER.  EACH LENDER ALSO
REPRESENTS THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE AGENT AND
BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM APPROPRIATE AT THE
TIME, CONTINUE TO MAKE ITS OWN CREDIT ANALYSIS, APPRAISALS AND DECISIONS IN
TAKING OR NOT TAKING ACTION UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AND TO MAKE SUCH INVESTIGATIONS AS IT DEEMS NECESSARY TO INFORM ITSELF AS TO THE
BUSINESS, PROSPECTS, OPERATIONS, PROPERTY, FINANCIAL AND OTHER CONDITION AND
CREDITWORTHINESS OF THE BORROWER.  EXCEPT FOR NOTICES, REPORTS AND OTHER
DOCUMENTS EXPRESSLY HEREIN REQUIRED TO BE FURNISHED TO THE LENDERS BY THE AGENT,
THE AGENT SHALL NOT HAVE ANY DUTY OR RESPONSIBILITY TO PROVIDE ANY LENDER WITH
ANY CREDIT OR OTHER INFORMATION CONCERNING THE BUSINESS, PROSPECTS, OPERATIONS,
PROPERTY, FINANCIAL AND OTHER CONDITION OR CREDITWORTHINESS OF THE BORROWER
WHICH MAY COME INTO THE POSSESSION OF THE AGENT.

 

8.7                                 INDEMNIFICATION.  WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSUMMATED, UPON DEMAND THEREFOR THE
LENDERS SHALL INDEMNIFY THE AGENT (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF
OF THE BORROWER AND WITHOUT LIMITING THE OBLIGATION OF THE BORROWER TO DO SO),
SEVERALLY AND RATABLY FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND
DISBURSEMENTS OF ANY KIND WHATSOEVER WHICH MAY AT ANY TIME (INCLUDING AT ANY
TIME FOLLOWING THE REPAYMENT OF THE LOANS AND THE TERMINATION OR RESIGNATION OF
THE AGENT) BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED BY OR
REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY
ACTION TAKEN OR OMITTED BY THE AGENT UNDER OR IN CONNECTION WITH ANY OF THE
FOREGOING; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT TO
THE AGENT OF ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS TO THE
EXTENT RESULTING FROM THE AGENT’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION.  IN ADDITION, EACH LENDER SHALL
REIMBURSE THE AGENT UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEY COSTS) INCURRED BY THE AGENT IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY DOCUMENT
CONTEMPLATED BY OR REFERRED TO HEREIN TO THE EXTENT THAT THE AGENT IS NOT
REIMBURSED FOR SUCH EXPENSES BY OR ON BEHALF OF THE BORROWER.  WITHOUT LIMITING
THE GENERALITY OF THE FOREGOING, IF THE INTERNAL REVENUE SERVICE OR ANY OTHER
GOVERNMENTAL AUTHORITY OF THE UNITED STATES OR OTHER JURISDICTION ASSERTS A
CLAIM THAT THE AGENT DID NOT PROPERLY WITHHOLD TAX FROM AMOUNTS PAID TO OR FOR
THE ACCOUNT OF ANY LENDER (BECAUSE THE APPROPRIATE FORM WAS NOT DELIVERED, WAS
NOT PROPERLY EXECUTED, OR BECAUSE SUCH LENDER FAILED TO NOTIFY THE AGENT OF A
CHANGE IN CIRCUMSTANCES WHICH RENDERED THE EXEMPTION FROM, OR REDUCTION OF,
WITHHOLDING TAX INEFFECTIVE, OR FOR ANY OTHER REASON) SUCH LENDER SHALL
INDEMNIFY THE AGENT FULLY FOR ALL AMOUNTS PAID, DIRECTLY OR INDIRECTLY, BY THE
AGENT AS TAX OR OTHERWISE, INCLUDING PENALTIES AND INTEREST, AND INCLUDING ANY
TAXES IMPOSED BY ANY JURISDICTION ON THE AMOUNTS PAYABLE TO THE AGENT UNDER THIS
SECTION 8.7, TOGETHER WITH ALL RELATED COSTS AND EXPENSES (INCLUDING ATTORNEY
COSTS).  THE OBLIGATION OF THE LENDERS IN THIS SECTION 8.7 SHALL SURVIVE THE
PAYMENT OF ALL OBLIGATIONS HEREUNDER.

 

57

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

 

8.8                                 AGENT IN INDIVIDUAL CAPACITY.  ANTARES AND
ITS AFFILIATES MAY MAKE LOANS TO, ISSUE LETTERS OF CREDIT FOR THE ACCOUNT OF,
ACCEPT DEPOSITS FROM, ACQUIRE EQUITY INTERESTS IN AND GENERALLY ENGAGE IN ANY
KIND OF BANKING, TRUST, FINANCIAL ADVISORY OR OTHER BUSINESS WITH THE BORROWER
AND ITS SUBSIDIARIES AND AFFILIATES AS THOUGH ANTARES WERE NOT THE AGENT
HEREUNDER AND WITHOUT NOTICE TO OR CONSENT OF THE LENDERS.  WITH RESPECT TO ITS
LOANS, ANTARES SHALL HAVE THE SAME RIGHTS AND POWERS UNDER THIS AGREEMENT AS ANY
OTHER LENDER AND MAY EXERCISE THE SAME AS THOUGH IT WERE NOT THE AGENT, AND THE
TERMS “LENDER” AND “LENDERS” SHALL INCLUDE ANTARES IN ITS INDIVIDUAL CAPACITY.

 

8.9                                 SUCCESSOR AGENT.  THE PERSON THEN ACTING AS
AGENT MAY RESIGN AS AGENT UPON THIRTY (30) DAYS’ PRIOR NOTICE TO THE LENDERS AND
TO THE BORROWER.  IF SUCH PERSON SHALL RESIGN AS AGENT UNDER THIS AGREEMENT, THE
REQUIRED LENDERS SHALL APPOINT FROM AMONG THE LENDERS A SUCCESSOR AGENT FOR THE
LENDERS.  IF NO SUCCESSOR AGENT IS APPOINTED PRIOR TO THE EFFECTIVE DATE OF THE
RESIGNATION OF THE AGENT, THE AGENT MAY THEREUPON APPOINT A SUCCESSOR AGENT FROM
AMONG THE LENDERS REASONABLY ACCEPTABLE TO THE BORROWER.  UPON THE ACCEPTANCE OF
ITS APPOINTMENT AS SUCCESSOR AGENT HEREUNDER, SUCH SUCCESSOR AGENT SHALL SUCCEED
TO ALL THE RIGHTS, POWERS AND DUTIES OF THE RETIRING AGENT AND THE TERM “AGENT”
SHALL MEAN SUCH SUCCESSOR AGENT AND THE RETIRING AGENT’S APPOINTMENT, POWERS AND
DUTIES AS AGENT SHALL TERMINATE.  AFTER ANY RETIRING AGENT’S RESIGNATION
HEREUNDER AS AGENT, THE PROVISIONS OF THIS ARTICLE VIII AND SECTIONS 9.4 AND 9.5
SHALL INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN OR OMITTED TO BE TAKEN BY IT
WHILE IT WAS AGENT UNDER THIS AGREEMENT.  IF NO SUCCESSOR AGENT HAS ACCEPTED
APPOINTMENT AS AGENT BY THE DATE WHICH IS THIRTY (30) DAYS FOLLOWING A RETIRING
AGENT’S NOTICE OF RESIGNATION (OR, IF LATER, TEN (10) DAYS AFTER THE DATE UPON
WHICH THE AGENT DESIGNATES A SUCCESSOR AGENT), THE RETIRING AGENT’S RESIGNATION
SHALL NEVERTHELESS THEREUPON BECOME EFFECTIVE AND THE LENDERS SHALL PERFORM ALL
OF THE DUTIES OF THE AGENT HEREUNDER UNTIL SUCH TIME, IF ANY, AS THE REQUIRED
LENDERS APPOINT A SUCCESSOR AGENT AS PROVIDED FOR ABOVE.

 

8.10                           COLLATERAL MATTERS.

 

(A)                                  THE AGENT IS AUTHORIZED (BUT NOT REQUIRED)
ON BEHALF OF ALL THE LENDERS, WITHOUT THE NECESSITY OF ANY NOTICE TO OR FURTHER
CONSENT FROM THE LENDERS, FROM TIME TO TIME TO TAKE ANY ACTION WITH RESPECT TO
ANY COLLATERAL OR THE COLLATERAL DOCUMENTS WHICH MAY BE NECESSARY TO PERFECT AND
MAINTAIN PERFECTED THE SECURITY INTEREST IN AND LIENS UPON THE COLLATERAL
GRANTED PURSUANT TO THE COLLATERAL DOCUMENTS.

 

(B)                                 THE LENDERS IRREVOCABLY AUTHORIZE THE AGENT,
AT ITS OPTION AND IN ITS DISCRETION, TO RELEASE ANY LIEN GRANTED TO OR HELD BY
THE AGENT UPON ANY COLLATERAL:

 

(I)                                     UPON TERMINATION OF THE COMMITMENTS AND
PAYMENT IN FULL OF ALL LOANS AND ALL OTHER OBLIGATIONS THEN PAYABLE UNDER THIS
AGREEMENT AND UNDER ANY OTHER LOAN DOCUMENT;

 

(II)                                  CONSTITUTING PROPERTY SOLD OR TO BE SOLD
OR DISPOSED OF AS PART OF OR IN CONNECTION WITH ANY DISPOSITION PERMITTED
HEREUNDER;

 

(III)                               CONSISTING OF AN INSTRUMENT EVIDENCING
INDEBTEDNESS OR OF ANY OTHER DEBT INSTRUMENT, IF THE INDEBTEDNESS EVIDENCED
THEREBY HAS BEEN PAID IN FULL; OR

 

58

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

 

(IV)                              IF APPROVED, AUTHORIZED OR RATIFIED IN WRITING
BY THE REQUIRED LENDERS OR ALL THE LENDERS, AS THE CASE MAY BE, AS PROVIDED IN
SUBSECTION 9.1(F).

 

Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent’s authority to release particular types or items of Collateral pursuant to
this subsection 8.10(b).

 

(C)                                  EACH LENDER AGREES WITH AND IN FAVOR OF
EACH OTHER LENDER (WHICH AGREEMENT SHALL NOT BE FOR THE BENEFIT OF THE BORROWER
OR ANY OF ITS SUBSIDIARIES) THAT THE BORROWER’S OBLIGATION TO SUCH LENDER UNDER
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE EQUALLY AND RATABLY SECURED
BY ANY REAL PROPERTY AND/OR OTHER COLLATERAL NOW OR HEREAFTER SECURING ANY
OBLIGATIONS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES TO SUCH LENDER, WHETHER
OR NOT THE SAME CONSTITUTES COLLATERAL HEREUNDER.

 

ARTICLE IX - MISCELLANEOUS

 

9.1                                 AMENDMENTS AND WAIVERS.  NO AMENDMENT OR
WAIVER OF ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND NO
CONSENT WITH RESPECT TO ANY DEPARTURE BY THE BORROWER THEREFROM, SHALL BE
EFFECTIVE UNLESS THE SAME SHALL BE IN WRITING AND SIGNED BY THE REQUIRED
LENDERS, THE BORROWER AND ACKNOWLEDGED BY THE AGENT, AND THEN SUCH WAIVER SHALL
BE EFFECTIVE ONLY IN THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR
WHICH GIVEN; PROVIDED, HOWEVER, THAT NO SUCH WAIVER, AMENDMENT, OR CONSENT
SHALL, UNLESS IN WRITING AND SIGNED BY ALL THE LENDERS, THE BORROWER AND
ACKNOWLEDGED BY THE AGENT, DO ANY OF THE FOLLOWING:

 

(A)                                  INCREASE OR EXTEND THE COMMITMENT OF ANY
LENDER, REINSTATE ANY COMMITMENT TERMINATED PURSUANT TO SUBSECTION 7.2(A),
INCREASE THE AGGREGATE REVOLVING LOAN COMMITMENT OR EXTEND THE CAPEX LINE
TERMINATION DATE;

 

(B)                                 POSTPONE OR DELAY ANY DATE FIXED FOR, OR
WAIVE, ANY PAYMENT OF PRINCIPAL, INTEREST, FEES OR OTHER AMOUNTS DUE TO THE
LENDERS (OR ANY OF THEM) HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (OTHER THAN
ANY POSTPONEMENT OR DELAY OF ANY DATE FIXED FOR ANY MANDATORY PREPAYMENT OF THE
LOANS PURSUANT TO SUBSECTION 1.8(C) OR 1.8(D));

 

(C)                                  REDUCE THE PRINCIPAL OF, OR THE RATE OF
INTEREST SPECIFIED HEREIN OR THE AMOUNT OF INTEREST PAYABLE IN CASH SPECIFIED
HEREIN ON ANY LOAN, OR OF ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER
ANY OTHER LOAN DOCUMENT;

 

(D)                                 CHANGE THE PERCENTAGE OF THE COMMITMENTS OR
OF THE AGGREGATE UNPAID PRINCIPAL AMOUNT OF THE LOANS WHICH SHALL BE REQUIRED
FOR THE LENDERS OR ANY OF THEM TO TAKE ANY ACTION HEREUNDER;

 

(E)                                  AMEND THIS SECTION 9.1 OR THE DEFINITION OF
“REQUIRED LENDERS” OR ANY PROVISION PROVIDING FOR CONSENT OR OTHER ACTION BY ALL
LENDERS; OR

 

(F)                                    DISCHARGE THE BORROWER OR ANY OF ITS
SUBSIDIARIES FROM THEIR RESPECTIVE PAYMENT OBLIGATIONS UNDER THE LOAN DOCUMENTS,
OR RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL, EXCEPT AS OTHERWISE MAY
BE PROVIDED IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS;

 

59

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

 

and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Required Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.

 

9.2                                 NOTICES.

 

(A)                                  ALL NOTICES, REQUESTS AND OTHER
COMMUNICATIONS PROVIDED FOR HEREUNDER SHALL BE IN WRITING (INCLUDING, UNLESS THE
CONTEXT EXPRESSLY OTHERWISE PROVIDES, BY FACSIMILE TRANSMISSION) AND MAILED BY
CERTIFIED OR REGISTERED MAIL, FAXED OR DELIVERED BY PERSONAL OR OVERNIGHT
DELIVERY, TO THE ADDRESS OR FACSIMILE NUMBER SPECIFIED FOR NOTICES ON THE
APPLICABLE SIGNATURE PAGE HEREOF; OR, IF DIRECTED TO THE BORROWER OR THE AGENT,
TO SUCH OTHER ADDRESS AS SHALL BE DESIGNATED BY SUCH PARTY IN A WRITTEN NOTICE
TO EACH OF THE OTHER PARTIES HERETO GIVEN IN COMPLIANCE HEREWITH, OR, IF
DIRECTED TO ANY OTHER PARTY HERETO, TO SUCH OTHER ADDRESS AS SHALL BE DESIGNATED
BY SUCH PARTY IN A WRITTEN NOTICE GIVEN IN COMPLIANCE HEREWITH TO THE BORROWER
AND THE AGENT.

 

(B)                                 ALL SUCH NOTICES, REQUESTS AND
COMMUNICATIONS SHALL BE EFFECTIVE (I) IF DELIVERED IN PERSON, WHEN DELIVERED,
(II) IF DELIVERED BY FACSIMILE TRANSMISSION ON THE DATE OF TRANSMISSION IF
TRANSMITTED ON A BUSINESS DAY BEFORE 4:00 P.M. CHICAGO TIME, OTHERWISE ON THE
NEXT BUSINESS DAY, (III) IF DELIVERED BY OVERNIGHT COURIER, ONE (1) BUSINESS DAY
AFTER DELIVERY TO THE COURIER PROPERLY ADDRESSED AND (IV) IF MAILED, UPON THE
THIRD (3RD) BUSINESS DAY AFTER THE DATE DEPOSITED INTO THE U.S. MAIL, CERTIFIED
OR REGISTERED; EXCEPT THAT NOTICES PURSUANT TO ARTICLE I SHALL NOT BE EFFECTIVE
UNTIL ACTUALLY RECEIVED BY THE AGENT.

 

(C)                                  THE BORROWER ACKNOWLEDGES AND AGREES THAT
ANY AGREEMENT OF THE AGENT AND THE LENDERS IN ARTICLE I HEREOF TO RECEIVE
CERTAIN NOTICES BY TELEPHONE AND FACSIMILE TRANSMISSION IS SOLELY FOR THE
CONVENIENCE AND AT THE REQUEST OF THE BORROWER.  THE AGENT AND THE LENDERS SHALL
BE ENTITLED TO RELY ON THE AUTHORITY OF ANY PERSON PURPORTING TO BE A PERSON
AUTHORIZED BY THE BORROWER TO GIVE SUCH NOTICE AND THE AGENT AND THE LENDERS
SHALL NOT HAVE ANY LIABILITY TO THE BORROWER OR OTHER PERSONS ON ACCOUNT OF ANY
ACTION TAKEN OR NOT TAKEN BY THE AGENT OR THE LENDERS IN RELIANCE UPON SUCH
TELEPHONIC OR FACSIMILE NOTICE.  THE OBLIGATION OF THE BORROWER TO REPAY THE
LOANS SHALL NOT BE AFFECTED IN ANY WAY OR TO ANY EXTENT BY ANY FAILURE BY THE
AGENT AND THE LENDERS TO RECEIVE WRITTEN CONFIRMATION OF ANY TELEPHONIC OR
FACSIMILE NOTICE OR THE RECEIPT BY THE AGENT AND THE LENDERS OF A CONFIRMATION
WHICH IS AT VARIANCE WITH THE TERMS UNDERSTOOD BY THE AGENT AND THE LENDERS TO
BE CONTAINED IN THE TELEPHONIC OR FACSIMILE NOTICE.

 

9.3                                 NO WAIVER; CUMULATIVE REMEDIES.  NO FAILURE
TO EXERCISE AND NO DELAY IN EXERCISING, ON THE PART OF THE AGENT OR ANY LENDER,
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.  NO COURSE OF DEALING
BETWEEN THE BORROWER, ANY AFFILIATE OF THE BORROWER, AGENT OR ANY LENDER SHALL
BE EFFECTIVE TO AMEND, MODIFY OR DISCHARGE ANY PROVISION OF THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS.

 

9.4                                 COSTS AND EXPENSES.  WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSUMMATED, THE BORROWER SHALL PAY OR
REIMBURSE:

 

60

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

 

(A)                                  ANTARES (INCLUDING IN ITS CAPACITY AS
AGENT) WITHIN FIVE (5) BUSINESS DAYS AFTER DEMAND (EXCEPT AS OTHERWISE PROVIDED
IN SUBSECTION 2.1(F)) FOR ALL REASONABLE OUT-OF-POCKET COSTS AND EXPENSES
INCURRED BY ANTARES (INCLUDING IN ITS CAPACITY AS AGENT) IN CONNECTION WITH THE
DEVELOPMENT, PREPARATION, SYNDICATION, DELIVERY, ADMINISTRATION AND EXECUTION
OF, AND ANY AMENDMENT, SUPPLEMENT, WAIVER OR MODIFICATION TO (IN EACH CASE,
WHETHER OR NOT CONSUMMATED), THIS AGREEMENT, ANY OTHER LOAN DOCUMENT AND ANY
OTHER DOCUMENTS PREPARED IN CONNECTION HEREWITH OR THEREWITH, AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, INCLUDING THE
ATTORNEY COSTS INCURRED BY ANTARES (INCLUDING IN ITS CAPACITY AS AGENT) WITH
RESPECT THERETO AND FOR ALL OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY IT IN
CONNECTION WITH THE ENFORCEMENT, ATTEMPTED ENFORCEMENT, OR PRESERVATION OF ANY
RIGHTS OR REMEDIES DURING THE EXISTENCE OF AN EVENT OF DEFAULT (INCLUDING IN
CONNECTION WITH ANY “WORKOUT” OR RESTRUCTURING REGARDING THE LOANS, AND
INCLUDING IN ANY INSOLVENCY PROCEEDING OR APPELLATE PROCEEDING) UNDER THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, AND ANY SUCH OTHER DOCUMENTS;

 

(B)                                 PAY OR REIMBURSE LENDERS WITHIN FIVE
(5) BUSINESS DAYS AFTER DEMAND FOR ALL ATTORNEY COSTS OF ONE LAW FIRM, ON BEHALF
OF ALL LENDERS (OTHER THAN ANTARES) INCURRED BY THEM IN CONNECTION WITH THE
ENFORCEMENT, ATTEMPTED ENFORCEMENT, OR PRESERVATION OF ANY RIGHTS OR REMEDIES
DURING THE EXISTENCE OF AN EVENT OF DEFAULT (INCLUDING IN CONNECTION WITH ANY
“WORKOUT” OR RESTRUCTURING REGARDING THE LOANS, AND INCLUDING IN ANY INSOLVENCY
PROCEEDING OR APPELLATE PROCEEDING) UNDER THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT; AND

 

(C)                                  PAY OR REIMBURSE AGENT WITHIN FIVE
(5) BUSINESS DAYS AFTER DEMAND FOR ALL OUT-OF-POCKET APPRAISAL, AUDIT,
ENVIRONMENTAL INSPECTION AND REVIEW (INCLUDING THE ALLOCATED COST OF SUCH
INTERNAL SERVICES), SEARCH AND FILING COSTS, FEES AND EXPENSES, INCURRED OR
SUSTAINED BY AGENT IN CONNECTION WITH THE MATTERS REFERRED TO UNDER CLAUSE
(A) OF THIS SECTION 9.4.

 

THE OBLIGATIONS OF THIS SECTION 9.4 SHALL SURVIVE PAYMENT OF ALL OTHER
OBLIGATIONS.

 

9.5                                 INDEMNITY.  THE BORROWER SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS EACH LENDER, THE AGENT AND EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, AGENTS AND ATTORNEYS-IN-FACT (EACH, AN
“INDEMNIFIED PERSON”) FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES
OR DISBURSEMENTS (INCLUDING ATTORNEY COSTS):

 

(A)                                  OF ANY KIND OR NATURE WHATSOEVER WITH
RESPECT TO THE ENFORCEMENT OF THIS AGREEMENT AND ANY OTHER LOAN DOCUMENTS, OR
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, AND WITH RESPECT TO ANY
INVESTIGATION, LITIGATION OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDING OR
APPELLATE PROCEEDING) RELATED TO THIS AGREEMENT OR THE LOANS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE USE OF THE PROCEEDS THEREOF, WHETHER OR NOT ANY
INDEMNIFIED PERSON IS A PARTY THERETO; AND

 

(B)                                 WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
SUCH INDEMNIFIED PERSON IN CONNECTION WITH OR ARISING OUT OF ANY PENDING OR
THREATENED INVESTIGATION, LITIGATION OR PROCEEDING, OR ANY ACTION TAKEN BY ANY
PERSON, WITH RESPECT TO ANY ENVIRONMENTAL CLAIM ARISING OUT OF OR RELATED TO ANY
PROPERTY OF THE BORROWER OR ANY OF ITS SUBSIDIARIES;

 

61

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

 

(all the foregoing, collectively, the “Indemnified Liabilities”); provided, that
the Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent arising from the gross
negligence or willful misconduct of such Indemnified Person as determined by a
court of competent jurisdiction.

 

No action taken by legal counsel chosen by the Agent or any Lender in defending
against any investigation, litigation or proceeding or requested remedial,
removal or response action shall vitiate or any way impair the Borrower’s
obligation and duty hereunder to indemnify and hold harmless the Agent and each
Lender.  In no event shall any site visit, observation, or testing by the Agent
or any Lender (or any contractee of the Agent or any Lender) be deemed a
representation or warranty that Hazardous Materials are or are not present in,
on, or under, the site, or that there has been or shall be compliance with any
Environmental Law.  Neither the Borrower nor any other Person is entitled to
rely on any site visit, observation, or testing by the Agent or any Lender. 
Neither the Agent nor any Lender owes any duty of care to protect the Borrower
or any other Person against, or to inform the Borrower or any other Person of,
any Hazardous Materials or any other adverse condition affecting any site or
Property.  Neither the Agent nor any Lender shall be obligated to disclose to
the Borrower or any other Person any report or findings made as a result of, or
in connection with, any site visit, observation, or testing by the Agent or any
Lender.

 

The obligations in this Section 9.5 shall survive payment of all other
Obligations.  At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person’s sole discretion, at the sole cost and
expense of the Borrower.  All amounts owing under this Section 9.5 shall be paid
within thirty (30) days after demand.

 

9.6                                 MARSHALING; PAYMENTS SET ASIDE.  NEITHER THE
AGENT NOR ANY LENDER SHALL BE UNDER ANY OBLIGATION TO MARSHAL ANY ASSETS IN
FAVOR OF THE BORROWER OR ANY OTHER PERSON OR AGAINST OR IN PAYMENT OF ANY OR ALL
OF THE OBLIGATIONS.  TO THE EXTENT THAT THE BORROWER MAKES A PAYMENT OR PAYMENTS
TO THE AGENT OR ANY LENDER, OR THE AGENT OR ANY LENDER ENFORCES ITS LIENS OR
EXERCISES ITS RIGHTS OF SETOFF, AND SUCH PAYMENT OR PAYMENTS OR THE PROCEEDS OF
SUCH ENFORCEMENT OR SETOFF OR ANY PART THEREOF ARE SUBSEQUENTLY INVALIDATED,
DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE OR REQUIRED (INCLUDING
PURSUANT TO ANY SETTLEMENT ENTERED INTO BY THE AGENT IN ITS DISCRETION) TO BE
REPAID TO A TRUSTEE, RECEIVER OR ANY OTHER PARTY IN CONNECTION WITH ANY
INSOLVENCY PROCEEDING, 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 ENFORCEMENT OR SETOFF HAD NOT OCCURRED; AND

 

(B)                                 EACH LENDER SEVERALLY AGREES TO PAY TO THE
AGENT UPON DEMAND ITS RATABLE SHARE OF THE TOTAL AMOUNT SO RECOVERED FROM OR
REPAID BY THE AGENT.

 

9.7                                 SUCCESSORS AND ASSIGNS.  THE PROVISIONS OF
THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES
HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS; PROVIDED THAT ANY ASSIGNMENT
BY ANY LENDER SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 9.8 HEREOF, AND

 

62

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

 

PROVIDED FURTHER THAT THE BORROWER MAY NOT ASSIGN OR TRANSFER ANY OF ITS RIGHTS
OR OBLIGATIONS UNDER THIS AGREEMENT WITHOUT THE PRIOR WRITTEN CONSENT OF THE
AGENT AND EACH LENDER.

 

9.8                                 ASSIGNMENTS, PARTICIPATIONS, ETC.

 

(A)                                  ANY LENDER MAY, WITH THE WRITTEN CONSENT OF
BORROWER, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD (PROVIDED THAT SUCH
CONSENT OF BORROWER SHALL NOT BE REQUIRED AT ANY TIME THAT A DEFAULT OR AN EVENT
OF DEFAULT EXISTS OR IN CONNECTION WITH ANY ASSIGNMENT BY A LENDER TO ANOTHER
LENDER, AN AFFILIATE OF A LENDER OR A RELATED FUND OF A LENDER), AND AGENT
(PROVIDED THAT SUCH CONSENT OF THE AGENT SHALL NOT BE REQUIRED IN CONNECTION
WITH ANY ASSIGNMENT AND DELEGATION BY A LENDER TO AN ELIGIBLE ASSIGNEE THAT IS
AN AFFILIATE OF SUCH LENDER), AT ANY TIME ASSIGN AND DELEGATE TO ONE OR MORE
ELIGIBLE ASSIGNEES (EACH AN “ASSIGNEE”) ALL, OR ANY PART OF, THE LOANS, THE
COMMITMENTS AND THE OTHER RIGHTS AND OBLIGATIONS OF SUCH LENDER HEREUNDER, IN A
MINIMUM AMOUNT OF $5,000,000 (OR SUCH LESSER AMOUNT TO WHICH AGENT, IN ITS SOLE
DISCRETION, MAY AGREE) OR, IF LESS, THE ENTIRE COMMITMENT OR LOAN(S) OF SUCH
LENDER; PROVIDED, THAT, THE BORROWER AND THE AGENT MAY CONTINUE TO DEAL SOLELY
AND DIRECTLY WITH SUCH LENDER IN CONNECTION WITH THE INTEREST SO ASSIGNED TO AN
ASSIGNEE UNTIL:

 

(I)                                     WRITTEN NOTICE OF SUCH ASSIGNMENT,
TOGETHER WITH PAYMENT INSTRUCTIONS, ADDRESSES AND RELATED INFORMATION WITH
RESPECT TO THE ASSIGNEE, SHALL HAVE BEEN GIVEN TO THE BORROWER AND THE AGENT BY
SUCH LENDER AND THE ASSIGNEE;

 

(II)                                  SUCH LENDER AND ITS ASSIGNEE SHALL HAVE
DELIVERED TO THE BORROWER AND THE AGENT AN ASSIGNMENT AND ACCEPTANCE IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO AGENT, SUCH LENDER AND ITS ASSIGNEE (AN
“ASSIGNMENT AND ACCEPTANCE”); AND

 

(III)                               THE ASSIGNOR LENDER OR THE ASSIGNEE HAS PAID
TO THE AGENT A PROCESSING FEE IN THE AMOUNT OF $3,500; PROVIDED NO PROCESSING
FEE SHALL BE REQUIRED TO BE PAID IN CONNECTION WITH AN ASSIGNMENT BY A LENDER TO
AN ELIGIBLE ASSIGNEE THAT IS AN AFFILIATE OF SUCH LENDER OR A RELATED FUND OF
SUCH LENDER.

 

(B)                                 SUBJECT TO THE PROVISIONS OF
SUBSECTION 9.8(F) BELOW, FROM AND AFTER THE DATE THAT THE AGENT NOTIFIES THE
ASSIGNOR LENDER THAT THE AGENT HAS RECEIVED AND PROVIDED ITS CONSENT WITH
RESPECT TO AN EXECUTED ASSIGNMENT AND ACCEPTANCE AND PAYMENT OF THE
ABOVE-REFERENCED PROCESSING FEE (IF APPLICABLE):

 

(I)                                     THE ASSIGNEE THEREUNDER SHALL BE A PARTY
HERETO AND, TO THE EXTENT THAT RIGHTS AND OBLIGATIONS HEREUNDER HAVE BEEN
ASSIGNED TO IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE, SHALL HAVE THE RIGHTS
AND OBLIGATIONS OF A LENDER UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;
AND

 

(II)                                  THE ASSIGNOR LENDER SHALL, TO THE EXTENT
THAT RIGHTS AND OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS HAVE
BEEN ASSIGNED BY IT PURSUANT TO SUCH ASSIGNMENT AND ACCEPTANCE, RELINQUISH ITS
RIGHTS AND BE RELEASED FROM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

 

(C)                                  SUBJECT TO THE PROVISIONS OF
SUBSECTION 9.8(F) BELOW, IMMEDIATELY UPON THE MAKING OF THE PROCESSING FEE
PAYMENT TO THE AGENT IN RESPECT OF THE ASSIGNMENT AND ACCEPTANCE,

 

63

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

 

IF APPLICABLE, THIS AGREEMENT SHALL BE DEEMED TO BE AMENDED TO THE EXTENT, BUT
ONLY TO THE EXTENT, NECESSARY TO REFLECT THE ADDITION OF THE ASSIGNEE AND THE
RESULTING ADJUSTMENT OF THE COMMITMENTS ARISING THEREFROM.  THE COMMITMENT
ALLOCATED TO EACH ASSIGNEE SHALL REDUCE SUCH COMMITMENT OF THE ASSIGNING LENDER
TO THE SAME EXTENT.

 

(D)                                 ANY LENDER MAY AT ANY TIME SELL TO ONE OR
MORE COMMERCIAL BANKS OR OTHER PERSONS NOT AFFILIATES OF THE BORROWER (A
“PARTICIPANT”) PARTICIPATING INTERESTS IN ANY LOANS, THE COMMITMENT OF THAT
LENDER AND THE OTHER INTERESTS OF THAT LENDER (THE “ORIGINATING LENDER”)
HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT:

 

(I)                                     THE ORIGINATING LENDER’S OBLIGATIONS
UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED;

 

(II)                                  THE ORIGINATING LENDER SHALL REMAIN SOLELY
RESPONSIBLE FOR THE PERFORMANCE OF SUCH OBLIGATIONS;

 

(III)                               THE BORROWER AND THE AGENT SHALL CONTINUE TO
DEAL SOLELY AND DIRECTLY WITH THE ORIGINATING LENDER IN CONNECTION WITH THE
ORIGINATING LENDER’S RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS; AND

 

(IV)                              NO LENDER SHALL TRANSFER OR GRANT ANY
PARTICIPATING INTEREST UNDER WHICH THE PARTICIPANT SHALL HAVE RIGHTS TO APPROVE
ANY AMENDMENT TO, OR ANY CONSENT OR WAIVER WITH RESPECT TO, THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, EXCEPT TO THE EXTENT SUCH AMENDMENT, CONSENT OR WAIVER
WOULD REQUIRE UNANIMOUS CONSENT OF THE LENDERS AS DESCRIBED IN THE FIRST PROVISO
TO SECTION 9.1.

 

In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.

 

(E)                                  NOTWITHSTANDING ANY OTHER PROVISION
CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO THE CONTRARY, ANY
LENDER MAY (I) ASSIGN ALL OR ANY PORTION OF THE LOANS HELD BY IT TO ANY FEDERAL
RESERVE BANK OR THE UNITED STATES TREASURY AS COLLATERAL SECURITY PURSUANT TO
REGULATION A OF THE FEDERAL RESERVE BOARD AND ANY OPERATING CIRCULAR ISSUED BY
SUCH FEDERAL RESERVE BANK, OR (II) PLEDGE ALL OR ANY PORTION OF THE LOANS HELD
BY IT (AND NOTES EVIDENCING SUCH LOANS) TO ITS UNAFFILIATED LENDERS FOR
COLLATERAL SECURITY PURPOSES; PROVIDED, THAT ANY PAYMENT IN RESPECT OF SUCH
ASSIGNED LOANS MADE BY THE BORROWER TO OR FOR THE ACCOUNT OF THE ASSIGNING OR
PLEDGING LENDER IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT SHALL SATISFY THE
BORROWER’S OBLIGATIONS HEREUNDER IN RESPECT TO SUCH ASSIGNED OR PLEDGED LOANS TO
THE EXTENT OF SUCH PAYMENT.  NO SUCH ASSIGNMENT OR PLEDGE SHALL RELEASE THE
ASSIGNING LENDER FROM ITS OBLIGATIONS HEREUNDER.

 

(F)                                    THE AGENT SHALL, ON BEHALF OF THE
BORROWER, MAINTAIN AT ITS ADDRESS REFERRED TO IN SECTION 9.2 A COPY OF EACH
ASSIGNMENT AND ACCEPTANCE DELIVERED TO IT AND A REGISTER (THE “REGISTER”) FOR
THE RECORDATION OF THE NAMES AND ADDRESSES OF THE LENDERS AND THE COMMITMENT OF,
AND PRINCIPAL AMOUNT OF THE LOANS OWING TO, EACH LENDER FROM TIME TO TIME.  THE
ENTRIES IN THE REGISTER SHALL BE CONCLUSIVE, IN THE ABSENCE OF DEMONSTRABLE
ERROR, AND THE BORROWER, THE AGENT AND THE LENDERS SHALL TREAT EACH PERSON WHOSE
NAME IS RECORDED IN THE REGISTER AS THE

 

64

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

 

OWNER OF THE COMMITMENTS, LOANS AND ANY NOTES EVIDENCING SUCH LOANS RECORDED
THEREIN FOR ALL PURPOSES OF THIS AGREEMENT.  ANY ASSIGNMENT OF ANY COMMITMENT
AND/OR LOAN, WHETHER OR NOT EVIDENCED BY A NOTE, SHALL BE EFFECTIVE ONLY UPON
APPROPRIATE ENTRIES WITH RESPECT THERETO BEING MADE IN THE REGISTER.  ANY
ASSIGNMENT OR TRANSFER OF ALL OR PART OF A COMMITMENT AND/OR LOAN EVIDENCED BY A
NOTE SHALL BE REGISTERED ON THE REGISTER ONLY UPON A SURRENDER OR REGISTRATION
OF ASSIGNMENT OR TRANSFER OF THE NOTE EVIDENCING SUCH LOAN, ACCOMPANIED BY A
DULY EXECUTED ASSIGNMENT AND ACCEPTANCE; THEREUPON ONE OR MORE NEW NOTES IN THE
SAME AGGREGATE PRINCIPAL AMOUNT SHALL BE ISSUED TO THE DESIGNATED ASSIGNEE AND,
IF APPLICABLE, ASSIGNOR, AND THE OLD NOTES SHALL BE RETURNED BY THE AGENT TO THE
BORROWER MARKED “CANCELLED.”  THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY
THE BORROWER OR ANY LENDER (WITH RESPECT TO ANY ENTRY RELATING TO SUCH LENDER’S
COMMITMENTS AND LOANS) AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON
REASONABLE PRIOR NOTICE.

 

9.9                                 CONFIDENTIALITY.  EACH OF THE AGENT AND THE
LENDERS SHALL MAINTAIN AND HOLD IN CONFIDENCE IN ACCORDANCE WITH ITS CUSTOMARY
PROCEDURES FOR HANDLING CONFIDENTIAL INFORMATION AND IN ACCORDANCE WITH SAFE AND
SOUND BANKING PRACTICES, ALL NONPUBLIC INFORMATION THAT THE BORROWER OR ANY OF
ITS SUBSIDIARIES, OR ANY OF THEIR AUTHORIZED REPRESENTATIVES, FURNISHES TO THE
AGENT OR ANY LENDER PURSUANT TO THE REQUIREMENTS OF THIS AGREEMENT
(“CONFIDENTIAL INFORMATION”), OTHER THAN ANY SUCH CONFIDENTIAL INFORMATION THAT
BECOMES GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN AS A RESULT OF A BREACH BY
THE AGENT OR ANY LENDER OF ITS OBLIGATIONS HEREUNDER OR THAT IS OR BECOMES
AVAILABLE TO THE AGENT OR SUCH LENDER FROM A SOURCE OTHER THAN THE BORROWER OR
ANY OF ITS SUBSIDIARIES, OR ANY OF THEIR AUTHORIZED REPRESENTATIVES, AND THAT IS
NOT, TO THE ACTUAL KNOWLEDGE OF THE RECIPIENT THEREOF, SUBJECT TO OBLIGATIONS OF
CONFIDENTIALITY WITH RESPECT THERETO; PROVIDED, HOWEVER, THAT THE AGENT AND EACH
LENDER SHALL IN ANY EVENT HAVE THE RIGHT TO DELIVER COPIES OF ANY SUCH
DOCUMENTS, AND TO DISCLOSE ANY SUCH INFORMATION, TO:

 

(A)                                  ITS DIRECTORS, OFFICERS, TRUSTEES,
PARTNERS, EMPLOYEES, AGENTS, ATTORNEYS, PROFESSIONAL CONSULTANTS, PORTFOLIO
MANAGEMENT SERVICES AND RATING AGENCIES; PROVIDED, THAT SUCH INFORMATION SHALL
BE DISCLOSED TO THE EXTENT A LEGITIMATE BUSINESS PURPOSE EXISTS FOR DOING SO AND
SUCH PURPOSE RELATES TO THE EXISTING RELATIONSHIP AMONG THE BORROWER, THE AGENT
AND THE LENDERS EVIDENCED BY THIS AGREEMENT, THE CREDIT FACILITY EVIDENCED
HEREBY OR THE LOAN PORTFOLIO OF THE AGENT OR SUCH LENDER CONTAINING THE CREDIT
EVIDENCED HEREBY;

 

(B)                                 ANY OTHER LENDER AND ANY SUCCESSOR AGENT;

 

(C)                                  ANY POTENTIAL ASSIGNEE OR POTENTIAL
PARTICIPANT TO WHICH SUCH LENDER OFFERS TO SELL ANY LOAN OR ANY PART THEREOF OR
INTEREST OR PARTICIPATION THEREIN OR ANY OTHER PERSON NECESSARY FOR PURPOSES OF
EFFECTUATING ANY TRANSACTION CONTEMPLATED BY SUBSECTION 9.8(E) (PROVIDED SUCH
PERSON AGREES TO KEEP SUCH INFORMATION CONFIDENTIAL ON THE TERMS SET FORTH IN
THIS SECTION 9.9);

 

(D)                                 ANY FEDERAL OR STATE REGULATORY AUTHORITY OR
EXAMINER, OR ANY INSURANCE INDUSTRY ASSOCIATION OR ANY STOCK EXCHANGE,
REGULATING OR HAVING JURISDICTION OVER THE AGENT OR SUCH LENDER OR ANY OF THEIR
RESPECTIVE AFFILIATES; AND

 

(E)                                  ANY OTHER PERSON TO WHICH SUCH DELIVERY OR
DISCLOSURE MAY BE NECESSARY OR APPROPRIATE (I) IN COMPLIANCE WITH ANY APPLICABLE
LAW, RULE, REGULATION OR ORDER, (II) IN RESPONSE TO ANY SUBPOENA OR OTHER LEGAL
PROCESS OR INFORMAL INVESTIGATIVE DEMAND, (III) IN CONNECTION WITH

 

65

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

 

ANY LITIGATION TO WHICH THE AGENT OR SUCH LENDER IS A PARTY, OR (IV) IN
CONNECTION WITH THE ENFORCEMENT OF THE RIGHTS AND REMEDIES OF THE AGENT OR THE
LENDERS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AT ANY TIME WHEN AN
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.

 

9.10                           SET-OFF; SHARING OF PAYMENTS.  IN ADDITION TO ANY
RIGHTS AND REMEDIES NOW OR HEREAFTER GRANTED UNDER APPLICABLE LAW, AND NOT BY
WAY OF LIMITATION OF ANY SUCH RIGHTS OR REMEDIES AT ANY TIME AND FROM TIME TO
TIME, UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT,
EACH LENDER IS HEREBY AUTHORIZED BY THE BORROWER, WITH REASONABLY PROMPT
SUBSEQUENT NOTICE TO THE BORROWER OR TO ANY OTHER PERSON (ANY PRIOR OR
CONTEMPORANEOUS NOTICE BEING HEREBY EXPRESSLY WAIVED BY THE BORROWER) TO SET OFF
AND TO APPROPRIATE AND TO APPLY ANY AND ALL:

 

(A)                                  BALANCES HELD BY SUCH LENDER AT ANY OF ITS
OFFICES FOR THE ACCOUNT OF THE BORROWER OR ANY OF ITS SUBSIDIARIES (REGARDLESS
OF WHETHER SUCH BALANCES ARE THEN DUE TO THE BORROWER OR ANY OF ITS
SUBSIDIARIES); AND

 

(B)                                 OTHER PROPERTY AT ANY TIME HELD OR OWING BY
SUCH LENDER TO OR FOR THE CREDIT OR FOR THE ACCOUNT OF THE BORROWER OR ANY OF
ITS SUBSIDIARIES;

 

against and on account of any and all Obligations which are not paid when due;
except that no Lender shall exercise such right without the prior written
consent of the Agent.  Any Lender having a right to set off shall purchase for
cash (and the other Lenders shall sell) participations in each such other
Lender’s pro rata share of the Obligations as would be necessary to cause such
Lender to share the benefit of such right of set-off with each other Lender in
accordance with their respective pro rata shares of the Obligations.  The
Borrower agrees, to the fullest extent permitted by law, that (i) any Lender may
exercise its right to set off with respect to amounts in excess of its pro rata
share of the Obligations and may sell participations to other Lenders, and
(ii) any Lender so purchasing a participation in the Obligations held by other
Lenders may exercise all rights of setoff, bankers’ lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation.  The
Borrower hereby grants to each Lender a security interest in all such deposits
and other Property, whether now existing or hereafter arising, held by each
Lender for the purposes set forth herein.

 

9.11                           NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. 
EACH LENDER SHALL NOTIFY THE AGENT IN WRITING OF ANY CHANGES IN THE ADDRESS TO
WHICH NOTICES TO SUCH LENDER SHOULD BE DIRECTED, OF ADDRESSES OF ITS LENDING
OFFICE, OF PAYMENT INSTRUCTIONS IN RESPECT OF ALL PAYMENTS TO BE MADE TO IT
HEREUNDER AND OF SUCH OTHER ADMINISTRATIVE INFORMATION AS THE AGENT SHALL
REASONABLY REQUEST.

 

9.12                           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED BY
ONE OR MORE OF THE PARTIES TO THIS AGREEMENT IN ANY NUMBER OF SEPARATE
COUNTERPARTS, EACH OF WHICH, WHEN SO EXECUTED, SHALL BE DEEMED AN ORIGINAL, AND
ALL OF SAID COUNTERPARTS TAKEN TOGETHER SHALL BE DEEMED TO CONSTITUTE BUT ONE
AND THE SAME INSTRUMENT.  A SET OF THE COPIES OF THIS AGREEMENT SIGNED BY ALL
THE PARTIES SHALL BE LODGED WITH EACH OF THE BORROWER AND THE AGENT.

 

66

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

 

9.13                           SEVERABILITY; FACSIMILE SIGNATURE.  THE
ILLEGALITY OR UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT OR ANY
INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER SHALL NOT IN ANY WAY AFFECT OR IMPAIR
THE LEGALITY OR ENFORCEABILITY OF THE REMAINING PROVISIONS OF THIS AGREEMENT OR
ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER.  ANY LOAN DOCUMENT, OR OTHER
AGREEMENT, DOCUMENT OR INSTRUMENT, DELIVERED BY FACSIMILE TRANSMISSION SHALL
HAVE THE SAME FORCE AND EFFECT AS IF THE ORIGINAL THEREOF HAD BEEN DELIVERED.

 

9.14                           CAPTIONS.  THE CAPTIONS AND HEADINGS OF THIS
AGREEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
INTERPRETATION OF THIS AGREEMENT.

 

9.15                           INDEPENDENCE OF PROVISIONS.  THE PARTIES HERETO
ACKNOWLEDGE THAT THIS AGREEMENT AND OTHER LOAN DOCUMENTS MAY USE SEVERAL
DIFFERENT LIMITATIONS, TESTS OR MEASUREMENTS TO REGULATE THE SAME OR SIMILAR
MATTERS, AND THAT SUCH LIMITATIONS, TESTS AND MEASUREMENTS ARE CUMULATIVE AND
MUST EACH BE PERFORMED, EXCEPT AS EXPRESSLY STATED TO THE CONTRARY IN THIS
AGREEMENT.

 

9.16                           INTERPRETATION.  THIS AGREEMENT IS THE RESULT OF
NEGOTIATIONS AMONG AND HAS BEEN REVIEWED BY COUNSEL TO THE AGENT, THE BORROWER
AND OTHER PARTIES HERETO, AND IS THE PRODUCT OF ALL PARTIES HERETO. 
ACCORDINGLY, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL NOT BE CONSTRUED
AGAINST THE LENDERS OR THE AGENT MERELY BECAUSE OF THE AGENT’S OR LENDERS’
INVOLVEMENT IN THE PREPARATION OF SUCH DOCUMENTS AND AGREEMENTS.

 

9.17                           NO THIRD PARTIES BENEFITED.  THIS AGREEMENT IS
MADE AND ENTERED INTO FOR THE SOLE PROTECTION AND LEGAL BENEFIT OF THE BORROWER,
THE LENDERS AND THE AGENT, AND THEIR PERMITTED SUCCESSORS AND ASSIGNS, AND NO
OTHER PERSON SHALL BE A DIRECT OR INDIRECT LEGAL BENEFICIARY OF, OR HAVE ANY
DIRECT OR INDIRECT CAUSE OF ACTION OR CLAIM IN CONNECTION WITH, THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS.  NEITHER THE AGENT NOR ANY LENDER SHALL HAVE
ANY OBLIGATION TO ANY PERSON NOT A PARTY TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS.

 

9.18                           GOVERNING LAW AND JURISDICTION.

 

(A)                               THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE
STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES; PROVIDED, THAT
THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(B)                               THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENT AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT

 

67

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

 

THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

 

(C)                               THE BORROWER DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY THE
BORROWER WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE BORROWER TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT.  A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE
MAILED BY REGISTERED MAIL TO THE BORROWER AT ITS ADDRESS PROVIDED IN SECTION 9.2
EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL
SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.  IF ANY AGENT
APPOINTED BY THE BORROWER REFUSES TO ACCEPT SERVICE, THE BORROWER HEREBY AGREES
THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE.  NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

9.19                           WAIVER OF JURY TRIAL.  THE BORROWER, THE LENDERS
AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE.  THE BORROWER, THE LENDERS AND THE AGENT EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS
SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

9.20                           ENTIRE AGREEMENT; RELEASE.  THIS AGREEMENT,
TOGETHER WITH THE OTHER LOAN DOCUMENTS, EMBODIES THE ENTIRE AGREEMENT AND
UNDERSTANDING AMONG THE BORROWER, THE LENDERS AND THE AGENT, AND SUPERSEDES ALL
PRIOR OR CONTEMPORANEOUS AGREEMENTS AND UNDERSTANDINGS OF

 

68

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

 

SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF, AND ANY PRIOR ARRANGEMENTS MADE WITH RESPECT TO THE PAYMENT BY THE
BORROWER OF (OR ANY INDEMNIFICATION FOR) ANY FEES, COSTS OR EXPENSES PAYABLE TO
OR INCURRED (OR TO BE INCURRED) BY OR ON BEHALF OF THE AGENT OR THE LENDERS. 
THE BORROWER HAS RELIED EXCLUSIVELY ON THE TERMS AND PROVISIONS CONTAINED IN
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS IN ITS EXECUTION AND DELIVERY HEREOF
AND THEREOF AND ENTERING INTO THE TRANSACTIONS WHICH ARE THE SUBJECT HEREOF AND
THEREOF.  EXECUTION OF THIS AGREEMENT BY THE BORROWER CONSTITUTES A FULL,
COMPLETE AND IRREVOCABLE RELEASE OF ANY AND ALL CLAIMS WHICH THE BORROWER MAY
HAVE AT LAW OR IN EQUITY IN RESPECT OF ALL PRIOR DISCUSSIONS AND UNDERSTANDINGS,
ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS AS OF THE DATE HEREOF.  NEITHER AGENT NOR ANY LENDER SHALL BE
LIABLE TO THE BORROWER OR ANY OTHER PERSON ON ANY THEORY OF LIABILITY FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.

 

9.21                           PATRIOT ACT.  EACH LENDER THAT IS SUBJECT TO THE
PATRIOT ACT HEREBY NOTIFIES BORROWER THAT PURSUANT TO THE REQUIREMENTS OF THE
PATRIOT ACT, IT IS REQUIRED TO OBTAIN, VERIFY AND RECORD INFORMATION THAT
IDENTIFIES BORROWER, WHICH INFORMATION INCLUDES THE NAME AND ADDRESS OF BORROWER
AND OTHER INFORMATION THAT WILL ALLOW SUCH LENDER TO IDENTIFY BORROWER IN
ACCORDANCE WITH THE PATRIOT ACT.

 

9.22                           REPLACEMENT OF LENDER.  WITHIN FORTY-FIVE DAYS
AFTER: (I) RECEIPT BY THE BORROWER OF WRITTEN NOTICE AND DEMAND FROM ANY LENDER
(AN “AFFECTED LENDER”) FOR PAYMENT OF ADDITIONAL COSTS AS PROVIDED IN SECTIONS
10.1, 10.3 AND/OR 10.6; (II) ANY DEFAULT BY A LENDER IN ITS OBLIGATION TO MAKE
LOANS HEREUNDER AFTER ALL CONDITIONS THERETO HAVE BEEN SATISFIED, PROVIDED SUCH
DEFAULT SHALL NOT HAVE BEEN CURED; OR (III) ANY FAILURE BY ANY LENDER TO CONSENT
TO A REQUESTED AMENDMENT, WAIVER OR MODIFICATION TO ANY LOAN DOCUMENT IN WHICH
REQUIRED LENDERS HAVE ALREADY CONSENTED TO SUCH AMENDMENT, WAIVER OR
MODIFICATION BUT THE CONSENT OF EACH LENDER (OR EACH LENDER HAVING REVOLVING
LOANS, TERM LOANS OR CAPEX LOANS, OR EACH LENDER DIRECTLY AFFECTED THEREBY, AS
APPLICABLE) IS REQUIRED WITH RESPECT THERETO, THE BORROWER MAY, AT ITS OPTION,
NOTIFY THE AGENT AND SUCH AFFECTED LENDER (OR SUCH DEFAULTING OR NON-CONSENTING
LENDER, AS THE CASE MAY BE) OF THE BORROWER’S INTENTION TO OBTAIN, AT THE
BORROWER’S EXPENSE, A REPLACEMENT LENDER (“REPLACEMENT LENDER”) FOR SUCH
AFFECTED LENDER (OR SUCH DEFAULTING OR NON-CONSENTING LENDER, AS THE CASE MAY
BE), WHICH REPLACEMENT LENDER SHALL BE REASONABLY SATISFACTORY TO THE AGENT.  IN
THE EVENT THE BORROWER OBTAINS A REPLACEMENT LENDER WITHIN FORTY-FIVE (45) DAYS
FOLLOWING NOTICE OF ITS INTENTION TO DO SO, THE AFFECTED LENDER (OR DEFAULTING
OR NON-CONSENTING LENDER, AS THE CASE MAY BE) SHALL SELL AND ASSIGN ITS LOANS
AND COMMITMENTS TO SUCH REPLACEMENT LENDER, AT PAR, PROVIDED THAT THE BORROWER
HAS REIMBURSED SUCH AFFECTED LENDER FOR ITS INCREASED COSTS FOR WHICH IT IS
ENTITLED TO REIMBURSEMENT UNDER THIS AGREEMENT THROUGH THE DATE OF SUCH SALE AND
ASSIGNMENT.  IN THE EVENT THAT A REPLACED LENDER DOES NOT EXECUTE AN ASSIGNMENT
AND ACCEPTANCE PURSUANT TO SECTION 9.8 WITHIN FIVE (5) BUSINESS DAYS AFTER
RECEIPT BY SUCH REPLACED LENDER OF NOTICE OF REPLACEMENT PURSUANT TO THIS
SECTION 9.22 AND PRESENTATION TO SUCH REPLACED LENDER OF AN ASSIGNMENT AND
ACCEPTANCE EVIDENCING AN ASSIGNMENT PURSUANT TO THIS SECTION 9.22, THE BORROWER
SHALL BE ENTITLED (BUT NOT OBLIGATED) TO EXECUTE SUCH AN ASSIGNMENT AND
ACCEPTANCE ON BEHALF OF SUCH REPLACED LENDER, AND ANY SUCH ASSIGNMENT AND
ACCEPTANCE SO EXECUTED BY THE BORROWER, THE REPLACEMENT LENDER AND THE AGENT,
SHALL BE EFFECTIVE FOR PURPOSES OF THIS SECTION 9.22 AND SECTION 9.8.  UPON ANY
SUCH ASSIGNMENT AND PAYMENT AND COMPLIANCE WITH THE OTHER PROVISIONS OF
SECTION 9.8, SUCH REPLACED LENDER SHALL NO

 

69

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

 

LONGER CONSTITUTE A “LENDER” FOR PURPOSES HEREOF; PROVIDED, ANY RIGHTS OF SUCH
REPLACED LENDER TO INDEMNIFICATION HEREUNDER SHALL SURVIVE AS TO SUCH REPLACED
LENDER.

 

9.23                           CONTINUED EFFECTIVENESS; NO NOVATION.  ANYTHING
CONTAINED HEREIN TO THE CONTRARY NOTWITHSTANDING, THIS AGREEMENT IS NOT INTENDED
TO AND SHALL NOT SERVE TO EFFECT A NOVATION OF THE OBLIGATIONS UNDER THE
ORIGINAL CREDIT AGREEMENT.  INSTEAD, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO TO REAFFIRM THE INDEBTEDNESS CREATED UNDER THE ORIGINAL CREDIT AGREEMENT
WHICH IS EVIDENCED BY THE NOTES PROVIDED FOR THEREIN AND SECURED BY THE
COLLATERAL.  THE BORROWER ACKNOWLEDGES AND CONFIRMS THAT THE LIENS AND SECURITY
INTERESTS GRANTED PURSUANT TO THE LOAN DOCUMENTS SECURE THE INDEBTEDNESS,
LIABILITIES AND OBLIGATIONS OF THE BORROWER TO THE AGENT AND THE LENDERS UNDER
THE ORIGINAL CREDIT AGREEMENT, AS AMENDED AND RESTATED HEREBY, AND THAT THE TERM
“OBLIGATIONS” AS USED IN THE LOAN DOCUMENTS (OR ANY OTHER TERM USED THEREIN TO
DESCRIBE OR REFER TO THE INDEBTEDNESS, LIABILITIES AND OBLIGATIONS OF THE
BORROWER TO THE AGENT AND THE LENDERS) INCLUDES, WITHOUT LIMITATION, THE
INDEBTEDNESS, LIABILITIES AND OBLIGATIONS OF THE BORROWER UNDER THE NOTES TO BE
DELIVERED HEREUNDER, AND UNDER THE ORIGINAL CREDIT AGREEMENT, AS AMENDED AND
RESTATED HEREBY, AS THE SAME FURTHER MAY BE AMENDED, MODIFIED, SUPPLEMENTED
AND/OR RESTATED FROM TIME TO TIME.  THE LOAN DOCUMENTS AND ALL AGREEMENTS,
INSTRUMENTS AND DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION WITH ANY OF THE
FOREGOING SHALL EACH BE DEEMED TO BE AMENDED TO THE EXTENT NECESSARY TO GIVE
EFFECT TO THE PROVISIONS OF THIS AGREEMENT.  CROSS-REFERENCES IN THE LOAN
DOCUMENTS TO PARTICULAR SECTION NUMBERS IN THE ORIGINAL CREDIT AGREEMENT SHALL
BE DEEMED TO BE CROSS-REFERENCES TO THE CORRESPONDING SECTIONS, AS APPLICABLE,
OF THIS AGREEMENT.

 

ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY

 

10.1                           TAXES.

 

(A)                                  SUBJECT TO SUBSECTION 10.1(G), ANY AND ALL
PAYMENTS BY THE BORROWER TO EACH LENDER OR THE AGENT UNDER THIS AGREEMENT SHALL
BE MADE FREE AND CLEAR OF, AND WITHOUT DEDUCTION OR WITHHOLDING FOR, ANY AND ALL
PRESENT OR FUTURE TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES OR WITHHOLDINGS,
AND ALL LIABILITIES WITH RESPECT THERETO, EXCLUDING, IN THE CASE OF EACH LENDER
AND THE AGENT, SUCH TAXES (INCLUDING INCOME TAXES OR FRANCHISE TAXES) AS ARE
IMPOSED ON OR MEASURED BY EACH LENDER’S NET INCOME BY THE JURISDICTION UNDER THE
LAWS OF WHICH SUCH LENDER OR THE AGENT, AS THE CASE MAY BE, IS ORGANIZED OR
MAINTAINS A LENDING OFFICE, OR ANY POLITICAL SUBDIVISION THEREOF (ALL SUCH
NON-EXCLUDED TAXES, LEVIES, IMPOSTS, DEDUCTIONS, CHARGES, WITHHOLDINGS AND
LIABILITIES BEING HEREINAFTER REFERRED TO AS “TAXES”).

 

(B)                                 IN ADDITION, THE BORROWER SHALL PAY ANY
PRESENT OR FUTURE STAMP OR DOCUMENTARY TAXES OR ANY OTHER EXCISE OR PROPERTY
TAXES, CHARGES OR SIMILAR LEVIES WHICH ARISE FROM ANY PAYMENT MADE HEREUNDER OR
FROM THE EXECUTION, DELIVERY OR REGISTRATION OF, OR OTHERWISE WITH RESPECT TO,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (HEREINAFTER REFERRED TO AS “OTHER
TAXES”).

 

(C)                                  SUBJECT TO SUBSECTION 10.1(G), THE BORROWER
SHALL INDEMNIFY AND HOLD HARMLESS EACH LENDER AND THE AGENT FOR THE FULL AMOUNT
OF TAXES OR OTHER TAXES (INCLUDING ANY TAXES OR OTHER TAXES IMPOSED BY ANY
JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 10.1) PAID BY

 

70

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

 

SUCH LENDER OR THE AGENT AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST,
ADDITIONS TO TAX AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO,
WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED;
PROVIDED, THAT EACH LENDER OR THE AGENT, AS THE CASE MAY BE, MAKING DEMAND FOR
SUCH INDEMNITY PAYMENT SHALL PROVIDE THE BORROWER WITH EVIDENCE THAT SUCH LENDER
OR THE AGENT, AS THE CASE MAY BE, HAS MADE PAYMENT OF SUCH TAXES OR OTHER
TAXES.  PAYMENT UNDER THIS INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30) DAYS
FROM THE DATE ANY LENDER OR THE AGENT MAKES WRITTEN DEMAND THEREFOR.

 

(D)                                 IF THE BORROWER SHALL BE REQUIRED BY LAW TO
DEDUCT OR WITHHOLD ANY TAXES OR OTHER TAXES FROM OR IN RESPECT OF ANY SUM
PAYABLE HEREUNDER TO ANY LENDER OR THE AGENT, THEN, SUBJECT TO
SUBSECTION 10.1(G):

 

(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 10.1) SUCH LENDER OR
THE AGENT, AS THE CASE MAY BE, RECEIVES AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE
RECEIVED HAD NO SUCH DEDUCTIONS BEEN MADE;

 

(II)                                  THE BORROWER SHALL MAKE SUCH DEDUCTIONS;
AND

 

(III)                               THE BORROWER SHALL PAY THE FULL AMOUNT
DEDUCTED TO THE RELEVANT TAXATION AUTHORITY OR OTHER AUTHORITY IN ACCORDANCE
WITH APPLICABLE LAW;

 

provided, that, if any additional payment is made by the Borrower under this
clause (d) for the benefit of the Agent or any Lender and the Agent or such
Lender, as applicable, determines that it has obtained a credit against, a
relief or remission for, or repayment of, the underlying Tax or Other Tax from
the appropriate taxing authority, then, to the extent the Agent or such Lender,
as applicable, determines that such credit, relief, remission or repayment is in
respect of, or calculated or determined with reference to, and retroactively
applies to, such additional payment made by the Borrower for the benefit of the
Agent or such Lender pursuant to this clause (d), the Agent or such Lender, as
applicable, shall, to the extent that it can do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment, pay to
the Borrower such amount as the Agent or such Lender, as applicable, shall
determine to be the amount which shall leave it (after such payment to the
Borrower) in no better or worse after-tax position that it would have been in
had the respective withholding or deduction not been required.

 

(E)                                  WITHIN THIRTY (30) DAYS AFTER THE DATE OF
ANY PAYMENT BY THE BORROWER OF TAXES OR OTHER TAXES, THE BORROWER SHALL FURNISH
TO THE AGENT THE ORIGINAL OR A CERTIFIED COPY OF A RECEIPT EVIDENCING PAYMENT
THEREOF, OR OTHER EVIDENCE OF PAYMENT SATISFACTORY TO THE AGENT.

 

(F)                                    EACH LENDER THAT IS NOT A CITIZEN OR
RESIDENT OF THE UNITED STATES OF AMERICA, A CORPORATION, PARTNERSHIP OR OTHER
ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE UNITED STATES (OR ANY
JURISDICTION THEREOF), OR ANY ESTATE OR TRUST THAT IS SUBJECT TO FEDERAL INCOME
TAXATION REGARDLESS OF THE SOURCE OF ITS INCOME (A ”NON-U.S. LENDER”) SHALL
DELIVER TO THE BORROWER AND THE AGENT TWO COPIES OF EACH U.S. INTERNAL REVENUE
SERVICE FORM W-8BEN OR FORM W-8ECI, OR ANY SUBSEQUENT VERSIONS THEREOF OR
SUCCESSORS THERETO, OR, IN THE CASE OF A NON-U.S. LENDER CLAIMING EXEMPTION FROM
U.S. FEDERAL WITHHOLDING TAX UNDER SECTION 871(H) OR 881(C) OF THE CODE WITH
RESPECT TO PAYMENTS OF “PORTFOLIO INTEREST,” A FORM W-8BEN, OR ANY SUBSEQUENT

 

71

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

 

VERSIONS THEREOF OR SUCCESSORS THERETO (AND, IF SUCH NON-U.S. LENDER DELIVERS A
FORM W-8BEN, A CERTIFICATE REPRESENTING THAT SUCH NON-U.S. LENDER IS NOT A
“BANK” FOR PURPOSES OF SECTION 881(C) OF THE CODE, IS NOT A TEN PERCENT (10%)
SHAREHOLDER (WITHIN THE MEANING OF SECTION 871(H)(3)(B) OF THE CODE) OF THE
BORROWER AND IS NOT A CONTROLLED FOREIGN CORPORATION RELATED TO THE BORROWER
(WITHIN THE MEANING OF SECTION 864(D)(4) OF THE CODE)), PROPERLY COMPLETED AND
DULY EXECUTED BY SUCH NON-U.S. LENDER CLAIMING COMPLETE EXEMPTION FROM, OR A
REDUCED RATE OF, U.S. FEDERAL WITHHOLDING TAX ON ALL PAYMENTS BY THE BORROWER
AND ITS SUBSIDIARIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.  SUCH
FORMS SHALL BE DELIVERED BY EACH NON-U.S. LENDER ON OR BEFORE THE DATE IT
BECOMES A PARTY TO THIS AGREEMENT.  IN ADDITION, EACH NON-U.S. LENDER SHALL
DELIVER SUCH FORMS PROMPTLY UPON THE OBSOLESCENCE OR INVALIDITY OF ANY FORM
PREVIOUSLY DELIVERED BY SUCH NON-U.S. LENDER.  EACH NON-U.S. LENDER SHALL
PROMPTLY NOTIFY THE BORROWER AT ANY TIME IT DETERMINES THAT IT IS NO LONGER IN A
POSITION TO PROVIDE ANY PREVIOUSLY DELIVERED CERTIFICATE TO THE BORROWER (OR ANY
OTHER FORM OF CERTIFICATION ADOPTED BY THE U.S. TAXING AUTHORITIES FOR SUCH
PURPOSE).  NOTWITHSTANDING ANY OTHER PROVISION OF THIS SUBSECTION, A NON-U.S.
LENDER SHALL NOT BE REQUIRED TO DELIVER ANY FORM PURSUANT TO THIS
SUBSECTION THAT SUCH NON-U.S. LENDER IS NOT LEGALLY ABLE TO DELIVER.

 

(G)                                 THE BORROWER WILL NOT BE REQUIRED TO PAY ANY
ADDITIONAL AMOUNTS IN RESPECT OF UNITED STATES FEDERAL INCOME TAX PURSUANT TO
SUBSECTION 10.1(D) TO ANY LENDER FOR THE ACCOUNT OF ANY LENDING OFFICE OF SUCH
LENDER:

 

(I)                                     IF THE OBLIGATION TO PAY SUCH ADDITIONAL
AMOUNTS WOULD NOT HAVE ARISEN BUT FOR A FAILURE BY SUCH LENDER TO COMPLY WITH
ITS OBLIGATIONS UNDER SUBSECTION 10.1(F) IN RESPECT OF SUCH LENDING OFFICE; OR

 

(II)                                  IF SUCH LENDER SHALL HAVE DELIVERED TO THE
BORROWER A FORM W-8BEN AND/OR FORM W-8ECI (OR ANY SUBSEQUENT VERSIONS THEREOF OR
SUCCESSORS THERETO) IN RESPECT OF SUCH LENDING OFFICE PURSUANT TO
SUBSECTION 10.1(F), AND SUCH LENDER SHALL NOT AT ANY TIME BE ENTITLED TO
EXEMPTION FROM DEDUCTION OR WITHHOLDING OF UNITED STATES FEDERAL INCOME TAX IN
RESPECT OF PAYMENTS BY THE BORROWER HEREUNDER FOR THE ACCOUNT OF SUCH LENDING
OFFICE FOR ANY REASON OTHER THAN A CHANGE IN UNITED STATES LAW, TREATY OR
REGULATIONS OR IN THE OFFICIAL INTERPRETATION OF SUCH LAW OR REGULATIONS BY ANY
GOVERNMENTAL AUTHORITY CHARGED WITH THE INTERPRETATION OR ADMINISTRATION THEREOF
(WHETHER OR NOT HAVING THE FORCE OF LAW) AFTER THE DATE OF DELIVERY OF SUCH
FORM W-8BEN AND/OR FORM W-8ECI (OR ANY SUBSEQUENT VERSIONS THEREOF OR SUCCESSORS
THERETO); OR

 

(III)                               IF SUCH LENDER HAS BEEN NOTIFIED BY THE
INTERNAL REVENUE SERVICE THAT SUCH LENDER IS SUBJECT TO BACKUP WITHHOLDING FOR
FAILING TO REPORT INTEREST AND DIVIDENDS RECEIVED, UNLESS AND EXCEPT TO THE
EXTENT SUCH NOTICE IS REVOKED, TERMINATED OR OTHERWISE OVERTURNED OR VACATED.

 

(H)                                 IF, AT ANY TIME, THE BORROWER REQUESTS ANY
LENDER TO DELIVER ANY FORMS OR OTHER DOCUMENTATION PURSUANT TO
SUBSECTION 10.1(F), THEN THE BORROWER SHALL, ON DEMAND OF SUCH LENDER THROUGH
THE AGENT, REIMBURSE SUCH LENDER FOR ANY COSTS AND EXPENSES (INCLUDING ATTORNEY
COSTS) REASONABLY INCURRED BY SUCH LENDER IN THE PREPARATION OR DELIVERY OF SUCH
FORMS OR OTHER DOCUMENTATION.

 

72

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

 

(I)                                     IF THE BORROWER IS REQUIRED TO PAY
ADDITIONAL AMOUNTS TO ANY LENDER OR THE AGENT PURSUANT TO SUBSECTION 10.1(D),
THEN SUCH LENDER SHALL USE ITS REASONABLE BEST EFFORTS (CONSISTENT WITH LEGAL
AND REGULATORY RESTRICTIONS) TO CHANGE THE JURISDICTION OF ITS LENDING OFFICE SO
AS TO ELIMINATE ANY SUCH ADDITIONAL PAYMENT BY THE BORROWER WHICH MAY THEREAFTER
ACCRUE IF SUCH CHANGE IN THE JUDGMENT OF SUCH LENDER IS NOT OTHERWISE
DISADVANTAGEOUS TO SUCH LENDER.  FURTHER, WITHIN THIRTY (30) DAYS OF WRITTEN
REQUEST OF THE BORROWER THEREFOR, THE AGENT OR THE APPLICABLE LENDER, AS THE
CASE MAY BE, SHALL EXECUTE AND DELIVER TO THE BORROWER, AT THE SOLE COST OF THE
BORROWER, SUCH CERTIFICATES, FORMS OR OTHER DOCUMENTS REASONABLY REQUESTED BY
THE BORROWER THAT CAN BE FURNISHED CONSISTENT WITH THE FACTS AND WHICH ARE
REASONABLY NECESSARY TO ASSIST THE BORROWER IN APPLYING FOR REFUNDS OF THOSE
TAXES REMITTED HEREUNDER.

 

10.2                           ILLEGALITY.  (A)  IF AFTER THE DATE HEREOF ANY
LENDER SHALL DETERMINE IN GOOD FAITH THAT THE INTRODUCTION OF ANY REQUIREMENT OF
LAW, OR ANY CHANGE IN ANY REQUIREMENT OF LAW OR IN THE INTERPRETATION OR
ADMINISTRATION THEREOF, HAS MADE IT UNLAWFUL, OR THAT ANY CENTRAL BANK OR OTHER
GOVERNMENTAL AUTHORITY HAS ASSERTED THAT IT IS UNLAWFUL, FOR ANY LENDER OR ITS
LENDING OFFICE TO MAKE LIBOR RATE LOANS, THEN, ON NOTICE THEREOF BY SUCH LENDER
TO THE BORROWER THROUGH THE AGENT, THE OBLIGATION OF THAT LENDER TO MAKE LIBOR
RATE LOANS SHALL BE SUSPENDED UNTIL SUCH LENDER SHALL HAVE NOTIFIED THE AGENT
AND THE BORROWER THAT THE CIRCUMSTANCES GIVING RISE TO SUCH DETERMINATION NO
LONGER EXISTS.

 

(A)                                  SUBJECT TO CLAUSE (C) BELOW, IF ANY LENDER
SHALL DETERMINE THAT IT IS UNLAWFUL TO MAINTAIN ANY LIBOR RATE LOAN, THE
BORROWER SHALL PREPAY IN FULL ALL LIBOR RATE LOANS OF SUCH LENDER THEN
OUTSTANDING, TOGETHER WITH INTEREST ACCRUED THEREON, EITHER ON THE LAST DAY OF
THE INTEREST PERIOD THEREOF IF SUCH LENDER MAY LAWFULLY CONTINUE TO MAINTAIN
SUCH LIBOR RATE LOANS TO SUCH DAY, OR IMMEDIATELY, IF SUCH LENDER MAY NOT
LAWFULLY CONTINUE TO MAINTAIN SUCH LIBOR RATE LOANS, TOGETHER WITH ANY AMOUNTS
REQUIRED TO BE PAID IN CONNECTION THEREWITH PURSUANT TO SECTION 10.4.

 

(B)                                 IF THE OBLIGATION OF ANY LENDER TO MAKE OR
MAINTAIN LIBOR RATE LOANS HAS BEEN TERMINATED, THE BORROWER MAY ELECT, BY GIVING
NOTICE TO SUCH LENDER THROUGH THE AGENT THAT ALL LOANS WHICH WOULD OTHERWISE BE
MADE BY ANY SUCH LENDER AS LIBOR RATE LOANS SHALL BE INSTEAD BASE RATE LOANS.

 

(C)                                  BEFORE GIVING ANY NOTICE TO THE AGENT
PURSUANT TO THIS SECTION 10.2, THE AFFECTED LENDER SHALL DESIGNATE A DIFFERENT
LENDING OFFICE WITH RESPECT TO ITS LIBOR RATE LOANS IF SUCH DESIGNATION WILL
AVOID THE NEED FOR GIVING SUCH NOTICE OR MAKING SUCH DEMAND AND WILL NOT, IN THE
JUDGMENT OF THE LENDER, BE ILLEGAL OR OTHERWISE DISADVANTAGEOUS TO THE LENDER.

 

10.3                           INCREASED COSTS AND REDUCTION OF RETURN.

 

(A)                                  IF ANY LENDER SHALL DETERMINE IN GOOD FAITH
THAT, DUE TO EITHER (I) THE INTRODUCTION OF, OR ANY CHANGE IN, OR IN THE
INTERPRETATION OF, ANY LAW OR REGULATION OR (II) THE COMPLIANCE WITH ANY
GUIDELINE OR REQUEST FROM ANY CENTRAL BANK OR OTHER GOVERNMENTAL AUTHORITY
(WHETHER OR NOT HAVING THE FORCE OF LAW), IN THE CASE OF EITHER CLAUSE (I) OR
(II) SUBSEQUENT TO THE DATE HEREOF, THERE SHALL BE ANY INCREASE IN THE COST TO
SUCH LENDER OF AGREEING TO MAKE OR MAKING, FUNDING OR MAINTAINING ANY LIBOR RATE
LOANS, THEN THE BORROWER SHALL BE LIABLE FOR, AND SHALL FROM TIME TO TIME,
WITHIN THIRTY (30) DAYS OF DEMAND THEREFOR BY SUCH LENDER (WITH A COPY OF SUCH
DEMAND TO

 

73

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

 

THE AGENT), PAY TO THE AGENT FOR THE ACCOUNT OF SUCH LENDER, ADDITIONAL AMOUNTS
AS ARE SUFFICIENT TO COMPENSATE SUCH LENDER FOR SUCH INCREASED COSTS.

 

(B)                                 IF ANY LENDER SHALL HAVE DETERMINED IN GOOD
FAITH THAT:

 

(I)                                     THE INTRODUCTION OF ANY CAPITAL ADEQUACY
REGULATION;

 

(II)                                  ANY CHANGE IN ANY CAPITAL ADEQUACY
REGULATION;

 

(III)                               ANY CHANGE IN THE INTERPRETATION OR
ADMINISTRATION OF ANY CAPITAL ADEQUACY REGULATION BY ANY CENTRAL BANK OR OTHER
GOVERNMENTAL AUTHORITY CHARGED WITH THE INTERPRETATION OR ADMINISTRATION
THEREOF; OR

 

(IV)                              COMPLIANCE BY SUCH LENDER (OR ITS LENDING
OFFICE) OR ANY ENTITY CONTROLLING THE LENDER, WITH ANY CAPITAL ADEQUACY
REGULATION;

 

affects the amount of capital required or expected to be maintained by such
Lender or any corporation controlling such Lender and (taking into consideration
such Lender’s or such corporation’s policies with respect to capital adequacy
and such Lender’s desired return on capital) determines that the amount of such
capital is increased as a consequence of its Commitment(s), loans, credits or
obligations under this Agreement, then, within thirty (30) days of demand of
such Lender (with a copy to the Agent), the Borrower shall pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender (or the entity controlling the Lender) for such increase.

 

10.4                           FUNDING LOSSES.  THE BORROWER AGREES TO REIMBURSE
EACH LENDER AND TO HOLD EACH LENDER HARMLESS FROM ANY LOSS OR EXPENSE WHICH SUCH
LENDER MAY SUSTAIN OR INCUR AS A CONSEQUENCE OF:

 

(A)                                  THE FAILURE OF THE BORROWER TO MAKE ANY
PAYMENT OR MANDATORY PREPAYMENT OF PRINCIPAL OF ANY LIBOR RATE LOAN (INCLUDING
PAYMENTS MADE AFTER ANY ACCELERATION THEREOF);

 

(B)                                 THE FAILURE OF THE BORROWER TO BORROW,
CONTINUE OR CONVERT A LOAN AFTER THE BORROWER HAS GIVEN (OR IS DEEMED TO HAVE
GIVEN) A NOTICE OF BORROWING OR A NOTICE OF CONTINUATION/CONVERSION;

 

(C)                                  THE FAILURE OF THE BORROWER TO MAKE ANY
PREPAYMENT AFTER THE BORROWER HAS GIVEN A NOTICE IN ACCORDANCE WITH SECTION 1.7;

 

(D)                                 THE PREPAYMENT (INCLUDING PURSUANT TO
SECTION 1.8 OR AS A RESULT OF AN ACCELERATION) OF A LIBOR RATE LOAN ON A DAY
WHICH IS NOT THE LAST DAY OF THE INTEREST PERIOD WITH RESPECT THERETO; OR

 

(E)                                  THE CONVERSION PURSUANT TO SECTION 1.6 OF
ANY LIBOR RATE LOAN TO A BASE RATE LOAN ON A DAY THAT IS NOT THE LAST DAY OF THE
APPLICABLE INTEREST PERIOD;

 

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the

 

74

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

 

deposits from which such funds were obtained.  Solely for purposes of
calculating amounts payable by the Borrower to the Lenders under this
Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made by a Lender
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the LIBOR used in determining the
interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing
in the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such LIBOR Rate Loan is in fact so funded.

 

10.5                           INABILITY TO DETERMINE RATES.  IF THE AGENT SHALL
HAVE DETERMINED IN GOOD FAITH THAT FOR ANY REASON ADEQUATE AND REASONABLE MEANS
DO NOT EXIST FOR ASCERTAINING THE LIBOR FOR ANY REQUESTED INTEREST PERIOD WITH
RESPECT TO A PROPOSED LIBOR RATE LOAN OR THAT THE LIBOR APPLICABLE PURSUANT TO
SUBSECTION 1.3(A) FOR ANY REQUESTED INTEREST PERIOD WITH RESPECT TO A PROPOSED
LIBOR RATE LOAN DOES NOT ADEQUATELY AND FAIRLY REFLECT THE COST TO THE LENDERS
OF FUNDING SUCH LOAN, THE AGENT WILL FORTHWITH GIVE NOTICE OF SUCH DETERMINATION
TO THE BORROWER AND EACH LENDER.  THEREAFTER, THE OBLIGATION OF THE LENDERS TO
MAKE OR MAINTAIN LIBOR RATE LOANS HEREUNDER SHALL BE SUSPENDED UNTIL THE AGENT
REVOKES SUCH NOTICE IN WRITING.  UPON RECEIPT OF SUCH NOTICE, THE BORROWER MAY
REVOKE ANY NOTICE OF BORROWING OR NOTICE OF CONTINUATION/ CONVERSION THEN
SUBMITTED BY THE BORROWER.  IF THE BORROWER DOES NOT REVOKE SUCH NOTICE, THE
LENDERS SHALL MAKE, CONVERT OR CONTINUE THE LOANS, AS PROPOSED BY THE BORROWER,
IN THE AMOUNT SPECIFIED IN THE APPLICABLE NOTICE SUBMITTED BY THE BORROWER, BUT
SUCH LOANS SHALL BE MADE, CONVERTED OR CONTINUED AS BASE RATE LOANS.

 

10.6                           RESERVES ON LIBOR RATE LOANS.  THE BORROWER SHALL
PAY TO EACH LENDER, AS LONG AS SUCH LENDER SHALL BE REQUIRED UNDER REGULATIONS
OF THE FEDERAL RESERVE BOARD TO MAINTAIN RESERVES WITH RESPECT TO LIABILITIES OR
ASSETS CONSISTING OF OR INCLUDING EUROCURRENCY FUNDS OR DEPOSITS (CURRENTLY
KNOWN AS “EUROCURRENCY LIABILITIES”), ADDITIONAL COSTS ON THE UNPAID PRINCIPAL
AMOUNT OF EACH LIBOR RATE LOAN EQUAL TO ACTUAL COSTS OF SUCH RESERVES ALLOCATED
TO SUCH LOAN BY SUCH LENDER (AS DETERMINED BY SUCH LENDER IN GOOD FAITH, WHICH
DETERMINATION SHALL BE CONCLUSIVE ABSENT DEMONSTRABLE ERROR), PAYABLE ON EACH
DATE ON WHICH INTEREST IS PAYABLE ON SUCH LOAN; PROVIDED THE BORROWER SHALL HAVE
RECEIVED AT LEAST FIFTEEN (15) DAYS’ PRIOR WRITTEN NOTICE (WITH A COPY TO THE
AGENT) OF SUCH ADDITIONAL INTEREST FROM THE LENDER.  IF A LENDER FAILS TO GIVE
NOTICE FIFTEEN (15) DAYS PRIOR TO THE RELEVANT INTEREST PAYMENT DATE, SUCH
ADDITIONAL INTEREST SHALL BE PAYABLE FIFTEEN (15) DAYS FROM RECEIPT OF SUCH
NOTICE.

 

10.7                           CERTIFICATES OF LENDERS.  ANY LENDER CLAIMING
REIMBURSEMENT OR COMPENSATION PURSUANT TO THIS ARTICLE X SHALL DELIVER TO THE
BORROWER (WITH A COPY TO THE AGENT) A CERTIFICATE SETTING FORTH IN REASONABLE
DETAIL THE AMOUNT PAYABLE TO SUCH LENDER HEREUNDER AND SUCH CERTIFICATE SHALL BE
CONCLUSIVE AND BINDING ON THE BORROWER IN THE ABSENCE OF MANIFEST ERROR.

 

10.8                           SURVIVAL.  THE AGREEMENTS AND OBLIGATIONS OF THE
BORROWER IN THIS ARTICLE X SHALL SURVIVE THE PAYMENT OF ALL OTHER OBLIGATIONS.

 

75

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

 

ARTICLE XI - RESERVED

 

 

ARTICLE XII - DEFINITIONS

 

12.1                           DEFINED TERMS.  THE FOLLOWING TERMS ARE DEFINED
IN THE SECTIONS OR SUBSECTIONS REFERENCED OPPOSITE SUCH TERMS:

 

“Accrual Period”

1.3(b)

“Affected Lender”

9.22

“Assignee”

9.8(a)

“Assignment and Acceptance”

9.8(a)(ii)

“Borrower”

Preamble

“Borrowing Base”

1.1(b)

“CapEx Commitment Fee”

1.9(d)

“CapEx Loan”

1.1(a)

“CapEx Loan Commitment”

1.1(a)

“Cash Contribution”

6.6(b)

“Commitment Fee”

1.9(b)

“Confidential Information”

9.9

“EBITDA”

Exhibit 4.2(b)

“Event of Default”

7.1

“Existing Lender”

1.3(a)

“Fee Letter”

1.9(a)

“Fixed Charge Coverage Ratio”

Exhibit 4.2(b)

“First Amendment”

Recitals

“Indemnified Person”

9.5

“Indemnified Liabilities”

9.5

“Lender”

Preamble

“Lender Letter of Credit”

1.1(c)

“Letter of Credit Participation Agreement”

1.1(c)

“Letter of Credit Participation Fee”

1.9(c)

“Leverage Ratio”

Exhibit 4.2(b)

“Maximum Revolving Loan Balance”

1.1(b)

“Original Credit Agreement”

Recitals

“Originating Lender”

9.8(d)

“Other Taxes”

10.1(b)

“Participant”

9.8(d)

“Permitted Liens”

5.1

“Restricted Payments”

5.11

“Replacement Lender”

9.22

“Revolving Loan Commitment”

1.1(b)

“Revolving Loan”

1.1(b)

“Second Amendment”

Recitals

“Taxes”

10.1(a)

“Term Loan”

1.1(a)

“Term Loan Commitment”

1.1(a)

“Transaction”

5.7(f)

 

76

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

 

In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:

 

“Account” means, as at any date of determination, all “accounts” (as such term
is defined in the UCC) of the Borrower and its Subsidiaries, including, without
limitation, the unpaid portion of the obligation of a customer of the Borrower
and its Subsidiaries in respect of Inventory purchased by and shipped to such
customer and/or the rendition of services by the Borrower and its Subsidiaries,
as stated on the respective invoices of the Borrower and its Subsidiaries, net
of any credits, rebates or offsets owed to such customer.

 

“Account Debtor” means the customer of a Borrower and its Subsidiaries who is
obligated on or under an Account.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business or division
of a Person, (b) the acquisition of in excess of fifty percent (50%) of the
capital stock, partnership interests or equity of any Person or otherwise
causing any Person to become a Subsidiary of the Borrower, or (c) a merger or
consolidation or any other combination with another Person.

 

“Acquisition Documents” means all documents, agreements and instruments executed
by the Borrower and/or its Subsidiaries in connection with the consummation of
an Acquisition and shall include, without limitation, the Grand Valley Purchase
Documents and the Dimension Purchase Documents.

 

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person.  A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise.  Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall for the purposes of this Agreement,
be deemed to control the other Person.  Notwithstanding the foregoing, neither
the Agent nor any Lender shall be deemed an “Affiliate” of the Borrower or of
any of its Subsidiaries.

 

“Agent” means Antares in its capacity as administrative agent for the Lenders
hereunder, and any successor agent.

 

“Agent-Related Persons” means Antares and any successor agent arising under
Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.

 

“Aggregate CapEx Loan Commitment” means the combined CapEx Loan Commitments of
the Lenders, which shall initially be in the amount of $7,500,000, as such
amount may be reduced from time to time pursuant to this Agreement.

 

77

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

 

“Aggregate Revolving Loan Commitment” means the combined Revolving Loan
Commitments of the Lenders, which shall initially be in the amount of
$40,000,000, as such amount may be reduced from time to time pursuant to this
Agreement.

 

“Aggregate Term Loan Commitment” means the combined Term Loan Commitments of the
Lenders, which shall initially be in the amount of $7,500,000, as such amount
may be reduced from time to time pursuant to this Agreement.

 

“Antares” means Antares Capital Corporation, a Delaware corporation, acting in
its capacity as agent for the Lenders hereunder.

 

“Applicable Margin” means (i) if a Base Rate Loan, one and three-quarters
percent (1.75%) per annum and (ii) if a LIBOR Rate Loan, three percent (3.00%)
per annum.

 

“Attorney Costs” means and includes all reasonable fees and disbursements of any
law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.

 

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended and in effect from time to time and the regulations
issued from time to time thereunder.

 

“Base Rate” means, for any day, a rate of interest equal to the greater of
(a) the rate of interest which is identified as the “Prime Rate” and normally
published in the Money Rates section of The Wall Street Journal (or, if such
rate ceases to be so published, as quoted from such other generally available
and recognizable source as the Agent may select) and (b) the sum of the Federal
Funds Rate plus one half of one percent (0.5%).  Any change in the Base Rate due
to a change in the “Prime Rate” or the Federal Funds Rate shall be effective on
the effective date of such change in the “Prime Rate” or the Federal Funds Rate.

 

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

 

“Borrower Pledge Agreement” means that certain Pledge Agreement dated as of the
Original Closing Date, by and between Borrower and the Agent, for the benefit of
the Lenders, pursuant to which Borrower has pledged one hundred percent (100%)
of the issued and outstanding capital stock of its directly-owned Subsidiaries.

 

“Borrower Security Agreement” means that certain Security Agreement dated as of
the Original Closing Date, by and between Borrower and the Agent, for the
benefit of the Lenders.

 

“Borrowing” means a borrowing hereunder consisting of Loans made to the Borrower
on the same day by the Lenders pursuant to Article I.

 

“Borrowing Base Certificate” means a certificate of the Borrower, in
substantially the form of Exhibit 12.1(a) hereto, duly completed as of a date
acceptable to the Agent in its reasonable discretion.

 

78

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

 

“Brentwood” means Brentwood Acquisition Corp., a Minnesota corporation and
wholly-owned subsidiary of Woodcraft.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in Chicago, Illinois or New York, New York are authorized or
required by law to close and, if the applicable Business Day relates to any
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.

 

“CapEx Line Termination Date” shall mean June 30, 2006.

 

“CapEx Note” means a promissory note of the Borrower payable to the order of a
Lender, in substantially the form of Exhibit 11.1(e)-2 hereto, evidencing the
Indebtedness of the Borrower under the CapEx Loan Commitment of such Lender
(and, after the CapEx Line Termination Date, all CapEx Loans held by such
Lender).

 

“Capital Adequacy Regulation” means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.

 

“Capital Expenditure” means an expenditure of the Borrower or its Subsidiaries
which should be capitalized under GAAP.

 

“Capital Lease” means any leasing or similar arrangement which, in accordance
with GAAP, is classified as a capital lease.

 

“Capital Lease Obligations” means all monetary obligations of the Borrower and
its Subsidiaries under any Capital Leases.

 

“Cash Equivalents” means: (a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof having maturities of not
more than six (6) months from the date of acquisition; (b) certificates of
deposit, time deposits, repurchase agreements, reverse repurchase agreements, or
bankers’ acceptances, having in each case a tenor of not more than six
(6) months, issued by any Lender, or by any U.S. commercial bank or any branch
or agency of a non-U.S. bank licensed to conduct business in the U.S. having
combined capital and surplus of not less than $250,000,000; (c) commercial paper
of an issuer rated at least A-1 by Standard & Poor’s Corporation or P-1 by
Moody’s Investors Service Inc. and in either case having a tenor of not more
than three (3) months and (d) money market funds; provided, that substantially
all of the assets of such fund are comprised of securities of the type described
in clauses (a) through (c).

 

“Code” means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.

 

“Collateral” means all Property and interests in Property and proceeds thereof
now owned or hereafter acquired by the Borrower and its Subsidiaries or any
other Person as debtor and any other Person who has granted a Lien to Agent, in
or upon which a Lien now or hereafter exists in favor of any Lender or the Agent
for the benefit of the Agent and Lenders, whether

 

79

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

 

under this Agreement or under any other documents executed by any such Persons
and delivered to the Agent.

 

“Collateral Documents” means, collectively, the Master Reaffirmation Agreement,
the Security Agreements, the Mortgages, the Guaranty, the Grand Valley Guaranty,
the Pledge Agreements, the Grand Valley Collateral Assignment of Asset Purchase
Agreement, the Grand Valley Collateral Assignment of Real Property Purchase
Agreement, the Dimension Collateral Assignment of Asset Purchase Agreement and
all other security agreements, patent and trademark assignments, lease
assignments, deposit account control agreements, guarantees and other similar
agreements, and all amendments, restatements, modifications or supplements
thereof or thereto, by or between any one or more of the Borrower, its
Subsidiaries or any other Person pledging or granting a lien on Collateral and
any Lender or the Agent for the benefit of Agent and the Lenders now or
hereafter delivered to the Lenders or the Agent pursuant to or in connection
with the transactions contemplated hereby, and all financing statements (or
comparable documents now or hereafter filed in accordance with the UCC or
comparable law) against the Borrower or its Subsidiaries as debtor in favor of
any Lender or the Agent for the benefit of Agent and the Lenders, as secured
party.

 

“Commitment” means, for each Lender, the sum of its Revolving Loan Commitment,
Term Loan Commitment and CapEx Loan Commitment.

 

“Commitment Percentage” means, as to any Lender, the percentage equivalent of
such Lender’s Revolving Loan Commitment, Term Loan Commitment or CapEx Loan
Commitment divided by the Aggregate Revolving Loan Commitment, Aggregate Term
Loan Commitment or CapEx Loan Commitment, as applicable.

 

“Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person:  (i) with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; (iii) under
any Rate Contracts; (iv) to make take-or-pay or similar payments if required
regardless of nonperformance by any other party or parties to an agreement; or
(v) for the obligations of another through any agreement to purchase, repurchase
or otherwise acquire such obligation or any Property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another Person.  The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported or,
if not a fixed and determined amount, the maximum amount so guaranteed or
supported.

 

“Contractual Obligations” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its Property is bound.

 

80

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

 

“Controlled Group” means the Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001
of ERISA.

 

“Conversion Date” means any date on which the Borrower converts a Base Rate Loan
to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.

 

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied or waived in
writing during such time) constitute an Event of Default.

 

“Dimension” means Dimension Moldings, Inc., an Ohio corporation.

 

“Dimension Acquisition” means the acquisition by Woodcraft of substantially all
of the assets of Dimension from Dimension pursuant to the Dimension Purchase
Agreement.

 

“Dimension Collateral Assignment of Asset Purchase Agreement” means that certain
Collateral Assignment of Asset Purchase Agreement dated as of the Second
Amendment Closing Date by Woodcraft in favor of Agent, for the benefit of the
Lenders, pursuant to which Woodcraft collaterally assigned all of its rights
under the Dimension Purchase Agreement to Agent, for the benefit of the Lenders.

 

“Dimension Earn-Out Obligation” means all obligations in respect of the “Earnout
Payments” pursuant to Section 1.6 of the Dimension Purchase Agreement as in
effect on the Second Amendment Closing Date, contingent or otherwise.

 

“Dimension Purchase Agreement” means that certain Asset Purchase Agreement among
Woodcraft, Dimension, each of Rhine Blake and Jim Herchek, as the founders of
Dimension, and RBJ Holdings, Inc., dated as of July 28, 2005, a copy of which is
annexed as Exhibit A to the Second Amendment.

 

“Dimension Purchase Documents” means the Dimension Purchase Agreement, together
with each other document, agreement and instrument executed in connection
therewith.

 

“Disposition” means (a) the sale, lease (other than the lease of real Property
or fixtures resulting in lease payments received by the Borrower and its
Subsidiaries, either individually or in the aggregate, of less than $50,000),
conveyance or other disposition of Property, other than sales or other
dispositions expressly permitted under subsection 5.2(a), and (b) the sale or
transfer by the Borrower or any of its Subsidiaries of any equity securities
issued by any of its Subsidiaries and held by such transferor Person.

 

“Dollars,” “dollars” and “$” each mean lawful money of the United States of
America.

 

“EBITDA Plug Amount” means, if the Borrower violated any financial covenants
contained in Sections 6.2, 6.3 and/or 6.5 for any test period, an amount which,
when added to actual EBITDA (or, with respect to Section 6.3, Cash Flow) of the
Borrower for such test period (and treating such amount as additional EBITDA (or
Cash Flow, as applicable) for such

 

81

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

 

purposes), and, solely for the Leverage Ratio contained in Section 6.2, when
also deducted from the then outstanding principal amount of the Obligations
(which deduction assumes compliance by the Borrower with subsection 1.8(g)),
would cause the Borrower to be in compliance with such financial covenants for
such test period; provided, that if the Borrower violated more than one such
financial covenant for any test period, the EBITDA Plug Amount applicable for
such test period for purposes of Sections 6.2, 6.3 and/or 6.5 shall be the
greatest of the amounts that so cause the Borrower to be in compliance with each
such financial covenant in accordance with the foregoing.

 

“Eligible Assignee” means any of: (a) a commercial bank organized under the laws
of the United States, or any state thereof; (b) a commercial bank organized
under the laws of any other country; (c) a finance company, insurance company or
other financial institution or fund which is engaged in making, purchasing or
otherwise investing in commercial loans for its own account in the ordinary
course of its business; or (d) a Related Fund.

 

“Environmental Claims” means all claims, however asserted, by any Governmental
Authority or other Person alleging potential liability or responsibility for
violation of any Environmental Law, or for release or injury to the environment
or threat to public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or otherwise alleging
liability or responsibility for damages (punitive or otherwise), cleanup,
removal, remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based upon the
presence, placement, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental, placement, spills, leaks, discharges, emissions or releases) of
any Hazardous Material at, in, or from Property, whether or not owned by the
Borrower.

 

“Environmental Laws” means all foreign, federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and regulations promulgated thereunder.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b),
414(c), 414(m) or 414(o) of the Code or Section 4001 of ERISA.

 

“ERISA Event” means (a) a Reportable Event with respect to a Qualified Plan or a
Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from
a Qualified Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer (as defined in Section 4001(a)(2) of ERISA); (c) a
complete or partial withdrawal by the

 

82

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

 

Borrower or any ERISA Affiliate from a Multiemployer Plan; (d) the filing of a
notice of intent to terminate, the treatment of a plan amendment as a
termination under Section 4041 or 4041A of ERISA or the commencement of
proceedings by the PBGC to terminate a Qualified Plan or Multiemployer Plan
subject to Title IV of ERISA; (e) a failure by the Borrower or any member of the
Controlled Group to make required contributions to a Qualified Plan or
Multiemployer Plan subject to Title IV of ERISA; (f) an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Qualified Plan or Multiemployer Plan; (g) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; (h) an
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code with respect to any Plan; (i) a non-exempt
prohibited transaction occurs with respect to any Plan for which the Borrower or
any of its Subsidiaries may be directly or indirectly liable; or (j) a violation
of the applicable requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Code by any fiduciary or disqualified
person with respect to any Plan for which the Borrower or any member of the
Controlled Group may be directly or indirectly liable.

 

“Event of Loss” means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property; (b) any pending
proceedings for the condemnation or seizure of such Property or for the exercise
of any right of eminent domain; or (c) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
Property, or confiscation of such Property or the requisition of the use of such
Property.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward to
the nearest 1/100th of 1%) equal to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided,
that if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions as determined by the Agent in a commercially
reasonable manner.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.

 

“First Amendment Closing Date” means April 30, 2004.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any

 

83

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

 

entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

 

“Grand Valley Acquisition” means, collectively, the Grand Valley Asset
Acquisition and the Grand Valley Real Property Acquisition.

 

“Grand Valley Acquisition Sub” means Grand Valley Acquisition, Inc., a Delaware
corporation and wholly-owned subsidiary of Woodcraft.

 

“Grand Valley Asset Acquisition” means the acquisition by Grand Valley
Acquisition Sub of substantially all of the assets of GVDC from GVDC pursuant to
the Grand Valley Asset Purchase Agreement.

 

“Grand Valley Asset Purchase Agreement” means that certain Asset Purchase
Agreement among Woodcraft, Grand Valley Acquisition Sub, GVDC, HBG Holding Co.,
as sole stockholder of GVDC, and each of Rhine Blake and Jack Smigel, as the
founders of GVDC, dated as of April 19, 2004, a copy of which is annexed as
Exhibit A to the First Amendment.

 

“Grand Valley Asset Purchase Documents” means the Grand Valley Asset Purchase
Agreement, together with each other document, agreement and instrument executed
in connection therewith.

 

“Grand Valley Collateral Assignment of Asset Purchase Agreement” means that
certain Collateral Assignment of Asset Purchase Agreement dated as of the First
Amendment Closing Date by Grand Valley Acquisition Sub and Woodcraft in favor of
Agent, for the benefit of the Lenders, pursuant to which Grand Valley
Acquisition Sub and Woodcraft collaterally assigned all of their respective
rights under the Grand Valley Asset Purchase Agreement to Agent, for the benefit
of the Lenders.

 

“Grand Valley Collateral Assignment of Real Property Purchase Agreement” means
that certain Collateral Assignment of Purchase and Sale Agreement dated as of
the First Amendment Closing Date by Grand Valley Acquisition Sub, in favor of
Agent, for the benefit of the Lenders, pursuant to which Grand Valley
Acquisition Sub collaterally assigned all of its rights under the Grand Valley
Real Property Purchase Agreement to Agent, for the benefit of the Lenders.

 

“Grand Valley Earn-Out Obligation” means all obligations in respect of the
“Earn-Out” pursuant to Section 1.4(b) of the Grand Valley Asset Purchase
Agreement as in effect on the First Amendment Closing Date, contingent or
otherwise.

 

“Grand Valley Guaranty” means that certain Guaranty, dated as of the First
Amendment Closing Date, made by Grand Valley Acquisition Sub in favor of the
Agent, for the benefit of Agent and Lenders.

 

“Grand Valley Mortgage” means that certain Open-End Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing dated as of the First
Amendment Closing Date

 

84

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

 

executed and delivered by Grand Valley Acquisition Sub in favor of Agent, for
the benefit of the Lenders.

 

“Grand Valley Purchase Documents” means, collectively, the Grand Valley Asset
Purchase Documents and the Grand Valley Real Property Purchase Documents.

 

“Grand Valley Real Property Acquisition” means the acquisition by Grand Valley
Acquisition Sub of certain real property and other assets of GVILLC located at
131 Grand Valley Avenue, Orwell, Ohio from GVILLC pursuant to the Grand Valley
Real Property Purchase Agreement.

 

“Grand Valley Real Property Purchase Agreement” means that certain Purchase and
Sale Agreement among Grand Valley Acquisition Sub, GVILLC, and each of JSRB
Investment LLC, a Pennsylvania limited liability company, The Mullett Company,
an Ohio corporation, and 1167 LLC, an Ohio limited liability company, dated as
of April 19, 2004, a copy of which is annexed as Exhibit B to the First
Amendment.

 

“Grand Valley Real Property Purchase Documents” means, collectively, the Grand
Valley Real Property Purchase Agreement, together with each other document,
agreement and instrument executed in connection therewith.

 

“Guaranty” means that certain Guaranty, dated as of the Original Closing Date,
as amended on the First Amendment Closing Date pursuant to the First Amendment,
made by each of the Subsidiaries of the Borrower (other than Grand Valley
Acquisition Sub) in favor of the Agent, for the benefit of Agent and Lenders.

 

“GVDC” means Ohio Door Co., a Pennsylvania corporation d/b/a Grand Valley Door
Co.

 

“GVILLC” means Grand Valley Investment LLC, an Ohio limited liability company.

 

“Hazardous Materials” means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law.

 

“High Yield Unsecured Documents” means, collectively, the High Yield Unsecured
Indenture, the High Yield Unsecured Notes and all related agreements, documents
and instruments evidencing or relating to the High Yield Unsecured Indebtedness.

 

“High Yield Unsecured Indebtedness” means the unsecured Indebtedness of the
Borrower which is incurred pursuant to the High Yield Unsecured Offering.

 

“High Yield Unsecured Indenture” means that certain Indenture dated as of
February 18, 2004 between Trustee and Borrower, as the same may be amended,
modified and/or supplemented from time to time as permitted herein and including
any other indenture pursuant to which any High Yield Unsecured Notes are issued.

 

85

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

 

“High Yield Unsecured Notes” means those certain 10.0% Senior Unsecured Notes
due 2012 in the aggregate principal amount of up to $120,000,000 issued by
Borrower pursuant to the High Yield Unsecured Indenture, including all notes
issued in exchange or substitution therefor.

 

“High Yield Unsecured Offering” means the offering by Borrower of up to an
aggregate of $120,000,000.00 in principal amount of High Yield Unsecured
Indebtedness upon the terms and conditions set forth in that certain
Confidential Offering Circular of the Borrower dated as of February 18, 2004.

 

“Indebtedness” of any Person means, without duplication: (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of Property or services (other than trade payables
entered into in the Ordinary Course of Business); (c) the face amount of all
letters of credit issued for the account of such Person and without duplication,
all drafts drawn thereunder and all reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments issued
by such Person; (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of Property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to Property
acquired by the Person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such Property); (f) all Capital Lease Obligations; (g) the principal
balance outstanding under any synthetic lease, off-balance sheet loan or similar
off balance sheet financing product; (h) the amount of the Grand Valley Earn-Out
Obligation then due and payable under the terms of the Grand Valley Asset
Purchase Agreement; (i) the amount of the Dimension Earn-Out Obligation then due
and payable under the terms of the Dimension Purchase Agreement; (j) all
indebtedness referred to in clauses (a) through (i) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness; (k) all
Contingent Obligations described in clause (i) of the definition thereof in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (a) through (j) above; and (l) all “Disqualified Stock” (as defined in
the High Yield Unsecured Indenture).

 

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case in (a) and (b) above, undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.

 

“Interest Payment Date” means, (a) with respect to any LIBOR Rate Loan (other
than a LIBOR Rate Loan having an Interest Period of six (6) months) the last day
of each Interest Period applicable to such Loan, (b) with respect to any LIBOR
Rate Loan having an Interest

 

86

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

 

Period of six (6) months, the last day of each three (3) month interval during
such Interest Period, and (c) with respect to Base Rate Loans, the first day of
each calendar month.

 

“Interest Period” means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day such Loan is disbursed or continued or on the
Conversion Date on which a Base Rate Loan is converted to the LIBOR Rate Loan
and ending on the date one, two, three or six (6) months thereafter, as selected
by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided, that:

 

(a)                                  if any Interest Period pertaining to a
LIBOR Rate Loan would otherwise end on a day which is not a Business Day, that
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Business Day;

 

(b)                                 any Interest Period pertaining to a LIBOR
Rate Loan that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period;

 

(c)                                  no Interest Period for the Term Loan or any
CapEx Loan shall extend beyond the last scheduled payment date therefor and no
Interest Period for any Revolving Loan shall extend beyond the Revolving
Termination Date; and

 

(d)                                 no Interest Period applicable to the Term
Loan, any CapEx Loan or portion thereof shall extend beyond any date upon which
is due any scheduled principal payment in respect of the Term Loan or a CapEx
Loan, as applicable, unless the aggregate principal amount of the Term Loan or a
CapEx Loan, as applicable, represented by Base Rate Loans or by LIBOR Rate Loans
having Interest Periods that will expire on or before such date is equal to or
in excess of the amount of such principal payment.

 

“Inventory” means all of the “inventory” (as such term is defined in the UCC) of
the Borrower and its Subsidiaries, including, but not limited to, all
merchandise, raw materials, parts, supplies, work-in-process and finished goods
intended for sale, together with all the containers, packing, packaging,
shipping and similar materials related thereto, and including such inventory as
is temporarily out of the Borrower’s or such Subsidiary’s custody or possession,
including inventory on the premises of others and items in transit.

 

“Lending Office” means, with respect to any Lender, the office or offices of
such Lender specified as its “Lending Office” opposite its name on the
applicable signature page hereto, or such other office or offices of such Lender
as it may from time to time notify the Borrower and the Agent.

 

“Letter of Credit Participation Liability” means, as to each Lender Letter of
Credit and each Letter of Credit Participation Agreement, all reimbursement
obligations and all other liabilities of the Borrower or any of its Subsidiaries
to Agent and the Lenders in connection with the Lender Letter of Credit or to
the obligee with respect to the transaction for which the Letter of Credit
Participation Agreement was issued, whether contingent or otherwise, including
with

 

87

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

 

respect to any letter of credit: (a) the amount available to be drawn or which
may become available to be drawn; (b) without duplication, all amounts which
have been paid or made available by the issuing bank or by the Agent under such
Lender Letters of Credit or Letter of Credit Participation Agreement, in each
instance, to the extent not reimbursed; and (c) all unpaid interest, fees and
expenses.

 

“LIBOR” means, for each Interest Period, the offered rate per annum for deposits
of Dollars for the applicable Interest Period that appears on Telerate Page 3750
as of 11:00 A.M. (London, England time) two (2) Business Days prior to the first
day in such Interest Period.  If no such offered rate exists, such rate will be
the rate of interest per annum, as determined by the Agent (rounded upwards, if
necessary, to the nearest 1/100th of 1%) at which deposits of Dollars in
immediately available funds are offered at 11:00 A.M. (London, England time) two
(2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably satisfactory to the Agent in the London
interbank market for such Interest Period for the applicable principal amount on
such date of determination.

 

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

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or deposit arrangement, encumbrance, lien (statutory or otherwise) or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including those created by, arising under or
evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a Capital Lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the UCC or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest of a
lessor under a lease which is not a Capital Lease.

 

“Loan” means an extension of credit by a Lender to the Borrower pursuant to
Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.

 

“Loan Documents” means this Agreement, the Notes, the Collateral Documents and
all documents delivered to the Agent and/or any Lender in connection with any of
the foregoing (including the Fee Letter).

 

“Margin Stock” means “margin stock” as such term is defined in Regulation T, U
or X of the Federal Reserve Board.

 

“Master Reaffirmation Agreement” means that certain Master Reaffirmation
Agreement dated of even date herewith by and among the Borrower, each of its
Subsidiaries and the Agent, to be in form and substance acceptable to the Agent.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, Property, or condition (financial
or otherwise) of the Borrower, any of its Subsidiaries, or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Borrower, any of its Subsidiaries or any other Person (other than the Agent or
Lenders) to perform in any material respect its obligations under any Loan
Document; or (c) a material adverse effect upon (i) the legality, validity,
binding effect or

 

88

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

 

enforceability of any Loan Document as against the Borrower or any Subsidiary,
or (ii) the perfection or priority of any Lien granted to the Lenders or to the
Agent for the benefit of the Lenders under any of the Collateral Documents.

 

“Mortgage” means any deed of trust, leasehold deed of trust, mortgage, leasehold
mortgage, deed to secure debt, leasehold deed to secure debt or other document
creating a Lien on real Property or any interest in real Property.

 

“Multiemployer Plan” means a “multiemployer plan” (within the meaning of
Section 4001(a)(3) of ERISA) and to which the Borrower or any member of the
Controlled Group may have any liability.

 

“Net Issuance Proceeds” means, in respect of any issuance of debt or equity,
cash proceeds (including cash proceeds as and when received in respect of
non-cash proceeds received or receivable in connection with such issuance), net
of reasonable out-of-pocket costs and expenses paid or incurred in connection
therewith in favor of any Person not an Affiliate of the Borrower.

 

“Net Proceeds” means proceeds in cash, checks or other cash equivalent financial
instruments (including Cash Equivalents) as and when received by the Person
making a Disposition and insurance proceeds received on account of an Event of
Loss, net of: (a) in the event of a Disposition (i) the direct costs relating to
such Disposition excluding amounts payable to the Borrower or any Affiliate of
the Borrower, (ii) sale, use or other transaction taxes paid or payable as a
result thereof, and (iii) amounts required to be applied to repay principal,
interest and prepayment premiums and penalties on Indebtedness secured by a Lien
on the asset which is the subject of such Disposition and (b) in the event of an
Event of Loss, (i) all money actually applied to repair or reconstruct the
damaged Property or Property affected by the condemnation or taking, (ii) all of
the costs and expenses reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (iii) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments.

 

“Note” means any Revolving Note, Term Note or CapEx Note and “Notes” means all
such Notes.

 

“Notice of Borrowing” means a notice given by the Borrower to the Agent pursuant
to Section 1.5, in substantially the form of Exhibit 12.1(b) hereto.

 

“Notice of Continuation/Conversion” means a notice given by the Borrower to the
Agent pursuant to Section 1.6, in substantially the form of
Exhibit 12.1(c) hereto.

 

“Obligations” means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Lender, the Agent, or any other Person required to be indemnified, that arises
under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.

 

89

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

 

“Ordinary Course of Business” means, in respect of any transaction involving the
Borrower or any of its Subsidiaries, the ordinary course of such Person’s
business, as conducted by any such Person in accordance with past practice and
undertaken by such Person in good faith and not for purposes of evading any
covenant or restriction in any Loan Document.

 

“Organization Documents” means, (a) for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (b) for any
partnership, the partnership agreement and, if applicable, certificate of
limited partnership or (c) for any limited liability company, the operating
agreement and articles or certificate of formation.

 

“Original Closing Date” means February 18, 2004.

 

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, P.L.
107-56, as amended.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any of its principal functions under ERISA.

 

“Permitted Acquisition” means any Acquisition by (i) any domestic Wholly-Owned
Subsidiary of the Borrower of substantially all of the assets of a Person, which
assets are located in the United States, or (ii) the Borrower or any domestic
Wholly-Owned Subsidiary of the Borrower of 100% of the equity interests of a
Person incorporated under the laws of any State in the United States or the
District of Columbia (such assets, in the case of an asset acquisition, or
entity, in the case of an acquisition of equity securities, are referred to
herein as the “Acquired Entity”) to the extent that each of the following
conditions shall have been satisfied:

 

(a)                                  the conditions set forth in Section 2.3
shall have been satisfied;

 

(b)                                 the Borrower shall have furnished to the
Agent and Lenders at least twenty (20) Business Days prior to the consummation
of such Acquisition (1) an executed term sheet and/or commitment letter (setting
forth in reasonable detail the terms and conditions of such Acquisition) and, at
the request of the Agent, such other information and documents that the Agent
may request, including, without limitation, executed counterparts of the
respective agreements, documents or instruments pursuant to which such
Acquisition is to be consummated (including, without limitation, any related
management, non-compete, employment, option or other material agreements), any
schedules to such agreements, documents or instruments and all other material
ancillary agreements, instruments and documents to be executed or delivered in
connection therewith, (2) pro forma financial statements of the Borrower and its
Subsidiaries after giving effect to the consummation of such Acquisition, (3) a
certificate of a Responsible Officer of the Borrower demonstrating on a pro
forma basis compliance with the covenants set forth in Article VI hereof after
giving effect to the consummation of such Acquisition and (4) copies of such
other agreements, instruments and other documents (including, without
limitation, the Loan Documents required by Section 4.12) as the Agent reasonably
shall request;

 

90

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

 

(c)                                  the Borrower and its Subsidiaries
(including any new Subsidiary) shall execute and deliver the agreements,
instruments and other documents required by Section 4.12 and the Agent shall
have received, for the benefit of the Agent and Lenders, a collateral assignment
of the seller’s representations, warranties and indemnities to the Borrower or
any of its Subsidiaries under the acquisition documents;

 

(d)                                 such Acquisition shall not be hostile and
shall have been approved by the board of directors (or other similar body)
and/or the stockholders or other equityholders of the Acquired Entity;

 

(e)                                  no Default or Event of Default shall then
exist or would exist after giving effect thereto;

 

(f)                                    after giving effect to such Acquisition
and any Loans to be disbursed in connection therewith, the Maximum Revolving
Loan Balance shall exceed the aggregate outstanding principal balance of
Revolving Loans by not less than $5,000,000, and the Borrower shall deliver to
the Agent a pro forma Borrowing Base Certificate evidencing compliance with this
condition, which pro forma Borrowing Base Certificate shall give effect to such
Acquisition and any such Loans to be disbursed in connection therewith;

 

(g)                                 the Acquired Entity is in the same line of
business as the Borrower

 

(h)                                 the “Available Liquidity” (as defined in the
High Yield Unsecured Indenture) of the Borrower shall be at least $7,500,000;

 

(i)                                     at least fifty percent (50%) of the
costs of such Acquisition are financed with “Acceptable Capital Contributions”
(as defined in the High Yield Unsecured Indenture); and

 

(j)                                     such Acquisition is permitted under the
terms of the High Yield Unsecured Documents.

 

“Permitted Issuances” means the issuance of debt securities by any of the
Borrower’s Subsidiaries in respect of Indebtedness permitted hereunder.

 

“Permitted Securities” shall mean equity interests of Borrower that by their
terms (or by the terms of any security into which they are convertible or for
which they are exchangeable) or upon the happening of any event or otherwise:
(A) are not convertible or exchangeable for Indebtedness or any securities that
are not Permitted Securities, (B) (i) do not mature and (ii) are not putable or
redeemable at the option of the holder thereof, in each case under clause (i) or
(ii) in whole or in part on or prior to the date six (6) months after the
earlier of the Revolving Termination Date or the actual payment in full in cash
of the Obligations, (C) do not have required payments of cash dividends or other
cash distributions on or prior to the date six (6) months after the earlier of
the Revolving Termination Date or the actual payment in full in cash of the
Obligations, (D) are unsecured and by operation of law or by legally binding
agreement are subordinated in right of repayment, liens, security and remedies
to all of the Obligations and to all of Agent’s and Lenders’ rights, Liens and
remedies, and (E) are not sold, issued or otherwise transferred in connection
with or as a part of a Public Offering.

 

91

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

 

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower or any member of the Controlled Group sponsors or maintains
or to which the Borrower or any member of the Controlled Group may have
liability.

 

“Pledge Agreements” means collectively, the Borrower Pledge Agreement, the
Woodcraft Pledge Agreement, and any other pledge agreement, in form and
substance acceptable to the Agent, entered into by any other Subsidiary of the
Borrower, or any other Person, and the Agent, on behalf of the Lenders in
respect of the Obligations.

 

“Pledged Collateral” has the meaning specified in the Pledge Agreements.

 

“Primewood” means Primewood, Inc., a North Dakota corporation and wholly-owned
subsidiary of Woodcraft.

 

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

 

“Public Offering” shall mean any offer or sale of securities pursuant to any
registration statement filed and effective with the Securities and Exchange
Commission or any other Governmental Authority.

 

“Qualified Plan” means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five
(5) plan years, but excluding any Multiemployer Plan.

 

“Rate Contracts” means swap agreements (as such term is defined in Section 101
of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.

 

“Related Agreements” means, collectively, the High Yield Unsecured Documents,
the Grand Valley Purchase Documents, the Dimension Purchase Documents and each
other instrument, document and purchase, merger and other agreement executed or
delivered by or on behalf of the Borrower or any of its Subsidiaries in
connection with a Permitted Acquisition.

 

“Related Fund” means (a) any fund, trust or similar entity that invests in
commercial loans in the ordinary course of business and is advised or managed by
(i) a Lender, (ii) an Affiliate of a Lender, (iii) the same investment advisor
that manages a Lender or (iv) an Affiliate of an investment advisor that manages
a Lender or (b) any finance company, insurance company or other financial
institution which temporarily warehouses Loans for any Lender or any Person
described in clause (a) above.

 

92

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

 

“Related Transactions” means the transactions contemplated by the Related
Agreements and includes, without limitation, the funding of the High Yield
Unsecured Notes, the consummation of the Grand Valley Acquisition, the
consummation of the Dimension Acquisition and the consummation of any Permitted
Acquisitions.

 

“Reportable Event” means, as to any Plan, (a) any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the thirty (30) day notice requirement under ERISA has been
waived in regulations issued by the PBGC, (b) a withdrawal from a Plan described
in Section 4063 of ERISA, or (c) a cessation of operations described in
Section 4062(e) of ERISA.

 

“Required Lenders” means at any time (a) Lenders then holding at least sixty-six
and two-thirds percent (662/3%) of the sum of the Aggregate Revolving Loan
Commitment then in effect plus the Aggregate CapEx Loan Commitment then in
effect (or, if after the CapEx Line Termination Date or if the CapEx Loan
Commitments have been terminated, the aggregate unpaid principal balance of
CapEx Loans) plus the aggregate unpaid principal balance of the Term Loan then
outstanding, or (b) if the Revolving Loan Commitments have been terminated,
Lenders then having at least sixty-six and two-thirds percent (662/3%) of the
sum of the aggregate unpaid principal amount of Loans then outstanding plus
outstanding Letter of Credit Participation Liability.

 

“Requirement of Law” means, as to any Person, any law (statutory or common),
ordinance, treaty, rule, regulation, order, policy, other legal requirement or
determination of an arbitrator or of a 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.

 

“Responsible Officer” means the chief executive officer or the president of the
Borrower or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants or
delivery of financial information, the chief financial officer or the treasurer
of the Borrower, or any other officer having substantially the same authority
and responsibility.

 

“Restatement Effective Date” means the date on which all conditions precedent
set forth in Section 2.1 are satisfied or waived by the Agent and all Lenders.

 

“Restricted Account” means each bank account of the Borrower and its
Subsidiaries set forth on Schedule 12.2 maintained at U.S. Bank or The
Middlefield Banking Company for purposes of paying certain payroll and operating
expenses in the Ordinary Course of Business; provided, that in the event U.S.
Bank or The Middlefield Banking Company delivers to the Agent a control
agreement in form and substance acceptable to the Agent, such account shall
cease to be a Restricted Account for purposes hereof.

 

“Restricted Credit Card Account” means Account No. 1-536-9138-1964 maintained at
U.S. Bank.

 

“Restricted Payroll Account” means Account No. 1-536-9138-1823 maintained at
U.S. Bank.

 

93

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

 

“Revolving Note” means an amended and substituted promissory note of the
Borrower payable to the order of a Lender in substantially the form of
Exhibit 12.1(d) hereto, evidencing Indebtedness of the Borrower under the
Revolving Loan Commitment of such Lender.

 

“Revolving Termination Date” means the earlier to occur of: (a) September 23,
2010; and (b) the date on which the Aggregate Revolving Loan Commitment shall
terminate in accordance with the provisions of this Agreement.

 

“Second Amendment Closing Date” means July 28, 2005.

 

“Security Agreements” means, collectively, the Borrower Security Agreement, the
Subsidiary Security Agreement and any other security agreement, in form and
substance acceptable to the Agent, entered into by any other Subsidiary of the
Borrower, or any other Person, and the Agent, on behalf of the Lenders in
respect of the Obligations.

 

“Solvent” means, as to any Person at any time, that (a) the fair value of the
Property of such Person is greater than the amount of such Person’s liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(32)(A) of the
Bankruptcy Code and, in the alternative, for purposes of the Uniform Fraudulent
Transfer Act; (b) the present fair saleable value of the Property of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured; (c) such Person
is able to realize upon its Property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in
the normal course of business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person’s ability to
pay as such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s Property would constitute unreasonably
small capital.

 

“Sponsor” means Behrman Capital III L.P., a Delaware limited partnership.

 

“Subordinated Indebtedness” means the Indebtedness of the Borrower or any of its
Subsidiaries which (i) contains terms, conditions, covenants, default triggers
and representations and warranties that are acceptable to the Agent and the
Required Lenders and (ii) is subordinated in right of payment and action to the
Obligations on terms and conditions satisfactory to the Agent and the Required
Lenders.

 

“Subsidiary” of a Person means any corporation, association, limited liability
company, partnership, joint venture or other business entity of which more than
fifty percent (50%) of the voting stock or other equity interests (in the case
of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof.

 

“Subsidiary Security Agreement” means that certain Security Agreement dated as
of the Original Closing Date, by and between each of Woodcraft, Primewood and
Brentwood and the Agent, for the benefit of the Lenders, and joined by Grand
Valley Acquisition Sub pursuant to a joinder dated as of the First Amendment
Closing Date.

 

94

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

 

“Target” means any other Person or business unit or asset group of any other
Person acquired or proposed to be acquired in an Acquisition.

 

“Term Note” means a promissory note of the Borrower payable to the order of a
Lender, in substantially the form of Exhibit 12.1(e) hereto, evidencing the
Indebtedness of the Borrower to such Lender resulting from the Term Loan made to
the Borrowers by such Lender.

 

“Trustee” means U.S. Bank National Association.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of Illinois.

 

“Unfunded Pension Liabilities” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used by the Plan’s
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.

 

“United States” and “U.S.” each means the United States of America.

 

“U.S. Bank” means U.S. Bank National Association, a national banking
association.

 

“Wholly-Owned Subsidiary” means any Subsidiary in which (other than directors’
qualifying shares required by law) one hundred percent (100%) of the equity
securities, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Borrower, or by one or more of the other
Wholly-Owned Subsidiaries, or both.

 

“Withdrawal Liabilities” means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the
Controlled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.

 

“Woodcraft” means Woodcraft Industries, Inc., a Minnesota corporation and
wholly-owned subsidiary of Borrower.

 

“Woodcraft Pledge Agreement” means that certain Pledge Agreement dated as of the
Original Closing Date, by and between Woodcraft and the Agent, for the benefit
of the Lenders, pursuant to which Woodcraft has pledged one hundred percent
(100%) of the issued and outstanding capital stock of its Subsidiaries.

 

12.2                           OTHER INTERPRETIVE PROVISIONS.

 

(A)                                  DEFINED TERMS.  UNLESS OTHERWISE SPECIFIED
HEREIN OR THEREIN, ALL TERMS DEFINED IN THIS AGREEMENT SHALL HAVE THE DEFINED
MEANINGS WHEN USED IN ANY CERTIFICATE OR OTHER DOCUMENT MADE OR DELIVERED
PURSUANT HERETO.  THE MEANINGS OF DEFINED TERMS SHALL BE EQUALLY APPLICABLE TO
THE SINGULAR AND PLURAL FORMS OF THE DEFINED TERMS.  TERMS (INCLUDING
UNCAPITALIZED TERMS) NOT OTHERWISE DEFINED HEREIN AND THAT ARE DEFINED IN THE
UCC SHALL HAVE THE MEANINGS THEREIN DESCRIBED.

 

95

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

 

(B)                                 THE AGREEMENT.  THE WORDS “HEREOF,”
“HEREIN,” “HEREUNDER” AND WORDS OF SIMILAR IMPORT WHEN USED IN THIS AGREEMENT
SHALL REFER TO THIS AGREEMENT AS A WHOLE AND NOT TO ANY PARTICULAR PROVISION OF
THIS AGREEMENT; AND SUBSECTION, SECTION, SCHEDULE AND EXHIBIT REFERENCES ARE TO
THIS AGREEMENT UNLESS OTHERWISE SPECIFIED.

 

(C)                                  CERTAIN COMMON TERMS.  THE TERM “DOCUMENTS”
INCLUDES ANY AND ALL INSTRUMENTS, DOCUMENTS, AGREEMENTS, CERTIFICATES,
INDENTURES, NOTICES AND OTHER WRITINGS, HOWEVER EVIDENCED.  THE TERM “INCLUDING”
IS NOT LIMITING AND MEANS “INCLUDING WITHOUT LIMITATION.”

 

(D)                                 PERFORMANCE; TIME.  WHENEVER ANY PERFORMANCE
OBLIGATION HEREUNDER (OTHER THAN A PAYMENT OBLIGATION) SHALL BE STATED TO BE DUE
OR REQUIRED TO BE SATISFIED ON A DAY OTHER THAN A BUSINESS DAY, SUCH PERFORMANCE
SHALL BE MADE OR SATISFIED ON THE NEXT SUCCEEDING BUSINESS DAY.  IN THE
COMPUTATION OF PERIODS OF TIME FROM A SPECIFIED DATE TO A LATER SPECIFIED DATE,
THE WORD “FROM” MEANS “FROM AND INCLUDING”; THE WORDS “TO” AND “UNTIL” EACH MEAN
“TO BUT EXCLUDING,” AND THE WORD “THROUGH” MEANS “TO AND INCLUDING.”  IF ANY
PROVISION OF THIS AGREEMENT REFERS TO ANY ACTION TAKEN OR TO BE TAKEN BY ANY
PERSON, OR WHICH SUCH PERSON IS PROHIBITED FROM TAKING, SUCH PROVISION SHALL BE
INTERPRETED TO ENCOMPASS ANY AND ALL MEANS, DIRECT OR INDIRECT, OF TAKING, OR
NOT TAKING, SUCH ACTION.

 

(E)                                  CONTRACTS.  UNLESS OTHERWISE EXPRESSLY
PROVIDED HEREIN, REFERENCES TO AGREEMENTS AND OTHER CONTRACTUAL INSTRUMENTS,
INCLUDING THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, SHALL BE DEEMED TO
INCLUDE ALL SUBSEQUENT AMENDMENTS, THERETO, RESTATEMENTS AND SUBSTITUTIONS
THEREOF AND OTHER MODIFICATIONS AND SUPPLEMENTS THERETO WHICH ARE IN EFFECT FROM
TIME TO TIME, BUT ONLY TO THE EXTENT SUCH AMENDMENTS AND OTHER MODIFICATIONS ARE
NOT PROHIBITED BY THE TERMS OF ANY LOAN DOCUMENT.

 

(F)                                    LAWS.  REFERENCES TO ANY STATUTE OR
REGULATION ARE TO BE CONSTRUED AS INCLUDING ALL STATUTORY AND REGULATORY
PROVISIONS CONSOLIDATING, AMENDING, REPLACING, SUPPLEMENTING OR INTERPRETING THE
STATUTE OR REGULATION.

 

12.3                           ACCOUNTING PRINCIPLES.

 

(A)                                  UNLESS THE CONTEXT OTHERWISE CLEARLY
REQUIRES, ALL ACCOUNTING TERMS NOT EXPRESSLY DEFINED HEREIN SHALL BE CONSTRUED,
AND ALL FINANCIAL COMPUTATIONS REQUIRED UNDER THIS AGREEMENT SHALL BE MADE, IN
ACCORDANCE WITH GAAP, CONSISTENTLY APPLIED.

 

(B)                                 REFERENCES HEREIN TO “FISCAL YEAR,” “FISCAL
QUARTER” AND “FISCAL MONTH” REFER TO SUCH FISCAL PERIODS OF THE BORROWER.

 

96

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

 

(C)                                  IF ANY CHANGE IN GAAP RESULTS IN A CHANGE
IN THE CALCULATION OF THE FINANCIAL COVENANTS OR INTERPRETATION OF RELATED
PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THEN THE BORROWER, THE
AGENT AND THE LENDERS AGREE TO AMEND SUCH PROVISIONS OF THIS AGREEMENT SO AS TO
EQUITABLY REFLECT SUCH CHANGES IN GAAP WITH THE DESIRED RESULT THAT THE CRITERIA
FOR EVALUATING THE BORROWER’S FINANCIAL CONDITION SHALL BE THE SAME AFTER SUCH
CHANGE IN GAAP AS IF SUCH CHANGE HAD NOT BEEN MADE; PROVIDED, THAT
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, THE REQUIRED LENDERS’
AGREEMENT TO ANY AMENDMENT OF SUCH PROVISIONS SHALL BE SUFFICIENT TO BIND ALL
LENDERS.

 

[Balance of page intentionally left blank; signature page follows.]

 

97

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

 

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

 

 

WII COMPONENTS, INC.,

 

a Delaware corporation, as the Borrower

 

 

 

 

 

By:

/S/ Dale B. Herbst

 

 

Name:

Dale B. Herbst

 

Title:

Treasurer

 

FEIN:

 

 

 

 

 

Address for notices for Borrower:

 

 

 

525 Lincoln Avenue SE

 

St. Cloud, Minnesota 56304

 

Attn: President

 

Facsimile: (320) 352-1504

 

 

 

Address for Wire Transfers for Borrower:

 

 

 

U.S. Bank National Association

 

ABA Number: 091000022

 

Account Number: 149510174050

 

Reference: Woodcraft Industries, Inc.

 

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

 

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

 

 

ANTARES CAPITAL CORPORATION,

 

as Agent and as a Lender

 

 

 

 

 

By:

/S/ Michael P. King

 

 

Name:

Michael P. King

 

Title:

Director

 

 

 

 

 

Address for notices:

 

 

 

311 South Wacker Drive

 

Suite 4400

 

Chicago, Illinois 60606

 

Attn: Portfolio Manager – Woodcraft

 

Facsimile: (312) 697-3998

 

Telephone: (312) 697-3999

 

 

 

Address for payments:

 

 

 

Antares Capital Corporation

 

Account # 4070-6016

 

Citibank N.A., New York

 

ABA # 021000089

 

Reference: Woodcraft

 

Please advise Jim Luchansky at

 

(312) 697-3991 upon receipt

 

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

 

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

 

 

M&I MARSHALL & ILSLEY BANK, as a
Lender

 

 

 

 

 

By:

/S/ Chad M. Kortgard

 

 

Name:

Chad M. Kortgard

 

Title:

Assistant Vice President

 

 

 

By:

/S/ John Howard

 

 

Name:

John Howard

 

Title:

Senior Vice President

 

 

 

Address for notices:

 

 

 

401 N. Executive Drive

 

Brookfield, Wisconsin 53005

 

Attn:   Nenita Yumang

 

Facsimile: (262) 938-8684

 

Telephone: (262) 938-8675

 

 

 

Lending Office:

 

 

 

651 Nicollet Mall

 

Minneapolis, Minnesota 55402

 

Attn:   Chad Kortgard

 

Facsimile: (612) 904-8012

 

Telephone: (612) 904-8195

 

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

 

Schedule 1.1(a)

 

Term Loan Commitments and CapEx Loan Commitments

 

Lender:

 

Term Loan Commitment:

 

CapEx Loan Commitment:

 

Antares Capital Corporation

 

$

4,772,727.27

 

$

4,772,727.27

 

M&I Marshall & Ilsley Bank

 

$

2,727,272.73

 

$

2,727,272.73

 

TOTAL

 

$

7,500,000

 

$

7,500,000

 

 

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

 

Schedule 1.1(b)

 

Revolving Loan Commitments

 

Lender:

 

Revolving Loan Commitment:

 

Antares Capital Corporation

 

$

25,454,545.46

 

M&I Marshall & Ilsley Bank

 

$

14,545,454.54

 

TOTAL

 

$

40,000,000.00

 

 

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